Tata Group Chairman N Chandrasekhar conducted the first-ever digital AGM of the group's oldest company, the Taj Group of Hotels (IHCL), with independent directors and others participating over the web from their homes as the company heard shareholders questions, grievances and in some instances flattering commentary for the management team.
"The past few months, the outbreak of Covid-19 pandemic developed rapidly into a global crisis resulting in an unfamiliar and uncertain terrain and affecting the very fundamentals of the world around us," Chandrasekhar said. " The Indian economy had slowed down on account of the NBFC decline, of credit growth, and the slowdown in manufacturing but the onset of Covid-19 has seriously impacted the Indian economy."
To that effect, he said, even as 2020 may see a contraction in Indian economy to the tune of 3–5 per cent, IHCL was hopeful of demand recovery in 2021. "Effectively managing our assets through sale of non-core assets and re-negotiation of contracts with its owners to arrive at win-win solutions can help release cash and further reduce expenses," he said at the AGM. "Last but not the least, being thrifty and financially prudent is paramount for the Company to survive through this crisis in order to revive its business and thrive in the post-Covid world."
He went on to add that the travel and tourism created jobs, drove exports, and contributed eight per cent of jobs in the country.
However, the hospitality sector has also come under severe pressure as a result of lockdowns, reduced air travel and the absence of public gatherings, which contribute to MICE (meetings, incentives, conferences and exhibitions) business.
IHCL has a 200-hotel portfolio with 25,000 rooms and a total of 27,594 employees. Of this, 158 hotels are operational, and 42 in stages of development. The company signed 29 new hotels and had opening of 12 hotels in the financial year, which include the Taj Fateh Prakash Palace in Udaipur, the Cidade de Goa and Taj Hotel & Convention Centre in Goa, and Taj JLT in Dubai.
The strategy going ahead would hinge on sales of non-core assets, being financially prudent and reviving the business but there was no expectation for business to be led by inbound foreign tourism. "While 2020 will see a contraction in India economy, demand is expected to bounce back in 2021 with domestic expected to play a strong role in the near term," Chandrasekhar told shareholders.
In answers to a variety of queries posed to him by those present during the two and a half hour meeting, Chandrasekhar also went on to detail how the company's visibility was limited thanks to the pandemic but was open to examining new revenue opportunities.
Those include Qmin the new food delivery app that had been launched, the repurposing of the Chambers in the near future and more, he said, adding that the Ginger brand would treble in volume in the next three years while the Searock negotiations in Bandra were complete and would be wrapped up before year end. IHCL has launched a five-pronged strategy called RESET 2020 to reset itself and rebound strongly in the post COVID world. RESET stands for Revenue Growth, Excellence in Operations, Spend Optimization, Effective Asset Management and Thrift.
In a sign of the times, Chandrasekhar wrapped up the company's 119th AGM by telling shareholders to stay safe, take care of their health and to remain optimistic.