ITC Hotels Expands Into Nepal With New Venture Under Fortune Brand

As India shifts from being a low-income to a middle-income economy and the desire to travel increases, the hospitality industry is poised to flourish. This presents a great opportunity for hoteliers to expand their footprint and benefit from the potential surge in demand, according to Samir. "Both business and leisure travel have bounced back from the steep decline in the Covid-hit years with sharper inclines thereafter."

The unprecedented surge in demand has led to a mismatch with supply. Currently, the occupancy rate of hotels in India is estimated to be 70%. "Many of the markets are hitting 80% and we expect rising demand to continue to outpace supply in the next two years," he said.

Temple towns have always been tourist hotspots, but Ayodhya has sparked a newfound interest in spiritual tourism among domestic travelers, Samir said. "We have already got one property coming up in Ayodhya to cater to the pilgrims and tourists alike flocking to this sacred city," he said. The hospitality firm has properties in other popular spiritual destinations like Tirupati, Katra (Vaishno Devi), Madurai and Amritsar.

ITC Hotels is set to invest about Rs 1,000 crore annually over the next few years to build new projects and renovate existing properties in India.

The cigarette-to-FMCG conglomerate will convene a meeting of the ordinary shareholders of the company on June 6 to approve the proposed demerger of ITC Hotels from ITC Ltd. into a separate listed subsidiary. The process is likely to be completed in the second half of the ongoing fiscal.

ITC's largest shareholder, British American Tobacco PLC, had earlier indicated it may divest its shares in the hotel business as part of the demerger process since hospitality is not an area of interest for the company. In March, BAT sold a 3.5% stake in ITC in a block deal to institutional investors for Rs 16,690 crore, trimming its holding to 25.5%.