MUMBAI: Last year, two well-known hospitality chains — Taj and Orient-Express Hotels (OEH) — were involved in a war of words over their respective brand positioning and image, following the Indian chain's acquisition of a pie of the NYSE-listed hotel-to-trains group. Though the argument subsequently died down, an interesting fact about the Taj brand was revealed at the Indian Hotels Company's (IHCL) AGM last week.
IHCL (owner of the Taj group of hotels) chairman Ratan Tata, while responding to a shareholder's query, said the Taj brand is valued in excess of Rs 4,000 crore. This is the first time the hotel chain, after its controversial acquisition of OEH stake, has mentioned its flagship brand's value. Its Taj name is sported across properties from luxury to leisure to business. UK's Brand Finance is learnt to be involved in the valuation of the hotel firm's intangible assets.
"There is a hard aspect and soft aspect when it comes to valuing hotel brands. The hard aspect includes taking into account the value of the property, while the latter looks at various factors like the perception of the brand by its guests, its revenue per room, customer database, strategic alliances and loyalty programmes," said Saurabh Gupta, associate director of hotel consultancy HVS International. Most hotel operators value their brands based on the softer aspects.
"A brand valuation helps the company to understand the potential of its various hotel brands and it could restructure its portfolio accordingly," Gupta said.
7 months ago