Taj Group of Hotels

Expanding the Realm through Branding

Strategy
Case study
Reference no 311-087-1

This case was written by K Bala Praveena, Amity Research Centers Headquarters,
Bangalore. It is intended to be used as the basis for class discussion rather than
to illustrate either effective or ineffective handling of a management situation.
The case was compiled from published sources.
2011, Amity Research Centers Headquarters, Bangalore.
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311-087-1

Taj Group of Hotels: Expanding the Realm Through Branding Strategy

Taj Group of Hotels: Expanding the Realm through Branding

Strategy
Author: Ms. K. Bala Praveena
Abstract: The Hospitality industry played a vital role in the economic growth of a country. As per the Travel
and Tourism Competitiveness Report 2009 of the World Economic Forum, India had been ranked 11th in
the Asia Pacific region and 62nd in overall position among the world's attractive destinations. Rapid growth
in the hospitality industry would enhance economic growth of the country .According to World Travel and
Tourism Committee, there had been 130,000 hotel rooms in India and the increase in tourist flow would
require 50,000 additional rooms by 2014.The Indian Hotels Company Limited (IHCL) and their subsidiaries
known as Taj Hotels Resorts and Palaces had been recognized as one of Asias largest and finest hotel
companies. The gradual rise in the economic growth enabled other competitive brands also to expand their
business in India. In order to compete with international brands, the Taj Company had rebranded their
hotels to cater to the customers and potential clients in all economic strata. A rebranding strategy of its
existing hotels and opening economy hotels was undertaken by the Taj Hotel Company. The case analyses
how the Taj Hotels succeeded and rebranded its various subsidiaries in order to gain larger market share of
the hotel industry in India.
Pedagogical Objectives
The case study helps to understand and analyse:
Growth of Indian Hospitality Sector
The Re-Branding Strategies of the Taj Hotel
Challenges faced and the opportunities gained through this endeavour.

Case Study
"A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things
well.1
Jeff Bezos, Chief Executive Officer and Chairman, Amazon.com
The Hospitality Industry was the major service sector that played a vital role in the world economy. The
hospitality industry comprised of various sub sectors like food, hotel and tourism. And these industries
would be affected the most in times of economic downturn. In India the accommodation concept had
several options from home stay to luxurious and gorgeous stay with different cultures, languages, life styles,
and cuisines and had increased the need for newer trend in the hospitality industry. The Indian government
had taken steps to improve travel and tourism sectors which had boosted the Hotel industry in India. It had
implemented the termination of domestic air travel taxes of 15%, 8% of reduced excise duty on aviation fuel
and removed number of restrictions on outbound chartered flights.2 From the year 1995-2010 business
opportunities in India had increased and the need for hotel stay had paved way to increased room tariffs
1
2

Branding Quotes of the Day, http://www.bizcommunity.com/Quotes/196/82.html

Hotel Industry in India, http://www.iloveindia.com/economy-of-india/hotel-industry.html, July 21st 2007

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Taj Group of Hotels: Expanding the Realm Through Branding Strategy

and occupancy level in Indian hotels. Indian hospitality industry ranked second in the Asia Pacific region in
terms of industry growth. According to the World Travel and Tourism Council (WTTC)3, India was ranked
18th in business travel and very soon would be among the top 5 in the world with regard to Hotel Industry.4
The increasing inflow of foreign travelers to India contributed to substantial revenue growth for the Indian
hospitality industry while the domestic consumers also patronized star hotels and restaurants.
Experts had opined that the demand for hotel stay would increase to 100% by 2012.5 The hospitality
industry would have to deal with four transformative problems like branding, human resources, developing
technology and upcoming market scenario by 2015. The demand for hotel rooms was consistently
increasing at the rate of 5% per annum since 2006. The industry anticipated an investment of $ 12.17 billion
by the end of 2011 with addition to 20 new international hotels in India.6
The Taj Hotels had been considered as an icon for every other hotel in India. The Taj hotels were proud
about their culture focused services, the luxury experienced by the guests, and the over all unique Taj Hotel
Experience. The Taj Hotel have set foot all over India and covered prominent industrial cities like Mumbai,
New Delhi, Chennai, hill stations like Chikmagalur, Ooty, Coonoor, Kodaikanal, Pilgrim centers like Shirdi,
Thirupathi and Wild life destinations like Kanha, Bandhavgarh, Panna and Pench national parks with their
luxury services, hospitality trend, viable locations and ample use of modern technology in their hotels. The
budding markets pertained to the hotel industry had welcomed more international as well as domestic
hoteliers to launch their brands in India7 like Uppal Group8, Marriott9, Panoramic Universal10, The Park11,
Hilton12, Hyatt13, Accorr14, Trident15, Leela Palaces & Resorts16, Kempinski17, Starwood18 and Vatika.19 The
Taj implemented the rebranding strategy to withstand the increasing competition in the Indian market. The
strategy included segregation of all the hotels that came under the Taj brand and to open an economy hotel.
The rebranding strategy followed by the Taj was to cover all the strata of customers and capture majority of
the Indian market. Brand Architecture and re-branding was implemented in Taj hotels to secure their market
3
4

The World Travel & Tourism Council (WTTC) was the global forum for business leaders in the Travel & Tourism industry.
Indian Hotel Industry, http://www.indianmirror.com/indian-industries/hotel.html, January 2011

2011, Amity Research Centers HQ, Bangalore. All rights reserved.

5 Hotel Industry in India, http://business.mapsofindia.com/india-industry/hotel-industry-in-india.html
6 Kumar Lokesh et al., Dissecting the Indian hospitality Industry, Technopak Perspective, Volume1,
http://www.technopak.com/Perspective/vol1/Dissecting%20the%20India%20Hospitality%20Industry.pdf, August 6th 2009
7 New Hotels in Pipeline, http://www.itopc.org/travel-trade/new-hotels-in-pipeline.htm
8 The Uppal Group is an established name in the real estate industry with the growing presence in residential, commercial,
hospitality and SEZ sector.
9 Marriott International, Inc. a worldwide operator and franchisor of a broad portfolio of hotels and related lodging
facilities. Founded by J. Willard Marriott, Marriott International has about 3,150 lodging properties located in the United
States and 67 other countries and territories.
10 Panoramic Universal, a Panoramic Group of Companies houses many businesses like Herbal Products under the brand
name HERBO marketed in UAE, US, UK would launch hotels in India.
11 The Park Group of Hotels is a pioneer in the concept of luxury boutique hotels in India. Over the 40 years since it was
first established, the group has grown in popularity and prestige, achieving global standards of product quality and
service excellence.
12 Hilton Hotels stands as the stylish, forward thinking global leader of hospitality.
13 Hyatt Hotels Corporation is an international operator of hotels. Hyatt Center completed in 2005 & located in downtown
Chicago at 71 South Wacker Drive is the headquarters for Hyatt Corporation.
14 Accor market leader in Europe, operates in 90 countries with 145,000 employees. The Group offers to its clients and
partners nearly 45 years of know-how and expertise.
15 The Oberoi and Trident are two brands of five star hotels operated and sometimes owned by the Oberoi Hotels &
Resorts located in several cities in India and across the world.
16 Founded in 1957 by Capt. C.P. Krishnan Nair, the INR 4.5 billion Leela Group is engaged in the business of ready-made
garments and luxury hotels and resorts.
17 The Kempinski name is proudly borne by a growing collection of distinguished properties around the world. As
Europes oldest luxury hotel group, the hotel is committed to providing the guests with memorable journeys inspired by
exquisite European flair.
18 Starwood is one of the worlds largest hotel and leisure companies. They conduct their hotel and leisure business both
directly and through their subsidiaries.
19 A real estate company associated with international stakeholders such as Goldman Sachs, Baer Capital, and Wachovia
Bank, who share their vision of creating homes, schools, restaurants, retail spaces, commercial spaces, and business
centres that uphold unparalleled quality and reflect timelessness.

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Taj Group of Hotels: Expanding the Realm Through Branding Strategy

share from the new competitive hotel brands. The Taj Hotels had 25% share of the Indian Hotel Industry
market.20 They were the largest players in Indian Hospitality Sector and had decided to retain the market
share by rebranding. Whether the ideas of rebranding and segmenting their popular hotels would help the
Taj to maintain its market leadership was remained to be seen.

Indian Hospitality Sector: Current Scenario

The growing business opportunities in India had increased the need for numerous hotels. In the past the
hotel sector was segregated into two segments namely luxury and unclassified hotels. While the earlier
focus of the hoteliers was on the major metro cities, currently the focus had shifted towards other cities. In
December 2010, the tourist arrivals totaled 6.55 million, marginally better than the 6.46 million of December
2009, according to the tourism ministry.21 Due to the opening of the economy, India had become a viable
and best place for hotel chains around the world to expand their business. According to the World Travel
and Tourism Council22, India had anchored itself in the eighteenth place and would maintain its position for
the next few years as such. Keeping an eye on the increasing business portfolio the demand for best hotels
and better accommodation would surpass the availability of rooms in India in the coming years.
Tourists and travelers had been taking their place of stay very seriously. Meeting the expectation of the
tourists had become a challenge to the hospitality sector. Hence the hospitality sector had plunged into
action by providing improved services and changed their hotel for the better. Fierce competition and fight to
become the leading player in the hospitality industry, the companies were contemplating on ideas and
innovating successful hospitality products and services every day. The foreign exchange earnings from
tourism increased from $11,394 million in 2009 to $14,193 million in 2010.23 Multinational Hotel Chains had
been congregating with Indian hoteliers to set their foot in the competitive hospitality sector in India. The
foreign tourists arrivals was on the increase so was the traverse of in- country travelers. Experts opined
that, Travelers gave importance to those countries, where the hospitality sectors took initiative to modernize
services. The main clientele for the hospitality sector were the international professionals, business
travelers and administrators. The travel for business had increased considerably due to globalization. The
government of India had taken initiative and rendered their help to develop the hospitality sector through
advertising campaigns like Incredible !ndia24 and Athithi Devo Bhava.25 India had opted for the online
travel industry which would pitch in 70% of the e-commerce activity.26 The online travel industry supported
the corporate travel packages, outbound travels, online booking of hotels and tickets etc.
The government of India had permitted 300 hotel projects, in which 150 were luxury hotels. Human
resources requirement for the hotel industry had increased from 7 million in 2002 to 15 million in 2010.27
The travel and tourism sector accounted for 6.4% of total employment in 2009 and was expected to

Ashiwal Shashi, Rebranding the Taj,

http://www.thehindubusinessline.in/catalyst/2010/08/05/stories/2010080550030100.htm, August 5th 2010
21 India got 5.58 Million tourists in 2010,
http://www.siliconindia.com/shownews/India_got_558_Million_tourists_in_2010__-nid-76825-cid-1.html
22 World Travel and Tourism Council is an international organisation of travel industry executives promoting travel and
tourism worldwide.
23 India got 5.58 Million tourists in 2010, op.cit.
24 The first marketing initiative of its kind, Incredible India was conceptualized in 2002 by V Sunil and Amitabh Kant, Joint
Secretary, Ministry of Tourism. The primary objective of this branding exercise was to create a distinctive identity for the
country. This resulted in the iconicIncredible !ndia logo, where the exclamation mark that formed the I of India was
used to great effect across all communications. The campaign successfully established India as a high-end tourist
destination, generating a 16% increase in tourist traffic in the first year.
25 A pioneer initiative by Ministry of Tourism, Government of India that will help tap into the full potential of tourism in
India. Ministry of Tourism, Government of India has introduced Atithi Devo Bhavah Program- A nation wide campaign
that aims at sensitising key stakeholders towards tourists, through a process of training and orientation.
26 Online travel contributes 70% of e-commerce worldwide, The HITWISE India Travel Report - An Insight,
http://www.business-standard.com/india/news/online-travel-contributes-70e-commerce-worldwide/427888/, March 9th 2011
27 Indian Hotel Industry, op.cit.
20

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Taj Group of Hotels: Expanding the Realm Through Branding Strategy

generate 40 million jobs by 2019.28 The Indian hotel industry had expanded 15% a year.29 Due to the
Common Wealth Games conducted by India in 2010, 50 international budget hotels had decided to
introduce their brand in New Delhi, India. The major reasons for the boom of hotel industry were due to the
rise in IT, Communication, Retail and Real estate field. Indian stock market and developing business
opportunities attracted global investors. As per a survey undertaken by Cond Nast Traveler magazine30,
India had been ranked as the 4th most favored country for holidays, above South Africa and Switzerland.
Along with these credentials, the availability of low cost medical facilities and the introduction of low cost
airlines had been expected to increase the demand for hotel rooms across many cities in India.31
The luxury hotels had been a major contributor for the hospitality industry32 (Exhibit I). Despite the
economic downturn in 2009, development in the hotel industry would lead to a tremendous growth in
revenue to the extent of $36 million by 201833 (Exhibit II). The Indian hospitality sector provided differential
tariff accommodations for meeting the varied income groups of the incoming travelers. The percentage of
the room availability depended upon the popularity of the city. The steady increase in the foreign tourist
arrival had a tremendous effect on the Foreign exchange earnings from tourism (Exhibit III). The ideas of
tourism and hotel stays had developed in the direction of adventure, medical, heritage and eco tourism
respectively. In tune with the skyrocketing real estate cost and with a concept of easing various threats, high
quality hotels had also sprung up in shopping malls. These hotels would be well under the budget of various
segments of customers and also would give an additional bonus of shopping experience and various
entertainment facilities. The tourist would also enjoy various hospitality benefits under one roof like food,
dining, shopping, movie theatres, and play-zone. In East End Mall34 in New Delhi and Express Avenue35 in
Chennai, such hotels had been constructed inside the mall.
Exhibit I
Contribution of Luxury Hotels to the Indian Hotel Industry

Source: Kumar Lokesh, et al., Dissecting the Indian hospitality Industry, Technopak Perspective, Volume1,
http://www.technopak.com/Perspective/vol1/Dissecting%20the%20India%20Hospitality%20Industry.pdf,
August 6th 2009

Panaromic Universal Limited Annual Report 2009-2010,

http://www.panoramicuniversal.com/infotech/image/images/Annual%20Report%20PUL%202009-2010.pdf
29 Hotel Industry Analysis Report, http://www.scribd.com/doc/23134349/Hotel-Industry-Analysis-Report
30 Cond Nast Traveler is a US magazine published by Cond Nast Publications. It has its origins in a mailing sent out by
the Diners Club club beginning in 1953, listing locations that would take the card.
31 Buoyant outlook for Indian hotel sector, http://www.expresshospitality.com/20070531/management06.shtml
32 Dissecting the Indian hospitality Industry, op.cit
33 ibid.
34 'The EastEnd Mall' is located in Lucknow, the capital city of Utter Predesh. The size of the mall is roughly 2,75,000 Sq.Ft.
with four floors and one basement parking floor. The mall consists of shops, food court, multiplex cinema, bars, hotels
and restaurants etc.
35 Express Avenue is a shopping mall in Chennai promoted by Express Infrastructure, a subsidiary of The Indian Express
Group. It is South Asia's largest shopping mall.
28

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Taj Group of Hotels: Expanding the Realm Through Branding Strategy

Exhibit II
Growth of Indian Hotel Industry

Source: Kumar Lokesh, et al., Dissecting the Indian hospitality Industry, Technopak Perspective, Volume1,
http://www.technopak.com/Perspective/vol1/Dissecting%20the%20India%20Hospitality%20Industry.pdf,
August 6th 2009

Exhibit III
Increased Foreign Exchange Earning

Source: Chirag, Foreign tourist arrivals in India Statistics,

http://www.squamble.com/2010/05/15/foreign-tourist-arrivals-in-ind0ia-statistics/, May 15th 2010

Due to the terror attack on Taj Mahal Hotel, Mumbai in November 2008, and the Taj hotels in particular and
the tourism and hospitality industry in general, had to face lower traffic and challenges in the year 2009-10.
The economic slowdown had added to the problem that had already prevailed. In the year 2009-10 there
was a decrease in the worlds tourism by 4.3% but Indian tourism was in a better position. Foreign
Exchange Earnings36 (FEEs) from tourism increased from INR 15,064 billion in 2002 to INR 54,960 billion
in 2009. The growth rate in earnings in 2009 vis--vis 2008 was 8.3%.37 In the Travel & Tourism
Competitiveness Report 2009 brought out by the World Economic Forum38, the hospitality sectors
contribution to the Gross Domestic product (GDP) would be $187.3 billion by 2019.
The tourism and travel industry was expected to contribute 7.7% p.a. to the country's GDP. Export income
from global tourists and tourism related products was expected to generate $ 51.4 billion by 2019. The
recent trend in hospitality industry was the introduction of Hospitality District. A new hospitality District had
Tens of thousands of companies around the world offer their goods and services to millions of customers in almost
every country. Many companies make a significant amount of their money by way of foreign exchange earnings.
37 Potentialities of Halal Tourism, http://www.halalinindia.com/halaltourism.php
38 The World Economic Forum is an independent international organization committed to improving the state of the world
by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas.
36

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Taj Group of Hotels: Expanding the Realm Through Branding Strategy

been under construction near Indira Gandhi International Airport, New Delhi, India. The author of the article,
Suneera Tandon, said The upcoming districts would have 8 hotel pioneers like Accor, Marriot (with Asian
West Hotels39), Dusti Tahni40 (With the Bird Group41), S.P. Jain Hotels42, Lemon Tree Hotels43 and Hyatt.
The above mentioned international hotels groups would bring 11 hotel properties by 2016.44 According to
Chintan Patel, Associate Director and Leader for real estate, industrial and hospitality advisory of Ernst
&Young, Across the globe , Hospitality Districts are common. Now for overnight stay, people will opt for the
hospitality districts instead of traveling to the city.45

The Taj Group of Hotels: An Overview and Global Expansion Plans

The Taj Hotel46, one of the iconic places in India had earned reputation for service excellence in the hotel
industry and had become a household name in India. The Taj Group of Hotels had been visited by tourists
from all over the world. As the pioneer luxury hotel in India it offered its customers or guests a feeling of
grand stay with utmost satisfaction, with its various facilities and services, The Taj Group of Hotels had
been a part of the Tata Group47 of Companies. The Taj Company was founded in 1902 and in 1903 the first
hotel of the company was opened by Jamshetji Nusserwanji Tata in Mumbai. Later an adjoining tower
building was constructed to meet the increased demand for rooms. After 1970 the company started its
geographic extension by introducing new tourist spots around India thus forming a successful and one of
the most well known hotel chains in India (Annexure I & II). The Taj group of hotels had worked closely with
the government of India in creating new as well as historic tourist destination all over India.
The Taj Group had a philosophy of service excellence which entailed providing consistently high levels of
personalized service and innovative means of improving service quality. In 1980, the Taj Group took its step
internationally by opening its first hotel outside India, the Taj Sheba Hotel in Sana'a, Yemen and in the late
1980s, it acquired the Crown Plaza, London, St. James Court, London and 51 Buckingham Gate Luxury
Suites and Apartments in London48 and the journey of international expansion continued. The Taj groups
international ventures were scattered all around the world in countries like Australia, Maldives, Sri Lanka,
Bhutan, Africa, America, Malaysia, United Kingdom, Mauritius and the Middle East.49 The Taj Hotels had 61
hotels in 2003 which was increased to 110 in 2010 and additions of 47 hotels are already in the pipeline. It
had around 13,200 rooms in 2010 and by 2012 the Taj had set to open another 12,000 rooms.50 Raymond
Bickson (Raymond) the CEO of the Taj Group of Hotels told that the company had been opening a hotel
every six weeks for the past seven years, and also adds numerous markets all around the world to the Taj
group of hotels assortments. These markets were Hong Kong; Singapore; Shanghai; Tokyo; Melbourne,
Australia; Tahiti; Fiji; Da Nang, Vietnam; Phuket, Thailand; Sri Lanka; Paris; Frankfurt; Berlin; Madrid; Milan,
The Company was converted into a Public Limited Company and the subsequently the name was changed to Chillwinds
Hotels Limited w.e.f August 25, 2007. The Company entered into a Scheme of Arrangement and Demerger with M/s Asian
Hotels Limited (Transferor Company) which is now known as Asian Hotels (North) Limited)
40 Dusit International has gained more than 60 years' experience in the hotel and hospitality field. Dusit have since
acquired a unique portfolio of deluxe hotels, building upon Thai culture and tradition to create a personalized welcome.
41 With over 40 years of experience in India and proven expertise as a technology provider to the travel industry, Bird
Group can claim to be one of the largest and most diversified entities within the industry.
42 S.P Jain Hotels also known as The Pride Group of Hotels owes its genesis and successful growth to
Mr. S. P. Jain who steered his conglomerate into the Hospitality Sector, after carrying out a thorough study in the year
1988 by inaugurating the groups first hotel in Pune, Maharashtra.
43 Lemon Tree Hotels are full-service moderately priced hotels that welcome business and leisure travelers with
contemporary accommodation and refreshing service in a multitude of cities like Goa, Gurgaon, East Delhi, Pune,
Ahmedabad, Aurangabad, Indore, Chennai, Muhamma - West of Kumarakom, Bengaluru and Hyderabad.
44 Tandon Suneera, "Check Into a Whole New City", BusinessWorld, March 7th 2011, page 56
45 ibid.
46 The Taj Hotels are arguably the finest 5 star luxury hotels in India.
47 The Tata group comprises over 90 operating companies in seven business sectors: communications and information
technology, engineering, materials, services, energy, consumer products and chemicals. The group have operations in
more than 80 countries across six continents, and its companies export products and services to 85 countries.
48 History and Certain Corporate Matters, http://www.tajhotels.com/abouttaj/companyinformation/HistoryOfTaj.htm
49 About Taj Hotels Resorts And Palaces,http://www.tajsafaris.com/about_us/taj.php
50 Higley Jeff, Bickson: Taj will grow as quickly as possible,
http://www.hotelnewsnow.com/Articles.aspx/4342/Bickson-Taj-will-grow-as-quickly-as-possible, November 4th 2010
39

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Taj Group of Hotels: Expanding the Realm Through Branding Strategy

Italy; Marrakesh and Tangier, Morocco; Miami; Chicago; Los Angeles; Costa Rica and Brazil.51 The
hospitality industry venture was increased to 29% by the Tata Company and has planned to pitch in INR
959 Million from 2010 to 2012, for their future national and international projects.52 The Pierre53, New York
was reopened to the public in the year 2009 after a grand renovation.
Experts pointed out that, the global economic recession, Taj terror attack and earlier natural calamities like
tsunami had a devastating impact on tourism sector and hotel industry in India. The occupancy level in hotel
rooms came to a standstill. In order to manage the decreased revenue, rigorous cost control measures
without compromising the quality were executed. The Taj hotel guests gave very high score for the
satisfaction level during their stay, despite the stringent measures taken by the hotel to combat down their
sliding revenue. From July to December 2010 the Taj Hotels showed a steady increase in their business.
The Indian Hotel industries have numerous international competitors and hence the Taj Hotels had targeted
to raise their turnover from $1.4 billion in 201054 to $2 billion in 2011 and had planned to protect their brand
in the Indian market. More than 37 hotel brands had set foot in India which had increased the competition
for Taj hotel in India. Taj had been expanding its realm internationally and had a significant hotel project in
the pipeline in the Middle East and Africa, with the Taj Exotica Resort & Spa on the Palm Island in Dubai
opened in June 2009 and properties to follow in Doha, Abu Dhabi, Al Ain, Ras Al Khaimah, Oman and two
in Morocco. Taj Exotica Resort & Spa was voted one of the Top 10 Luxury Hotels in Asia in the 2011
TripAdvisor Travelers Choice Awards. Girish Sehgal, General Manager at Taj Exotica Resort & Spa
commented: "As most of our guests refer to the Trip Advisor website before choosing their hotel in the
Maldives, this award is one of the most important endorsements of the resorts services."55 The Taj Exotica
Resort & Spa had also won the world's 'Top 16 Escapes for Grown Ups' in November 2010 and the world's
'Best Luxury Villa Resort' in the World Luxury Hotel Awards.56
Egypt and Istanbul were other areas where Taj was actively seeking opportunities, and a hotel was opened
in Cape Town in December 2009 in the old Reserve Bank of South Africa.57 The Taj group had more than
100 hotels in 2010 all over the world flagging under various brand name such as - the luxury Hotels Taj and
Vivanta, while Ginger and Gateway were budget hotels and a joint venture with &Beyond58 for Taj Safari
Limited.59 In all its luxury hotels, Taj offered Spa facilities under the name Jiva Spa giving an extra hype.
The Company had also set foot in China at the end of 2010 and had planned to operate two luxury hotels in
Beijing and Shangai. The future expansion of Taj Hotels would be in Phuket and Australia. The International
ventures by the Taj Hotel were well calculated and attuned to the sudden rise and fall of the global
economy. The Rebranding of various hotels under the Taj Group was considered as a best solution to
ensure a place in the Indian Market.

The Re-branding Strategy of Taj: Opportunities and Challenges

ibid.
IHCL plans Rs 959 cr capex; promoters to up stake,
http://articles.economictimes.indiatimes.com/2010-08-05/news/27618954_1_ihcl-sea-rock-hotel-vivanta, August 5th 2010
53 The Pierre is a luxury hotel in New York City located at 2 East 61st street, owned by Taj Hotels Resorts and Palaces of
India. The Pierre came under the management of the Four Seasons Hotels and Resorts in 1981. In its 75th anniversary year
in 2005, The Pierre became a Taj Hotel as Taj Hotels Resorts and Palaces.
54 Hutchinson April, Taj Hotels plans rapid expansion,
http://www.ttglive.com/c/portal/layout?p_l_id=3208370&CMPI_SHARED_articleId=2471108&CMPI_SHARED_ImageArticleId
=2471108&CMPI_SHARED_articleIdRelated=2471108&CMPI_SHARED_ToolsArticleId=2471108&CMPI_SHARED_Comment
ArticleId=2471108&articleTitle=Taj Hotels plans rapid expansion&fromSearch=yes, May 15th 2009
55 Gribbon Mary-Clare, et al., Taj Exotica Resort & Spa, Maldives Voted Among Top Ten Luxury Hotel In Asia In 2011
Tripadvisor Travelers' Choice Awards,
http://www.tajhotels.com/press_room/press_releases/Awards%20&%20Accolades/2_0_2_February2011.htm, February 10th
2011
56 ibid.
57 ibid.
58 &Beyond Company has experience in luxury safari travel spans for many decades. From 1990 to 2008 they went by
the name of Conservation Corporation Africa (CC Africa) and were globally recognised as one of the worlds pioneering
responsible luxury adventure tourism companies.
59 IHCL plans Rs 959 cr capex; promoters to up stake, op.cit.
51
52

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The Taj hotels have been present for more than 100 years in the Hotel Industry. In order to survive in the
competitive market, rebranding their hotel was necessary. The Taj Hotels covered 25%60 in Indian market
and would like to maintain its position in the same pace. International Hospital Industry would have
individual brands for every segment where their hotel group operates. The strategy would guarantee strong
brand equity when the hotel group enters economy or budget hotels. In the past The Taj Group of Hotels
refrained themselves from the brand segmentation and re-branding strategy. In order to survive in the
competitive hotel industry the Taj groups had planned to add 12 hotels before 201461 in the business hotel
segment. The company had decided to follow a sub-brand strategy, where by, the business hotels would
run under a separate hotel brand name but endorsed by the Taj brand. Taj Group also planed to use its
Gateway brand to bolster up the budget hotel segment.
Through the Re-Branding exercise the Taj group had segmented their hotels and introduced new hotel lines
in order to cover all the segments of customers. The Taj hotel which had been serving the upscale segment
over the years had introduced new branding strategies to attract people of different classes. The group
introduced Ginger brand for low segment clients and Vivanta brand for the High scale clients. The Gateway
brand of hotels catered the upper scale while the Taj resorts and palaces remained unchanged. The
rebranding of the Taj Hotels was also due to the confusion occurred among the guest of Taj Hotels. During
the 90s the Taj Group of hotels realized the need for rebranding as the guests got confused with the
varying standards of the Taj brand of hotels all over India. While some hotels rode on the good-will of the
Taj brand, the angle of luxury segment differed notably. And hence there was a chance of huge damage to
the flagship brand The Taj. The first re-branding occurred when the Taj hotels were re-grouped into three
groups Taj luxury hotels, Taj business hotels and Taj leisure hotels. Even then there were certain hotels of
Taj that didnt fit into these categories. Yet the re-grouping caused sub categorization, and caused more
problems to The Taj name. Later a syndicated research was facilitated for direct branding efforts. One of the
key inputs was the Brand Asset Valuator62, which revealed that while the Taj brand scored high on esteem,
relevance and knowledge, the gap with competitors on differentiation was decreasing.63
An extensive qualitative and quantitative research conducted by the Taj Group of Hotels resulted in the
disentanglement of the Taj brand into Taj, Vivanta, Gateway and Ginger. Featuring the architecture of Taj
Tradition the Vivanta by Taj would spread its wings under the Taj brand name. The Gateway would not
have the Taj flagship. And the Ginger Brand would stand independent, which would be accommodated
under the Indian Hotels and not part of the Taj Hotels. The clarity in the brand segregation allocated each
brands to have their own place among the various needs of the guests and meet the prospective upcoming
competitive market. The Taj Hotels presented a rejuvenated and recharged Taj Brand Equity. The new
brand (Ginger) worked separately without affecting the Mothership of Taj Brand. The brand demarcation
addressed the various issues faced by the customers and created satisfaction to a certain extent. As Ajoy
Misra (Misra), Senior Vice President, sales and marketing, Indian Hotels, said that Each brand will build its
base on the Taj constants of hygiene, honesty, integrity and customer centricity. Each brand is administered
by a separate small business unit but corporate functions like HR, finance, sales and marketing, IT, legal,
etc will be common for the three brands.64
Experts opined that the re-branding strategy ensured the Taj hotels brand equity and simplified the process
of expansion of the hotels. The Indian travel and tourism industry was expected to grow at an annual rate of
8.8% to $90.4 billion by 201565; those brand maneuvers have become very important to ensure that the
Indian hospitality brands would be ready to face the global challenges. Misra says, The brand architecture

Rebranding the Taj , op.cit.

Roll Martin , Taj and Oberoi Hotels - Unpolished Indian hospitality brand jewels,
http://www.venturerepublic.com/resources/Taj_and_Oberoi_Hotels_-_Unpolished_Indian_hospitality_brand_jewels.asp
62 The Brand Asset valuator of advertising agency, Young and Rubicam measure Brand Value.
63 Rodrigues Cynthia, Building the brand, Tata Review,
http://www.tata.com/company/Articles/inside.aspx?artid=Le+O3OZTgmU=, May 2010
64 Building the brand, op.cit.
65 Taj and Oberoi Hotels - Unpolished Indian hospitality brand jewels, op.cit.
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exercise has released the potential of the Taj. Its long-term benefits will be unprecedented and will
transform our growth, internationalization, profitability and brand equity.66
The Tata Group's hospitality firm Indian Hotels Co Ltd67 (IHCL), which runs the Taj brand of hotels, had
launched its new brand, Vivanta, a portfolio of 19 properties across the country in the ''upper upscale''
segment.68 According to Raymond the launch of Vivanta was a new chapter in the 107-year history of Taj.
He further added that, "This brand is a testament to the dynamism and innovation that the Taj is known for
and had huge growth prospective among the emerging hospitality industry.69 The brand was the direct
contender for the Trident Hotels70 in India, competing with the upper upscale segment of customers. The
Vivanta Brand helped the Taj Hotels to stretch their brand to the expanded segment of customers. The
Vivanta Hotels were elegant and modern and served the premium division of the clientele that included a
combination of business and holiday hotels catering to the upper upscale segment. The Vivanta by Taj
group included landmark city hotels across India, such as Vivanta by Taj-President in Mumbai and Vivanta
by Taj-Connemara in Chennai, as well as resorts like Vivanta by Taj-Fort Aguada and Vivanta by TajHoliday Village, both in the state of Goa on the Arabian Sea.71 The Vivanta Brand would emanate fashion
along with the strong sense of living life to the fullest.72The brand was an authentication of vitality and
modernization of Taj and it retained the name of Taj in order to deliver a customer focused experience.
The Gateway73 Hotels were the new brand of Taj that adhered to the every whims and fancies of the
modern tourists. The Hotel offered a unique experience according to the customers, that were easy,
dependable, delectably pleasant nevertheless chivalrous. These hotels were up scale oriented and in which
18 of them in 2011 working in its full speed while 11 had been in the runway. And the Tata Company had
also planned to include 21 more hotels to the brand. The Gateway Hotel came into existence after an
elaborative evaluation of their brand architecture strategy by the Taj Hotels and Palaces. The Gateway
Hotels were divided into seven zones Stay, Hangout, Meet, Work, Workout, Unwind and Explore74 and
pampered those customers who belonged to the upscale or mid market segment with its 24/7 essential
services, menus and facilities. The Gateway Hotel and Resorts had announced a new property in Theog,
Shimla. Along with the addition of the Shimla hotel, The Gateway Hotel and Resorts have an overall
portfolio count of 39 hotels in India and had planned to expand to other popular destination in India.75
Ginger Hotels by Taj was basically an Economy no frills Hotel. It had paved way into the market and
concentrated on those growing middle class customers who would be budget concerned and yet expected
class in their stay. Keeping the future in mind the company would ponder into those market segments where
there would be potential. One such project was opening up of the Ginger Brand of Hotels in Jamshedpur,
Building the brand, op.cit.
The Indian Hotels Company Limited is an India-based company. The Company, together with its subsidiaries and its
jointly controlled entities are engaged in the business of hoteliering with the exception of two jointly controlled entities,
which are engaged in the business of air catering. The other areas of business include ready to eat/ready to cook foods
business.
68 Indian Hotels unveils 'upper upscale' Vivanta brand, http://www.domainb.com/companies/companies_I/IndianHotels/20100915_indian_hotels_oneView.html, September 15th 2010
69 'Aggressive' growth planned for Taj's Vivanta brand,
http://www.travelweekly.com/Travel-News/Hotel-News/-Aggressive--growth-planned-for-Taj-s-Vivanta-brand/, December
08th 2010
70 Trident hotels are five star hotels that have established a reputation for excellence and are acknowledged for offering
quality and value. These hotels combine state of the art facilities with dependable service in a caring environment, making
them the ideal choice for business and leisure travellers. Presently there are nine Trident hotels in India.
71 'Aggressive' growth planned for Taj's Vivanta brand, op.cit.
72 19 Taj Hotels Migrate to a New Brand,
http://www.xeniosworld.com/2010/09/19-taj-hotels-migrate-to-a-new-brand/, September 15th 2010
73 Taj rebrands two properties,
http://www.domain-b.com/companies/companies_I/IndianHotels/20090103_taj_rebrands.html, January 9th 2009
74 The Indian Hotels Company Limited, 109th Annual Report 2009-2010,
http://www.tajhotels.com/AboutTaj/InvestorRelations/pdf/Annual-Report-2009-10.pdf
75 Prabhu Gaurav, The Gateway Hotel Signs Up A New Hotel In Shimla,
http://www.tajhotels.com/press_room/press_releases/New%20Hotels%20&%20Developments/6_1_4_February2011.htm,
February 17th 2011
66
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the first such hotel in the state of Jharkand.76 Raymond said that the Ginger Hotels was for the entry point
into the economy segment of market for the swift expansion of the Taj Company in India. He further added
that, If we can find a better model of building those budget hotels in the secondary and tertiary markets, we
could probably ramp up to about 200 hotels in the next five years. That would be our goal.77 The Ginger
brand was successful and well received by the customers. Hence the Taj Group planned to open one
Ginger hotel every two months. As of March 2010, 21 Ginger hotels were in operation.78
The implementation and success of these variations in Taj Hotels development, would entitle the customer
to stay loyal to the hotel. Raymond said that a young customer would prefer Ginger in his first job, after a
decade Gateway and after an overall success in his career he would go in for class, elegance and
contemporary like Vivanta and Taj Palaces and Resorts. The variations in these branded hotels were
compared with Tata Cars by Raymond - Ginger to Nano, Gateway to Indica, and Vivanta to Sumo and if
luxury was to be included then Jaguar Land Rover.79 The Taj Group popularly known in the luxury segment
had successfully implemented their rebranding strategy to sustain competition. As planned they opened one
hotel for every six weeks during 2003 -10.80 Rebranding strategy enabled Taj Group to serve the customers
throughout their life based on their economic status.
The upper scale luxury segment of the Taj hotels played the prominent role in the revenue generation of the
Tata Company. Nearly 65% of the entire companys revenue was generated from the Taj and 35% from
Vivanta and Gateway and hence any changes in the Indian scenario would likely affect the Tata Company
revenue.81 The brand expansion process was fast tracked by the Taj hotels to survive in the Indian Market.
Infrastructure and governmental regulations were a major challenge for the hospitality industry and the Taj
Group. The Taj aimed to enhance their business along with the development of infrastructure in India.
Competition was another challenge for Taj. Strong economic growth in India had attracted many
international brands to set up operations in India. Nearly 47 international brands82 had entered the Indian
market to tap the emerging opportunities. In addition many other hotel chains had planned to enter the
Indian market in the coming years. The triumph of Taj Group of hotels would depend upon its ability to
satisfy the customers on the basis of room rates, quality of accommodation, service level and convenient
locations. To retain customers and enhance their brand value, Taj planned to enhance their services by
providing Food and Beverage options, welcome drinks, mini-bar and a limousine experience.83
Experts had opined that the fortunes of the hospitality84 sector businesses were sensitive to economic
fluctuation. The hotel sector was adversely affected by national and international developments, changing
trends in the domestic market, decline in hotel stays and government policies and regulation. Variation in
foreign exchange rates had also been a major threat that would be dealt as a menace in the hotel sector.
Some of the major challenges faced were: Political unsteadiness numerous political parties with different

Roots to spend Rs80 crore on new hotels this year news,

http://www.domain-b.com/companies/companies_I/IndianHotels/20090808_roots.html, August 8th 2009
77 Bickson: Taj will grow as quickly as possible, op.cit.
78 The Indian Hotels Company Limited, 109th Annual Report 2009-2010, op.cit.
79 ibid.
80 ibid.
81 Bhandari Bhupesh, Indian Hotels' four-brand strategy for success,
http://business.rediff.com/special/2010/oct/11/spec-indian-hotels-four-brand-strategy-for-success.htm, October 11th 2010
82 ibid.
83 The Indian Hotels Company Limited, 109th Annual Report 2009-2010, op.cit.
84 ibid.
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issues, Terrorist activities both external and Internal, Spreading of infectious diseases - H1N185, Bird Flu86
etc, Weather extremities hot weather of India and Natural calamities earthquake, tsunami87 etc.
Travel behavior of the tourists had also impacted the growth of hotel industry. Decline in international
airfares, strengthening of Indian currency had made countries like Europe, South East Asia and Australia
more affordable. These resulted in increased outbound travel impacting the leisure resorts in the domestic
market adversely.
Globally travelers were looking for new level of comfort in the Indian hotel industry. Due to the precise
perception of the Taj brand, it would meet the expectation of the tourists.The Taj hotels had been
rebranding their resorts and palaces in Sri Lanka and had plans to enter China. Taj hotels aimed to
enhance their revenue, reduce their debts and fund their expansion through internal development. The Taj
Group of hotels was the pioneer to implement the rebranding strategy and expand their business catering to
all segments of the society. The Taj Group believed that this would be an added advantage amongst its
competitors. It had also planned to add around 1000 rooms and reap benefits in 2012. Misra said, The
benefits to be gained from cleaning up the Tajs brand equity far outweigh the tactical losses in businesses.
It will also help us in terms of business development by encouraging us to stop being complacent.88 In an
expanding and challenging global economy, it needs to be seen whether the rebranding Strategy of Taj
Hotels would thrive in its race of covering all strata of customers and gaining its undying glory in the
hospitality sector.

Influenza A (H1N1) virus is a subtype of influenza A virus and was the most common cause of human influenza (flu) in
2009. Some strains of H1N1 are endemic in humans and cause a small fraction of all influenza-like illness and a small
fraction of all seasonal influenza. H1N1 strains caused a few percent of all human flu infections in 200405.
86 Avian influenza is flu infection in birds. The disease is of concern to humans, who have no immunity against it. The
virus that causes this infection in birds can change (mutate) to infect humans. Such mutation could start a deadly
worldwide epidemic.
87 A tsunami harbor wave or tidal wave is a series of water waves caused by the displacement of a large volume of a body
of water, usually an ocean, but can occur in large lakes.
88 Building the Brand, op.cit.
85

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Annexure I
Map of Taj Group of Hotels

Source: Hotel Chains in India, http://www.maps-india.com/tourism/taj-group-hotels/

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Year
1903
1974

1980
1984

1989
1990

1998
2000

2001

2002

2003
2004
2005

2006

2007

2008

Annexure II
Mile Stones Achieved by Taj Group of Hotels
Event
Opened its first hotel, the "Taj Mahal Palace" in Mumbai, India.
Opened its first five star deluxe beach resort, the "Vivanta by Taj - Fort Aguada, Goa".
Began business in metropolitan hotels by opening the five star deluxe hotel, the "Taj
Coramandel" in Chennai.
Opened first hotel outside India, the "Taj Sheba Hotel" in Sana'a, Yemen.
Entered into a license agreement to operate the "Taj West End" in Bangalore, "Vivanta
by Taj - Connamera, Chennai" and the "Savoy" in Ooty.
Opened a five star deluxe hotel in Calcutta, the "Taj Bengal."
Established the Taj Kerala Hotels and Resorts Limited with the Kerala Tourism
Development Corporation.
Opened the "Vivanta by Taj - Bentota" in Bentota, Sri Lanka.
Established Taj GVK Hotels and Resorts Limited with the GVK group to operate three
hotels in Hyderabad.
Awarded the management contract for the "Taj Palace", Dubai.
Launched the "Taj Exotica Spa and Resort" in Maldives.
Obtained licenses to manage and operate two leisure hotels: the "Rawal-Kot" in
Jaisalmer and the "Usha Kiran Palace", Gwalior.
Acquired an equity interest in "Regent Hotel" in Bandra, Mumbai which is later renamed
as the "Taj Land End."
Re-launched its flag ship property as the "Taj Mahal Palace and Tower."
Launched its first luxury serviced apartments, "Wellington Mews" in Mumbai.
Opened its first economy hotel under the brand "Ginger" in Bangalore.
Obtained a management contract to operate "The Pierre" in New York, USA.
Entered into a management contract to operate the "Taj Exotica" in Palm Island,
Jumeirah, Dubai.
Obtained the operating agreement for the "Umaid Bhavan Palace" in Jodhpur.
Acquired the "W" hotel in Sydney, Australia which is later renamed as the "Blue
Sydney". Commenced operation of its first wildlife lodge at Mahua Kothi, Bandhavgarh.
Acquired the "Ritz-Carlton" in Boston, USA which is later renamed as the "Taj Boston."
Commenced operation of its second wildlife lodge at Baghvan, Pench.
The Taj Mahal Hotel, New Delhi unveiled Delhis first contemporary Japanese
restaurant WASABI by Morimoto.
Taj Hotels Resorts and Palaces won two prestigious awards at The 2008 World Travel
Awards: 1) Rajput Suite at The Taj Mahal Palace & Tower, India won Indias Leading
Suite. 2) Taj Lake Palace, Udaipur awarded Indias Leading Castle & Palace.
Taj Safaris unveiled two new luxury lodges: Pashan Garh and Banjaar Tola which will
be the third and fourth lodges added to the Taj Safari circuit.
Taj Hotels Resorts and Palaces Introduced Telepresence Services in Collaboration with
Tata Communications.
Graze, the Modern European dining restaurant at Vivanta by Taj - M G Road,
Bangalore, the only restaurant to be honoured the coveted Wine Spectator Award of
Excellence 2008 from America's leading wine appreciation magazine Wine Spectator.
The Taj Mahal Hotel launches VARQ.
Taj Hotels Resorts and Palaces had won the Cond Nast Traveller UK in 10th Readers'
Travel Awards.
Taj's luxury properties had been recognised within the following categories: Overseas
Business Hotel, the World's Top 100 and Overseas Leisure Hotel in Asia and the Indian
Subcontinent.
Taj Hotels Resorts and Palaces unveiled a premium business hotel Vivanta by Taj -

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2009

2010

Trivandrum, Kerala.
Taj Hotels Resorts and Palaces, launched a new brand The Gateway Hotel.
Taj Hotels Resorts and Places have ranked No. 1 in the Best Hotel Chain in India
category at the Business Traveller Awards 2008.
The spas at the Usha Kiran Palace, Gwalior and the Rambagh Palace, Jaipur have
been included among The 101 Best Spas in The World - Tatler Spa Guide 2008.
The Taj Mahal Palace & Tower, Mumbai was under siege during the 26/11 Mumbai
Terror attacks.
The Taj Boston was named the best hotel in Boston and for the second year in a row
ranked #22 among the world's top 100 hotels in the latest survey of hotels worldwide by
Institutional Investor magazine.
The Taj Hotels Resorts & Palaces 'No room for the Ordinary' advertising campaign for
the print media bagged the 2008 PATA Gold Award in the Marketing Hospitality
category and also won a second award the 2008 Gold Magellan Award.
On December 21st, The Taj Mahal Palace & Tower reopens the rooms in the The Taj
Mahal Tower.
Taj Lake Palace, Udaipur voted as the winner of the Editor's Choice Award 2008 for
Gallivanter's Guide.
Taj Boston awarded 2009 Mobil Four-Star honors in recognition of its gracious and
efficient service and luxurious accommodations and public spaces.
The Pierre, re-opened on June 1st following a meticulous $100 million renovation to
create new guestroom
Taj Hotels Resorts and Palaces announce their new premium hotel, "Vivanta by Taj Panaji, Goa", slotted in the "upper upscale" segment.
The Taj Residency Ummed in Ahmedabad migrated to The Gateway Hotels portfolio,
making this its third property in Gujarat and the 31st Gateway hotel in India.
Taj launches Vivanta by Taj, Coral Reef, Maldives.
Rambagh Palace, Jaipur have been voted the Best Hotel in the World by Cond Nast
Traveller in the Readers Travel Awards for 2009 across travel and industry categories,
in the World Top 100. It also tops the list of 'Overseas Leisure Hotels for Asia and the
Indian sub-continent'.
Taj Exotica Resort & Spa Maldives have been ranked 18th best Overseas Leisure Hotel
in Middle East, Africa & the Indian Ocean Islands in the Cond Nast Readers' Awards
2009.
Ummeid Jodhpur was migrated to the brand The Gateway Hotel Jodhpur.
The Indian Hotels Company Ltd announced its foray into Srinagar, in Jammu and
Kashmir.
Taj Hotels Resorts & Palaces had been recognised for its excellence and service for its
properties - Taj Exotica Resort & Spa Maldives and Taj West End Bangalore at the
Leading Hotels of the World Annual Convention held in Venice, Italy in November 2009.
The Umaid Bhawan Palace, Jodhpur have been voted the Hotel Of The Year by the
Gallivanter's Guide Editors Choice Awards.
Taj Hotels Resorts and Palaces announced the opening of Taj Cape Town.
Vivanta by Taj - Hari Mahal, Jodhpur won the award in 'Hotel Providing Best Facilities
for Differently Abled guest' category.
The Indian Hotels Company Ltd announced a new hotel in North-East India, with the
unveiling the foundation stone for Vivanta by Taj - Guwahati, Assam.
The Taj Mahal Palace & Tower, Mumbai announced the reopening of the elegant and
legendary Ballroom, in the iconic Heritage Wing of the property on the March 30th
2010.
Indian Hotels Company Limited had been recognised for its employment engagement
at the workplace.

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The Indian Hotel Company Limitied was chosen by the Credit Suisse Research Institute
as one of the 27 'Great Brands of Tomorrow'.
The Gateway Hotel Beach Road Calicut had been voted India's Best Five Star Hotel in
the National Tourism Awards 2008-2009 by The Ministry of Tourism, Government of
India.
Source: Taj Company information, http://www.tajhotels.com/abouttaj/companyinformation/HistoryOfTaj.htm

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