The Taj group of hotels plans to expand its chain of hotels internationally by adopting an asset light strategy which would see it running hotels on long-term management contracts. The group plans to raise Rs 50 crore in ‘03-04 by selling idle assets including small non-performing hotels in its chain. It plans to use the proceeds for international expansion especially for taking up small stakes in at least three to four hotels. Taj world-wide has eight hotels in the UK, Maldives, Nepal, Sri Lanka, Oman and Dubai.

"We need to speed up our presence internationally. The only way to do it fast is to take up hotels on operating and management contracts. We will also take up a small share of equity in key hotel properties. This is the way most renowned global hospitality chains have grown," said Taj group’s spokesperson, Ravi Dubey. "As a policy, Taj is moving towards becoming an asset light company. In India too, two business hotels, one each at Pune and Lucknow, are sold to associate company Piem hotels," he added. Taj, under the Indian Hotels Company, (IHC), reported a profit of Rs 23.3 crore for ‘02-03 from the sale of the two business hotels to Piem hotels. Taj will also restructure its subsidiary companies to reduce the number of companies to 34 from 40 in the current year. Indian Hotels shares ended 5.08% up at Rs 251.35 on Friday.

"Taj, under IHC, has a 55% equity stake in St James Court. The balance 45% of equity is shared by associate companies — Piem hotels and Oriental hotels. Taj has no immediate plans to divest its stake in St James Court. The hotel is likely to report profits this year. Taj continues to own, operate and manage the hotel. It only shares a franchise and marketing arrangement with the UK-based Crowne Plaza group," Mr Dubey added.