The Indian Hotels Company (IHCL) is faced with the difficult task of renovating the Taj hotel, fairly extensively damaged in the recent terror attacks on Mumbai (See: Mumbai terror toll mounts; army launches final assault)
However, IHCL says the hotel is well insured so the cost of renovating and repairing the iconic hospitality structure will not hit the company in a big way (See: Insurance and terrorism – how much was the Taj insured for?) The century-old Taj hotel suffered extensive damage in the shootouts between security forces and terrorists that went into last weekend.
''Our company has in place adequate insurance cover. We are working with reputed agencies to sanitize and reopen the hotel,'' the Indian Hotel Company Ltd told the Bombay Stock Exchange a week after the start of terrorist attacks that hit various locations in Mumbai but were concentrated on Hotel Taj and Trident.
Three insurance companies, Tata AIG General Insurance and ICICI Lombard General Insurance and IFFCO Tokio General Insurance are evaluating the damage caused by the attack.
The Victorian style tower wing is expected to be re-opened shortly as it has not suffered significant damage.
IHCL said it had lost 10 employees in the attack while 11 others injured are being treated at hospitals.
The heritage wing of the hotel has suffered the impact of the severe assault, Indian Hotels said. "We are working with reputed agencies to sanitise and repair the hotel to be in a position to re-open the Tower wing on priority," it said.
Police authorities formally have handed over the custody of the hotel back to the company management, Indian Hotels said. Special external agencies have been contracted by the company to assess the damage and to quantify the costs and time-lines for the repairs and restoration of the hotel, it added.
Preliminary understanding is that the tower wing of the hotel has not suffered any significant damage, while the heritage wing did suffer from the impact of severe assault, Indian Hotels said.
There are however, possibilities that it can take about a year to rebuild the hotel.
Analysts also fear that with the hotel would be unable to take any bookings for the next few months. This coupled to the fact that revenues from high-margin businesses such as food and beverages and retail outlets on the property also taking a hit, the topline of the company can be affected by 5 to 10 per cent this year.
Analysts had expected IHCL to post net sales of nearly Rs 1,900 crore this fiscal.
The century-old Taj property of IHCL contributes nearly 35 per cent to its standalone revenues.