Check in to the world of hotels

Outside of the IT space, if there’s one other area in which India has built truly global brands — with quality that can match the best — it is undoubtedly hospitality. The Taj Hotels, The Oberoi Group, ITC Hotels and The Leela can all stand up to the best in the business, anywhere in the world. Yet, this industry, that has been built by visionaries like Rai Bahadur MS Oberoi, Ajit Kerkar and Captain CP Krishnan Nair, has not received the recognition and global accolades, that lesser Indian successes have.

Chitra Narayanan’s book takes an objective view of this space — the key players, the business aspects, the back stories, the regulatory hurdles, the transformation with the new tech platforms and the evolution from standalone chains to deeper integration into the global ecosystem. This book also examines the changes that have transformed this space over the past decade and how existing players are coping with change.

‘ From Oberoi to OYO ’ is a captivating chronicle of the evolution of India’s hotel industry, which unlike many other industries has held its own against global behemoths. Moreover, unlike other categories where Indian-owned companies have survived on price discounting, the big three Indian chains still command top dollar and have kept the global chains to under 50 per cent of the market. Chitra Narayanan, using her journalistic instincts, effectively switches from research-led commentary to insight-based observation, enlivened by an interesting anecdote bringing the story alive.

The book seamlessly takes readers through the changing landscape with the emergence of new platforms, the online travel agencies (OTAs) and their disruptive impact. For one, brand loyalty has diminished, given price transparency and many chains striking global deals with multinational corporations whose executives are big users. Then the emergence of players like Airbnb and OYO who have disrupted the supply side with additions of thousands of rooms with next to zero capital costs.

Also, the shift in dependency from traditional room occupancy based metrics to banqueting, food and beverage — and the importance of building signature F&B brands — Bukhara, Dum Pukht, Karavalli, Masala Kraft, Blue Ginger — that command loyalty and margins that are less volatile than room revenues.

Strategies well analysed

Narayanan’s book does a great job of analysing the strategies of the key Indian players, and how they got there. It traces the growth trajectory of the Taj Hotels from a single hotel — the iconic Taj Mahal Palace, Bombay — to when Ajit Kerkar joined the Tatas in the 1960s and took it to over 40 hotels in his 37 years with the group. More significantly, he pioneered Kerala and Goa as luxury destinations and created a whole new category of palace-hotels in Rajasthan.

Another great story is the growth of the Oberoi chain and how over time it sharpened its offering to make personalised service its biggest differentiator. How the Oberois managed to track and pamper its regulars, catering to their specific needs, long before CRM and tech tools came into existence is in itself a fascinating story.

Another great story is of the ITC Hotels, that grew out of ITC’s need to diversify beyond tobacco. Home grown in every which way, the chain firmly lives up to Ajit Haksar’s vision that each hotel must be rooted in the city’s soil and history. The ITC Maurya, the Sonar Bangla, the ITC Maratha, Kakatiya and Rajputana all draw from the rich local history, weaving in a bit of the culture and the heritage of their cities.

Fittingly Narayanan’s book calls out the ‘intrepid explorers’, the gentlemen who came out of the comfort of senior roles with the established chains to carve out their own destiny, building some great destinations: Anil Madhok from the Oberois to Sarovar Hotels, Patu Keswani from the Taj to Lemon Tree and, most recently, Oberoi boss Kapil Chopra’s launch of Postcard hotels.

The section also offers a great take on Aman Nath and Francis Wacziarg, co-founders of the Neemrana chain who pioneered the concept of sustainably renovating heritage properties into destination hotels — without altering the local character and using staff and produce from the vicinity.

The real disruption in an otherwise stable industry was not the appearance of the mid-market value chains, but the emergence of aggregators — or branded franchise properties — most specifically OYO Rooms. Ritesh Agarwal, the young founder with no background in hoteliering, challenged the dominance of the established players recognising the gap in availability of good, hygienic and affordable rooms and the issue of discoverability — with many small mon-n-pop establishments’ inability to market their standalone properties.

Building itself on disruption and innovation OYO transformed the hotel space using technology right from sourcing, supplies, housekeeping and also altering existing paradigms like 6 am check-ins and ₹999 pricing. Of course the infusion of big sums from VCs like SoftBank helped the rapid scale up, boosting OYO’s valuation to levels that would make the established chains seem nearly irrelevant.

One wishes this book examined why, despite oodles of talent and a great ‘ atithi devo bhava’ heritage, Indian hotel chains haven’t gone onto conquer the world or at least been definitive leaders in the Asian region. Another question Indian hoteliers should ask themselves is about the conspicuous absence of Indian restaurants at the top of the heap in the global fine-dine set, despite Indian cuisine being differentiated, varied and widely loved.

From Oberoi to OYO is a fascinating read on the Indian hotel industry, offering a ringside view of the growth and evolution through the eyes of an astute observer who not just gets the business side, but also the many consumer nuances that make for lasting memories.

The writer is an Angel Investor and Business Strategist.