With architects and hoteliers facing the challenge of profitable designs, we brought together the Who’s Who of the industry to speak their minds in the first edition of Hotelier India’s ‘Think Turf’ series in partnership with Hafele India
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Hotelier India: Can you indeed, ‘profit’ from your hotel’s design?
Sanjay Sethi, MD & CEO, Berggruen Hotels: We are a very young company, and one of the critical challenges we faced when we started off was to develop a commercially viable proposition with the design of the hotel, because, very often, you get land whose shape could vary extensively from the intended design. Therefore, we had to have a design to make it viable for us to buy land which could be twisted or turned around.
The solution was to keep a concept which had a cookie-cutter room design but had the flexibility and malleability to adapt to the shape of the land. So when we started working on the designs, we had set ourselves the intent of giving a certain look and feel to the hotel, yet making revenue to non-revenue spaces efficient enough to deliver low gross area per room. We actually have 440-450 square feet gross built up area per key. with our room size of 230-235 square feet.
Manoj Bhatia, CHA: In the Indian scenario, if you have a cookie-cutter model which says you are going to have the same set of rooms, business centre, restaurants, and so on, and you want to replicate that across the country, I don’t think this is a good idea. I disagree with this concept because certain cities in India do not have the business traffic but they have high food and beverage business. The F&B business, in one of our former hotel companies in Ludhiana, used to make double the revenue they make from rooms. We Indians spend a lot of money on non- business events such as weddings, receptions, and others. And for that you need fairly large spaces.
Vijay Thacker, director, Horwath HTL India: We find that viability issues are most often stressed because owners do not retain integrity to the product that they originally wanted to build. There is nothing wrong in being called the owner of a three-star or budget hotel. Everybody can’t make five-star hotels. But many a time, the owner wants to build a three-star hotel with five-star facilities. The moment you try to do that you get the worst of both.
Rajiv Puri, senior director, design management, Asia Pacific, Marriott International: It is very essential to have a key element which is directly in proportion to revenue. The challenge which we faced in the country when we came in with the Courtyard brand, was to educate our partners about the design model. There are lots of things owners want to do which we find were not needed for the Courtyard brand.
Hotelier India: What are the challenges you face?
Prem Nath, Prem Nath & Associates: There are many owners who don’t know anything about hotels, they just want the best hotel.
Vijay Thacker: Sometimes owners don’t have the perception about what is best and what it costs.
Jurgen Wolf, MD, Hafele India: We had a similar kind of experience with independent owners or developers who thought they would decide what goes in since they are paying the bill. The other aspect is that many want the best for the cheapest price. But I would say things are getting better than what it used to be earlier, because lots of international groups have more influence now.
Rajiv Kaul, SVP, The Leela Palaces, Hotels & Resorts: What is the best? I tell them to show me the hotel and in most cases, it’s not even the status of a JW Marriot, and they talk about luxury. In India, luxury and five-star are vastly abused terms. They are used very loosely by everybody. There is a mistaken notion of luxury because everybody is getting excited about the marble they are using. Nobody is getting excited about the shower pressure, or what the specification of pipes used, are.
Sanjay Sethi: One of the critical things we should keep in mind while designing hotels is that we need to consult with our end users, the customers. We conducted this exercise of interacting with our customers to understand what exactly they want. Today, we have been able to design a hotel which has literally been designed by our customer. Very often, owners and developers forget that customer element.
Hotelier India: What elements of a hotel’s design are most important? How can you make them more efficient?
Rajiv Puri: For Courtyard, we have tried to make it as efficiently as possible. We spend money where guests can touch and feel the product. Many times we enter into a discussion with the architect and they say they want to spend money on the outside, and we say we don’t want to spend on the facade in a business hotel. Guests get into a car and get off at the lobby, they don’t even look at the outside.
KK Malhotra, president (Hospitality), Future Capital Holdings: Quality needs to be improved. Most hotels are not sound proof. You can actually hear people clapping hands next door.
Rajiv Kaul: You can even hear the sound of the flush being used in the next room. And this is with most hotels, who still use the same pipe for heating and cooling purpose. Project management is the inherent weakness in the country. No project starts on time, forget about its finish schedule.
The whole thing is about the quality of guests we used to have. There was a time when we only used to have mid-management to senior level people coming here; you never had board-level people coming to India. Today we are blessed. Take Delhi – that’s the reason why we have taken a stand that we are going to have 48-square meter rooms – which means I have to deliver an average room rate of Rs22000 plus – because it’s doable.
Jurgen Wolf: Why does nobody actually ask me not how I like the service in the hotel, but how I like the facilities in the hotel? Nobody asks you whether you would do any improvement to the hotel room.
Hotelier India: How do you work out how much budget to allocate for your hotel’s interior design?
Prem Nath: My concept is that hotels have to be a good experience for the guests, and for the hoteliers, it has to be a profitable business. One should offer a five-star experience at a three-star price. It may not happen in the metros, but lots of development is happening in non-metro places. Your hotel room should be better than your guest room in your own home. Hotels are trend setters. It should be luxurious, something which we can’t afford at home.
Rajiv Kaul: If you are going to over-design any place, you are not only going to spend more money for civil services, but also, you have to put furniture, equipment, and other things. It all begins with the architect. You need to determine your project cost keeping in mind the average rate that the market can bear. If there is a disconnect, then that’s not viable.
Rajiv Puri: When you talk about a business hotel, it has to be on the money where you are designing and it has to be very efficient, good looking, nice and clean, maintenance-free building.
But when you are getting into Delhi’s diplomatic enclave and you want to make a statement, you are shooting for that high rate. Then I can understand you can probably afford to go in for some kind of luxury and vanity with that kind of product. But a business hotel really does not need all that.
Jurgen Wolf: I want comfort more than luxury in a three-star hotel.
Sanjay Sethi: I think the point Mr Nath is trying to make is that there are certain aspirational needs of the guests that also need to be fulfilled. Therefore, at least to that level the comfort should be provided for. But there has to be a line to that, and one must identify where one draws that line.
Vijay Thacker: It’s the question of retaining integrity to what you want to build. It’s a good thing if you have got the confidence to play the luxury game – keep your integrity and yes, the market will come. On the other hand, let say a market needs a five-star and a Courtyard, and if an owner decides to do a Courtyard, then he should do a Courtyard. He should not try and build a Courtyard Renaissance.
PROFILES
Rajiv Kaul
I have been with The Leela Palaces, Hotels & Resorts, since March 2006, and am responsible for six operating properties in India. I am also actively involved in the planning and development of new hotels at Chennai, New Delhi, Hyderabad, Pune, and Agra. I have held influential appointments with the Oberoi as well as the Taj Group of hotels.
Prem Nath
My career span has covered a wide array of projects, such as designing and engineering the Revolving Restaurant at Hotel Ambassador in the 1970’s, besides other properties such as Golden Palm at Bangalore, Hotel Sea Princess, HHI Kolkata, and Hotel Sands. I am a council member of the US Green Building Council (USGBC), and Indian Green Building Council (IGBC), as also an associate member of FHRAI.
Rajiv Puri
With over 23 years of experience, today I direct the team of the company’s regional project discipline in design and project management for all its company’s hotel brands in the region. I am a licensed professional engineer in Ontario, Canada.
Sanjay Sethi
I am an out-and-out hotel operations person, with competencies in design and development, financial models and hotel marketing. I have spent 18 years in the hospitality industry, of which 14 have been with the Taj Group alone; prior to joining Berggruen Hotels, I was the area director of the Taj Group in Hyderabad.
Vijay Thacker
I am a practising chartered accountant, with over 23 years consulting experience in the hotel, tourism and leisure sectors. I have also been involved with the conceptualisation, feasibility, and management company work for ETA’s Dubai Lifestyle City project.
KK Malhotra
Until recently, I was the president, ITC Hotels; I started my stint with ITC by opening their flagship property in New Delhi, the Maurya Sheraton, as general manager. I have also worked as joint divisional manager (Hotels) at ITDC and was responsible for setting up the corporation’s new hotels, besides planning and commissioning several major hotel projects.
Jurgen Wolf
My international career began in 1982, with my first foreign assignment as branch manager at Iraq. Based in Mumbai since 2001, I am presently the managing director of Hafele India, and, in this capacity, am responsible for all Hafele operations in India, Bangladesh, Sri Lanka, Nepal, and Bhutan.
Manoj K. Bhatia
With 26 years of experience in the Indian hospitality industry, I have managed a number of prime hotels in India, Switzerland and Canada. Till recently, I was the managing director at Obelia Hotels, which managed the Beacon Hotels & Resorts brand, before being merged with Concept Hospitality. I was awarded the first honorary diploma in hotel management, from the Swiss Hotel Association Hotel School.
