John Spence’s life has been an adventurous roller-coaster ride. He dropped out of university after two terms thinking he was the world’s best guitarist. “I quickly realised that I am the worst guitarist after not getting a job even in a punk band,” he laughingly reminisced. He drifted into the road management and promotional side of the music business and managed several groups, including wellknown ones like Karma Club, US Mix and little known ones like Banana Rama.
While living on the road was par for course during this period, Spence enjoyed the travel, the planes and the hotels. Slowly, he drifted into the property business in 1980s, when he started working with a company in Tenerife and worked his way up to become the MD.
When he visited India in 1993, he was fascinated by the country and started his first resort in Goa, called Royal Resorts. Over time, he added more properties to his portfolio and renamed the brand to The Karma Group. This name underlines his firm belief that fate has been the guiding force in his life; offering him opportunities, which he quickly grabbed.
Always one to take quick decisions, Spence maintains that he is not in the lodging business, but in the entertainment one. Hence, he envisages The Karma Group not as a place to stay, but one that provides wholesome entertainment to guests – be it in the kids clubs, bars or restaurants. He tells Vinita Bhatia how he equates guest experience by leaving them with indelible, pleasant memories.
When you decided that Goa had tremendous potential as an international holiday destination, you sold off your London home, your car and belongings to set up Royal Resorts – all within a day. Looking back, would you have done things differently?
Yes, when I set up my first resort I was working for a company called Global, which had resorts all over Europe. 28 years ago, I was invited to attend a conference in Hyderabad. Though I had never been to India before, though I loved Indian food and had good Indian friends back in the UK.
When I turned up in the country, I had a few days to look around. An hotelier kindly gave me a tour, which is how I ended up in Goa and it was one of those light bulb moments. I saw huge opportunity with the beautiful beaches, fantastic food, friendly people and domestic tourism just kicking off.
Back then, the holidaying middle-class wanted international beach resorts. Moreover, Europeans wanted to visit the state as it represented a cheap winter sun destination. Charter flights were coming via the Middle East and it presented them with a chance to go to Mauritius, the Seychelles and Caribbean.
When I returned, I told my American bosses about this magical place and the great opportunity we should consider as a company. They laughed at me because they believed India was full of poverty, which wouldn’t be attractive to our hotel industry.
So, making a snap decision, I resigned my position of a highly paid MD, cashed in all my savings, sold my London house and my car and also persuaded a few brave individuals to join me on this adventure. We turned up on the beaches of Goa to start our first resort, which was extremely underfunded. We did sales in the evening and accounts over night and lived in modest non-AC accommodations. Coming to doing things differently, there is always scope for that – like borrowing money, securing oneself since our cash flow was very tight and we had many hairy moments. But it also really set the foundation for our group.
Since we did not borrow money, we had no debts, unlike many other hotel companies. I still own 100% of the company and we always used our cash flow to buy new resorts.
The Karma Group currently has 48,000 lifestyle members who buy points for a number of years and another 20,000 shorter-term associate members.
What’s your portfolio currently?
We have 44 properties, of which 36 are currently open. In India we have a resort each in Kerala, Karnataka, Himachal Pradesh and Dharmshala, three in Rajasthan and four in Goa with a fifth on the way.
Overseas, we have properties in the UK – one each in and around London, one in Salford Hall and Isles of Scilly. In France, we have Le Preverger chateau outside St. Tropez, two resorts in Normandy and will soon develop a chateau in Carcasson. We are present in Germany, Spain, Italy, Greece and in Asia, we have properties in Vietnam, Thailand, Philippines, Australia and of course Indonesia.
That is quite an expansive portfolio!
We acquired a lot of properties over the past few years. 2020 was tremendously successful for us and we acquired 10 resorts during the pandemic as we were relatively cash-rich. We have a regular revenue stream from our timeshare and club members, even when the resorts weren’t open. So, the plan is to add about five resorts annually to reach a strategic growth curve between India and the rest of the world.
What prompted the decision to get into the timeshare accommodation business?
When the timeshare business started in the mid-80s, it was relatively dinosaur. Now, it is much closer to a private members club. We also launched a new Karma Club where people buy an annual membership. Every year, they can cash in their points for a holiday at any of our resort assets. They can either take seven nights for one summer holiday vacation or four nights in one resort and three in another.
Essentially, they get free accommodation and discounts on extra accommodation, F&B and other things along with the annual membership.
How is this business likely to evolve especially with sharing accommodation options becoming more popular amongst travellers?
During the pandemic we were forced to develop other products, like Karma Nomad where members can cash in their points and rent a camper van to go around their state or local areas. However, the timeshare
model has worked very well for us till date.
The timeshare industry has be-come more sophisticated and far more flexible. Consumers now have an app on their phone to check their membership status and book an available property. Going forward, this flexibility and choice of resorts will further increase.
How many members are part of Karma Group’s timeshare program?
We currently have 48,000 lifestyle members who buy points for a number of years and another 20,000 shorter-term associate members. We normally grow by about 10% year-on-year; some memberships expire and new members sign up.
During the pandemic, this was lower, as we weren’t able to market it as much as we normally would. However, we could still grow it successfully and remote-selling using platforms like Zoom and telephone marketing saw encouraging response. The number of new members coming onboard was far higher than what we dared to hope for when the pandemic began.
How has your brand’s core principles evolved in the recent months?
We are like a family; providing entertainment and not just lodging. We offer a lifestyle and many of our members love being part of Karma. It’s tremendous to see the loyalty with many members who have been with us for over 15 or 25 years; they love to explore our various resorts.
We are very much a five star hippie and we strongly believe that the best holiday you have is when you are a kid and backpacking; you slept in basic accommodation but sensed a spirit of freedom. We very much appeal to that sentiment.
How is adhering to these principles allowing Karma Group to power through the pandemic by building deeper connections with its guests, while also boosting operational performance and pipeline?
We strongly believed in being green and sustainable, long before it became a trendy word. Our core values are about being boutique, and all-inclusive. These got strengthened during the pandemic, and what we have seen is the necessity to further re-establish that we are in the entertainment business.
With the term ‘experience economy’ gaining ground, how is Karma Group capitalising on this trend to encourage guests to spend money on memorable experiences during their stay, which extend beyond F&B and local sightseeing?
Absolutely, we create experiences. We don’t believe in making the cheapest room or the biggest beds – it is all about experiences. This could include a guest arriving at our resort in Goa to our DJ playing great music by the pool, or a 3-day trip to Le Preverger in France where the French actress Jeanne Moreau or the American designer Laura Ashley lived. We also invite our members to go olive picking and then put them in the press to make olive oil and later send them the oil.
Similarly, we organise trips to our vineyards in France and Italy where members can pick the grapes to make the wine. Recently, we sponsored a comedy by Dante to celebrate his 700 death anniversary in Florence, near our Borgo di Colleoli resort where acclaimed actors like Helen Mirren and Ralph Fiennes participated. It was live streamed and some of our members watched it live, while others followed it at our London hotels.
We also sponsor sporting events like a box during the rugby game in England or tennis in Perth for our members in Australia. This is the kind of differential and exceptional experiences we offer our guests. Since we have been doing this for over 28 years, we are a bit ahead of the curve when it comes to experience- led stay.
What are some of your other plans for the Indian market?
Technology plays a big role in the development of our existing and upcoming resorts. Hence, we are developing some innovative elements, including a new app. Our customers can use it to see the properties and type of accommodation available, the experiences planned and how to cash their points in a single click with immediate confirmation. However, since we believe in human interactions, a team member will also follow up personally to connect them with a concierge and help with anything else they might need.
