Hospitality sector needs infrastructure and industry status

puneet-chhatwal Puneet Chhatwal | Aayush Goel

The hotel industry, along with aviation, got a frontline pummelling from the pandemic, but you will find it hard to see looking at Taj, India’s leading hotel chain. The Tata group company is on a renovation and repositioning spree, steadily popping out new ideas and experiences.

Its latest venture was the relaunch of its business club, Chambers, at Delhi’s Taj Mahal Hotel (Taj Mansingh). Reimagined and redesigned, this illustrious meeting point of India’s movers and shakers now comes with features like a 60-seater restaurant and a cigar lounge. The seven meeting rooms are all state-of-the-art, with one of them designed by the Italian luxury house Stefano Ricci.

Chambers is just a pivot, as Taj reinvents itself for a new world, new opportunities and a new normal. In an exclusive interview, Indian Hotels CEO Puneet Chhatwal explains the strategy, and what else is in store. Excerpts:

Q/ Where does the renovation of Taj Mansingh stand?

A/ Forty per cent is achieved, 60 per cent still to go. Your arrival experience—the porch, the lobby, the all-day dining (Machan) is done, Chambers is done. Three brand-new guest floors are complete; nine more to go. Banquet halls will all be refurbished. Varq (the Indian cuisine restaurant) will not be redone. And what used to be the Wasabi will be redone.

Q/ Into?

A/ Most probably into some kind of shopping space. We can’t make the margins which the hotel needs to give revenue share.

Q/ Is that decision caused by Covid-19?

A/ No, there is nothing that has changed because of Covid. I would say it was a very informed decision, and [planned] much before Covid. Because when you get into a design board, it takes a long time to design and redesign a property that has been No.1 of Delhi for several decades. It is a property Delhiites have always associated themselves with. It is not an easy job, it takes time. You have to be careful that you don’t lose the emotional connect with people who have patronised the place for four-plus decades. At the same time, you have to stimulate the progress, you have to do things differently. That actually lengthens the process.

Q/ Chambers is bigger now. There seems to be a lot hinging on its relaunch.

A/ Chambers is more than double the [earlier] size. It came up to support the Taj brand in the 1970s. Since then we have Chambers in seven more locations, and two more are to be added [soon].

The Taj brand is the nation’s ‘strongest’ brand across all sectors (as per a Brand Finance report in 2020). So Taj does not need any kind of help from other brands. And the other brands have become so mature, like Chambers, which had become a very important private membership club for what we call people who have the ability to inspire other people. These are the accomplished achievers, be it in business or in jobs or in inspirational leadership or being a role model.

Exclusive elegance: Chambers, the business club at Delhi’s Taj Mahal Hotel, which was relaunched recently Exclusive elegance: Chambers, the business club at Delhi’s Taj Mahal Hotel, which was relaunched recently

So a time comes when you have to change everything. Be it your wardrobe, or it’s your brand or your club proposition. And the time comes when you have to let certain brands fly [away], stand on their own feet. And I think Chambers is a very good representative of that kind of positioning.

Q/ There seems to be a strategy to leverage Chambers across cities.

A/ Earlier it was a national membership, now it is international. It is lifelong, you can even pass it on to the next generation. It is a new set of privileges in terms of upgrades.

Q/ Have the initial rules changed now?

A/ Of course, a lot has changed. We have only increased the membership fee now, to 020 lakh for new members (existing members can upgrade at a surcharge). And it is only by invitation. You may request, but you still have to go through the whole procedure, and if you are found suitable, then you get in.

The profile we are looking at is usually the MD/CEOs, the established business people. But I think there is an opportunity as the world around us changes. There would be a lot of 35 to 40-year-olds, startups who have made it big.

Q/ What’s your guesstimate of when the business will be ‘normal’?

A/ Anybody’s take! Nobody’s seen the crystal ball. If you don’t get crazy mutations of the virus as it happened in Europe, then I think in four weeks we [will be] out of this. Also, because of the vaccination drive. If I am wrong, then maybe by end of April. But we have already seen a change.

We have seen how strongly leisure (travel and tourism at domestic leisure destinations) have bounced back. And a lot of people have been travelling a lot.

When you are put in lockdown and your revenue goes to zero, then 15 per cent or 30 per cent is also good. But in order to break even, you have to have almost 50 per cent of the pre-Covid level of revenue, not just occupancy. And even though rooms started coming back, there were restrictions on F&B, swimming pool, massages, spas.

In India, in the higher category of hotels, 50 per cent [revenue comes from] rooms and 50 per cent is others (like restaurants and banquets). So bars were shut; then (when they opened) there were restrictions. We were not doing 1,000-2,000 guest weddings anymore. So it has an impact.

Q/ There’s been a lot of talk over the repositioning of the Taj brands. What is the final status on that?

A/ ‘Gateway’ is the one.

Q/ Gateway will go?

A/ It will not ‘go’, we will just put it in the drawer. When the right time comes, we will take it out again.

Q/ Do you want anything specific from the lawmakers to overcome the difficult times?

A/ Infrastructure status at the Central level and inclusion in the concurrent list. When India’s constitution was written 75 years ago, tourism could not have been important. But since then, a lot of things have been included, so the time has come to make that change for this industry also. And an industry status at the state level. We need both.