Indian Hospitality Industry 19

Appended below is Nothing Good or Positive about International Fast 

Food Chains  in India, I am very serious about the state of affairs 

when I say what follows..!

o   First one to come to India with a bang was, Pizza King (Part of Shakey’s Pizza Chain) in 1984, shaking the food industry like never before and closed down in just four years with over 22 outlets in Delhi and Mumbai. Consequently the next few years witnessed a phenomenal growth of Halwai business and by default Narula’s came to the fore.I remember in 1995, when KFC (Kentucky Fried Chicken) opened in ‘Friends Colony’, the first customers who visited and queued up, were well to do educated middle class Delhiites. We all felt that we have finally arrived and were all set to share the international platform.

o   Why we were so keen to bring International Fast Food to India?, Because of reasonable prices, high levels of hygiene standards, Strict Quality control, and all new world famous international fast food cuisine which was  not available in India e.g. Fried Chicken, Pizzas, Burgers. In 1996 it was  Domino’s Pizza, followed by Pizza Hut and King of Fast Foods McDonald’s. Then Subway opened their first  outlet in 2001, followed by Dunkin Donuts in 2012 and Burger King in 2014.I am not counting AU BON PAIN, Carl’s Jr, IHOP, Papa John Pizza California Pizza, Wendy’s, Taco Bell, Krispy Kreme and many more. 

o   We the urban Indians are always very much excited about all the different variety of foods chains coming to India. We willingly accepted all these chains with open arms and big heart. As September 23 comes to an end it’s going to be 30-35 years, I decided to try to understand where these international fast food chain’s stand today, and why most of them were not doing too well. My views on these concepts are very personal, and are not influenced by any opinion or any other extraneous factors; I may be right or wrong, that only time will tell, but much will depend on the adjustments or let’s say course correction these chains are willing to make.

1.     Domino’s Pizza; Today they have over one thousand four hundred and ninety five outlets in over 320 Indian cities. But when you compare it with their American or European counterpart, their product served in India has not been upgraded or improved, whereas American and European products are far superior in terms of quality, variety and innovation. In India only innovation is Indianization and Modification - period! At this juncture, I assert  with good amount of conviction that, we Indians don’t want to eat the Indianized version -  instead we want the authentic version of truly American Domino’s Pizza same as what is served across the USA. We have always been looking American favours and taste, which has been missing. I feel that the only reason they (Domino’s Pizza) are surviving is because of pizza’s satiety value and delivery system.

2.     Pizza Hut; Opening of their first restaurant was more like, as if an international casual dining chain of the sorts had finally arrived in India. In the early stages they had similar clientele to that of TGIF or Pizza King. But within a few years the downslide started, simply because of no innovation in the menu, as a result slowly the outlets started experiencing product fatigue. To survive, they started the delivery system similar to that of Domino’s. Pizza Hut restaurants use to be my favourite in America because of amazing Salad Bar to go along with great Pizzas. In India some of their restaurants even served wine and beer. Unfortunately like America, Pizza Hut is no more a favourite Pizza joint in India – when compared to Domino’s they are left with only 413 restaurants and are declining.

3.   Pizza Express; A British Pizza chain, they serve the best and remain the most innovative pizza joint in town. But they are little expensive when compared to most other upmarket Pizza chains. Their product is genuinely International, flavours are amazing, certainly a treat for every Pizza lover. But they are also going through hard times because of gourmet product line and high prices.

The fact remains that India’s pizza market has not grown simply because of the distinctive Indian palate, as a result pizza chains have been under pressure to  modify / Indianize their menu to match the Indian taste and in the process they have not only lost their unique flavours but have also diluted their identity. Today every big city has a pizza outlet offering similar or even better value pizzas’ for the same or less money. Domino and Pizza Hut need to get better products and taste, add variety for health conscious generation, even upgrade technology to maintain their leadership position.

            1.     McDonald’s; Number one Fast food chain in the world. People who taught the world quality, standardisation and efficiency to the food Industry, unfortunately in India they have lost their authenticity and sheen. A chain created by the genius of Ray Kroc, lives a compromised life in India. In America even today, who’s who of American society lives on their product including Ex-President Trump, who makes no bones about his inclination toward MacDonald. In India with over 900 outlets, they are surviving only on Aloo Tikki Burger and softy. Service and quality standards have been compromised beyond belief. You will never hear people suffering from bad stomach by eating McDonald burger anywhere in the world, but in India nearly one in every middle class family will confirm of the same. In early eighties when we had a meeting with the head of McDonald’s International business Director on his visit to India, we were told that their main issue was to make sure they overcome the food quality & outlet hygiene issue in India. And today at least one person in the family has been victim of bad food. On other hand, you will never hear anyone getting upset stomach after eating at Haldiram or Bikaner. My view about McDonald’s is, that they have selected wrong operators as they are pure vegetarian franchises, one is Marwari from Mumbai and other one a baniya from Delhi both coming from very strict vegetarian back ground, where they don’t even eat garlic or onions. Those guys are more than happy with Aloo Tikki Burger and a Softy; I guess their targets are met. Why would they be keen on finding ways to sell real McDonald’s food, for which the chain is famous for, or even consider improving the quality? And this is the biggest compromise by McDonald. Today a very large number of middle class populations have travelled to different parts of the world and all of them will confirm that the product in India is way below the standards compare to Middle East, Europe or America.

            2.   Burger King; Although a late starter,with over 350 stores, has been a big disappointment in India. It is difficult to believe that it is the same chain which won strong legal case against McDonald regarding quality of their products on their own merit. Concept of Broiled burger is just a myth in India. All grilled burgers patties are pre-cooked, just heated and served. In the race of price line, like McDonald they have lost their brief. I feel that we in India were looking for authentic American Style Burgers and what we are getting is a poor version of Indianized burgers and that also you have to be very effective in ordering freshly prepared burger, otherwise they will try to pass off old prepared burger. I would not be wrong if I say that nearly 20% of burgers sold by McDonald and Burger King, as per their own standards are NOT FIT for human consumption. I also feel that Burger King should stop copying McDonald’s strategy and must be bold, innovative and serve truly American Burgers in their true original character and style. I still remember that every time I use to take a flight from the Zurich Airport, I would make a point to visit Burger King and have Chicken Burger or even a Vegetarian Burger and as always, they were outstanding.

            3.   Wimpy’s, Wendy’s, Carl’s Jr. Including Dunkin Donuts; These are some of the international burger chains that have either exited or are on the verge of collapsing, simply because they serve inferior quality product, while trying to create the Indian version. I have no hesitation in stating, that we Indians are one of the largest communities, which have travelled many times across the world, in last decade and who are well aware of the quality standards of international Fast Foods in other countries and these very people are the one who are rejecting these burger chains, that they all patronise when they go abroad- what a paradox. Indians still love burgers, but due to poor clones of international fast food served in India they are now-very seriously-looking at the local chains. Only in Gurgaon we have over fifty outlets serving freshly prepared burgers (check it out on Zomato if you please) and these are doing well in their own way.This is true for all metros.

The fact remains that India is a huge burger market, both Non-Vegetarian and Vegetarian. We all know that Mumbai alone sells, native style Indian  Burgers called Vada Pao and  they sell more in one day, than McDonald and Burger King put together in one month. Not to mention the potential of non-vegetarian burgers all over India. What we require is genuine, authentic, good quality Burgers of same standards which is expected from brands like McDonald and Burger King. My hunch would be that they can still be market leaders because of their systems, experience, product quality and worldwide presence if they decide to sell their authentic recipes.

            1.     Kentucky Fried Chicken; Here is another product which has made its mark in Fast food Industry. Kentucky Fried Chicken (KFC) opened their first outlet in 1995, is today the most successful brand in this category. With nearly eight hundred outlets, KFC is second most successful Fast Food chain in India after McDonald. Problem is the product quality, reason being, a)Food available is not the authentic original recipe, b) Too much bread crumbs. Yet they are doing well, as till date they have really no competition. With entry of Popeyes Chicken we expect a strong competition coming up. But real competition in India is with Tandoori Chicken and for that they have a long way to go. As for product analysis, quality of fried chicken served is not up to the mark, it is loaded with chicken skin and excessive coating of bread crumbs. Chicken based chains like, Chick-Fillet or Raising Cane, I feel will do very well if they were to venture in India. At present, what we have in India is already a history in the USA anyway. Indians love eating chicken as long as it is healthy and properly prepared, but serving their downgraded recipes will not help anyone in the long run.

    2.  Subway; In India this is another product, which has made in-roads into the fast food industry.Their first outlet was opened in 2001 in Saket Market. Today they have nearly 550 outlets in India. Ever since then, they have been downgrading the quality of raw material, product and even the standards of hygiene in their outlets.

One of the main reasons India was looking for a Food Chain from abroad was the technology, innovation, healthy product line, unfortunately Subway has compromised on all counts. I have seen cat sized rats freely moving around their Kiosks with my own eyes. As for the product they are losing their original product positioning line Eat Fresh , as they are now leaning more towards pre-cooked sub fillings, poor quality of meats and wilted fresh vegetables. They are now introducing poor adaptations (Indian versions) of Subway sandwiches.

In last twenty years, over thirty International Fast food chains have entered in the Indian market, selling from Pizzas to Burger, Bakery, Coffee, Fried Chicken, Donuts and so on. Most of these chains have not been doing too well. Many of them have closed down; many are heading toward the closer, remaining ones are surviving on miscellaneous products. My little research confirms, that all these products are in trouble because of following reasons:-

a)      Conscious effort to Indianize / Modify the product is hurting the quality of the product and market is not too happy with it.

b)      Not enough research is undertaken to understand the market requirement in terms of consumer profile their likes and dislikes.

c)      Major compromise on the quality of raw materials.

d)      Freshness of product.

It is rather depressing to see those Kings of Fast Food industry are nothing in the face of Indian competition. Because of this, today leaders of the Indian Fast Food Industry are domestic chains of Halwai origins e.g. Bikaner, Haldiram, Saravana Bhavan or Sagar Ratana.

My shout to all of you is – why are you compromising, you are capable of doing better; please get your act together or …!

 

                                           Written by Anil Chak & Virat Varma

Indian Hospitality Industry 18

 

Pitah Se Hai Naam Mera - Pitah Se Hai Jaan Meri

   Pitah Se Hai Saans Meri - Jiya  Jiske Sahare  Mein - Hai Pitah hi Rab Mera

Vidya Sagar was the oldest of eight children of his father Shri Daya Ram Varma, they were three brothers and five sisters.  Shri Daya Ram Varma retired as Superintendent in Indian Railways in the late thirties before Independence.

Vidya Sagar, as my father was called, Graduated from Hindu College in 1933.  He was only five feet five inches tall and was very good in studies. He was also famous for his bouts of anger, even his father was scared of his anger pang. As I remember him on this day, I realize how mediocre I was as a son, as a manager or even as a human being. Today, I also realize, how difficult it must have been for him to discover that his only son, was an average student of a brilliant father. But, I guess he still loved me all his life, trying to make me a better human being.

On this ‘Father’s Day’, I would like to dwell on the fond memories of the years I spent with my father and share the same with my loved ones. Here are some interesting anecdotes and high points of his life worth a mention. I hope all of you are as proud of your father as I am and will remain in this life and beyond;

·      His first job offer was with Reuters in Shimla, just after his graduation and when he went for interview he was rejected as they felt he looked too young. He was furious and walked into Chairman’s office and demanded an audience with him. His secretary was so amused she let him have the meeting. Even to my father’s surprise he not only got the job, but a better job as Executive Assistant to the C&MD. There he was trained by C&MD’s secretary, she made him polish name plate, learn filling before he learned to write. Due to this hard work and extensive reading and writing he had great command on the English language and administration;

 Vidyasagar’s training was tough and what he learnt, remained with him throughout his life. Here is an interesting incident he uses to narrate about his experience in the executive dining hall, where the staff use to have their lunch. Once, while eating the soup with slurping sound he told C&MD’s secretary “Soup is delicious Ma’am” and she replied “I guess I can hear it”

·       My father’s first serious job was as Business Manager to Indian National Chronical (Times of India). After India got freedom, he decided to join Indian Government and was offered a job in Ministry Of Information and Broadcasting for less than half the salary. He was comfortable with that, but got confused when some people started criticizing the working of Government.  He was very impressed by Mr. C.D. Deshmukh who was our first Finance Minister, he wrote to him putting his fears and asking for his advice. Mr. Deshmukh replied, he wrote “No Job is good or bad, Job is what you make of it.” That became his motto all his life and mine too – for better or for worse.

My father had the distinction of getting selected as Press Attaché to Sardar Vallabh Bhai Patel at the time when all the royal states and principalities were being merged together to form one country called India. On completion of his assignment, he was asked by Sardar Patel if he wants something in return, he refused and went back to his Government Job in the Ministry of I&B. He was one of the most honest persons I have ever come across in my life, for this he paid very high price. The Government took away his seniority of 27 years as punishment for not allowing bureaucrats to make money. Although while growing, up I wanted to be the most dishonest man in the world, but genes I guess run deep, and like my father  I have also paid a heavy price for being honest manager for my employers during various assignments.

·    Dad was a great parent. His life was not easy and to top it all my mother’s health was always a major issue. As father of four daughters, he was always a worried man. Although being the only son, I was never enjoyed a special treatment of the sorts, on contrary he was he was very harsh on me. I have some beautiful memories of him taking care of me, whenever I was down with fever. Those mesmeric and tender times that still linger in me with happy memories. 

·        Vidyasagar Varma was a terror to all his brothers and sisters as well. Of five kids, first three including I, where petrified of his temper and discipline. I still remember the brutal beating which I got when I got back home very late, after watching Ram Lila. He thought I got lost or missing. Today as grown up father I can understand his predicament-with no unpleasant feeling. Later on - more than beating - I remember him crying and hugging me and taking care of me through the night-quite naturally my father had a very gentle heart.

·    My father passed away in 2005, he was 95 years old. His last ten years brought us all very 
close. I had opportunity to fuss over him and had the privilege of getting so much love and affection which was visible in his eyes; I could sense that he was proud of what he and Bhisham had made me.

 Although, I never mentioned it in the open, but I have always loved him, for he was  a strict disciplinarian. He was  my hero, my inspiration.  

 Written by Anil Chak & Virat Varma

Indian Hospitality Industry 17

Food has always fascinated me from my childhood. I have memories of going with my father to Nathu’s at Bengali Market to eat chat or Chana Bhatura. My uncle Bhisham who was member of Gaylord Restaurant in CP, used to bring home Ice cream in summer, packed in a tin container. Then there are recollections of Coca Cola or Pepsi and Choco bar being sold for 25 paisa in sixties, Masala Dosa in Moti Bagh market was priced at 30 paisa. Fried Aloo-Kachalu Chat next to liberty cinema was a great delicacy at a throwaway price of 50 paisa.

Earlier, in the fifties, when my father’s was posted in Lucknow, we enjoyed famous Chat Savories  which were regarded as local delicacies at Chowdhary Sweet House, then there was  Milkshake in Hazratganj, Kulfi made in cigarette tin box and most amazing of all Muter Chat all were priced  under one rupee. My dearest friend late Major Vinod Gulati , whenever he used to be in Delhi used to take me for treat to famous CP restaurants like Volga, Standard or Laguna and spend under five rupees to have Cold coffee with Ice cream, Coke with Ice cream or Espresso (Today it is called Cappuccino) with delicious Paneer Pakora and fried veg burger. Memory of those favourite dishes still haunt me and keep the mouth flushed with saliva, it also reminds me of the Golden Era of F&B in the sixties and seventies. CP had over 20 top class restaurants and all were doing well.

Let me not digress any further from the main objective of this blog. We Indians have been great foodies from times immemorial, we love to snack anytime and every time, it’s our never ending song of love. More then lunch or dinner we remain excited about in-between snacks like a samosa or patties, chat, kababs, Pao Bhaji, or Vada Pao and Kulfi Fallooda and so on - the list is endless, and snacking continues, the only difference being, that these snacks have become our meal today.

The Halwai shops that use to sell these snacks - some years back- as a side business, today these very snacks have become the main source of their revenue. Fast Food turnover of Indian food in these restaurants have made them Kings of Fast food in India. I remember in 2002 when I opened Evergreen Fast Food Restaurant for Chopra Brothers in Green Park, New Delhi. Evergreen’s the Sweet business turnover was highest in Delhi. Within just a year, one of the owners’ themselves informed me that the restaurant was doing extremely well, and that income from Mithai business now is nothing as compared to what they were earning from the fast food restaurant. Remarkably, the great thing was that with low selling rates we were able to achieve food cost of less than 35-40%, and in this calculation their genuine gross profitability was over 42% of the turnover. Today I feel that while the Menu card rates of Indian fast food has gone up by almost 110%. Strangely enough I must put these rates against the cost, which has gone up by not more than 50%. It is a very uncomfortable feeling to note that this trend of ad hock increase in the sale price is dictated not only by marginal increase in the food cost but also by marketing trends.Through this blog I am trying to convey my reservations with such bizarre pricing trends and creativity behind this approach and strategy.

The purpose of this blog is only to highlight the fact that such illogical and unplanned hike in selling prices across the  categories of food outlets is not the outcome of increased cost of food ingredients’ but  because of the competition with the similar outlets.  I will try to give reasons that will finally impact the business in times to come.

On the other hand when International Fast Food Industry came to India, fortunately they have continued to follow their preset management standards till date. When McDonald opened in India, their highest selling was Burger Aloo Tikki which was priced at Rs.20 and today after 28 years it sells for Rs.45.00. Even the McChicken Burger which started at Rs. 45 is being sold at Rs.115.00, quite a similar is the situation with Pizza Chains and other international Food chains. These international food chains are very smart, they realized in the very beginning that India is a country where people literally survive on snacks, and that they have to establish themselves simply by providing good quality food that is hygienic and at rock bottom prices, as a result even today their bestselling burger at Rs. 45.00 is cheaper then Vegetable Burger of Haldiram or Bikaner where it is priced at Rs.110.00, and  even the Vada Pao is sold at a higher price than McDonald’s Aloo Tikki Burger. This is the reason that the growth and profitability of these successful International Chains is way ahead of their Indian competitors.

 In my opinion, the Restaurant Industry in India, is in dire straits. Every year we open thousands of restaurants with all kind of cuisines and also close nearly same number of restaurant due to failure, the reasons for such failures are as follows;

A.      High rentals,

B.      Sub-standard food,

C.      Mediocre services and high Food and Beverage Rates.

 The fact remains that in places like Cyber Hub and Ambience mall, Gurugram, Defence Colony- New Delhi and including other prominent Malls of Delhi, we come across 40 to 50 per cent of the restaurants frequently change names, ownership and cuisine every year. I opened my own Restaurant of good standard called Cafe California in Connaught Place, New Delhi in 2003, serving Multi Cuisine. Even today many food and beverage  menu items are popular even today and are part of the menu of some of the most happening restaurants. On other hand their selling prices are at least 7 to 12 times more than in 2003, whereas the cost of food and ingredients has not gone up in the same proportion. In some ways I feel while food standards and services are deteriorating, the selling prices are going up every day- well almost.  In last 15-20 years there are very few restaurants which still exist even today and majority of the survivors have kept their rates reasonable for e.g.  Big Chill, Kwality Restaurant-CP, Karim’s, Embassy, Moti Mahal-GK, Narula's Ice cream Parlors to name a few. All these Restaurants are surviving not just because they are popular but also because their prices are highly competitive. All of them have a reputation of providing good value for money and satiety. On other hand new concepts are rather expensive and are devoid of any effort by promoters to provide value for their pricing. Menu research and engineering is rather negligible.

Before I talk about the status of F&B, I need to mention the approach to F&B costing especially in the hotels. Food cost of the Hotel menus are planned on actual costing of 10% to 14% of selling price. Primary observation tells me one basic criterion i.e. Bigger the Hotel Higher the Rates - with no connection to the actual food cost.  It is quite shocking to note that due to the unplanned and nonchalant attitude of the big players in the Hotel Industry, where every hotel on an average, loose over 15% to 20% of F&B income, due to pilferage and wastage, which could have actually been their profit. Interestingly, most of the Hotels, despite having the relevant software, do not use it effectively to their benefit, strangely enough even the International Chains shy  away from using it in India. Reason being that it is cumbersome and manpower intensive, to start with. Can you imagine if McDonald or Burger King  were not to follow the  inventory management software to manage cost control, with  each restaurant will be showing negligible or no profit. This is because their profit margins are comparatively very low; this is just a problem of blindly following the trends without bothering about their impact on the revenue. If the Hoteliers do not create food recipe, how do they arrive at / or finalize the rates on the menu card?  A small case study- I recall when I was working in 1974 in Akbar hotel, which was considered best Hotel in Delhi and was in direct competition with Oberoi Inter Continental, I was given task to review the rates and recommend enhancement for Coffee Shop and their Specialty Restaurant. I worked on the costing of all recipes and recommended the enhanced  rates keeping the food cost of each item at 30 % and took it to GM K.K. Mahalotra along with the menu rates of Ashoka and Oberoi, he reviewed and adjusted the price, in some cases little lower and in some cases higher. Altogether their was 5 to 10 percent higher. That’s how the menus were finalized back then, but today it is different, no original recipes, no cost analysis/working, simply enough rates of competition are reviewed and outlet  increase the rates accordingly, at will. This trend was started in 1976-77, when Oberoi decided to increase their rates on ad hoc  basis, they came up with totally different strategy of pricing themselves over and above the market (in some cases even doubled  the selling prices) to establish themselves as a Hotel only for the Elite Class. I still remember Espresso (Today's Cappuccino) was available for Rs.2.50 in all the good hotels, they decided to sell same Espresso for more than double the rates. Their strategy was to position themselves higher than the competition and their strategy worked so well that, we all visited the hotel just for having their expensive coffee. Slowly other Hotels started following their strategy, today all Hotels started blindly copying the tactics of Oberois – this over a period of time became the main reason for the decline in sales of restaurants operating within the Hotel premises. This is also the reason that today you get cappuccino or tea at Rs.750.00 plus taxes at Oberoi / Taj /ITC, whereas the cost to hotel remains under Rs.10.00 apiece. This trend slowly and steadily gave birth to a Free Standing Restaurant Market in elite areas of all major metros including New Delhi, where areas like Defence colony, Pandara Road, Vasant Vihar Market saw the mushrooming of many good standalone restaurants.  There was time when nearly all the Hotels use to open with minimum two speciality restaurants, one coffee shop, a bar, a discotheque and a banquet hall, but all that has now changed. Today majority of new Hotels have All Day Dinning and a Bar only and by chance if they have just one restaurant, it is either not doing well or it is being used for some other purposes. The main reason for this, is high selling prices and high taxation. Scary part is that even those large Flagship Hotels in major metros, who boast of three to four restaurants; unfortunately only their All Day Dining is doing well and if they are lucky their one Speciality Restaurant doing reasonably well. Remaining outlets keep suffering from a decline in business.

All over the world the Hotel room rates are related to the quality of Hotel, its classification and the services they offer, but their F&B rates are at par with the similar outlets in other hotel or standalone market restaurants. Now coming back to India - This might be the only country where the rates of F&B outlets operating within the Hotel premixes are on an average double or even more than those in a free standing restaurants. Today, the main reason, why so many free standing restaurants and restaurants in Hotels are not doing well is because of high rates. Fact is that they themselves are responsible for pricing themselves way above and out of the market. It is a common sight that the Hotel coffee shops are overcrowded at breakfast simply because it is a part of the room tariff and free lunches and dinners are currently unheard of. I am very sure, that if all of them work on 30/35 per cent food cost formula; we will be a witness to the revival of food and beverage business in Hotels.

 Learning from experience, majority of new Hotels today are designed with one All day dinning, Bar and Banquet Hall. Some of the chains have accepted the reality that food & beverage in Hotels sales will continue to post declining trends. Sad to see Hotel industry in place of fighting for revival of past F&B glory, they are silently accepting their defeat. They are again trying to copy European and US trend, whereas we are ignoring the trends of South East Asia, where some Hoteliers are redesigning their strategy by allowing well established Restaurant brands to open their hotels- indeed a smart move.

 In last three/four years we have seen the banqueting business flourish like never before. The rates have doubled after the COVID 19 scenario. Today the average wedding rates are anywhere between Rs.3500 to Rs. 6500 per head in  five star Hotels, even more then the best restaurants in India, plus add decoration charges, flower charges and entertainment charges and still business is booming. For me it is a bubble, it will continue as long as country’s economy is doing well, but it will burst at the slightest hint of recession.

Food and Beverage was and still is the most important aspect of Hospitality Industry, well managed food and beverage operation improves all aspects of the Hotel profitability, still it is worrisome that even after so many years of operation our F&B operation has not professionalized by the management including top hotel Indian and international Hotel chain. It is shocking to note that in nearly all hotels have no effective F&B control systems.   Their saving grace is large banquet revenue (Large Banquet party costing is always less than 10 %) and  thanks to banquet’s contribution, this reduces their costing to under 25%., same is the situation with most of the industry.  

Today it is boom time, how long? Maybe next two years. Reality is, at the peak of this boom, hospitality status is, compromised management of Hotels or restaurants, service standard below average, Food quality in most of the cases repetitive, still we are continuously complacent because revenues are coming.  If no effective action is taken correct, it matter of time it might become irreversible.

On other hand the International Restaurants / Fast food chains due to their smart planning, are capturing bigger market share with competitive pricing strategies.

Today it is the boom time, but for how long? Maybe next two years. Reality is, that  in the peak of hospitality boom we have lot of poorly managed Hotels and even restaurants, where the  service standards are poor or below average, Food quality in most of the cases remains average and hotel services continue to decline - and still we are complacent because revenues are coming. While on other hand slowly and stealthily the  International Restaurants/ Fast Food chains are happily  capturing a bigger chunk of the market share with their competitive and strategic  price line..

Written by : Anil Chak & Virat Varma

Indian Hospitality Industry 16

During my professional life in India, that spans over 48 years, I was distressed only on two occasions with regards to the future of the ‘Hospitality Industry’, first time it was in 80s’ when the industry was passing through major industrial disputes that had erupted across the country, the staff was revolting against the HR policies, low wages and babu culture. I remember getting an opportunity to attend a seminar organized by Professor Majumdar, during her lecture she pointed out how to circumvent the man management crises, Prof Majumdar said that there was an urgent need to understand the meaning of ‘Worker Evaluation System vis-à-vis Productivity and Employee value. She also warned that any delay in understanding this mechanism will cost dearly - and it did.

Established chains like TAJ and ITC started hiring staff for their city hotels from other cities to avoid a sticky Union situation and in the process, they landed up paying through their nose. While Oberoi Hotels were smarter, they started paying highest salary in market along with extensive training (over hundred days in a year), they also started working on the policy of inducting over 10 to 15% of new staff every year and finding ways and means through motivation-competition- promotion getting old staff to leave for better. The staff didn’t mind, because they were well trained and got lots of opportunity in other hotels. International brands were even smarter; they started providing staff the facilities like never before and who remained got absorbed by the booming hospitality Industry.

Today as the COVID pandemic settles down, the industry is, once again,  experiencing a major problem relating to man management and the  situation is bad,  it is so bad that it is not only effecting the quality of operations at present, but it might also have a long term impact on the future of hospitality industry. Everyone was fully aware of the fact that once COVID was contained, the industry will start booming, like never before, well if so, how come we were caught off guard? How come all of a sudden the most glamorous and promising industry has lost its sheen and is no more a star attraction to the young and not so young - Why?

In this blog, I have tried to address some of these issues giving my reasons, supported with zest of my the discussions with large number of HR Directors and GMs who are actually staring at the crisis and facing the music;

·         Before COVID became a pandemic our Industry was doing quite well. Most of the Hotels were making good money. But when pandemic was declared the ownership and stakeholders got worried about their own fate and interest, and all they could focus on, was their primary money earner i.e. The Staff and their salary bills. They grossly misjudged the situation and saw COVID as an opportunity to ease out the majority of staff and those who remained were paid pittance for over two years. Whatever the owners might say today, most of operating Hotels/ Restaurants were hardly able to break-even or earn very little money, because of the scare and compulsory quarantine laws resulting in compulsory quarantine and food take-away. Although the money was less but wheels of  hotel  industry kept rolling - thanks to COVID rules.

·         Over hundreds of thousands of Hospitality staff was sent home without any compensation across India. This was indeed the darkest period for the staff and their families. Just imagine the plight of all those poor people who had earned crores and crores of money for their bosses, were all of a sudden abandoned to fend for themselves and face a dark future. This by any standard was grossly unethical.

·       All those who earned millions in tax for the Government, got no backing or any kind of relief or support from the Labor or Tourism ministry. The way they were treated by one all, left a very sad view of this Industry.

·         I also need to mention that there were few Hotel management companies, who did take care of their employees during this difficult period. But these were very few as compared to the humongous industry manpower.

·        What happened to those people, totally changed their lives forever. It was a question of survival as such they started looking for any kind of job, it could be from Zomato delivery boy, to just any job in any other industry, to opening their own small business - fortunately in most cases it worked. Surprisingly enough most of them ended up earning much more than their previous Jobs. They also realized that industry and promoters were short changing them – by making them work for 10-12 hours every day at comparatively low salary.

·       And when things became normal, all the hotels wanted their staff back, but it was too late and to their surprise, most of the competent staffers were well settled and declined the offer to join back, simply because most of them were earning much more than they were, in their last job, regardless of the position and the ones who had established their business were earning way above and beyond their last salary drawn.

Today, the situation is pretty grim, as most of the Hotels are suffering in terms of the quality of service due to shortage of trained staff and the floating manpower that is available is below the industry standards as they are not trained. On other hand, the one’s who have returned, are busy in playing musical chairs with Hotels. Although present situation has not started affecting the owners yet, because the business boom continues to spiral, but the hospitality industry pundits’ are justifiably worried and are busy looking for long term solutions to resolve the situation.

The main reason why hospitality is no more an attractive career option is basically due to poor remunerations. From one of the most sought after professions it has become an industry of lowest paid salaries. It is not surprising that nearly 60% of Hospitality graduates end up joining other professions - with fixed timings, better wages and ample time for family life. On other hand after studying for four year in catering college, only few of the youngsters get into management program, the remaining start their career on waiter’s salary with average working 10 to 14 hours, no holidays for Diwali, Holli, Eid or Christmas – who would  like their sons / daughters to invest their time in this thankless career?

As hospitality consultant I wanted to know where we stand in comparison to other industries in India and the finding are rather demoralizing. Some facts are placed below;

The Industries are divided into three broad categories and are termed as High, Moderate and Low:

HIGH:

Finance/Sales& Marketing/Business Development/Architecture and soft ware

MODERATE:

Info Tech/Health Care/ Insurance/Customer Care/Human Resources

LOW:

Construction, Transport and finally The Hospitality

 In the recent past, just a few years back, the hoteliers were compared only with the glamorous world of film stars.  Unfortunately today they have come down to all time low on the financial ladder - which is just not acceptable. Today it is a tough going for a hospitality worker. The performance and value of ‘Hospitality Staffer’ peaks when he is in his twenties, for a supervisor it is late thirties, for a manager the maximum age remains is forties and for GM it is fifties- but only if one is very lucky. After this the down slide begins, and the knowledge and the experience doesn’t help - then we worry about why young people are not joining the hospitality Industry?

Another website gave following list of top ten and forgetting us totally;

1.      Medical Industry

2.      Data Scientist

3.      Machine Learning Expert

4.      Software

5.      Product management

6.      Management

7.      Invest Management/ Banking

8.      Finance

9.      Sales & Marketing

10.   Legal

As you will notice that the hospitality professionals figure nowhere in the list, I did some research and finally found  it is the truth, that one of the lowest paid Jobs in our country today are in the hospitality sector. It is demoralizing for a guy like me, who kept comparing this industry to any other equally glamorous Industry, but today all that pride and warmth stands shattered. Like the film industry we have short span of professional life, ageing gracefully works fine as we grow steadily in the profession but  as we touch fifty, which is when the down slide begins, which translates into older you are with -lesser is your value & pay.

Dozens of highly talented Hoteliers once over 55 – 60 years old I have seen looking for jobs on half the salary they were earning and still not getting hired. Not surprisingly on the other hand young and fresh entering hospitality sector job market is realizing that their salaries have shrunk to about 60 to 70% of what their market worth in other professions’. What was 15 years back a good decision; has become a worthless option - unless there is enough financial backing to start a standalone business venture of the sorts.

When some body comments that nearly 40 to 50% seats in catering collages are lying vacant, I am not surprised, as far as manpower is concerned, worst is yet to come.

On other side the Industry is experiencing a biggest boom ever, and the best yet to come. Profitability is very high because of high rates, and surge in business, high occupancy and redoubled banquet business, but acute shortage of staff remains a handicap. Recently, I had the opportunity to talk to a large number of Staff & Managers and found that all of them were demotivated and disappointed with leadership and owners, they were even envious of colleagues who were brave enough to leave industry and settle for greener pastures.

The Questions that need to be urgently addressed are:

-          Why Senior Managers, Owners and Stakeholders are overlooking these issues? Can they visualize the long term repercussions of this trend? In majority of cases; No.

-          What effort these organizations have made to motivate and retain the manpower they have? No and they don’t care.

-           If this trend continues, do they realize what could happen to the business? Not Yet.

It is true that majority of hotels have become complacent toward the condition of the most critical tool of the Hospitality Industry i.e. The Work Force. What scares me the most is the fact that, with so many new hotels coming in next few years, and they will need to be staffed. How do the stalwarts and the industry pundits plan to get good trained staff? Most certainly there is a need to create awareness about the impending Industry crisis and take precautions before it is too late or else be prepared to bear the brunt of it all.

Human Recourses Managers need to point out to their Senior Managers and promoters about what can happen in years to come. Ownership which has been treating manpower as something of use and throw commodity- as and when required, has to change. Another important thing I would like to highlight is that our Industry staff are most disciplined, second only to the armed forces. The staff is trained to be polite and courteous under any and all conditions and that makes the job even tougher.  Fortunately for hospitality staff, now future is changing for the better and in their favor.

As things are, I foresee that next one year will be very tough for Hospitality Industry in terms of staff recruitment and the numbers will become a major source of worry. Even today in the hotels, on average, for every 10 new staff recruited, we are losing approximately 9-12 already working staff members. New joining is on higher salary and at times even higher than two-to three-year-old staff salary, as for new and qualified entrants they are very few and that number will keep on reducing unless some drastic action is taken.

Question is what is the solution? After lot of discussions with concerned senior managers, I have few suggestions which I urge the industry to seriously consider, if required modify and implement. I hope you will, as hotelier, will forward your valuable advice to right channel, as we need all the help to bring back our industry to right track if we want our industry to do well in future.

1.      Hospitality Industry’s main assets /component are the people who work there. During COVID we as senior mangers and promoters physically, mentally not only degraded them, without any concern for their future nearly 80 % were sacked. Remaining 20% were paid less then 50% of their salary. Today we need to be more understanding toward their issues, try to make efforts to win back their trust and restore faith in our system. Work on pension/ insurance schemes for their financial security and most all give them the salary which they deserve.

2.      In seventies and eighties, when Unionization was at its peak, we introduced a system to try and free the staff from the clutches of Unions; we converted large number of work post into officers. Today nearly thirty percent officer level staff has very poor productivity and there salary is equivalent to three to four staff. Why not go back to the old system, follow South East Asia see how they are doing very well. South East Asian Hospitality is considered best in the world. Reduce number of officers, and recruit more staff to improve Hotel functioning, productivity and the money. This will help in increasing the  wages across the ranks and it will attract higher productivity and service standards

3.       What kind of salary are we paying to our staff? My study shows Hotels are paying nearly 15-21% of turnover as wages. With an average of Rs.30-37000 per employ. But if we remove salary of HODs including GM then the wages are below Rs.24500. GM and his Executives salary itself is nearly35- 45% of the wages.  I think all this is self-explanatory. Time has come to have lean, mean and competent team but a very well paid team.

4.    To attract more people joining the industry, we need to improve the take home salary by; [A.] Enhancing income through motivation- change in attitude and  good financial, [B.] Income and productivity linked incentives in all departments and [C.] work on floating organizational structure.

5.      Food and Beverage income(22-25% GOP) when compared to rooms income has one third of GOP compare to Room  income(65-75% GOP) that is when you are doing well. We also know that the major staffing is in this very department. The truth remains that on an average out of ten hotels or restaurants only one can be called truly successful in F&B Sales. But all these Hotels have at least four F&B outlets (one ‘All Day Dining’, and 24hr room service, a Bar, and at least one or two specialty restaurants). In most of the Hotels these Restaurants are subsidized by ‘All Day Dinning’ and Banquets. There is a need to reorganize these, if the restaurants are not giving expected returns? The solution is to either close or lease it. Some of the International Management Hotel Chains, strong in F&B operation has already done that.

There are many more ideas to create staff attraction, rebuild faith in the Hospitality industry. Let Federal Associations, Labor Ministry, Hotel & Restaurant Industry sit together and find solutions. We need to fill up our Hospitality institutions, motivate people to join our industry and that can only happen if there are attractive remunerations, sense of belonging as time goes by, and slowly the  future potential to be genuinely visible.

Finally! Remember that if we need to develop India as premier tourism destination we need to take care of the most important tool that drives India’s hospitality Industry – The Manpower.

Written By Anil Chak & Virat Varma

Indian Hospitality Industry 15

 

Over the years as an hotelier I have harbored a belief that our biggest strength lies in our ability to transform basic raw material into delicious and unique Indian food, both in terms of appearances, taste and keeping all the nutritional values preserved. The wizardry of our chefs of yester years has been of unmatched levels; the food they made can safely be termed as ‘Ambrosia’, coming even near to which the best of the chefs can only dream today.

Those were the days when flavors were influenced by the location, spices. What they produced both veg/non veg, changed every 100 miles. Our cooks were influenced by the temple food, appeasement food for the kings and Nawabs and even poverty became a good reason for creativity and improvisation. But unfortunately, since last 10 or 15 years our chefs have stopped evolving.

 Back in sixties the first breed of Indian chefs started emerging with the growth of Indian restaurants in major cities. New breed of chefs may not have been excellent, but the quality of food they produced in those times was truly authentic, delicious and standardized.

Those amazing chefs with no degrees or diplomas gave us Gushtaba / Rishta, a soufflé of meat from Kashmir, Tandoori Chicken, Butter Chicken from Delhi, Kakori &  Galouti Kababs from Avadh, Temple food from Orissa, amazing selection of sweet from Bengal, Gujrati Farsans, Maharashtrian spicy cuisine to relish, South Indian wonder food of Idly and Dosa, Appam and Avial, plus a huge variety  of Veg and Non Veg dishes from traditional Chettinad cuisine of Tamil Naidu, Malabar Parantha with Kerala Beef curry and best of Hyderabadi Biryanis to die for, in the process, this pursuit of excellence established our food identity.

Then we saw the emergence of a new era of professionally qualified chefs during 1970/80, and then what happened?

I distinctly recall the entry of chefs qualified from catering college joining the Industry. Hungry for knowledge, they worked hard to learn, but very few concentrated on Indian cuisine. Eighties and Nineties saw this new breed of chefs establishing themselves                                      as continental chefs. But very few tried to venture into Indian food. We were still dependent on traditional chefs who were in short supply, as most of the good ones were going out of the country. All of a sudden there was extreme shortage, and so all hotel chains took a decision to increase the salaries of chefs and cooks practicing Indian cuisine by nearly 60/70% to charm them to stay back in India. Although this didn’t stop the migration but to full fill the demand a large number of hotel graduates started joining Indian kitchen. We the senior managers were very happy with the changing trends. We felt that finally the good quality Indian food is about to make a comeback. What really happened was simply unbelievable.

On the 1^st of January 1990 I was transferred back to Delhi from Centaur Srinagar as Area GM for Centaur in Delhi. Centaur Delhi was the real hotspot of trouble with unions dictating the management. It took couple months of hard work and man management to brings the affaires under control. Business started booming, restaurants took off. We had this Indian restaurant called Rasoi, which was under Sous Chef Rattan Singh Mehta and Chef Munir. The Rasoi was an outstanding concept and was considered only second to famous the Bukhara. Rasoi was selected by Air India to present the Rasoi Food on all important international flights. Team of chefs were sent to Mumbai ChefAir for preparation of Indian Food. Air India also wanted educated senior chef to travel as Ambassador of this famous Restaurant and explain to VIP passengers on board, about the food. Due to work load we couldn’t send Sr. chefs from Delhi, I requested my MD to send some one from Centaur Juhu and he deputed one young chef with some knowledge of Indian Food as he was good in presenting and talking. This ability of his made ideal choice for one passenger, TV Producer traveling on one of the flight and chef was selected to first cooking TV show, rest was the history. Today he is one of the richest Chef and Restaurateur, and a famous TV celebrity but rather a mediocre chef.

The reason why I mentioned this story, is  to put on record how and why the deterioration of Indian food started. After the success of this below average show, every chef wanted to be a celebrity TV chef, for they felt if he can succeed regardless of intricate knowledge and delicate accents of Indian food so can we or anybody. Next few years we saw over two dozen chefs becoming TV chefs, and most of them bastardizing the ‘Good Indian food’ in the  name of fusion/new era food – simply because of the absence of their inadequate knowledge of authentic Indian recipes’

Thanks to social media platforms, that has grabbed the attention of one and all alike, and has trivialized humans and their professional skills to divert the focus on the glitz and glamour of the medium. The chefs have succumbed to the lures of instant fame and loads of money that comes with it. Their avarice has altered their mind and priorities, the professional excellence have been compromised. Amidst this paradigm shift the connoisseurs have been deprived of good quality Indian food. We have over fifty Moti Mahals’ but except for one or two, they can’t produce the same food which made them famous. Earlier nearly all Hotels maintained a second restaurant as pure Indian Restaurant. Now all that is changing because Indian cuisine is not doing well any more. In Delhi we can count good Indian Restaurants in Hotel on our fingertips - Bukhara, DumPukht in ITC, Varq in Taj Mansingh and Dhaba in Claridge’s in over 70 Hotels in NCR. Similarly, the number of good free standing restaurants has also come down substantially - Like Indian Accent, Chor Bizarre, Lazeez Affaire, Gulati and only one Moti Mahal at Greater Kailash. The sprinklings of the other restaurants here and there are not worth a mention in terms of quality, authenticity and presentation. Most of the new restaurants are serving Indian food that is heavily compromised in terms of skill, ingredients and processes but are very high on spices, chilies and excessive oil. All this has resulted in the fact that a large number of guest end up with food poisoning primarily due to stale curries.

Today world renowned dishes have been meddled, fiddled and tinkered to a point that the authentic versions lie buried in the pages of history forever. Few examples are ‘Ma ki dal’ a staple that has lost its original flavor and taste- what you get to taste is more of cream, butter and tomatoes to enhance the taste – whereas for ‘Authentic Ma Ki Dal, you will have travel to Amritsar’s famous Kaiser Da Dhaba. Butter Chicken is prepared with onions and spices, whereas authentic recipe had only tomatoes, butter, cream and white pepper and the flavors of cooked marinate married to the flavors of tandoori chicken made this dish what it was, but today there no difference between Butter Chicken and Chicken Tikka Masala in most of the restaurants. One of the famous chefs and a renowned food critic used to make Chicken Tikka Masala with tomato soup. Same distortion I have seen in case of Dosa, an Omelet and all curries regardless of ingredients look greasy/oily. It’s a fact, that today more and more people get sick eating Indian curries than any other cuisine. Delhi Belly is a direct result of this new age cooking phenomenon that establishes the fact, that inadequate knowledge is dangerous thing. Indian restaurants are slowly contributing to their own decline and one of the reasons is the deteriorating standards of commercialized demonstration / teaching of various foods via dedicated programs on media channels. On other hand where the HALWAI shops use to do pittance of food business till late eighties are major grossers today, each outlet is serving over 800 to 2000 guests and are providing very basic food that is fresh like e.g. Thalli, Chana Bhatura, Dosa/Uthappam in their authentic form & no fusion and they are ruling the ‘Restaurant Industry’ to become the most profitable food business chains in the country.

There are many reasons for the decline of Indian food served in the restaurant Industry. Some of them I like to highlight;

·      Since I remember even in fifties we served and presented the food we eat is the same way, as we do today. Same table cloth or placemat with silver style service and food brought to table in big bowls, today, sadly enough, only contents in the bowl has changed. In last fifty years food recipes, style of services has changed all over the world. No other food in restaurants is prepared in advance and served later, apart from Indian. If you are ordering Chinese, Continental, Mexican or even fast food is not precooked anywhere in the world. Food is prepared when the order is placed and served fresh, which is not the case of  Indian food - we refuse to grow with time. On the contrary in India even McDonald and Burger King are compromising their food standards and sell nearly 60% of their food which has a life span of 10 minutes, precooked and stored in their heated bins.

·      Fusion gone wrong. World wide fusion in food was introduced to enhance the food flavors, taste and appearance. Unfortunately, we never understood the depth of flavors of original recipes and started looking for instant flavors and taste and started using chemicals like Monosodium glutamate, Tomato Ketchup etc., to improve flavors and thus started the decline. I will be the last person to condemn fusion, but it has to be undertaken by people who fully understand and respect the importance of our heritage cuisine.

·      In seventies and eighties when we tried to develop management trainees’ fresh from catering college as ‘Kitchen Chefs’ after training, this fresh breed of chefs with limited experience of two years were suddenly exposed to the glory, glamour and opportunities in the international food branches such as; Continental, Chinese, Thai or Italian. While working they got a chance to enhance their knowledge and experience with years of dedication and hard work. Whereas on other hand, these young chefs of the Indian food branch became fully qualified just after two years of training and became celebrities in just a few years. All this resulted in a great shortage of experienced chefs. The sad part is that even the best and most successful of them cannot produce delectable food when compared to those unqualified but experienced good cooks.

·      It is not that we only have those fly by night TV chefs who cook for special effects. There
are some great Chefs as well, with tremendous experience and productions skills. Such as Vikas Khanna, Ranveer Singh Brar, Manjit Singh Gill, Manish Malhotra, Veenit Bhatia and upcoming Kunal Kapoor. I bow before them and if you ask them, most probably they still say that they are student of Indian cuisine and are still learning. I really hope that people like them will influence the future of Indian food and not TV’s bubblegum super chefs.

Lastly, I must narrate an interesting story of Indian food decline. One of the finest chef India produced is Imtiaz Qureshi, father of Mughlai and Awadhi cuisine. While working with ITC he must have seen dozens of mediocre qualified chefs getting elevated with limited experience and knowledge. Realizing the opportunity he started promoting his family member as Indian Mughlai Chef. Story is that nearly every member his family irrespective of his earlier profession(butcher/painter/tailor) is today working as Indian chef in various Restaurants’ and Hotels  and funnily producing better food then qualified chefs, all over the world.

What we can do to stop the decline in the standards of Indian food?

We all would love to see more Indian restaurants servicing authentic Indian food. If you feel like eating delicious basic Chicken Curry or Mutter Paneer or even basic yellow Tarka Dal- can you name two to three good Indian restaurants near you? No. Indian food is our food, we grew up on this, and unfortunately today we have to struggle to get this food for us or our family.

I think time has come to change with time, try to produce fresh food for each guest similar to Chinese, Italian or Continental cuisines. I am sure we need to research and modify our methodology of cooking without compromising the quality, taste and flavor – And Believe me it’s not rocket science! Best Wishes.

My salute to these ‘Amazing Chefs’, as I bow to their commitment and skills with gratitude, needless to mention that I will remain a humble witness to their contribution and devotion in keeping the traditions of  Indian Culinary Art alive and singing.

All these chefs are celebrities in their own right. Out of these, two chefs need a special mention Late. Pradeep Arora and Atul Mathur. Although I have worked with lots and lots of Chefs but these two were always my inspiration and I must mention that if the fate had been kind to them they had potential to be among the finest chefs in India.

 Written by Anil Chak and Virat Varma