Indian Hospitality Industry 23

The World considers America as the father of 

Modern Fast-Food industry!

Will they extend their valued support to this industry or will they allow its Self-Destruction!!

 First  time I visited the United States of  America it was in 1982.  My wife’s father Mr. J.N. Parimoo was then posted in Washington DC as Senior Correspondent, representing India’s Premier Publication the Times of India. Being an ardent fan of McDonald’s, my first priority was to visit their restaurant to relish their amazing Burgers and appreciate the advancement of technology in food and how it has changed the face of food industry forever. Since then nearly forty years have passed, legend of Raymond Albert Kroc (October 5, 1902- January 14, 1984) is long gone, and a million new players have emerge. Do I see American food moving in the right direction or the decline has started?  I guess, I do want to pen down my thoughts and my experiences for all my friends who read my blogs.

·        For me, exposure to the American food started with my first visit to DC and Boston when I was working as Manager Airport Restaurant and Flight Kitchen, Calcutta in 1980-82. Then MacDonald’s was the harbinger of ‘Fast Food Revolution’, with amazing products like Big Mac, Chicken Nuggets, Milkshakes and fries. I also got exposed to Danny’s Dinner, IHOP, Dunkin Donuts and Burger King. My favorite was Big Mac, Milk Shakes and Fries. I also loved dinning at Danny’s or IHOP. Life was amazing at Washington DC, with worlds most advance Metro Subway. Pizza Hut Chain, casual dining restaurant with Salad Bar became a force to reckon, Pizzas became one of the most favorite food of eighties and nineties.

·        In the following visits, I saw Burger King emerge as a leader with help of latest food technology and high-quality food standards. Brands like Wendy’s, Hardee’s and many more appeared on the scene to assert their presence. We also saw in casual dining, the emergence of brands like TGIF ( Thank God Its Friday) becoming a prominent leader in their segment along with a new breed of Tex-Mex food serving Americanized Mexican Food. Then appeared cafés like Au Bon Pain serving bakery, sandwiches and croissant with coffee, convenient for people on the go or short of time. For dessert we witnessed the mushrooming of Ice cream Parlors with various Innovations. Every visit was a kind of an eye opener- as I was exposed to new food, improved technics, better tastes and equally better standards. 

·        Then in late nineties we saw the Restaurant Industry getting further revolutionized with the opening of King of Restaurant business, called Cheese Cake factory, nearly all their restaurants were with over 300 covers. This American casual dining chain became leader of the American class and quality of food till date. With nearly ten page menu, they boast of world cuisine. Their service is the most welcoming, friendly and yet casual. This Phenomenal concept has not been copied or improved in last thirty years. Similarly, we also saw the popularity of Frozen Yogurt as health food. 

·        On my last visit to USA in February 2019 just before Covid took charge of the world, we got stuck in America for over eleven months. Living in southern America, I savored American food with great passion, like no one can make better fried food then the southerners’. Tried and tasted amazing chicken Burgers at Chick-Fil-A  the  best and the most successful Fast Food chain of America. Also tried fast growing chain in the US, Raising Cane’s and Zaxby’s are a single product chicken based chains. Today these are the most consistent and fast growing chains in America. By this time I also became a great fan of Coffee, it became one Cappuccino a day-as essential as brushing teeth every morning, fully realized the magic of Starbuck in America. 

·        I can safely say that, I have most passionately tried the food served by nearly all popular food chains in America. My favorite is, Subway for small pizzas, Fire House Subs for their vegetarian subs & salad, Taco Bell, Chipotle & Del Taco for Tacos, Burritos and Quesadillas, Popeye’s for Hot biscuit, Arby’s for roast beef. Jake in the box, Hardee’s, Shake Shack for loaded burgers, Church’s for fried chicken, PJI in Laurel for amazing chicken sandwich and Onion Rings, Kentucky Fried Chicken for Pot Pies, Sonic Drive Inn for shakes, Dominos Papa Johns and many more, localized concepts some with amazing food. This does not include long list of casual dining restaurants in New York, DC, New Orleans, Hollywood Beach Florida, Hattiesburg, Boston, Philly, Houston, Jackson, Laurel, Biloxi and many more on the Highways of US of America. 

·        My list of favorite today is, 1) Chic-fil-A -  Serving amazing food only six days a week, by miles the best chicken burger in America. Due to quality, taste and their customer relationship they earn double the revenue of any well doing Macdonald and that also with Sunday closed. 2) Panera Bread - the best bakery based casual dining serving soups, sandwiches to die for and simply amazing salads and that also at reasonable price. 3) Zaxby’s - Again a single product concept with real crispy fried chicken. My favorite is Kickin Chicken Sandwich with Tongue Torch sauce and crispy fried mushrooms. 4) Raising Cane’s – This is again single product chain doing phenomenal business, serving just chicken fingers with their special sauce and Texas Toast with coleslaw. And lastly 5) The Cheese Cake factory – Now this is the unforgettable dining experience in the world. Their vast menu, unbelievable variety and amazing food quality, coupled with their superlative service standards all together contribute to the unique experience which   may be the best in the world. They have been leader of food Industry for over 30 years and no one to challenge them yet - anywhere in the world.

My latest visit to USA this year (2024), post Covid, has shaken my belief in the American capabilities. My experience in quality, food, innovation and hygiene has taken a severe beating. Let me try to give you few of my bad experiences in last 12 weeks;

1.     Visited MacDonald and ordered Crispy Chicken Burger with fries and coke. The Burger patty had chicken skin inside the fillet and when I pointed it out to the staff they just ignored, I just had to discard the burger. Fries by now had become soggy, and then I tasted one chicken nugget, which was rubbery and had a cartilage inside. What has happened to MacDonald’s, position as world’s number one fast food brand? You can feel the deterioration all around, in terms of service & hygiene. I am sure and glad that Ray Kroc is not alive to see this decline. One thing is still reasonably okay, and that is their Breakfast. It is rather unnerving to see the decline of the God of fast food. This is only one example; people have stories about bad experiences.

2.     In India I am use to having coffee (Cappuccino) regularly around forenoon. This habit I have had for more than 15 years, even during the Covid times I use to pick up coffee every day from Lee Café, Laurel MS. Now with Starbuck in Laurel I was really delighted and have been going there every day for my coffee. Even with this brand I saw, a casual administrative approach, they didn’t have sugar for one whole week. Erratic staff attitude, few times we had to wait for coffee for over 35 minutes. Mind you this is only one year old Starbucks store. This is again a common complaint, all around, unfortunately they have no competition. 

3.   With the great Burger King, a brand which was considered technically far superior in technology, quality and hygiene standard, my experience was total disaster. Their famous original Chicken Sandwich and Crispy Chicken Burger had precooked soggy patty with stale limp lettuce, similar was the fate of their Crispy chicken burger. Beverage machine had no ice, so I had to drink warm coke. Restaurant was dirty and not well kept. Hard to believe and it is the truth and everybody in America knows it. 

4.     Panda Express can certainly be awarded for serving the best substandard Chinese food. Most chicken and meat dishes have more corn flour covering then the chicken or meat inside. Noodles thick and nearly Al dente, spring rolls are neither crisp nor tasting Chinese. Commercialization has taken toll on the quality. This is not only with Panda Express but most of Asian food court outlets. 

5.     Every visit since the eighties Mexican restaurant has been high light of good food. But this time I saw total deterioration in quality, hygiene and food standards. It seems everything is cooked by immature part time cooks. Only good food I ate was at Johnny Sanchez, restaurant owned by celebrated Master Chef Aaron Sanchez in New Orleans. 

6.     As a food professional, what has disappointed me the most was, the realization that, even at Cheese Cake Factory, quality of food can go down? Out of five visits to various locations, I was totally disappointed with quality of food; some of the dishes were just insipid and inedible. But in few locations food preparations were quite okay, not memorable, but reasonably fine. 

7.     Today I have already completed over 80 days in US of America and on average have consumed at least one meal outside in the restaurant, fast food outlet or decent Dinner. My experience has been average to disappointing. Most of the casual Dinners are not Chef Centric Restaurants trying to serve anything prepared with compromised recipes and presentation, as long as the size of meat, chicken or fish is big enough, the taste or flavor remains inconsequential. Most of the time proteins are hard and tasteless. You might be able to compare the quality of food in these causal dinning outlets, with the food served in England during the seventies – which was average irrespective of  quality in terms of taste or flavor- simply put it was just cooked protein . I feel that today in America there are at least two dozen mediocre or substandard Restaurants, for one good restaurant. It also reminds me of my country and quality of the food going through the same cycle. 

8.     In some ways, I feel that renowned Fast Food Chains may be held responsible for taking the professional cooks away from the Restaurant Industry. They did this by developing modern instant cooking system for preparing Burgers, Pizza or Fried Chicken by untrained and unqualified staff having basic education for limited menu items. They also worked with delivery supply chains to prepare ‘Mise en Place’- a French culinary phrase for putting in place Or Gather - ready to produce pre-prepared frozen food items ready for frying, grilling or baking. This system was so successful that nearly the entire industry started adopting this method, to avoid high cost of qualified chefs. But for regular restaurants or even fast food outlets with large menu size started adopting the same system and that has compromised the food standards and is responsible for the decline. This system worked well for fast food chains till they had a mile long menus and uncontrollable numbers of outlets. This is the reason why short menu chains like Chick fill A, Raising Cane’s, Zaxby’s along with few others are doing well, but all major Brands with large menu are having quality issues. America must get the qualified Chefs Culture back to bring quality into the food.

9.     Talking of my country India, Indian food in America continues to be a liability to our class and culture. Even today nothing has changed from the sixties and seventies- it’s the same table cloth, same strong smell of Indian spices, same kind of depressed and worn out look and same kind of food- below average and extremely expensive. Reason for that also remains the same, which is staffs who are not qualified cooks but are preparing food under supervision. There are few good restaurants and some of them are Michelin Star certified, but as things are, I have my reasons to doubt the capabilities of Michelin committee to understand Indian food. If same standards are applied, we will have over dozens Michelin Star Indian restaurants in each city.

Coming back to American food Industry, what has really happened after Covid?, Why they have stopped being innovating and progressive for the food?, simply enough, there has been no innovation, improvement or enhancement of service, technology or product quality. It appears as if they are still trying to adjust to new world order. What’s more disturbing is that the food quality has fallen to levels which are even lower than what they were during the Covid period.

Mind you, the Industry is doing well, and it is a boom time all around,   anyone producing average or little above average food is doing well. Rates of food items have doubled in the last three/four years, as such returns are comforting. All projections are rather positive and lead to higher demand. New projections for future are pointing at a ‘Big Leap’ in the food and beverage industry, especially in the short snack food segment. Declining quality standards, I think, is the main reason for retarded demand/growth in few of the fast food outlets and restaurants segment, which needs to be, addressed post haste.

I also fear that in the race to introduce new technologies and increase profitability, they are ignoring the vital factor of improving the food standards using the same technology. There is also a possibility of business stagnation or even decline in the Fast Food and Restaurant industry because of superior technology being introduced in the Take – Home segment of semi prepared snack meals - which is doing remarkably well by any standard.

Today food industry in Australia, UK and South East Asia, has taken the lead over American Industry. This is happening only because due importance is being given to not only quality of food but also to the quality of the manpower who are actually producing the food. Simple example to note, is to compare food prepared in various International prestigious competition programs like Master Chef Australia or UK, where everyone can see the level of skills and compare to the American competitors.

Finally, I feel that American Industry has the capability to bounce back. They need to revisit their strengths, make their menus compact and food more flavorful and appealing. There is also a need for food ‘Management Company’ to conduct a thorough study of what and where things are going wrong. Fast food chains need to improve their quality of products through supply chains management and also up-skill and re-skill their staff with the same values for which Macdonald’s and Burger King stood for and conquered America. Americans’ need to introspect a bit and appreciate the fact that major part is quite in place and needs some fine tuning, but quality, taste, flavors and presentations are equally important. I am sure; I will see better trends in my next visit to USA. God Bless you America. 

Written by Virat Varma & Edited by Anil Chak

Indian Hospitality Industry 22

                                   PAMMI THAKRAL MY DEAREST FRIEND 

My Lalaji

I vividly recall meeting this highly polished gentleman, immaculately dressed Indian with proper British accent, walking into my office with the request of booking few rooms for his guests in Centaur Hotel cum convention Centre, Srinagar in the October of 1987. He was Head of Senator Group, who was    building three Hotels in Kashmir. I was a little taken aback with his introduction; however it didn’t take us much time to figure out common friends. He invited us for drinks at his place and that was the beginning of a long friendship which he ended today forever by God’s wish. Now I hope that maybe he will wait for me in heaven to show me around. But my fear is that I, most probably will go to hell, unless the Gods think otherwise.

Paramjit Singh Thakral was the youngest sibling , with his older sister and two brothers. Being good in education he was sent to London for a Hotel Management course. He stayed in London for more than 7 years during which he got transformed from simple Sardar of Punjab to elegantly dressed suave Indian Gora with impeccable British accent to match his demeanor fit for a distinguish hotelier. There he was selected by Air India to help in opening their first Airline Hotel in Mumbai, India. Centaur Mumbai, when opened was rated as one of the finest Hotels in India, with highest occupancy rate in the country for over a decade. From there he was picked up by ITC Hotels to manage famous Sea Rock Hotel at Bandra and from there he was transferred to open there flagship Hotel for South in Bangalore. From there he took over Hotel Yak and Yeti in Kathmandu for many years and when I met him he was head of Senator Group in Kashmir. A highly professional guy with the disposition of an introvert, he was an outstanding Hotelier and a man of principals which he lived up throughout his career

What can you say about a fine man, a great Hotelier and a dearest friend for over 37 years? We use to meet nearly every day, if we were in town. He was my dearest friend and will remain so till I am alive. There was nothing in his life which I was not aware of and same was with him.  Friends and colleagues all use to be little surprised of our closeness and not only him but also his wife who is an equally close friend and their kids were family. Usually I had reputation of people taking me for granted/ride, but as compared to him, I think, I looked crooked, that’s how noble was my friend. Always full of smile, I never heard him with any kind of negative view about any one. He only looked at the positive side of each situation or person.  

Pammi was great connoisseur  of good music and dedicated fan of Talat Mahmood songs, he even sang beutifully  but being married to family of singers, he kept a very low profile in singing. We were lucky he sanged his last one for us

As a professional hotelier, he was par excellence. Great innovator, true professional and was just amazing in man management. His first job in India at Centaur Mumbai, he created a finest example of high turnover, outstanding superlative service and some of the most successful F&B concepts, which assisted Hotel with unprecedented service cycle in the history of Hotel Industry in India.  He was a man of high integrity, thoroughly professional and was humble as well – indeed a very rare combination of multi-faceted virtues all rolled into my dear friend Pammi. As a friend I followed his career path and he became an inspiration to people like me. Miss you dear buddy.

Written By Virat Varma &  Anil Chak

Indian Hospitality Industry 21

 

Today Hotels in India are doing extremely well. The boom which started after COVID-19 still continues. What’s more, we are running short of rooms - even during the off-season. Hotels on the hill-stations have never experienced this kind of rush in the past. But, it is also true that, in the coming years we will witness a quantum leap in the inventory of hotel rooms.

My question is that are we gearing-up to meet this demand with better management practices, superior upscale service standards and introduce the superior version of F&B and Bouquets facilities to address the surge of demand which is dormant at present.

In this blog, I would like to enlighten our Industry with some ground realities. Since last few years I have been extensively involved as a ‘Mystery Auditor’, reviewing the industry status. I am glad that today the demand for hotel rooms is unprecedented, but sadly enough our service standards in last fifty years, are at the lowest ebb. It seems that we have forgotten the basic principles of hospitality. Corporate hotel managements of all chains keep inventing new service upgrades with little or no implementation at the operational level. Today all this is being conveniently overlooked because of excessive demand, but soon the life of hotels will complete its full circle soon; and then the correction or upgrade will be very cumbersome and very expensive.

At this juncture, to justify my claim, I will try to point out some very sensitive issues that cropped up during various ‘Points-of-Contact’ both with the customers/guests.

·    Central Reservation System (CRS)

Despite the advancement of technology in all aspects of hotel reservation system today, the numbers of booking that are generated through the CRS are on the decline, primarily due to lack of clarity on the room rates among those handling the enquiries, which in turn leads to uneventful telephonic discussion. More often than not, the operators advise guests to check the final room rates with the Hotel directly as they are not updated by hotel in the reservation system. Moreover, the management prefers to trust the reservation sites for business generation rather than their own team. The importance of communication between revenue management and reservation systems should not be ignored - not only in the interest of business generation but also guest satisfaction, which is critical factor, for long term benefits. Today Hotels loose over 20% of possible business due to communication gap between the CRS and hotel reservation including the corporate sales. Consequently, we end up picking reservations on much lower rates and also paying higher commission to the reservation sites, because of this problem the guest remains confused between the CRS and hotel reservation system.

·    Front Office Operations

For old school professionals like me, the ‘Front Office’ still remains the first and last support for clients/guests. Unfortunately, today this is slowly becoming a weakest department in the Hotel. In most of the hotels, FOM has morphed into more of an administrative unit. Their involvement in generating business is zilch; the staff under them is untrained and do not function in tandem with their colleagues’.  In the last two years we have visited over thirty odd hotels across India during which, most of the time (say 90%) we were disappointed, in one way or another with the performance of Front Office. The use of telephone in the operations have been ignored simply because most of the hotel operations works on mobile phones, but the entire guest operations are carried on using the installed hotel telephone lines and that is also being presently ignored. Our experience revealed that over 75% of the hotels we surveyed require both Technology and instrument upgrade. Same is the situation with Concierge/Bell Desk operations. Somehow, we have conveniently forgotten the role they play in creating guest satisfaction. We have a perfect system and, in most cases, excellent software, but still in majority of cases the human factor has failed to comply.

·    Food and Beverage Operations and Services

In India, for decades the reputation and success of any hotel was always defined by the popularity of their food outlets and banquet business. Best hotels were known by the number of famous restaurants they had. Seventy percent of the F&B revenue came from non-resident Guests, forty percent of hotel occupancy was also generated due to contacts developed through the F&B clientele. Everything has changed today, majority of city hotels are finding it difficult to fill up the ‘All Day Dining’ and bar in the hotel; today, on an average there is just 20% occupancy in their outlets and they are happy. The room service is just for name’s sake and the Banquets are at mercy of God and Auspicious Dates for various ceremonies of life. During the eighties and the Nineties on an average we saw ‘Room to F&B ratio’ to be 1:1 and in some large Hotels it was even more, while today it is down to 1:0.25 or even less. On other hand F&B menu rates have sky rocketed, as today a cup of Coffee in a five star Hotel, which cost hotel Rs.8 to 10, now sells anywhere between Rs.500 to Rs.900 and same is the situation with the other food items on the menu. Irony is, only time restaurant is full, is Breakfast, which is a complimentary offering to the resident guests.

 The quality of food available in the Hotels is also sub-standard, and is sold at very high price, the same goes for hard and soft beverages. As for innovations, we checked the ‘Restaurant Menus’ of over 50 to 60 Hotel Restaurants and found seventy to eighty percent items are common. Today free standing popular independent restaurants are doing extremely well but I feel they are also slowly increasing rates. The real winners are food chains like Haldiram’s, Bikaner, Big Chill, Sagar Ratna and many more. This is one of the reasons why the profitability of hotels will register a down slide in times to come. Although post COVID - 19 booms is still going on, but let us not overlook the fact that there are many more Hotels that are being built at present, and this factor will impact the market when fresh room inventories get added to the existing pool in the next two or three years.

A new extension of the F&B department has emerged post COVID-19 which is called Banquets. Today for some unknown reason banqueting business has started generating phenomenal amount of revenue; reason for the same is unprecedented growth in banquet rates.  I remember during the PRE-COVID 19 days when average rate uses to be 2000 plus, which today has gone up to 3500 plus, thus registering an unbelievable growth of 80%, unheard of specially after low economic growth of past two years due to COVID 19. With volume rates higher than any ala’carte rate of best Hotel Restaurant, it is just a matter of time when we will face major down slide.  

·    Service Standards

There is a major decline in the quality of services being provided in a good ‘Five Star and Five Star Deluxe Hotels. The Hotels earn their major GOP from room revenue, but at present most of the services stand diluted when compared to even the normal standards of the Hotel industry. My experience tells me that, now a days nearly 95% of the 5-star hotels do not provide evening service unless you are a VIP or ask for it; there is no daily change of Linen, whenever wherever possible, basic amenities like fruit basket, chocolates etc. are either not provided, instead some cheap unattractive down market Indian snacks are placed. Mini Bar operation is also on the decline. Information graphics provided in the rooms are slowly reducing or in some cases vanishing. Out of over twenty hotels I visited in last four months, nearly 60% didn’t have Menu to order food. Hotels insist on using bar code to read the menu. Even the laundry, which is out sourced in most of the hotels, does not follow any prescribed standards; quite naturally the results are way below the required quality and standards.

·    The General Manager of the Hotel

Contribution of a General Manager in the success of any hotel is very much relevant, even today. After over fifty years of hotel industry, the magic of a competent GM remains the most important component responsible for making any Hotel from good to outstanding. My last two years of mystery audit analysis clearly points out lack GM’s involvement in day to day running/operation of the Hotel. Today GM spends over 80% of his time in his office and most of the time, when Guests want to meet he is “in meeting”.

Questions which GM needs to answer for himself are:-

1.       How many times he is seen in public areas?

2.       Does he know what is being served in the buffet today?

3.       How many guests has he interacted with, today?

4.       Does the front office cashier have enough change for the guest?

5.       When was the last time he spent little time with Garden staff?

6.       When was the last time he had staff cafeteria food in the Cafeteria?

7.      When was the last time he got operational feedback from the staff, Trainees or     Guests?

8.    When was the last time Guest saw him in the lobby in morning checkout time and evening, when Guests are coming back?

You will be shocked to know that out of over thirty Hotels I stayed in the last two and half years, I saw only one GM mingling with the guests. And this story must be told; early this year I stayed at Hyatt Regency, Chandigarh for two days. Every morning while having breakfast, I saw GM taking round of ‘All Day Dinning’, greeting, wishing and talking with guest, examining the buffet spread - he was very approachable to one and all alike. Similarly, I saw him, in the evening doing his rounds in the lounge and other restaurants. Making sure all guests knew who he was, he made sure that everything was in order in his hotel, and in the process his presence made sure that any confusion or complaints are handled well. Always remember if GM is on the move, whole hotel is alive and kicking

Hotel Ethics

Lastly, the most damaging thing I felt was that hotels have started promising the services that either don’t exist or have been conveniently withdrawn/discontinued without informing the guests. For example, as you all know, most of the five-star hotels have created a new category few years back to enhance ARR, it is called Business/Executive class rooms with lounge service. But in reality, in most of the hotels, there is no lounge available to Guests. Surprisingly enough, the lounge is kept closed even if they had one. So, customer is tricked into paying more for regular room and in most of the cases, they don’t even provide even fruit basket. Is this ethical or just smart!  Don’t they realize that by closing the lounge to save few hundred rupees, they have opted to compromise their credibility; in fact they forget the reality, that if the  guest is using the lounge for a drink will always end up eating/hosting a dinner with his guests in the Hotel, in turn it helps to increase  food sales. This just one example of tricking played on the guests.

As hoteliers we all know how to trick the customers at various stages. The question is! Are we building the goodwill of the Hotels for long term benefit or compromising the reputation for short term gains.As hotelier I am taken back by new kind of policies are being framed by hotels, and wonder whether they are for the benefit of the Hotel or otherwise. If ‘profit at all cost’ is the compelling force behind every policy - even if it means to cheat the customer then it is unethical and is contrary to the principles of the Hospitality industry.

…“Hospitality is the relationship of a host towards a guest, wherein the host receives the guest with some amount of goodwill and welcome. This includes the reception and entertainment of guests, visitors, or strangers.”…!

Written Anil Chak & Virat Varma

Indian Hospitality Industry 20

 

I grew up in Delhi knowing just three hotels! Oberoi Maidens, The Imperial Hotel and The Ashok Hotel. In 1966-67 I left India for Beirut for higher studies. I returned to Delhi in 1974, only to see that things were just about the same or let’s say, they were marginally different, though we had new entrants in the hospitality industry, but all were under Government management, and were owned by ITDC, a public sector company, which also had five new hotels in Delhi - Ashok, Akbar, Lodhi, Janpath and Ranjeet and many more were coming up all over India, at that time in private sector we had, The Oberoi in north and Taj in west. Only International connection was the Intercontinental Hotels. As for me, the real modernization and professionalism in the hotel industry came to India with the entry of the InterContinental of the IHG Chain franchising two hotels, Oberoi InterContinental Delhi and Taj InterContinental in Mumbai. It might surprise a lot of young professionals to know that most of the system manuals existing today are built on original InterContinental Hotel Manuals.

Lots of water has flown under the bridge since then, today from individually managed hotels in India, the hospitality sector is   now a chain driven business. We have over fifty hospitality chains operating in India at present – including both Indian and International. Prominent Indian Brands are Taj, The Oberoi, ITC Hotels, ITDC, Clarks, Leela, Lalit, Park Hotel, Lemon Tree and Sarovar. Leading International Hotel companies operating in India are Marriot, Hyatt, IHG, Radisson and Hilton. In this blog I would like to discuss my take on each of these chains - their strengths & weaknesses, their positioning and what their future is in the Indian subcontinent.

From seventies till nineties Indian brands like Taj, The Oberoi, ITDC and ITC Hotels ruled the Indian hotel Industry, where people like Ajit Kelkar, Biki Oberoi, S.N.Gadhoke were the Demi Gods of hotel Industry, followed by Captain C P Krishnan Nair  founder of Leela Group and Lalit Suri of Lalit Hotels. They were the Kings of Hotel Industry. They created excellence in the Indian Hotel Industry. This trend continued till the late nineties. First the ITDC Hotels were the largest Hotel Chain in India with five prominent Hotels in Delhi and 17 Hotels all over India. By 2000 they had over 35 properties. Unfortunately the downslide of ITDC started when more and more operators slowly established themselves and introduced better management concepts and understanding. Thereafter the dominance of bureaucracy became a major factor for the collapse of ITDC along with corruption, mismanagement and careless attitude. Consequently the government sold most of the properties to private companies and today - as expected- nearly all the properties are rolling in money. ITDC hotels kept few Hotels with themselves including India’s best designed Hotel The Ashok and a few others. It would not be wrong to say as I mentioned earlier, the only reason The Ashok hotel is still with them is only for  the purpose of ‘milking the cow’ as much as they can. I guess, the truth is that ITDC doesn’t really want to stay alive anymore.

Now let’s talk of other renowned Indian Hotel Chains, namely The Oberoi, Taj Hotel Group and Welcome Hotels by ITC. All of these had one thing in common for their survival, that each one of them  had a God Father – for Oberoi Hotels with MS Oberoi and Biki Oberoi gone, their survival now depends on the Mukesh Ambani Group. Despite all the celebrity status, the owners of some of the best Hotels in the world, depend totally on their Sugar Daddy for financial backing. Same is the situation with Taj Group or ITC Hotels, where the quality of their  services have gone down, and the quality of food - which was their main strength- has also been compromised in most properties, including in their flagship hotels. My view is, that people at the helm of the prime Hotel chains could not preempt  the rapid expansion of the International chains as a serious forthcoming competition and they let the international brands define the qualitative difference, not only in the standard of services and concepts but  they allowed the quality to slowly and steadily go down in all the areas. To come up in numbers these leading brands came up with dozens of new brand names and signed-up hotels which they didn’t have  the capacity to neither manage nor market the facilities to fill the rooms, as a result they were ostracized by the hotel clients. For years due to poor performance, most of their B grade/town hotel properties were not doing well enough. At that stage either a strong financial might of their Godfather, or a parent company they served for their existence, could have saved them, but could not, because of the fact that they had lost their reputation which stood in the way of most of these prime properties. Fortunately post COVID boom has come to their rescue, but the fact remains that today all these internationals chains are way ahead  in every facet of excellence in the hospitably sector.

Today’s natural leaders are International Hotel Management Brands like Marriot, Hilton, Hyatt Group, Intercontinental Hotels and Radisson Hotels. They are ruling the industry because of the hard work, innovation, good management, research, investment in Marketing the property to ensure high profitability among the these Hotels. Their agreements are tough and  one sided and are on ‘take it or leave it basis’, despite their rigid conditions they remain the most preferred brands, because they control 65/70% of hotel rooms in the country today. I feel they are doing well because they mean business, they don’t sign where they can’t make money and they deliver most of the time. After long research, I would like to extend my views on each one of them below.

Inter Continental Hotels are the oldest and also the most successful brand in this country. Since the sixties they have served the in Indian hospitality industry, the truth is that they wrote the first operations manual for the Indian hotels. Even today those manuals have not lost their relevance. One of the major reasons for the success of Taj Group and Oberoi Hotels is the efforts made by Intercontinental Hotels - The  Oberoi Intercontinental and Taj Intercontinental were the first professionally management Hotels in India. Even today the service offered by these two hotels has no parallel.  They were the true Icons. InterContinental Hotels have Holiday Inn, Crown Plaza and a few more as a part of their branding. In India, the man responsible for establishing  these names {Holiday Inn and Crown Plaza} and getting them the right brand positioning and due recognition in India - is none other than Rajiv Sharma who was one of the most successful development managers’ in our country. Today IHG manages over 50 Hotels and have another sixty under construction.

Marriot Hotels today are the largest Hotel Management Company especially after they took over the Starwood Group. Marriot in India have rather a checkered past, they signed up with Ansal’s a real estate company in Saket, which was later taken over by ITC Hotels and they lost out, then they signed with JP Hotels for conversion of all there properties and lost, then they also signed up with another luxury chain called Leela Hotels & Resort and   just one week before the opening lost it yet again, there were many more such misses. I guess that these experiences helped them to lose their arrogance and rethink the India strategy. They worked hard with Rahejas’ in Bombay, who changed their fate with Renaissance Hotel at Powai and JW Marriot at Juhu. The problem was with their development team, I myself experienced their arrogance twice - first with their expat managers’ and second, more importantly with their Indian (Brown Sahab) mangers’. The luck of the Marriot group finally changed when they took over Starwood Hotels, which was a very successful brand in India. After that The Sheraton became the most popular brand with two Flagship Hotels- Maurya Sheraton & Oberoi Sheraton, Westins in Mumbai, NCR and other cities. Marriot is changing for better, now the slant is more Indianized and Humane. I need to present a case study about the earlier arrogant attitude coupled with a feeling of being superior to others. In 1999 I was working as CEO of PKF (Rattan Mama Consultants) and was invited by ITC Hotels to prepare Status Feasibility/viability report about Ansal owned Marriot – Saket Delhi, which was under construction for a long time and as ITC Hotels had purchased the property, they were keen to know the future of the Five Star property as this was  a B - location at that time. My report confirmed their fears, because of which the ITC Board had decided to terminate the management agreement with Marriot. After finishing this meeting with ITC top bosses, I had next meeting with the Representative of Marriot in Hyatt Regency, Business Lounge. I met Steve the newly appointed India Head along with the Vice President-South East. During the meeting I mentioned about ITC hotels purchasing Marriott Saket, their first property in North India and asked what will happen to them, as ITC Manages their Hotels themselves, and then what will happen to the Marriot’s management contract which is operative. Our friend from Singapore laughed and said, “we’re going to teach these Indian jokers, how to manage Hotels”. I gave him a look and said” please don’t under estimate their management skill. He laughed and said you’ll see. They were sacked and in arbitration they pleaded for a compromise. The compromise was, that for next five years the world's best Hotel Management Company had first time, franchised a Hotel which was not managed by them but by ITC Hotels. If they were not full of themselves, I am sure things would have worked out in their favor.

Hyatt Hotels has been a great chain and has had success all the way. After the Asiad, The Asian Hotel was going through really a tough time - rumors were that their property was up for sale and then Hyatt Hotels took over and changed everything. Even today that Hotel has best F&B with two world class restaurants operating for last thirty years and still are the leaders in Food and Beverage concepts, Service standards and its a brand that clearly defines hospitality standards in the Indian Industry. Although, all this has been achieved due to hard work and dedication of the team of Hyatt professionals headed by Peter Fulton, he is the star of Hyatt success in India. Although a few cracks are visible after his retirement, but Hyatt is a very professional company and I am sure they will bounce back soon.

Accor India - In 1997 when I started working as CEO of PKF, I had a visitor from France, this man who was representing Accor India, Rolland, informed me their company had decided to invest 100 crores in establishing Accor brand in India but unfortunately, they were  not been able to get a suitable partner. After he left, my friend Rajiv Sharma took over for a year before joining IHG. Accor’s first experience was with Mahindra Group, but it didn’t work out.  It is also a fact that, although they were in India during the Asian Games with Surya Sofitel in Friends Colony, it took twenty years for them to establish themselves along with a tie-up with the owners of Indigo Airlines. Today they have 56 Hotels operating with nearly 30 hotels in the pipeline. Accor Group unfortunately has not been able to bring any major strength to the table e.g. Marketing strength, F&B operation or excellence in operation. Although they are quite well settled but still remain on rather a weak wicket, I don’t see them growing any faster or establishing some kind of pioneering  position for themselves in Indian Hotel Industry.

Hilton Hotels & Resort, the world’s best Hotel chain unfortunately has a different history in India. First time they came after tying up with Lalit Suri the political millionaire converting very well managed Holiday Inn, in Delhi in 2001/2, which was a total disaster. Holiday Inn under Lalit Suri management was performing better operationally and the service was good. Under Hilton it was a total mismanagement and as a result they were sacked within a year.  After that they signed up with the Oberois’ for their 3Star brand called Trident Hotels and that alliance also didn’t last very long and they parted ways. In 2011 when I was busy completing Piccadily Hotel’s first property in Janakpuri, while scouting for a management cum franchise Hotel Company, we invited Hilton along with others and as the luck would have it, we finalized Hilton Janakpuri as their first Hotel in India. Hilton Janakpuri Hotel was opened with a lot of fanfare and an equally large pre-opening Budget. Being the first Hilton managed Hotel in India, hotel business took of quite well. Furthermore, due to good  all-around publicity, they opened another six Hotels in a row, namely Nehru Place Hotel, Hilton, & Hilton Double Tree at Noida, and Hilton Double Tree and Hilton Garden (Now Hilton Double Tree) in Gurgaon and Hilton Garden at Saket Delhi, all together seven Hotels in NCR. Unfortunately as a Management Company, they failed as mangers, failed as employers and they also failed miserably as a marketing company. For three years they managed but could never achieve even 60% of the budgeted targets. The worst and much more happened, because of which all their promoters came together to form a committee and decide to terminate the tie-up contract. By the time they hired a new and a better Country Head to control the damage, four properties including Janakpuri in Delhi NCR exited from the brand. New Boss tried his best to save these hotels but it was too late for these four properties, but Chennai Hotel was saved. For next few years Hilton survived and grew but not too well. They once again committed a blunder by hiring the Ex Marriot person as their new CEO. Fortunately thanks to their wisdom and luck he was eased out within a year. The good news is that the new CEO Zubin Saxena is a very well-grounded guy with his feet firmly planted on the Indian ground. I really hope that, given an opportunity and power he might change the fortunes of Hilton for the better in India.

The Radisson Success Story- This is a story of this young boy called Kulbhushan, with stars in his eyes. I knew KB Kachru (KB) when he returned from his training stint abroad. He exhibited great ability to deliver from a very young age. His hard work at ITDC Hotels exhibited his class. In 1984 he left ITDC and joined hands with Carlson Group to open TGIF, one of the most successful Restaurant Chains in India. By 1998 he was able to bring a new brand called Radisson Hotel to Delhi airport. Although it was a franchise but he provided more   support than any other chain did in the management contract. He turned this Hotel into a money bag for the promoters. Although he was the Vice President but I have seen KB literally working as sales representative visiting all hotel promoters trying to convince them for a tie-up. All his early tie-ups’ were personally finalized. He built the Indian company from scratch. He worked as though he owned the company. I could never see him gloating, always down to earth, humble and he always kept the door open for promoters and new clients. Today Radisson is the most successful story, built brick by brick and  sheer hard work.There was a time, when many people tried to poison the top management but soon every one realized his gentle capability and the virtue of magical control over his promoters, they gave up. Without him - to me – the company in India will be incomplete. The fact is, Radisson Hotel is a success story because of KB. I would not be wrong to mention that he is the most dynamic leader of the twenty first century. With his contribution, today Radisson is the largest Hotel chains in India, as he single handedly established Radisson chain in India, today he stands shoulder to shoulder with the likes of Industry Greats e.g. MS Oberoi(Founder Of Oberoi Hotels), SN Gadoke (Creator of ITDC Hotels), Ajit Kelkar(Creator of Taj Group) and  of course K B Kachru Creator and today Chairman of Radisson Hotels in India).  

Sarovar & Lemon Tree The Underdogs One of the Most successful domestic brands are two companies started by senior Hotel executives, one from Oberoi and other  one from Taj. 

 Anil Madhok after working for over four decades for Oberoi Hotels, joined hand with his junior college Ajay Bakaya and formed a company called Sarovar Hotels. It was a humble beginning with a Hotel Marine Plaza. As they signed few more hotels, they faced difficulties because of inexperience in the early years, but did not give in. I remember one of their clients, Agra Hotel did not pay them their fee for years, still they supported them, providing total backing till they were strong enough to stand. An excellent company ethics. That is the reason why today they have over 100 properties under their belt. Although today they have sold a part of the stake to Louvre Hotels, but their business ethics have not changed. God bless Sarovar and Ajay Bakaya.

The Lemon Tree Hotels, second most successful chain had comparatively an easier climb. Patanjali G. Kashwani ( Patu) and his friend Late Puneet Bagrodia started this company initially with a Hoyel in Goa .  Puneet parted ways in early 2010 with his hotel in Goa called Wishpering Resort in tow. Later Puneet Bagrodia passed away due to cancer.

 On other side Patu Kaswani who was always a very good manager was able to get more hotels under his belt. He was also smart enough to mobilize International funds for his company. Today Lemon Tree Hotels operate over 100 Hotels and is growing. I feel that the reason for the success of both these Hotels is that they address three- and four-star segment which was totally ignored by the major National/International chains. Both these companies have worked hard to keep their segment of market in their grip. Taj and ITC tried their best but unfortunately could not bring the same results in this segment. In future as they are very focused and tight fisted, they will take advantage of their performance and credibility to get into higher segment successfully.

In the next ten years I see them as leader in their segment both in terms of number of hotels and profitability.  

                                                                 Written by Anil Chak & Virat Varma

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