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

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