Mr Oberoi on how he built the eponymous hotel chain and his vision for the future
It’s not everyday that the chairman of a company you meet, walks you through the products that he manufactures or the services that he provides. Obviously, it comes from a sense of pride and passion in his product when the top boss takes that trouble or interest to take you on a guided tour of his facility . It strikes you even more, if the person is an octogenarian and when he does that for almost an hour after completing a three-hour long interview . We are talking about the 82-year-old chairman of Oberoi Hotels and Resorts, Prithvi Raj Singh Oberoi , or as he is addressed by friends–just Biki.
The chain was founded in 1934 by his late father Mohan Singh Oberoi who started out as a billing clerk after migrating from what is now Pakistan; later his dad pawned his wife’s jewelry to buy the Clarkes Hotel in Shimla. Biki was apointed successor after the death of his older brother Tikki in 1984. He survived November 2008 terrorist attack at his Oberoi hotel in Mumbai, a hotel whose construction he’d personally overseen. He still lives on a farm outside Delhi, but was visiting the hotel for business that night. Son Vikram and nephew Arjun help him run the chain.
We meet Oberoi at the Oberoi Hotel in Mumbai, at the Fenix, an all-day dining restaurant, housed at the lobby level, which has been recently refurbished after the terrorist attacks. An energetic 82-year-old Oberoi is seated next to his son Vikram (47), who was recently appointed as the hospitality chain’s chief operating officer . As we walk in and greet him, Oberoi tell us that this is his first meal of the day. What caused the delay? “Work” , pat came the reply, as we ordered some coffee.
Oberoi, dressed in a light grey blazer, blue shirt and black trousers, with a printed silk pocket square, appears rather relaxed despite the casual but penetrative glances of the waiters attending on him. The story goes that he flies to London every few months and gets his suits custom-tailored by the acclaimed Kilgour French Stanbury. During the course of our conversation, he says he doesn’t need too many suits these days and a visit every four months works just fine for him.
In keeping with his sartorial elegance, Oberoi, unlike most men his age, bounces with vitality. He is still on top of the things at the Oberoi Group . His touch is visible at every nook and corner of the group’s 30-odd properties as he is said to attend to every detail of a new property or a renovation personally, right down to the cutlery and the bed linen. Oberoi says it’s a bit of an exaggeration since everything is laid down in a manual anyway.
But this passion for perfection comes from the lessons in luxury that he acquired in his formative years just by travelling and checking into the best hotels globally, as also how to run them. Oberoi says that it was really his father Rai Bahadur Mohan Singh Oberoi who steered him in this direction , following which he happily travelled the world till he was pushing 40.
It’s a small wonder then that the Oberoi chain is acknowledged for setting standards in service and luxury. Oberoi’s Vanyavilas, Rathambore ; Udaivillas, Udaipur ; Amarvilas, Agra; and Rajvilas, Jaipur are now frequently ranked among the best properties in the world. But Luxury for Oberoi is “just a perception” . Or perfection perhaps!
After coffee, we head to the Kohinoor suite, located on the 21st floor, for a more relaxed conversation. Oberoi is staying at the opulent suite, which carries a jawdropping price tag of Rs 2.75 lakh a night, has a living room with fully equipped workspace, a master bedroom with a luxurious bathroom , a mini-gym , personalized butler service and with the most breathtaking view of the bay over Marine Drive thrown in.
Once the second-largest hospitality chain, the group has been pushed to the third spot by ITC Hotels . Oberoi is unfazed by that. “We don’t want to be in the quantity race. Quality is our focus.” The top slot is occupied by the Taj chain. However, unlike the Taj that has boosted its portfolio through acquisitions , Oberoi has grown organically. Contradicting perceptions that Oberoi was slow in expanding, he rattled off names of almost a dozen properties which would be completed over the next few years, perhaps the chain’s biggest show of aggression in recent times.
It starts with the inauguration of its Oberoi Gurgaon , positioned as a luxury hotel for the business traveller , this month. It would be followed by Oberoi Hotels in Hyderabad by 2013, Pune by 2011-end , a jungle resort in Kabini (Karnataka) and a luxury resort near the Chandigarh hills. Then there are a few Trident Hotels across Hyderabad, Pune and Navi Mumbai. Besides, it’s also planning one each in Bangalore, Jaisalmer and Goa. The biggest sign of action in the company is its huge push for managing hotels abroad. While Oberoi Dubai is expected to be ready by 2012, it is planning new ones at Marrakesh, London, New York, Shanghai , Moscow and Paris.
Of late, not only are guests flocking to Oberoi hotels , investors too have made a beeline. ITC, Reliance Industries and Analjit Singh of Max Group have been wooing the chain, but Oberoi isn’t worried about their presence. The family owns 34% stake in the company but ITC and Reliance are at striking distance from the open offer trigger of 15%. Indian rules suggest an acquirer will have to make an open offer for 20% stake in a company where its holding touches 15%. While the general buzz is that Reliance may not sit on the fence for too long, Oberoi says that Reliance’s investment is purely financial and it has no intention to run the company.
The group is now tweaking its business model to align with the new business environment. The chain intends to follow in the footsteps of global hotel chains like InterContinental that prefer managing properties than owning them. “We are going into that model,” says Oberoi, puffing on a Havana cigar. The new 202-room Oberoi Gurgaon is under management contract . “We may make small equity investments . In certain strategic locations, where we can’t find a partner, we would then invest .” In the next 10 years, Oberoi says, 60% of its portfolio will be managed and the rest will be owned against almost 80 % now which is owned. Globally, chains earn 3% on sales or 10% on profits as management fees.
When asked about the legacy he wanted to leave behind , Oberoi says, “I will like to be remembered as one who put India on the hospitality map.” Oberoi, for a good part of his life, lived in hotels just like his father and group founder. His favourite hotel outside his own is the Four Seasons in Florence. In 1972, Oberoi built a farm house in Delhi and since then has been residing there. But he also has another house in Nandi Hills, which is 35 km from Bangalore . “If I retire, I will live there.” Post retirement, he also desires to pursue painting , a newly acquired interest . But as of now, he is yet to decide when he’d like to hang up his boots.
from The Economic Times and Forbes