Personally I never thought that the future of Delhi’s Taj Mahal Hotel (or Tajmansingh) was ever in doubt. The Taj was forced to sign an unfair lease agreement when the hotel was built during the Emergency. When the lease came up for renewal, the NDMC (which owns the shell of the building) took a needlessly bloody-minded attitude given how much money the corporation had earned from the hotel over the years . (There are NDMC-owned properties that have returning nothing to the Corporation; some still owe crores). And, to be fair, the Taj management did screw up the renewal process; it should never have let it get to the stage where there was an auction.
Why did I think the Taj would win? Well, because once the auction was restricted to Indian hotel companies, I had guessed that it would be a Taj vs ITC battle.
ITC is a professionally-run company which saw the value in acquiring an iconic property but which, I guess, was not prepared to lose money on the acquisition. Any company that won the bid would get only the shell of the hotel (the Taj owns all the fittings) and would have to close the hotel for around two years to refit it, a process that would cost around Rs. 200 crore or more apart from the lost revenues during the time the hotel was closed for refurbishment.
For the Taj, keeping the hotel was not merely a business decision. There was a huge sentimental attachment to the property. Plus, the Taj group started out with an advantage of several hundred crores. If it retained the hotel (which it did eventually ) it would not need to spend the vast sums of money that any new operator would have had to expend. Some investment is required: the rooms need to be redesigned, both in terms of space and fittings.But it is not as vast as the fortune any new operator would have had to spend.
Given all this, I was confident that the savvy Puneet Chhatwal , who now runs the Taj, would balance sentiment with commerce and make the winning bid. Which is exactly what happened.
If the Taj can increase the revenues it gets from room rates and do some F&B re-adjustment (they can start by blowing up Machan, which never recovered from a hideous redesign nearly two decades ago), it can easily make more money from the Mansingh despite the higher percentage of revenues it has to pay NDMC.
People often ask me why the word ‘iconic’ is usually used to describe the hotel. And it is a good question . Delhi is not short of hotels that can be called ‘iconic’. There is the Imperial which was built in the last years of the Raj and has a sense of history. There is the Ashoka, built in the 1950s by a consortium of maharajahs and government bodies to evoke the grand hotels of Europe with an Indian touch. And there is the Oberoi, the first modern five star hotel in India which changed all the rules when it opened in 1965.
The Delhi Taj does not have the advantage of history or of being the first of its kind. When it opened in 1978, the Ashoka had not yet been run to the ground by ITDC, the Oberoi was already Delhi’s top hotel and though the Imperial was struggling, it still had the historical background that remains its unique selling proposition to this day.
So, what makes the Taj so iconic?
I reckon that it was no single factor but a combination of many things . While the Oberoi remained the first choice of foreign tourists and businessmen, the Taj set out to actively court Indian business.
These days, when there are 70 flights every day between Delhi and Mumbai, we do not realize how far apart the two cities seemed in the 1970s with only a few Indian Airlines flights to connect them. In that era, Bombay was Bombay. And Delhi was Delhi.
The Oberois symbolized the power of Delhi (thought their most profitable hotel was in Bombay). The Taj was a Bombay company run by Bombay people and perhaps the only major hotel company in India not to be run by Punjabis. Apart from the Parsis who you would expect to find in a Tata company, the Taj’s bosses came from all over the subcontinent. Ajit Kerkar was a Marathi-speaking Goan and his number two Camellia Panjabi was a Sindhi from Bombay.
In some ways, the arrival of the Taj in Delhi marked the first attempt by Bombay to stake its claim in India’s capital. The Oberois, who were incredibly powerful, did their best to lobby against the Taj’s arrival but Ajit Kerkar finally outwitted them by finding an unlikely ally in Sanjay Gandhi.
From the moment the Taj opened in Delhi, it was as though a slice of Bombay had been transported to the capital. Most of the hotel’s top executives came from the Bombay property and the Taj assembled a team of the best chefs and managers from all over India to open the hotel, breaking though the stranglehold that Punjabi Delhi had on the hotel business. (I reckon that one reason why the Maurya, which opened at roughly the same time, had less impact was because it was run by the same old ex-Oberoi/ex-ITDC people that Delhi was used to. It had none of the Taj’s freshness).
If you look at the guest profile of the Delhi Taj in its first two decades, you will find that the Bombay elite constituted a large chunk of its regulars. It became a home-away-from –home for Bombay businessmen who came to petition the government, for lawyers who came to appear before the Supreme Court, for Bollywood stars who were bewildered by Delhi and many many other Bombay people
Delhi had always had international hotels full of foreign tourists. The Taj was Delhi’s first national hotel full of successful Indians.
A second crucial component in the Taj’s success was the food. I doubt if anyone has ever put as much effort into planning a hotel’s restaurants as the Taj did. The company’s top chefs travelled through Italy finding dishes for Casa Medici, the hotel’s Italian restaurant, accompanied by Kerkar and Panjabi. Casa Medici was India’s first authentic Italian restaurant and though it never did as well as it should have because it was ahead of its time, its influence was phenomenal.
Until the Taj opened Haveli, its Indian restaurant, all Indian food in Delhi was descended from the Kwality, Moti Mahal kind of places. The Maurya found great success with Bukhara, which was Moti Mahal, four generations on, but its Avadhi restaurant Mayur never really took off. (They closed it eventually and opened Dum Pukht over a decade later). Haveli, on the other hand, which broke with the Punjabi food formula, became the city’s top Indian haute cuisine restaurant, introducing Delhi to such dishes as Achar Gosht which were then widely copied.
The two most influential restaurants however were House of Ming which introduced North India to spicy Sichuan food and led directly to the death of Cantonese food in India and the invention of Punjabi Chinese with its red sauces and chilli graves. Until that happened however, the House of Ming was a world class restaurant . But later, greedy managers started Punjabifying the food (in the late 1980s I think) to please rich guests.
As influential was Machan, the coffee shop. The Oberois had Café Espresso, an atmospheric narrow coffee-shop but young people could only afford to go there for a coffee. (It is significant that even those who remember the restaurant with affection struggle to remember a single dish).
The Taj took a deliberate decision to lower the prices at Machan and to make it the hotel’s advertisement for itself. Kerkar chose a genius manager for the restaurant (the late Ronnie Lobo) and with prices that were low (a steak was Rs 12!), Machan was packed out night and day.
What will happen now ?
Well, the Taj management can heave a sigh of relief. After years of using service to replace hardware, the group can finally make the improvements that the hotel needs. The Taj has been lucky to have a series of terrific General Managers who rescued the hotel after a really bad patch lasting several years in the late 1990s and the early part of this century: Abhijit Mukherjee, Yannick Poupon, Digvijay Singh and now Satyajeet Krishnan. But there is only so much that managers can do when the rooms and small and the restaurants need to be renovated (or in the case of new Machan, blown up)
The Taj now operates in a very different environment where the foreign chains are asserting themselves (Marriott-Starwood is now larger than Taj if you exclude Taj’s Ginger hotels); where the Oberois have a global reputation for luxury; and where ITC, once written off by Taj executives, has emerged as a serious challenger to the old primacy of the Taj, taking it on successfully in city after city: Chennai, Bangalore, Calcutta and most recently in Hyderabad.
How the Taj moves forward with the Delhi property will be crucial to its future. History has given the Taj management many iconic properties – the original Taj, the Aguada complex in Goa, the West End in Bangalore, The Connemara, FishCove and The Coromandel in Chennai, the Rajasthan palaces and so many others. Previous managements have screwed up some of those properties. But I am guessing that Puneet Chatwal will put things right.
Retaining the Delhi hotel is a good beginning.