Eyes on untapped luxury markets: Harshavardhan Neotia redefines Ambuja Neotia Group’s success metric

Neotia owns nine hotels operated by the Taj group

AmbujaNeotia Group chairman Harshavardhan Neotia has operated for nearly four decades out of Kolkata, building a vast real estate, hotels, and healthcare empire. Even in an often-tough regulatory and political environment, he has survived, and thrived, being the nephew of S.K. Neotia, one of the founders of the Ambuja Cements group, and from a family whose business history spans over a century.

"You have to have the humility to know that everything is not in your control...Que sera sera (Spanish for 'whatever will be, will be'). As long as you are at peace with that idea, then you can do whatever you want to do. One of the things I learnt from my great-grandfather is to not be excited when something great happens, and to also not be despondent if something does not work out," Neotia, asked about the mantra for his success over the years, said during a recent interaction with Moneycontrol.

Neotia, whose hotels business is headed for a public listing in the next few years, plans for more. Away from the beaten path, he plans to set up luxury properties in lesser-known destinations in West Bengal, such as Lataguri, in the state's forested foothills in the north, and the dense forests of the Sunderbans. In his home ground of Kolkata, he is teaming up with operators such as the Apeejay Surrendra Group for the latter's second Park Hotel-branded property in the city, after the iconic Park Hotel on Kolkata's Park Street.

He even plans to bring his long-term strategic partners, the Indian Hotels Company Ltd (the Taj group) to operate those resorts in the new destinations, for the new-age traveller who wants experiences and a relaxed itinerary, over a packed schedule. The challenge, he said, is to make such destinations infrastructure-ready and easy to access, all while keeping to a premium price point.

"Our tariffs are above Rs 20,000 (per night). We are trying to get a different kind of tourist to our properties. The challenge is establishing the destination. The scenery is there. People, and I am talking of the elite, have not heard of these destinations. They may have heard of Ranthambore, Pench, and Bandhavgarh, where there are lots of hotels...The infrastructure in the forest is inadequate and run-down. You have to negotiate with the forest department to buy high-quality vehicles for them, and then rent it from them, as they would not allow others to operate them," Neotia remarked.

With Indian tourism at an inflexion point, developers, funds, and a variety of other sources have stepped up their hospitality offerings to cater to the well-heeled traveller, prepared to spend more not just to travel to destinations, but also to buy an experience. This also comes at a time when demand for hotel rooms in major cities and tourism destination far outstrips supply, and tariffs continue to grow.

The IHCL, which co-owns the Tree of Life chain of hotels with AmbujaNeotia, has stepped up talks with developers to grow across product categories, while Brookfield-backed Leela Palaces, Hotels, and Resorts have also taken both asset-light and asset-heavy models to grow its portfolio in such destinations. Emerging players such as K Raheja Corp-backed Chalet Hotels launched its new brand, Athiva, specifically aimed at the premium segment.

AmbujaNeotia, which owns nine hotels that are run by IHCL under a number of brands, is also following a similar playbook. Close to Kolkata and in its outskirts, the group owns properties such as the Raajkutir and Ganga Kutir, and at the sprawling Makaibari tea estate near Darjeeling, it developed the Taj Chia Kutir property. With IHCL, it has signed up more than a dozen new properties, five of which are under construction.

"All our 'kutirs' will have an elaborate spa, the cuisine will be very important, and there will be some experiences for our guests, be it a jungle safari or anything else. We aim for a freshness to the food, a farm-to-fork experience...The more well-to-do are looking for a slow life at our properties. They don't want an activity-filled day, unlike when you are a younger person. The category that we are catering to have a chock-a-block life. They are coming to see something new and to unwind, have a leisurely day," Neotia observed.

New healthcare opportunities

The group owns and operates four hospitals in Kolkata, Guwahati, and Siliguri, including both "mother-and-child" care facilities, and a multi-speciality hospital under the 'Getwel' brand.

Access to private healthcare, Neotia said, has been expanded for more due to various state-level schemes, especially West Bengal's Swasthya Sathi, the state's universal coverage scheme of upto Rs 5 lakh per family per year, as well as private health insurance taken up by families in the emerging middle class of India, including in Tier-II markets.

Neotia added that it is now building four more hospitals, including at state capitals to expand its healthcare push, such as Patna and Raipur.

"Healthcare has become affordable to many more people. Demand is huge. Everyone who was forced to go to a state government hospital, can now go to a private healthcare facility (due to such schemes)," Neotia said.

Even as competition from the large hospital chains exist in some of the markets that AmbujaNeotia operates in, such as from the private equity-backed Manipal Hospitals, Neotia said that with demand for quality healthcare being much higher than supply of hospital beds, competition is not a major concern.

He added that the company may talk to strategic investors in the future to expand its bed capacity, although not in the near-term.