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Podcast | Deep dive – The business of family: The Oberois

The story of the Oberois begins with the irrepressible Mohan Singh Oberoi who was born on August 15, 1898, in Bhaun, a small village in undivided Punjab.

May 28, 2018 / 05:13 PM IST

Let us start with a brief history of India's hospitality Industry before World War 11 because this business family expanded a hospitality empire in a country where the idea of luxury in select locations was appropriated largely by the British.

We have already spoken to you in one of our previous podcasts about how JRD Tata pioneered the idea of Indian hospitality.  But post independence in 1947, there was no movement or spurt of growth in the hospitality sector.  In 1956, when the then Prime Minister of India Jawaharlal Nehru, returned from the Non-Aligned Movement Conference, he saw the urgent requirement for world class hospitality to host visiting dignitaries.

What resulted was the building of the first-ever government funded Ashoka Hotel in New Delhi.

An agreement between India Tourism with Sheraton/ Holiday Inn also franchised a project in Bombay. The ideal of "Be Indian, Buy Indian" saw three Welcome Group Hotels being commissioned between 1975 and 1977.

By now, there were three leading Indian hotel companies in India. The Taj, and the Welcome Group, the Oberoi hotels, and this is where our big Indian family story of the day begins. Ladies and gentleman, we bring you the story of the Oberois.

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Poverty drove him to Simla in 1922 with his young wife. In Simla, he approached one Mr. Grove, the manager of the upscale hotel Cecil where the British often congregated to escape the summer heat and was hired as a clerk. It is said his demeanour, perfectly knotted tie and smart shoes impressed Grove.

The story of the Oberois begins with the irrepressible Mohan Singh Oberoi who was born on August 15, 1898, in Bhaun, a small village in undivided Punjab.

His father Attar Singh Oberoi was a humble contractor in Peshawar and died early as victim of a deadly cholera epidemic when Mohan was just a few months old.

Battling great odds, Mohan first completed his basic education in the village school, matriculated from DAV School in Rawalpindi and passed his intermediate examinations from Lahore.

Circumstances were such that he needed a job as soon as possible and became a supervisor at the age of 18 in a relative's shoe factory but the factory shut down because of communal unrest and riots.

In 1927, Clarke, who had by then been managing Cecil Hotel for a while, was offered a 1 year contract to manage a property called Delhi Club. He invited his most promising employee to help him in this new venture. Their first joint venture was a catering contract for Delhi Club.

This was a 50-room property and soon, Mohan pressed upon Clarke to buy out the hotel. A Delhi based contractor Sardar Bahadur Narain Singh lent the duo Rs 135,000 for the deal. Interestingly, the contractor went on to build the Imperial in Delhi. The shadow of debt, however, was beginning to loom.

But before we talk about that, we must share with you, an interesting anecdote involving Sardar Bahadur Narain Singh and Mohan Singh.

He took over the Grand in 1937, which had been shut down for over five years over fears of contamination in its water supply. To his first guests, he promised that both water and food would be brought from outside.  With his by now polished to perfection business acumen and passion for details, he turned this struggling property into a runaway success.

World War II was on and this was a time for austerity and a different brand of hospitality. Calcutta was packed with soldiers and to accommodate them, Mohan Singh refurbished the hotel from top to bottom and added 1500 beds which were offered for just Rs 10.

Business was so brisk that cashiers could not keep up and were pushing cash under the carpet to count it the next morning.

New beginnings and expansion

And soon the Oberoi empire began to expand.

Mohan began to buy shares in what was then India's leading hotel collective, Associated Hotels of India Ltd. What followed next was straight from a Salim Javed script for Yash Chopra. In 1944, he arrived uninvited at the annual meeting of Associated Hotels of India Ltd.  With him was a canvas bag stuffed with controlling shares which he presented with a flourish to the directors. With this move, he gained control over hotels located in Delhi, Lahore and Rawalpindi.

In 1949, Mohan floated The East India Hotels Ltd (EIHL), named after the East India Company.  Associated Hotels of India then merged with EIHL.

Mohan's skill in updating and reviving failing properties held him in good stead and  his acquisitions included the Soaltee Hotel in Katmandu,  Mena House close to the Egyptian pyramids; and Hotel Windsor in Melbourne that he renovated back to life and profit.

Personal and professional setbacks

Mohan  was on cordial terms with General Ayub Khan, and on his advice" had invested in and developed four hotels in Pakistan -- Faletti's in Lahore, Flashmans in Rawalpindi, the Cecil in Murree and Deans in Peshawar. In 1965, when a war between India and Pakistan broke out, it cost Mohan the four hotels and all the passion he had invested went to waste.

The war put an end with finality to his dreams of doing business in Pakistan. To add insult to injury, they received a measly sum  of just Rs 800,000 at a postwar sale of properties in the 1970s.

The Oberoi legacy continues

Prithviraj Singh "Biki" Oberoi remained as the Executive Chairman of  EIH Limited (formerly East India Hotels) till 2013, a post that he acquired after the death of his father. He continues to successfully guide The Oberoi Group, which runs a chain of luxury hotels, The Trident hotels and Oberoi Hotels & Resorts.

His son Vikarm is now the CEO and Managing Director of EIH and his nephew Arjun Oberoi (the son of Tilak Oberoi) currently looks after the Project Development and is designated as Managing Director- Development.

Even though in his eighties, the venerable Biki continues to live, breathe, talk and ideate hospitality at the Oberoi Farms farmhouse -cum-office on the outskirts of Delhi.

In his years of active stewardship, he enhanced the growth of the Oberoi brand and learnt from his father to make the best of the worst. In an interview, he recalled once how in 1942, after Calcutta had been bombed, Mohan took him, a very young Biki in his car to the docks to show him the devastation caused by Japanese bombing. These visuals would prepare him to face the destruction that the Trident suffered during the terror attack in 2008 when gunmen spent two days hiding in the hotel, killing about 20 guests and 11 staff members.

The interiors of the hotel were in shambles and Biki and his team spent over 18 months and almost $40m rupees rebuilding everything from a scratch.

The pristine interiors are now guarded like never before. Guests have to go through airport security protocol and no chances are taken.

Though Mohan was prepared by destiny for inevitable success, Biki was prepared by his father to succeed in more ways than one. Biki was educated in St. Paul's School, Darjeeling, India, and later the United Kingdom and Switzerland. He graduated in Hotel Management from Lausanne, Switzerland. In 2010, he was recognised as the “Corporate Hotelier of the World” by Hotels magazine.

Till he hit his forties, he had never lived in a house and hopped from one hotel to another all across India.

Mohan also sent his son on a trip around the world to let him savour the different dimensions of international hospitality.

In 1954, Biki was given a modest little enterprise to run, and his first – it was Maidens in New Delhi. The shortage of adequate accommodation in Delhi in those days saw many diplomats making a beeline for Maidens including an Egyptian ambassador who stayed there for over eight years.

Father and son also collaborated in building a truly industrial-scale hotel in Delhi in 1965  and it had  swimming pools, multiple  restaurants and 320 rooms even though it was tough, considering foreign exchange was scarce in the years before the liberalisation of economy.

Things have changed since them and hotels have also become business centres and need all the attendant paraphernalia to facilitate conferences, meetings and more. Hotels are now also fitness and wellness destinations as also event hubs and the Oberois have kept up with the trends but what Biki has distilled from his years in the business is that the true capital of any business is people. In this case, the staff and the guests.

Biki knows that  in any industry but most importantly in the hospitality industry, training the staff to serve in the highest traditions of service and to keep them inspired is key to lasting growth and success.

As of 2011, the group's total revenue worth was Rs 1142.95 crores  and the Oberois were now operating 29 luxury hotels and 2 river cruise ships in five countries under the luxury ‘Oberoi’ and five-star ‘Trident’ & Maidens brands.

Oberois also became one of the most decorated hotel chains and diversified successfully into areas like flight catering, airport eateries, travel, car rentals, project management and corporate air charters.

In the domestic arena, Oberois directly competes with Hilton hotels, Hyatt hotels, Marriott international & Taj Hotels.

Even in his eighties, Biki remains as feisty as ever and lives at the Oberoi Farms farmhouse -cum-office on the outskirts of Delhi.

In 2016, he approved the decision to shut down Oberoi's historic and one of its most profitable properties in Delhi to renovate it at the cost of over Rs 325 crore.

Having inherited his father's eye for fine detailing and aesthetics, he hired Adam Tihany, a New York-based designer and architect to give the hotel a fresh, contemporary uplift while retaining its classicism.

It is important to acknowledge here that this was a hugely risky preposition but then the son of Mohan Singh Oberoi has learnt from the best to turn adversity into opportunity, having navigated the challenges of doing business in colonised India to working in an increasingly liberal economy that has brought with it international competitors like Four Seasons, Hyatt, and Marriott.

The present

Even though, Biki has today passed the baton of running EIH to his son Vikram and nephew Arjun (the son of Biki’s brother Tilak Raj ‘Tikki’ Oberoi), he remains the captain of the Oberoi enterprise. Mr Hospitality himself has the final word, always.

Biki knows that he cannot compete with his rivals on the back of numbers but he can offer what they cannot. Nostalgia and old world values that have stood the test of time.

As he said once in an interview to Fortune India, “We want to be the best, not the biggest.”

So the race was never with anyone else and there was never an itch to turn hospitality into a commodity. The promise was always to offer a premium service experience and that has never been diluted even if its costs the brand some additional revenue.

The values of exemplary service have trickled down to the next generation and a story goes that once Anand Mahindra, the head of the Mahindra Group asked for a glass of water during a gym session at an Oberoi property and was quickly served by a well turned out gentleman who later turned out to be  Vikram Oberoi, Biki’s son.

One thing the Oberois have never done is to overreach the brief. They have invested in their strengths and recognised their failures well in time. Biki is aware that today in a market teeming with hotel promotions, inviting home stays and the influx of new players,  smart marketing strategies are a must.

One of his favourite go to corporate bibles is a study on tech disruption by Mark Woodbridge that advocates disruptive change over obsolete ideas whose time has passed.

He has also ensured that EIH doesn’t own the rights to the Oberoi brand and those remain within the family.

Vikram, his son and Arjun, his nephew supposedly work as a coherent unit under his guidance and there is no obvious tussle for oneupmanship.

Because perhaps even they know that though they can add new dimensions to the Oberoi brand, its primary energy and vision comes from a grand old man who refuses to stop learning or to hang up his boots.
Moneycontrol News
first published: May 28, 2018 04:50 pm

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