DI interviews the CEO, Anuraag Bhatnagar on what’s brewing at the hospitality chain, committed to the core values originally set by the legendary founder Capt Nair.
We are meeting for the first time, since the last wave when we had multiple restrictions in place. As the world is opening, we caught up, to understand what’s new at Leela, that was bought over by asset management group Brookfield, just a few months before the first lockdown started. Not new to hospitality, as our sources tell us, the group owns in excess of 31,000 keys globally. Which means they understand hospitality as a business to grow. Personally, I have known this well, since the group appointed Anuraag Bhatnagar as their CEO in India – surely, they had done their homework well. The choice could not have fallen on better shoulders. Anuraag has since been building his team. Some of his key team members are ex-Starwood, and subsequently ex-Marriott, where he worked himself, before joining the new team at Leela.
What has been his brief since taking over the assignment? It could not be an easy task, considering the daunting legacy left behind by Capt Nair and his team! How does Anuraag view his task ahead?
The legacy that he created in terms of the beautiful palaces, the ethos of Leela Dharma and so much else, needs to be preserved, nurtured. Alongside, we are mindful that to take this legacy forward, we need to rely on more technology, people skills and therefore take this legacy forward to a global arena that we as a prized MNC can do.
So, what have you done to accentuate the legacy?
We have introduced many innovations all aimed at preserving Leela’s core values. If you ask anyone what these values are, you will be told these are core Indian values, embedded in the warmth and genuine graciousness of the heart into a luxury experience. To accentuate these, we have introduced more Indian rituals, at every Leela property, keeping in mind what that city or region stands for. A ceremonial evening ritual at a certain time for each property. We have added Leela Palace service, which is a few notches above the traditional butler service, highlighting the Indianness of each property. This will take care of anticipatory services, various touch points in the guest experience. We also have launched Tishaya, which is our amenity program. It’s been taken from a flower, that blossoms every twelve years, a range of fragrances that are internationally exported to over 20 countries. We are celebrating the best of India, under our banner “Icons of India”, which we launched recently with NDTV and Satyavarthy ji. We will soon come out with Aujasya, which is our vitality program, based upon both body and mind. Given our international reach, we want to take all these elements to the next level.
But taking it forward to the next level? It would also mean more properties, increasing your footprint both in India and overseas? What’s the strategy? Your owners are asset managers, and asset light ironically is a model of growth being pursued by many in the industry?
We acquired the Leela brand, in complete recognition of what the brand stood for. My brief is to preserve this legacy with a sense of humility and the wow factor in mind. To recreate this legacy in today’s time would have been impossible. How will we expand? An asset light strategy we have noticed has not stood the test of time. Our preferred route for expansion would be the ownership route. I think we will keep a balanced approach. We are not keen on just a fee earning model. There would be cities where ownership is a difficult type, and collaborations would be easier, but with like minded people.
So, is there an allocated fund made available to you to buy around, say with a shopping list? Or, are your owners saying we have invested what we wanted to do, now it is up to you to take this group further from within your resources?
We do have access to capital. It’s not that whatever the owners wanted to commit has been consumed in the acquisition itself. We will have access as and when we find the right opportunity to grow the brand further. It’s also not that any specific allocation has been made. It would depend upon specific opportunities that come our way, how they give us the further edge in our space.
Are there plans to launch any sub brands. I do understand at one point in time, there was a thought process to introduce a second brand, like the Oberoi has a Trident?
We are in the ultra-luxury space and we wish to remain in this space only. Where the asset quality supports the experiential quality that the Leela brand promises. We will remain in this space and there would be no Leela Light, so to say. This is our USP. We feel this cannot diluted. We do not have any plans for any sub brand.
Commercially, these last few years have been most challenging, to say the least. What has it been like for you?
As Leela, we have been mindful of what we have stood for, even in the last two to three years. For most of the corona period, we have been able to preserve almost 90% of our pre covid daily rate across the system. We made an operational profit in 2020 and a significant profit during 2021. Today, our market share in our space, compared to our peers, is almost 17 to 18 percent higher than in the pre covid time. We have gained more customers, raised our daily market rate and we have been able to add more hotels. This has been possible simply because everybody realises our focus in on Luxury and our Indian core values.
And whom do you consider your competitors, with whom you are vying with this luxury space?
We play in the luxury space and therefore any luxury brand is our competitor. This also varies by market.
Where do you see your market share going?
Where do you see it going forward? I see it stabilising around 20/22% higher percentage points market share higher than during pre-covid times. There is a reason for this. When we acquired Jaipur, we acquired a few strategic inroads into new international clientele, possibility to work on new itineraries, we get to work in an extended arena.
But Jaipur too is a collaboration?
No, it is co-owned. We are 50% owners.
What about Ahmedabad?
We are not the owners, the state government. The hotel is a SPV between the government of Gujarat and the Railways. It is our Hon’ble PM’s pet project.
Where is the next growth going to be?
That’s a great one, as today later this evening we are going to announce two new hotels, both in Kerala. These are two Raviz Hotels, one in Kovalam and the other in Ashtamudi. Together these are 250 rooms, which is a significant number in Kerala. Dr Ravi Pillai, the prosperous Indian based out of Bahrain and Dubai is the owner of these properties. Both are becoming Leela hotels. Kovalam, you will recall was earlier the Leela Kovalam, so this is ghar vapsi of sorts. But he was also entrusted us with his iconic new property in Ashtamudi, next to Kollam. The owners are putting in money, upgrading the assets, based upon a very detailed plan of upgrading. Some immediate upgrade, some of it has already started.
What about Mumbai, where your present property is outside of your management, so to say?
In Mumbai we have a CRS arrangement with them. Its working well, we have a great working relationship with Dinesh and Vivek.
Would you look at having your presence in Mumbai?
Sure, we would. This process is always ongoing.
What about globally? Say, in a place like London?
Indeed, we are looking at cities globally where we see Indians as a strong user market. In some of these cities we already have a strong presence as Brookfield, and know the territory well. I am sure such opportunities will come our way as we go along.