The 'new economy' constantly throws up a multiplicity of entrepreneurial ventures trying to solve the problems of modern India. By telling their stories I try to catch a glimpse of the entrepreneurial evolution that India is going through. I have a weakness for the gloss of novelty and chase it in all experiences, from exploring new cities and restaurants, to changing what I read.
Amruda Nair’s family home, a large white bungalow partially covered by ivy, hides within the compound of The Leela Mumbai hotel. Our car pulls up to the porch and we make our way to a large living room, where she is seated. There’s a gilded look to the place. The legacy that Amruda is heir to surrounds her. Over the past three decades, her family has created one of India’s most storied luxury hotel brands. The Leela Palaces, Hotels and Resorts, founded by her grandfather the late Captain CP Krishnan Nair, owns and runs iconic hotels in Delhi, Chennai, Udaipur, Bengaluru and Mumbai. Her father, Vivek Nair, is now the chairman and MD of Hotel Leelaventure, the listed holding company of the hospitality group that clocked revenues of Rs 661 crore in FY2016. Though, initially at least, our meeting has less to do with maintaining a legacy and more with building a new one.
Early last year, Amruda, together with Doha-based billionaire Sheikh Faisal Bin Qassim Al Thani (Forbes estimates his net worth to be $2.3 billion, or Rs 15,277 crore, as of September 3, 2016) announced a joint venture to create Aiana Hotels & Resorts, a global hospitality company. Since then, the Doha-based company has signed management contracts for eight hotels in both India and the Middle East. The locations of the hotels are based on a hub-and-spoke model—cities with an international airport serve as hubs and hotels are at driving distances from it.
Now, in her role as the joint MD and chief executive of the firm, she is putting the finishing touches on the first few properties set to roll out under the Aiana banner. “The basic premise of creating a new brand was to launch an Indian-inspired brand in the Middle East,” says the 33-year-old. While the brand would have an “Indian service ethos”, it wouldn’t necessarily be Indian in terms of design or the broader concept. The decision was also based on a very specific premise. The Indian luxury hospitality segment has long focussed on catering to the nearly four-and-a-half million forex-paying tourists that visit the country every year, she explains. “If you look at the number of Indians travelling abroad, you’ve got five times that much. We’re expected to see 20 million [Indians travelling abroad] this year alone.” The idea was simply to look outward.
This, however, remained hypothetical until Amruda met her future business partner at the Leela Group’s Chanakyapuri property in New Delhi, in 2014. Al Thani is the chairman and CEO of Qatar’s Al Faisal Holding, which, through a subsidiary, owns marque properties like The St. Regis Washington, DC, the Four Seasons Hotel in Cairo and the Grand Hyatt in Berlin. An ardent antique collector, he was on an antiquing expedition to India when he met Amruda, who was then heading asset management for the Leela Group. Al Thani asked her what she would like to do in the future and she decided to run her idea by him. “I said: I think everyone’s looking in when we should be looking out. What I’d like to do is follow the Indian traveller.” It has been a couple of years since, and she’s doing just that.
Crucially, the company is based on an asset-light model that does not involve ownership of properties—Aiana will run the hotels through management contracts with developers that own the properties.
The model is a departure for both the players involved. Al Faisal Holding and the Leela Group have both been hotel owners, though the latter has begun taking up more management contracts of late. “The asset-light model is an internationally accepted model for the hospitality business and Indian markets are fast aligning to global trends,” says Mandeep Lamba, managing director, hotels and hospitality group at the investment management firm Jones Lang LaSalle (JLL) India. “Leading Indian hospitality companies such as Oberoi, Taj, ITC and Leela have all embraced this model as part of their growth strategy.”
Nevertheless, Amruda says they will be leveraging their experience as hotel owners too. Two of the early properties that Aiana will be managing are owned by Al Thani. That includes a large, 600-room hotel being developed in Mecca and a project in Doha. “But it’s owned by him in his private capacity,” Amruda points out. “He’s got seven other hotels under construction in Doha.” Just one of these is an Aiana. “It all depends on whether it fits or not.”
The ‘fit’ that she refers to is a rather broad outline of hotels that will fall under the Aiana banner. The hotels, she says, will either be four- or five-star properties, and will be intensely local. “Overall, the idea is for the property itself to be as local as it gets. We’re not going to be cookie-cutters,” she adds.
It’s a departure from the more conventional hotel management chains that look to create standardised experiences throughout a particular brand. The focus among American hotel chains entering Asia during a period of heightened growth in the 1980s was standardisation, says Amruda. American travellers dictated what they wanted the room to be, and what they wanted then was a standardised box, which helped create a sense of familiarity no matter where they were in the world. “We’re the exact opposite.”
Amruda insists each Aiana will have an identity of its own. “We’re building a 33-room villa concept in Kerala’s Munnar and we’re building a 600-room pilgrimage hotel in Mecca.” That is not to suggest that there won’t be some fundamental, binding elements within the brand. Each property will include one modern Indian restaurant as well as an Ayurvedic spa. Aiana, Amruda says, will also be Indian “from a service perspective”.
While working with an established brand is one thing, selling a new brand to a developer is a daunting task, but she seems to have pulled it off. “It’s a difficult thing to do. Out of the blue, convincing people to spend over a hundred crores to back a concept,” says Vivek Nair, with a touch of fatherly pride.
The word heiress has over time found a somewhat ignominious place in public discourse. The word connotes a sense of entitlement and privilege. There’s little evidence of that when we meet Amruda. For her, Aiana has, in many ways, been a culmination of nearly a decade of experience starting from being an intern at the Mandarin Oriental, New York in 2007 to an executive role at the Leela Group, where she ran the internal financial processes.
Another consequence of being an heiress is that it’s easy to presume that Amruda was born to do what she does. That, too, is not quite true. In fact, working in hospitality wasn’t necessarily the plan until she joined a hospitality management course at Stenden University of Applied Sciences in the Netherlands, in 2004. Before that, Amruda even toyed with the idea of becoming a journalist, spending a summer at the London School of Journalism. “I always wanted to write,” she says. She eventually joined the family business, after completing her master’s degree in hospitality administration and management from Cornell University and a two-year stint in investment sales and asset management in Singapore with JLL. But she continues to write. “Now I write about hospitality,” she says, characteristically wheeling the conversation back to the business at hand.
All through the interview, Amruda hardly wavers from the details of her work. From talking about data, which drives decisions and in turn leads to the setting of goals, and finally, results, she is focussed on the present and there’s little else but the order of business. But when pressed, she relents with a bit of reflection and some memories. When The Leela Goa was being set up in 1991, (“It was the year my brother was born,” she recalls), “I have lots of memories of going to Goa for holidays, while my dad would be at the site.” The affinity for the development stages of hotels is something she has in common with her father, who was instrumental in the building of, among other things, the big and swanky The Leela Palace New Delhi. In that regard, Amruda says she’s taken after him.
Ask her what she looks for when picking a site and she replies, “It’s always location, location, location. There’s nothing you can do to fix that. No matter how good the service is or how well it’s designed.” She then whips out her smartphone to show pictures of the sites that Aiana is developing in Munnar and Sakleshpur, near Bengaluru. The latter is a 50-acre site situated in a coffee plantation, with a water body in the middle. She flips through a few pictures and points to the open areas surrounded by vegetation. “We’re deciding where the villas are going to be, depending on where the trees are placed,” she says.
Perhaps subconsciously, her grandfather’s famed gardening instincts seem to have crept into the new brand’s green ethos. She agrees. “Leela’s known for its gardens. We’re creating indoor gardens in Doha and Mecca. We have our own take on how it will be incorporated,” she says.
The past few years haven’t been smooth sailing for Indian luxury hotel brands. While the 2008 recession was the immediate contributor to the troubles, the industry has also struggled with more fundamental problems. “Hotel development in the Indian context is complex on account of the over hundred permissions, sanctions and licences required, the very high cost of borrowing as also the high cost of land,” says JLL’s Lamba. This makes hotels very capital intensive projects. Add to that, the high cost of capital in India and the fact that several leisure destinations like game reserves, plantations and other hill destinations are not very well connected by flight, and it’s no surprise that luxury travel in India remains a formidable market to thrive in. “The main issue here is we don’t have adequate hotel rooms to cater to foreign travellers,” says Nair, who is also the honorary secretary of the industry body, Federation of Hotel & Restaurant Associations of India (FHRAI). Nair says that the industry has been lobbying the government for infrastructural incentives in order to fill the demand-supply gap.
Aiana’s game plan to deal with these issues involves straddling both worlds as and when possible. In keeping with the idea of following the Indian traveller, it will focus on the Middle East first, given the bases of the two owners, and then Nepal, Bhutan and Sri Lanka, in the near future. “Given the long-standing relationship between Qatar and India, there is also great synergy in the way we travel. This is why we want to bring Aiana as a new lifestyle hotel brand to the Middle East and will continue to support Aiana through our ambitious expansion plans,” says Al Thani.
The company, through the contracts it has signed, will have nearly 1,000 rooms under management across eight properties in Qatar, Saudi Arabia and India, says Murlidhar Rao, senior vice president-operations at Aiana.
And with several properties under development, Amruda’s not looking to sign on any more greenfield developments. There may well, however, be conversions of existing hotels to the Aiana brand in places like Goa and Jaipur. The rollout of the first two hotels (in Munnar and Mecca), expected by early 2017, has been taking up most of her time. “With 800 rooms under development in the Middle East I travel around the region quite a bit, meeting owners and developers,” she says.
And what kind of hotels does she herself prefer? “Usually it is sports-led,” she says. “I usually pick a place that’s near a park.” An avid runner, she always makes sure she packs her running shoes. “It’s a great way to see a city,” she says, adding that she likes running along waterfronts. “In the end, I click the cityscape,” she says. With Aiana, she’s set to be adding to them soon.