100 Royal Orchid hotels in five years across India: Chander Baljee

MR. CK Baljee, Chairman & MD Royal Orchid Hotels
By Bikramjit Ray

The Royal Orchid Group is going to take the management contract route and expand from 28 hotels--which is operates at present--to a 100 properties within the next five years. This is what Chander Kamal Baljee, Chairman and Managing Director of the Royal Orchid Group, based out of Bangalore told BW Hotelier.

’The next big push in the hospitality sector is going to be in the mid and budget segment of the industry in India,’ he said. The going is going to get more and more competitive, but the group was ready for all comers.

’We are not afraid of the competition, though I feel luxury chains entering the budget and mid-segment may not work for them because the luxury hotel operator doesn’t really ’get’ the mindset needed to operate successfully in this segment,’ he said.

’The change in the mindset of the luxury group to get into this segment is very difficult. That’s why you notice that Taj, set up a different company for the budget segment, because the luxury group manager cannot run the budget product’, he added.

There is competition from the big international chains as well, as they expand into the tier-two cities in India.

’They do have an advantage with their distribution network, but my question is, how many customers from abroad do come to these tier two cities, how effective is the network then’? he asked.

Customers in tier-two cities are also not always aware of a big brand are much more price-driven.

’In bigger cities, international chains they do well, but in smaller cities they will find the going difficult. A local player like us definitely has an advantage’, he said.

Indian businessmen setting up hotels are in awe of international brand, he felt. Their decisions become more ego driven. ’When you set up a hotel with an international chain, everything has to be of international standard, because the operator does not want to compromise. The set up cost is high. The fee is high, the cost of operation is high’ he conjectured.

A group like Royal Orchid, as a hotel operator would have cost overheads at least 10 per cent less on gross operating profit, Baljee told BW Hotelier.

’We do a lot of value engineering’, he said, giving the example of their Bharuch property, where the group asked the owner who was in the process of doing up the rooms, not to overspend since Bharuch as a market did not need that level of luxury. ’The result was that the owner saved Rs 2 lakh a room on interior fittings and the hotel is rocking,’ he said adding that the hotel should be built according to the market it services.

’We are not that large, we are more approachable. I still get to speak to owners at least once a month, if they can find the time,’ he added.

Service standards are also very important for the brand and a lot of effort has been made to maintain service levels. ’Our hallmark is that we are a very friendly,’ he smiled.

Royal Orchids growth strategy seems to be spread across the country, not just in the southern peninsula, BW Hotelier asked Baljee how he would combat this image of a south-centric hotel chain.

We are based out of Bangalore. Traditionally we have been in the south and west of India. We have now appointed Pushpinder Kumar, vice-president operation who is based out of Delhi, who is in charge of Gujarat, Rajasthan and North. We also have Shobu Mathew, vice-president sales is also based out of Delhi,’ he explained.

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