Serving the Individual Traveler: "Biki" Oberoi

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Serving the Individual Traveler: "Biki" Oberoi

Chekitan S. Dev Cornell University School of Hotel Administration, [email protected]

Al Glanzberg

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Recommended Citation Dev, C. S., & Glanzberg, A. (1990). Serving the individual traveler: 'Biki' Oberoi. Cornell Hotel and Restaurant Administration Quarterly, 31(2), 15-18.

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Abstract [Excerpt] As chief of Oberoi Hotels, Prithviraj S. Oberoi has one of the most difficult jobs a person could ask for. He runs the hotel chain started by his father, Mohan S. Oberoi. In 1934, when hotel keeping in India was in its infancy, M. S. Oberoi became the first Indian national ot enter the hotel field yb acquiring Clarkes Hotel in Simla. Previously, hotels in India were owned by British and Swiss families and catered mainly to British residents. M.S. Oberoi expanded his group of hotels, and in 1965, he introduced the first five-star deluxe hotel in India-the Oberoi Inter-Continental in New Delhi. He also began international expansion in the ’60s, opening the Soaltee Oberoi in Kathmandu and managing the historic Mena House hotel in Cairo.

Today, Oberoi operates hotels in India, Nepal, Sri Lanka, Singapore, Egypt, Saudi Arabia, Tanzania, Indonesia, Australia, and Iraq. In addition to the hotels, Oberoi Hotels has a substantial in-flight catering business, operates airport restaurants, has an expanding export company, and runs one of India’s largest travel agencies, Mercury Travels. Here is a look at the Oberoi hotel chain and family.

Keywords hotel industry, market strategy, business travelers, Oberoi Hotels, case studies

Disciplines Hospitality Administration and Management

This article or chapter is available at The Scholarly Commons: https://scholarship.sha.cornell.edu/articles/796 Serving the Individual Traveler: "Biki" Oberoi

By focusing on the individual business traveler, "Biki" Oberoi has guided Oberoi Hotels from their base in India to management of 31 hotels in nine countries on four continents by Chekitan S. Dev and Al Glanzberg AS CHIEF of Oberoi Hotels, Prithviraj S. Oberoi has one of the most difficult jobs a person could ask for. He runs the hotel chain started by his father, Mohan S. Oberoi. In 1934, when hotel keeping in India was in its infancy, M. S. Oberoi became the first Indian national to enter the hotel field by acquiring Clarkes Hotel in Simla. Previously, hotels in India were owned by British and Swiss families and catered mainly to British residents. M.S. Oberoi expanded his group of hotels, and in 1965, he introduced the first

Chekitan S. Dev, Ph.D., an assistant professor of marketing at Cornell University School of Hotel Administration, is a native of India and a graduate of the Oberoi School of Hotel Management. Al Glanzberg, who specializes in writing about international travel, spent a month in India researching the Oberoi organization. The Oberoi Hotel in New Delhi.

15 five-star deluxe hotel in India-the identical-the affluent, quality- Oberoi Inter-Continental in New conscious traveler who is seeking Delhi. He also began international an international standard of luxury expansion in the ’60s, opening the and comfort with a high degree of Soaltee Oberoi in Kathmandu and personalized service. Oberoi Hotels managing the historic Mena House overall enjoy a 40-percent repeat hotel in Cairo. business. Today, Oberoi operates hotels in India, Nepal, Sri Lanka, Singa- Segmented Markets pore, Egypt, Saudi Arabia, Tanza- Oberoi is also well aware of the nia, Indonesia, Australia, and Iraq. possibilities of product differentia- In addition to the hotels, Oberoi tion. Two Oberoi hotels stand side Hotels has a substantial in-flight by side in Bombay. The Oberoi catering business, operates airport Towers, a 650-room hotel, aims at restaurants, has an expanding the general public, while the newer export company, and runs one of hotel, the 350-room Oberoi, caters India’s largest travel agencies, to the top-of-the-market segment, Mercury Travels. Here is a look at mainly business travelers and the Oberoi hotel chain and family. dignitaries. The difference between these two hotels is like and Oberoi’s Global night Strategy day. The atmosphere in the larger &dquo;Biki&dquo; Oberoi: &dquo;Motivation is the key The Oberoi group aims to serve the Towers is that of a busy, bustling to successful hotel operation. To international and domestic affluent inner-city property with holiday- motivate people, you must listen to traveler. Oberoi seeks to a airline and their concerns, and you must tell give makers, crews, tourists, of service them honestly what they can expect high degree personalized while the Oberoi’s ambience is in your company.&dquo; and a high standard of luxury and serene and peaceful. comfort. The city hotels typically Market cater to upscale travelers and Economy business executives on expense Oberoi will be competing in a new accounts. Personalized service is market segment through an agree- stressed so much that its hotels ment with Accor’s Novotel chain. A employ an average of three persons contrast to Oberoi’s current strat- per room. egy, the joint venture plans to build Oberoi Hotels maintains a net- 20 four-star hotels in India. Oberoi work of marketing professionals in is counting on Novotel’s expertise sales offices in Australia, India, with economy hotels in developing North Africa, Southeastern and countries, while Novotel will western Asia, the U.S., and benefit from Oberoi’s knowledge of throughout Europe. The group also India. The hotels will average maintains a reciprocal marketing under 100 rooms, with room rates and reservation arrangement with projected at US$30 to $40 per Loews Representation Interna- night. Novotel will participate in tional and Leading Hotels of the project equity and provide systems World. Oberoi strictly monitors and building plans. Oberoi will marketing strategies to ensure the manage the properties. worldwide image of Oberoi Hotels is maintained and enhanced. Food Service The company is not immune to Oberoi has designated a 3.5-acre frequent-guest promotions. It cul- site in Delhi for its flight-catering tivates domestic consumer loyalty division. The unit prepares 4,000 with its Oberoi Executive Club and meals a day and supplies food to offers special services to valued ten airlines. The flight kitchen has clients. Oberoi’s domestic and separate sections for continental international market target is and Indian cuisine, for hot and cold

16 foods, and for its bakery and confectionery units. It also has a fully automated, computerized delicatessen unit. On-Line Oberoi Hotels has developed its own computer program, known as O’pm, for front-office on-line operations. It is currently operational at the 600-room Mena House Oberoi in Cairo and the Dubai Metropolitan Hotel. The system comprises about 450 user screens, can generate 200 different reports, and runs about 200 processing programs in a network data base. Using O’pm, front-desk employees can respond to in-house guest inquiries in just 2.5 seconds. Available. The O’pm system, exhibited at the 1989 New York hotel show, received enthusiastic Two Oberoi hotels stand side-by-side in Bombay. The Oberoi, foreground, serves an of business executives. Next the Oberoi Towers aims for Oberoi to market upscale group door, response. plans leisure travelers and mid-scale business travelers. Oberoi software to make O’pm computer-based software available of a luxury tax of up to 20 percent 25 rupees (US$1.50) in his pocket. in India and overseas. and a change in tax law that Finding a job as front-desk clerk in discontinues the 20-percent the Cecil Hotel, he gained first- Hotel Expansion deduction for advertising and hand experience in hotel opera- Oberoi Hotels plans to add over promotion formerly enjoyed by the tions. From that modest beginning, 2,000 rooms to its existing capacity industry. Another industry setback M.S. Oberoi has built his firm into by the mid-’90s. The company has is the recent visa requirement for one of Asia’s largest international begun construction on the Banga- all foreign travelers including the hotel chains. At the age of 90, M.S. lore Hotel, a 200-room hotel that Commonwealth countries. Oberoi is still active as chairman of should be operational in 1991, Other economic setbacks include Oberoi Hotels. located in the central business import duties on materials to up- Biki district. grade existing facilities, increase of Roadblocks to expansion. A airfares for foreign visitors, and an In 1980, Mohan Oberoi passed the major constraint to hotel expansion annual inflation rate of 20 percent. torch to his son, Prithviraj, whom is lack of infrastructure in India. In addition to an adequate supply friends and associates call Biki, Growth is hampered by lack of of both skilled an unskilled labor, then 50 years old. He holds the good roads, the short supply of elec- an economic plus is the expansion position of vice chairman and tricity at most tourist destinations, of computerized office systems that managing director of Oberoi and the inefficiency of domestic have permitted a decrease in labor Hotels. &dquo;Biki&dquo; Oberoi has a work airline systems. While telephone costs. Another plus is more auto- style that many of us might envy. and telex services have recently mated kitchen equipment that Oberoi executive offices are improved, service is still inad- streamlines operations and cuts adjacent to his home in New Delhi. equate in many cities. Still, the down on labor costs Corporate headquarters are a short potential for hotel development is distance away in Delhi, and em- M.S. great. Much, however, needs to be ployees are continually shuttling done by both government and the M.S. Oberoi’s life is a classic rags- between his office and headquar- private sector. to-riches story. In 1922, when he ters. Biki walks to work when he is Some issues of concern that may arrived in Simla, then the summer in town. He is, however, on the are the of British he had road for six months of the impede growth imposition capital India, only year, ,

17 we’d be nowhere,&dquo; he said. &dquo;I per- sonally spend much of my time on motivation.&dquo; Money alone is not enough to motivate employees, Biki said. Instead, motivation depends on listening and talking. &dquo;Half the battle is lost if you don’t listen to people. They must be able to participate in decisions.&dquo; At the same time, Biki finds it important to discuss the future with his employees. He believes people want to know whether they have a chance for promotion, or whether their performance will leave them in their current job. &dquo;If people are not told these things, they lose motivation,&dquo; he said. Training is essential to the Oberoi strategy. He looks for intelligent people who have pleas- ant personalities, are able to communicate, and are willing to work hard. He is convinced that anyone can be trained to work in a hotel if they have the proper basic skills. &dquo;If a person has good taste, is well traveled and well read, has varied interests, and likes food and drink, that person can be a hotel- overseeing existing hotels and his firm does not have a property man with little training. My fellow investigating the possibilities for in the U.S. He bought New York’s hotel operators might not agree, new sites. The newest location for Barbizon Hotel a few years ago. but I think this is not a compli- Oberoi hotels is the U.S.S.R. Biki When he purchased it, the property cated business,&dquo; he said. &dquo;It has says: &dquo;Here’s a chance to show comprised residential apartments. become more complex, though, what we can do.&dquo; What Oberoi has Hoping to rehabilitate the with financing, strategy, and the done is to promote his company to Barbizon completely, Oberoi like.&dquo; the Soviets by means of a top-shelf attempted to buy out the 140 Oberoi resists the trend toward video with a sound track in Rus- tenants. New York City’s rent- ever-larger hotels. He is convinced sian. Marketing on this level shows control laws made the apartments that he cannot fulfill his promise of that the Oberoi company is a force too attractive, however, and his high service in a large hotel. &dquo;I to be reckoned with. effort failed. Reluctantly, Oberoi have fought expansion tooth and A visit to Biki’s home reveals the sold the Barbizon. &dquo;We are still nail. If you get too big, you spoil the man to be an avid art collector-an considering a prime location in the hotel. It is better to upgrade the avocation that carries over to the U.S.,&dquo; he said, but he made it clear rooms to improve your rate.&dquo; At one decor of Oberoi hotels. Groomed all that just any location won’t do. property Oberoi did so by adding his life for his position, Biki carries private Motivation for Success swimming pools. well the mantle of one of the lead- Summing up his strategy, ing hoteliers in India. He attended Although Oberoi’s hotel properties Oberoi said, &dquo;We don’t want huge the hotel management school in are top quality, when he is asked hotels. We want to be recognized as Lausanne, Switzerland, and now for the secret of his success, Biki a quality hotel operator with well- oversees his own hotel school. says his employees are his biggest known hotels that provide some- One of Biki’s frustrations is that asset. &dquo;If we didn’t have our people, thing different