B U S I N E S S I N D I A • November 15,2009 C o r p o r a t e R e p o r t s

Are you being served? With India's first destination spa and a growing chain of business hotels, third generation hotelier Ashok Khanna is living up to his grandfather's name

His father's son: Ashok and Gautam Khanna

A t 48, when ordinary folks slow down and start planning thteir retirement, Ashok Klianrna

turned up his sleeves and turned entre­preneur. The third generation hotelier, son of hospitality heavyweight Gaiu-tam Khanna and grandson of tine father of Indian hospitality M.:S. Oberoi, after having served The Obercoi for 28 years, decided that it was time tto branch out. It helped that he never looked at the Oberoi as a legacy h e

would inherit - Gautam Khanna married Swaraj, daughter of M.S. Oberoi in 1950, and Ashok was the first among the third generation to join the business, and dedicated his youth to growing the company. "I always thought of myself as a part of the organisation and not an inheritor." However, the spirit of enterprise had passed down and, though dormant through his youth, spurred him to go solo in 1997; this was when Biki

Oberoi started asserting himself in the group that led to Gautam Khanna's well-publicised exit. Ashok, however, downplays the family feud, "1 was always looking to have something of my own but was waiting for the right opportunity." There was an inherent need to stand out and not toe the line.

In the IT boom of the late 1990s that brought in burgeoning salaries and escalated stress levels, Khanna finally found his niche. "Realising that IT professionals need a break ever) three months , we saw an opportunity in starting a health and wellness destina­tion spa." Having zeroed in on this, Khanna travelled across the world studying about spas and then spent months on searching for the right loca­tion - going from Kanyakumari to Ooty to Assam and then all the way up and down the Ganga. Accessibility, cli­mate, ambience and manpower, all determinants to the right spot, but somehow the mix just did not seem to come together. Until Khanna Senior, with a lifetime dedicated to the indus­try - he started Oberoi's first overseas property, Mena House in Egypt and was instrumental in its global march -recalled meeting the Maharaja of Garhwal who'd spoken about his castle up in the Himalayas.

"As 1 drove up from Rishikesh to Narendranagar, 1 could see the turrets of the palace from between floating clouds, and I knew this was the spot." And so was born Ananda in the Himalayas - South Asia and the Middle East's first destination spa, which has been voted the 'world's best' thrice in a row by the vied for Reader's Awards by Conde Nast Traveller. Attracting a global clientele, Ananda has featured in almost every major publication, and boasts a 35 per cent repeat clientele. Some guests come back two or three times a year and t h e n some tu rn Ananda Yogis, who stay-connected year round, 'i he spa philosophy is deep: spiritualism, yoga, ayurveda and wellness. And in the pristine Himalayas, replete with good energies born of penance by saints and holy

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B U S I N E S S I N D I A • November 15, 2009 C o r p o r a t e R e p o r t s

men, these seem achievable goals. Not only to the Indians blessed with a spiri­tual bent, but also to overseas visitors who arrive in truckloads.

"My husband is a dreamer and a thinker," reflects Neelam Khanna. "He believed in wellness well before it turned the trend it is today." She admits that his decision to leave a job and start a business did seem daunting, but then she'd been privy to his yearn­ing for creating something new all along. Indeed, it would have been eas­ier to set up a hotel, which is in his bloodline, rather than start a first with no parallels to follow. But, she reasons, he is a man of few needs and desires, "and that gives you the strength to start on a new path and not worry about failure". The guiding spirit behind the spas and the Ananda Spa Institute, Neelam candidly acknowl­edges that when Ashok started Ananda she was unfamiliar with the very con­cept of a spa. "Being much ahead of time, the first two years were tough, but at the end of it we'd built a brand."

Sibl ings for A n a n d a In infancy they battled 9/11 and while they managed to scramble through, Khanna decided not to remain con­fined to the leisure space. "We decided to venture into business hotels that are largely insulated from the vagaries of leisure travel." This would also be the growth engine for the company as Ananda, though a raging success and a big brand, its replication depends on external factors. "We've been slow to grow Ananda as location is fundamen­tal to our ethos," Neelam explains, adding that while they've been search­ing for another magical destination, they haven't stumbled on it so far. Opposed to a watered down version, they're also not in favour of a spa fran­chise. Khanna attributes this to his learnings at The Oberoi, a period where he learnt everything about the business. "The Senior Oberoi would often say that if he had a way he would create a law against management contracts. I agree, as finally it is your reputation which is at stake."

And so Ista was identified as the cat­alyst. The first property came up in 2006 at Bangalore and managed very quickly to carve a niche and plant the

I H I I R (India Hospitality and Health Resorts) flag. In India, where the hospi­tality pyramid is inverted - maximum rooms in the star segment tapering down to limited rooms and blurred segmentation. Ista knew just where on the pyramid it would perch - a business hotel in the upper upscale cat­egory with a price range of Rs7,000-Rs 10,000. With its cutting edge design, clean lines, intuitive service and inspired F & B options, it ushered in a hitherto unfamiliar vibrancy together with a youthful appeal. Tailored to the biz traveller, Ista displaces the pro­fessed bedrock of business hotels: affordable functionality, and ensures creature comfort while facilitating

second nature to us and while older companies are trying to break the mould, the mould exists".

It helped that during his Cornell days Khanna had Bill Marriott, chair­man and C E O of Marriott Interna­tional, as a roommate, and had in those formative years visited business hotels all over the world. "Hardware anyone can do, what sets a hotel apart is what you do with it operationally." Their signature is simplicity, the nuances of basic hoteliiering: hygiene, good service and good food. And help­ing the Khannas in this objective is a young energetic team - the average age at IHHR is 23 - that feels a strong sense of ownership, which translates into

Ista Hotel Amritsar. opened in April 2009

business processes both in terms of work and afterhours.

"We identified the new age business traveller who was being ignored by luxury hotels," says Andrew Saldanha, vi>, operations. "Ours are cocoons of rejuvenation created to fill the gaps left by established hotel chains." Waiters don' t tower over guests but go down on one knee to take orders, laundry is offered at no charge and in no time, guest preferences are noted - right down to the fruit they prefer in their room, restaurant menus are changed daily to avoid fatigue and all the rooms have the thoughtful touches that make the harried business person feel at home. Predictably, established chains have been on their tail but Saldanha is not unduly concerned, "being a young company, youthfulness of product is

humility of service and going that extra mile to ensure jguest comfort -both I H H R benchmarks. Also by now, Neelam has carved a place for herself.

With Ashok caught up with growth, the spa aspect was 'offloaded' onto her - something she's mastered over time. While she keeps the wow factor ongo­ing at Ananda, with visiting masters, enhancements like t h e recently intro­duced 'pregnant ladies programme' and Tibetan treatments; she is instru­mental in extending Ananda to Ista: a best of Ananda spa facility for guests and is also concentrating on making a success of their all-new spa training facility. Realising t h e potential of the wellness industry and that their therapists were constantly poached, the Ananda Spa Institute (as i ) was launched in Hyderabad last year. The

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B U S I N E S S I N D I A * November IS, 2009 C o r p o r a t e R e p o r t s

poaching, while flattering, created a permanent void; also being pioneers in the industry they realised the dire need for certified therapists, A S I can take up to 120 students and offers training in ayurvedic therapies, inter­national therapies and a teachers train­ing programme in yoga. A course for beginners in yoga is being framed.

G r o w i n g t h e d r e a m The drive to grow and excel is not lim­ited to the family, rather it is a shared dream at I H H R , where the senior man­agement gathers every afternoon over a home-cooked lunch delivered from the Khanna farmhouse. Here, over

sleeve. Saldanha, an Oberoi old hand who joined in 2004, says what makes I H H R score over established companies is the joy of being part of a growing company, and growing along with it. "Here one can contribute to growth and also the character of the company. In a large company one needs to fulfil a role that is spelt out and the freedom and creativity is relatively smaller." Similarly Jaideep Anand, G M , Ista Hyderabad also quit Oberoi and shrugs, "Why would I leave a hospital­ity major to join a small company but for our focus on excellence and the management team?" Tagged as a place for constant learning and quick

Three-legged stool: Saldhana, Khanna and Natrajan

easy banter and diet reminders, top brass exchange ideas; like what aspect to play-up at their upcoming Pune property, while a certain congenial air looms. This ease of being and warmth permeates across the floors lending that certain hominess without taking away from the Delhi H Q . It's all guns blazing but not cut throat; homely without turning into a mom-and-pop shop. Yes, joining the big guns on this lunch table is young Aashica - Khanna's youngest daughter who, having returned from Cornell, is learning the ropes - but I H H R is not owner-driven and one of their key successes is the talent they've been able to draw from the industry.

Top management is small, eight people, but each has an ace up his

growth opportunities, word of mouth has helped the company continually add to its talent pool.

The challenge has not been so much to attract top professionals but to shortlist line staff. Khanna admits that they had to curb expansion plans for lack of superior professionals, "only 200 people from across India met our requirements". The other big challenge, of course, was funding. But given their credibility as hoteliers they managed an initial borrowing of Rs36 crore, and Ananda was started with a Rs65 crore investment. Growth capital was subsequently provided by Morgan Stanley Private Equity, which invested Rsl75 crore. The current paid up capital of the company is Rsl75 crore. Currently, the company

has offered rights shares to the exist­ing investors. This issue is underway.

Today, Ista is present across Banga­lore, Hyderabad, Amritsar and com­ing soon to Pune. "Our growth strategy for Ista is to target under-ser­viced Tier II and III towns," explains Mahesh Natrajan, V P , marketing. Having invested Rs700 crore across these properties the company has set aside another Rs800 crore for expan­sion across Amdavad, Belapur (New Bombay), Nagpur, Coimbatore, Jaipur and Puri. Sites at each of these cities have been bought and projects firmed up, but in light of the slowdown they've slowed down their pace too. "One needs to keep reserves as with the downturn long-term planning is out," Khanna explains. However he's quick to add that Ista as a strategy is well-tuned to India's growth pattern.

"We've identified cities with new age industries and a young workforce," clarifies Natrajan. Business hubs or industrial towns are targets as also under-serviced cities; like Amritsar, where the newest Ista is filling a much needed void. Tourism authorities claim that the Golden Temple has a higher footfall than the Taj Mahal, and yet the city has no star hotel. Ista, in its sixth month, is already a preferred stop for tourists, N R I S and even pilgrims. This, when reputations have been built largely by word-of-mouth publicity.

With Ananda, the group never advertised - relying solely on recom­mendations; however with Ista they've adopted both word-of-mouth and the traditional route. Natrajan eluci­dates lsta's marketing strategy: lever­age current clients, organise corporate fams, referrals, monitor social media and feedback and also advertise through print, television and the digi­tal medium. And it's working. All of three hotels but the impact is such that regulars are looking to the group as a chain and the company is rolling out a loyalty programme shortly.

For Ananda die-hards there's rea­son to cheer too. Jaipur and Puri will each be bestowed with an Ananda. Here the luxe factor will remain at par with the original; however, the focus will be families, and not health and wellness.

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