Hilton: Back with a bang
With plans to open one hotel every 45 days over the next two years in India, the Hilton chain has massive opportunities in the non-luxury space – and it seems to be grabbing them.india Updated: Aug 05, 2011 16:44 IST
Bobby Kooka, the creator of the Air-India maharaja and one of JRD’s old associates, has written that once, when he complained to JRD Tata about how bad things were at the Taj and asked why, considering that JRD was so intolerant of the slightest imperfection in Air-India (of which he was chairman), he did nothing about the Taj. "There is so much wrong at the Taj," JRD replied, "that I would not know where to begin."
It was during this phase that Bombay House toyed with the idea of getting an international hotel chain to take over the Taj. The Tatas brought in Hilton, then the world’s most famous name in hotels, and asked the executives to take a look at the property. The American executives who flew into Bombay saw the hotel and said that Hilton would run it but they thought that it needed more rooms.
So, they suggested, the Tatas should pull down the existing building and construct a large multi-storey tower in its place. That would be the Bombay Hilton. Fortunately, JRD was horrified enough by the thought of demolishing one of Bombay’s loveliest buildings to turn down the Hilton proposal. Instead, he turned to indigenous managers who took over the Taj, turned it around, built a multi-storey extension next to the old building, and then spun off the name to create one of India’s greatest hotel companies.
But that wasn’t the last we heard of the Bombay Hilton. Bobby Kooka pops up again in our story. The top management of Hilton Hotels decided that the company needed to construct a Bombay Hilton even though the Tata proposal had not worked out. Kooka, who knew the Hilton management, introduced the company’s executives to Indian investors and a spot was found for the proposed Bombay Hilton: near the sea in Worli.
The distinguished Indian architect IM Kadri was hired to design the hotel and sent on a tour of Hilton’s hotels around the globe. Kadri designed the property and construction was about to begin when Hilton pulled out. Apparently, visiting Hilton senior management decided that the sea at Worli smelt too bad and that, therefore, this was the wrong location for a hotel. The Hotel Hilltop (a three-star) was eventually built on that spot (Hilltop sounds near enough to Hilton) but it neither achieved any fame nor lasted very long. Kadri was the real gainer.
He put that experience to good use and went on to design many great Indian hotels in the 1970s and 1980s, including nearly all the Taj hotels built in that era. Though Hilton lost out – it should have been the first global chain in India – the domestic hotel industry gained. While the great American chains – chiefly Hilton, but also Sheraton and Intercontinental in the 1970s – introduced five star hoteliering to the world, India created its own brands.
The Oberoi learnt a lot from a tie-up with Intercontinental in Delhi from 1965 onwards but it was the Oberoi brand (rather than Intercontinental) that gained – which was as true of the Oberoi-Sheraton tie-up in Bombay in the 1970s. The Taj created its own culture and though ITC tied up with Sheraton in the late 1970s, it retained its own identity: do you know anyone who called the Maurya Sheraton the Sheraton? We’ve always called it the Maurya.
Perhaps as a consequence, Indians have been insulated from the legend of Hilton. Created by Conrad Hilton (familiar to TV viewers from the recent Mad Men) in 1919, it was the first American chain to expand into the whole world. In many countries where Hilton landed, there was no conception of modern hoteliering till Hilton came and taught the local industry how it was done.
Even in sophisticated London, the opening of a Hilton on Park Lane – at the time, the tallest building in Mayfair – represented an epochal event and the hotel became linked with the Swinging Sixties especially when Allen Klein took a suite and made the Beatles and the Rolling Stones come there to pay court to him.
In the old days, Hilton was a family-owned company (yes, Paris Hilton is descended from Conrad) but it soon split into two companies. The family ran the US hotels while TWA owned Hilton International. When TWA went bust, the international company went through a bad patch with a variety of owners (including betting-shop conglomerate Ladbrokes) failing to recognise the value of the brand while the US company seemed unsure of how to cope with the arrival of new competitors. In India too, Hilton has taken decades to make a mark.
Properties have come and gone from the Hilton fold (the Lalit in Delhi, Sanjay Khan’s spa resort outside Bangalore etc.) and a potentially rewarding tie-up with Oberoi Hotels (under which the Tridents were rebranded as Hiltons) did not last the course. A vast development deal with DLF has also floundered because of the real estate slump. But the hotel industry has changed so much in the last two decades, that the time is probably right for Hilton to make a more assured return to India.
While the Indian chains have successfully filled the luxury space, there are vast areas that have still not been addressed. You only need to look at the development of Hilton Worldwide to recognise how consumer needs and hotel offerings have evolved. Once there was just a single Hilton brand (plus Conrad for Hilton International’s US properties). Now Hilton has ten different brands ranging from Waldorf Astoria (from the New York Hotel that was Hilton’s US flagship) and Conrad (both luxury) to Doubletree and Hilton Garden Inn (more mid-market).
Iconic hotels (such as the one on London’s Park Lane) continue to be called Hilton but otherwise the old Hilton name only means “five-star but not overly luxurious.” It is a formula that seems to be working. Hilton Worldwide (now owned by Blackstone) has over 3,750 properties and 6,15,000 rooms in 85 countries across ten brands. The US and international companies are better integrated and the brand architecture is fully in place.
In India, Hilton is headed by Lenny Menezes, one of India’s best-known and most experienced hoteliers who made his name with the Taj Group in the years when the chain was growing rapidly. It has six hotels under three brands in three cities and so many more are planned that Lenny aims to open one Hilton-branded hotel every 45 days over the next two years. Of the Indian Hiltons, I’ve been to three. The Hilton Garden Inn in Saket (Delhi) ended up serving me the best thin-crust pizzas I’ve eaten recently – which was a surprise because Garden Inns abroad are not renowned for their F&B.
I went to the Doubletree (another mid-priced brand) in Delhi’s Mayur Vihar (which is actually just off the DND flyway so is ideally located for Noida) and was again startled by the calibre of the food (great steak). I saw the Hilton (next to Doubletree) which has yet to open but seemed like a great five-star option for that area. Lenny is close-mouthed about the chain’s expansion plans (which is sensible given that each hotel requires a separate deal with an individual owner) but from what I could gather, the strategy is to focus on basic five star with no needless frills at rates that are truly competitive.
Indian hotels can be expensive so success will come to anybody who offers a good product at reasonable rates. Where I do foresee a problem is in brand-architecture. The rooms at the Doubletree, Mayur Vihar, seemed to me to have everything that any middle-level business executive would need. The restaurant at the Saket Garden Inn had food and ambience that you expect to find at a much fancier hotel.
Hilton has raised its minimum standards in India to levels that are higher than abroad – which could lead to confusion. There are plans for Waldorf Astorias and Conrads through nobody will talk about them. When these hotels do open then we’ll see how the granddaddy of all hotel chains can fight its Indian competition in the luxury segment. Till then, however, Hilton has massive opportunities in the non-luxury space – and it seems to be grabbing them.
From HT Brunch, July 31
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First Published: Jul 29, 2011 17:18 IST