The Taste with Vir Sanghvi: Here’s why Indians shy away from hotels with foreign brand names
In this week’s column, Vir Sanghvi answers the question that all foreign hoteliers are asking: Why are Indians disrespectful towards the power of global luxury brands?Updated: Apr 11, 2018 09:10 IST
When The Oberoi, New Delhi re-opened this January after an extensive renovation, it chose to announce its re-emergence on social media with the hashtag #theiconreturns. For most people below the age of 50 (i.e. everyone on social media), the hashtag merely captured the hotel’s almost mythic status in Delhi.
But for older guests the hashtag was an in-joke. When the hotel first opened in 1965, it was called The Oberoi InterContinental. Over time, this was abbreviated by younger guests to “the I-con”, not necessarily because they regarded the hotel as iconic but because it was a handy diminutive of InterContinental. The new hashtag punned on that nickname.
I remember the InterContinental’s nickname because it was one of the few occasions when a foreign brand name stuck to an Indian hotel. Otherwise Indians have stayed with the names of our own chains. In 1972, for instance, The Taj Mahal Hotel in Bombay also tied up with InterContinental for its new tower wing. The intention, I think, was to encourage people to call the old wing “The Taj” while the tower would be called The InterContinental. Except that it never worked that way. Nobody in Bombay ever called the hotel anything except “The Taj”.
Both the Oberoi and the Bombay Taj eventually ended their tie-ups with InterContinental and though I have lost count of the hotels that the InterContinental name has been attached to over the years (Lalit Suri’s group, Delhi’s Taj Palace, The Surya, to name a few), the truth is that the name means little to most Indian guests. The branding never held.
Some of this is clearly InterContinental’s fault --- how can the only global hotel brand that most Indians knew as far back as 1965 just throw away that advantage? --- but a lot of it has to do with Indian resistance to foreign brand names. Many of ITC’s hotels had Sheraton branding at one stage. But did you ever hear anyone refer to, say, the Maurya as “The Sheraton”? Or take the Leela group, which has tie-ups with Kempinski. Have you ever heard anyone refer to any of those hotels as anything other than “The Leela”?
Even Hilton, the original global American chain, has failed to establish its brand in India. A hotel, due to be built in Worli in Bombay in the early 1960s, would have been the first American hotel in India. But almost at the last moment, after the plans were ready, Hilton pulled out.
Since then, almost nothing has worked. A deal with Lalit Suri’s group ended badly. So did another arrangement with the Oberois (for the Trident hotels). One with DLF never took off. And though there are individual, well-run Hilton properties (I am a fan of the Conrad in Pune), the brand has flopped in India. (Though I gather that Hilton is now ready to try yet again.)
Because so many great foreign brands have failed to make much of an impression in India, we have never really understood hotel branding. The Oberois have just two brands: The Oberoi for deluxe hotels and the Trident for five stars. ITC has the mother brand as well as Fortune (which most people don’t realise is owned by ITC) as the brand for lesser, good-value hotels. (Attempts to create awareness around ITC’s few WelcomHotels have not seen dramatic successes.)
For years and years, the Taj followed the sensible policy of calling everything ‘Taj’ while offering distinctions within the mother brand, say Taj Residency, for basic five star hotels, Taj Garden Retreat (for tiny resorts), Taj Exoticas (for upmarket beach resorts), etc. Then, vast amounts were spent on an idiotic rebranding exercise that created Vivantas and Gateways. That branding was scrapped a couple of years ago but I gather that the ghost of Vivanta stalks the corridors of Express Towers and the brand may well return from the dead.
About the only foreign company that has got its branding absolutely right in India is Marriott, which is now a household name in most cities and whose sub-brands are either clearly distinguished (nobody who goes to a Courtyard by Marriott expects JW Marriott levels of service) or cleverly disguised. (Most Ritz-Carlton guests don’t realise they are staying in a Marriott hotel.)
It has worked for Marriott because the brands have been reared organically. (Except for Ritz-Carlton, which was an acquisition and has retained its identity.) But often, modern hotel companies are created through takeovers. Take Hilton, for instance. Though the company was founded by Conrad Hilton, he sold the part of Hilton that ran its overseas hotels to TWA. So Hilton in the US and Hilton International were two separate companies with two different owners. The US Hilton could not open Hilton hotels abroad and had to create the Conrad brand for its foreign operations.
When the two Hilton chains were re-united by new owners in this century, the Conrad brand made no sense in its original avatar. It was re-invented as a sort-of-luxury hotel. (Waldorf-Astoria, named after the terrible --- now thankfully extinct --- New York flagship of US Hilton is the top Hilton luxury brand.)
Or take Starwood, for example. Most of its hotels were collections of chains created by other people. Its mainstay, Sheraton, was run for decades by the ITT conglomerate till Starwood bought it. Le Meridien was Air-France’s hotel chain. Westin was an old American hotel company that Starwood acquired after United Airlines and a Japanese company had owned it.
Because Starwood grew by acquisition its brands were not clearly defined. If you woke up in a Westin, Meridien or a Sheraton, it would be difficult to work out which hotel you were in; there was not enough difference to tell them apart. And Marriott, which bought Starwood a couple of years ago, is now struggling to impose some order on the brands.
The global hotel companies are hoping that at some stage, Indians will wake up to the power of branding. So far, at least, we have continued to be largely indifferent. When the so-called luxury hotel brands have come to India, we have not given a damn.
Over a decade ago, when the Four Seasons opened in Mumbai, it made extravagant projections based on the rates it thought it could demand because of the power of the brand. Within a few months, those expectations had to be scaled down and the company realised that the brand counted for little: the Four Seasons Mumbai would have to work hard for every penny it earned.
That has been the experience of Ritz Carlton too. I love the Bangalore property but my guess is that for most of its existence it has not been able to match the rates charged by the JW Marriott next door – and within the Marriott system, JW comes much below Ritz Carlton.
Foreign hoteliers always ask me why Indians are so disrespectful of the power of global brands. I tell them it is because we are so satisfied with our own hotel companies that we like the sense of a single brand, one that holds out the guarantee of a good stay.
Once we are comfortable with a mother brand, the sub-branding matters less and less.
Only two foreign companies have understood this. One is, of course, Marriott, which is now India’s largest hotel company (its hundredth property opened last week) The other is that great success story in the Indian market: Hyatt.
Last week, I interviewed Mark Hoplamazian, the CEO of Hyatt on stage at the HICSA hotel conference. I know Hoplamazian and have always been taken aback by the depth of his understanding of (and his obvious love for) India where Hyatt now operates nearly 30 hotels.
Hoplamazian is one of those thoughtful CEO’s who will engage fully in a conversation and think deeply about the answer to a question before saying anything. And so, at our HICSA session, I put him on the spot a little by asking if Hyatt had a problem with its branding.
Hyatt regulars know that a Hyatt Regency is a luxury hotel, a Grand Hyatt is a large luxury hotel, usually with conference facilities and that a Park Hyatt is up there at the top with Four Seasons or Ritz Carlton. But does the average guest know that? Do enough people realise how different a Park Hyatt is from say, a Hyatt Regency?
Hoplamazian gave a measured and reasoned response but conceded that perhaps Hyatt needed to do a little more work on brand identity. But, he said, he reckoned that the important thing was that they were all called Hyatt. And that alone was enough to convince many guests that they would have a great stay.
After our session, I thought about what he had said. I don’t know enough about the global hotel market to comment but in Indian terms, he was spot on.
There was a time when just the name “Taj” on a hotel guaranteed a warm, high-quality experience even if you were at, say, the tiny Taj Garden Retreat in Coonoor or the massive Taj Palace in Delhi.
So it is with ITC. The name alone is enough to hold out the promise of great food and personalised service. And every Oberoi Hotel, whether it is a Vilas or The Oberoi, Mumbai (probably India’s best hotel) stands for luxury.
We don’t always get the distinction between a Grand Hyatt or a Park Hyatt. But the Hyatt name alone is enough. I like the fancy Park Hyatt in Chennai but I will also seek out the simpler Hyatt in Chandigarh because I know it will be the best hotel in town.
Perhaps it is because of our experience with single-brand Indian hotel companies, but as of now, Indians care less about the prestige of global luxury brands or even the distinctions between each company’s brands, than we do about the mother brand.
Give us a name we can trust. And the rest of the branding will look after itself.
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