The Right Moves
Dilip Ray, owner and CMD of Mayfair Hotels & Resorts has an uncanny knack for selecting the perfect location for his hotels
By Vinita Bhatia
It is not uncommon for guests staying at any Mayfair Hotels & Resorts‚Äô property to see its owner and CMD, Dilip Ray, walking briskly around with a couple of housekeeping staff trailing in his wake. He likes to personally keep an every single thing in the public spaces and in guestrooms. A garden hose left uncoiled in the lawn, a misaligned photo frame on a wall or dust-lined window panes irks him so much that he will work on it himself, rather than tell his staff.
In fact, so fastidious is he about these minute details in his hotels that he once called off a partnership because he found his intended partner too meddlesome! Recalling the instance, Ray said he had entered into an alliance with a Bhubaneshwar-based partner for setting up a hotel. Few days before the property‚Äôs opening, he arranged the furniture in the lobby. The next morning, he found it had been reorganised. Ray returned it to its original arrangement, but his partner-to-be changed it again. ‚ÄúI called him promptly and told him the deal was off, just because he changed the presentation of the reception area. I have not set foot into that hotel since,‚ÄĚ he laughingly recalled.
Many might call this is the idiosyncrasy of a well-established hotelier. But Ray has always liked to do things to his liking, sans interference. That way, he can take responsibilty for any failures, and also exult in the success.
BROOK NO INTERFERENCE
A student of Rajkumar College, Ray pursued his further studies at New Delhi’s Hindu University. However, his father was keen that he become a barrister and got the youngster admitted to a law school in London. Ray shifted to Darjeeling for a year so that he could get used to the UK‚Äôs cool climes. However, as fate would have it, the year he was to depart to London, his father passed away and the responsibility of his mother and six sisters fell on the young Ray‚Äôs shoulders.
His father had a well-established liquor trading and contract business while his maternal grandfather, Nilamani Routray, had been the ex-chief minister of Odisha. However, neither of these careers appealed to Ray. He decided to take a completely contrarian path, which was opposed by his entire family. Taking loans of around INR 20,000 from his friends, he started a little restaurant in Rourkela in 1980.
This was a rundown structure on a remote lane with hardly any streetlights and a 1.5 acre mango orchard in its backyard. The fare cooked in this dhaba-style restaurant was ideal for factory workers from a nearby steel plant. His first day‚Äôs earning was INR 3700 ‚Äď a big sum in the early 80s ‚Äď and there was no looking back from there for the young man.
AN ENTERPRISE IS BORN
There is a very interesting reason why Ray selected the name for this restaurant. ‚ÄúI used to play Monopoly often, where one had to buy a hotel called Mayfair. Secondly, when I opened this business, majority of my people told me it ‚Äėmay‚Äô not run. So, I decided to call it ‚ÄėMayfair‚Äô!,‚ÄĚ he laugingly stated.
Later, some of his customers suggested that if the restaurant had some rooms, they could stay the night rather than just trudge home to sleep. Sensing a business opportunity, Ray built a five-room hotel with an asbestos sheet for a roof.
And the rest, like they say, is history. Today, the tiny Rourkela hotel, which marked the genesis of Mayfair Hotels & Resorts, is a sprawling 65-room property with the mango orchard still attached. A decade later, Ray started a hotel in Puri and kept expanding the brand‚Äôs portfolio. Currently, the company has 10 operational hotels with four on the way (Kalimpong, Kolkata, Raipur and Siliguri). And the original Rourkela hotel that started it all still contributes a healthy INR 10 crore annually.
NOTHING LIKE BOUTIQUE
When he started establishing the Mayfair entity in the early 80s, India‚Äôs highly unorganised hospitality industry was beginning to see signs of consolidation. Well-established Indian companies like ITC Hotels, Taj Group of Hotels, the Oberoi Group, etc, were focused on the luxury segment, while few international brands like IHG had entered the country as well (courtesy a tie-up with The Oberoi Group) and were planning their expansion. Sarovar Hotels decided to tap the budget segment while Apeejay Group‚Äôs Park Hotels started opening design-led hotels. Ray realised that no brand was concentrating on boutique hotels, which he felt had tremendous opportunity, especially in the North-eastern part of India.
There was another another reason he decided to focus on the boutique hotel business. Though Ray‚Äôs family was well-provided for, when he decided to expand his business, banks were charging hefty 22% interest rates and were reluctant to give loans even with collateral. Ray raised money for his hospitality venture through his own sources but decided that to succeed he needed to stand apart from the pack. Ergo, the boutique hotel concept, where competition was non-existent.
PLOUGHING BACK WHAT HE EARNED
For over two decades, Ray followed a simple corporate model ‚Äď he ploughed back into the business what he earned. He would also select the locations of his hotels with great care; rather than opting for places that had a high density of hotels, he chose sites that were slightly remote and had a bit of history and mystique attached to it.
However, sometimes there existed intervals between the openings of his properties. After opening Mayfair Darjeeling in 1997 and following it up with Mayfair Lagoon Darjeeling two years later, he opened Mayfair Spa Resort & Casino in Gangtok and Mayfair Convention, Bhubaneshwar after a decade.
This was because he became actively involved in politics in the interim and was appointed Cabinet Minister, Industries, Government of Orissa from 1990 to 1995. From 1996 to three years later, he was the Minister of State (independent charge) holding portfolios of the Ministry of Animal Husbandry and Dairying, Food Processing Industries and from 1998 to 1999 he was Minister of State, Coal. He was also Minister of State, Steel from 1999 to 2000.
‚ÄúWhenever I was not busy with my political duties, I would focus more on building hotels. That explains the gaps between the opening of the hotels in Mayfair‚Äôs portfolio. Now, I have planned my schedule in a way that I devote number of specific days for my political responsibilites and the rest are dedicated to hoteliering,‚ÄĚ he explained.
At the same time, he is happy with the measured pace he has chosen for opening Mayfair‚Äôs hotels. By not falling for the lucre of growing fast, he could spend more time during the development of each property and ensure that everything was perfect before opening it to the public. And post-opening too, he keeps reinventing so that guests will find something new whenever they visit the hotel.
‚ÄúI treat all my properties like living things, and keep adding new elements to them to keep its vibrancy alive. It could be some new design pieces, lightings or fixtures, but these add a touch of vivid freshness,‚ÄĚ Ray stated.
ALL IN THE FAMILY
Even today, Ray gets a lot more done by lunch than most people do by the end of the day. That is also because he begins his day by 4.30am and takes a round of his hotels, checking if its public areas have been thoroughly cleaned during the night, a routine he has set in all his hotels. ‚ÄúThis ensures that cleaning is done when the guests are unlikely to be inconvienced. Also, the cleaning staff doubles up as a security staff in the night,‚ÄĚ he explained.
He lets us in on one of his business secrets ‚Äď his entire business team comprising architects, designers and even his entire hotel staff are from Odisha. This ensures that his attrition rate is around 5%; an exceptionally good percentage, especially in the hospitality industry that is wrought with high employee turnover.
‚ÄúMost of the 2300 people in our workforce are not professionals. They join us, we train them, grow up the ranks and stay with us. They might not have certificates from any hotel academy, but I will hire them as long as I know they are willing to work hard and will be loyal to Mayfair,‚ÄĚ Ray said.
And many of his employees have stayed with him for several years. Souvagya Mohapatra is a good example of long-standing loyalty. He started with Mayfair several years ago as a F&B executive and is currently its executive director. Talking about his experience working with Ray, Mohapatra said, ‚ÄúHe treats his staff like family members, without any discrimination and rewards them for their hard work. Since most of the team also belong to Odisha, it is like working for one great big family.‚ÄĚ
Ray revealed that the only time he hired people from outside of the state (even the staffers at Mayfair Hideway Spa Resort, Goa are from Odisha) is for the Kolkata project. ‚ÄúThat was because this is a 18-floor project, which is not my forte. Otherwise, for the rest of the properties, I rely on locals, as I know exactly how to work with them,‚ÄĚ he explained.
So involved is he with his properties, that during the development stage, he would travel to factories in China and Malaysia to source the right products and amenities, including mattress, pillows, kitchen equipments, etc.
His wife, Pooja, who has a keen eye for aesthetics, also plays an instrumental role in picking out the right artefacts for the hotels. His daughter is currently managing Mayfair Spa Resort & Casino, Gangtok, while one of his sons oversees the Raipur and Gopalpur hotels. His daughter-in-law is also actively involved in the hospitality business.
Keeping the business in the family ensures that guests are taken care like they would be in a relative‚Äôs home. This strategem has helped the Mayfair brand to cater to international travellers particularly, despite the linguistic challenges that they might sometimes face with the staff. Currently, the Darjeeling property witnesses around 30% international travellers and he expects the same percentage at the upcoming Kalimpong property, which is expected to open by Q3 2017.
Ray clarified, ‚ÄúMost global travellers are finicky about cleanliness and will first check the bed sheet or pillow case ‚Äď which we take great pains to ensure is clean. They are not as concerned about a mispronounced name, so we focus on the basics of hoteliering rather than the trivia.‚ÄĚ
This is precisely why Ray himself is very particular about ensuring guest comfort and hygiene, and will make no compromises there. The result is that most of his guests have ended up becoming Mayfair‚Äôs brand ambassadors. Rarely has the company invested in marketing activities till date, though it has over 90% occupancy for a better part of the year ‚Äď and majority of its business comes form word-of-mouth publicity from guests!
THE GUT INSTINCT
For a person investing in new properties for over two decades, how does Ray identify the right location? Ray smilingly said that it was largely gut instinct.
‚ÄúI like to visit the land or properties that I will be investing in, early in the morning. Then I think about what I would like to build on that property, since I don‚Äôt go for high-rise buildings. The architect simply designs my idea, but the interior, the architecture, the garden; everything is done by me. Everything from buying the bedsheets to artefacts is done by me,‚ÄĚ Ray revealed.
Our talk turned to Mayfair Palm Beach Resort, Gopalpur-on-Sea, a property that was initially built by an Italian in 1914. Ray said that it was later bought by the Oberoi Group. ‚ÄúAround 1950, the sister of Bata‚Äôs chairman loved it so much, she said she wanted to work there. She stayed there till 1952 and her grave is still there. It had 18 rooms, but no one visited it, so the place shut down in 2007,‚ÄĚ Ray reminisced.
He also recalled how in 2012, the Oberoi Group finally they agreed to sell it because it was falling apart. One of Oberoi Hotel Group‚Äôs VPs informed him then that the highest annual turnover they did at the hotel was INR 1.3 crore.
Ray bought the property, and a month later, converted the entire hotel and opened it for business on 9th December 2012. On 15th January, 2013, he called up the same VP and informed him that within a month and few days, he had managed to do business of over INR 1.37 crore. Today, the same property contributes a healthy INR 14 crore turnover annually.
So how did he manage this turnaround? According to Ray, the modus operandi is simple ‚Äď you have to stop thinking like a hotelier and start thinking like a guest. In this particular hotel, the only design chnage he implemented was setting up a private verandah with a separate entrance for each cottage. This gave each guest the feeling of having a private beach to themselves.
‚ÄúAdditionally, I dug up all the old photos of popular people who had stayed at the hotel and put it up on the walls for guests to see. I joined two rooms to make a bigger one with a private pool. We did not get any celebrity to inaugurate the hotel on the opening day; instead, my five-year older granddaughter cut the ribbon. Yet, the hotel is always full,‚ÄĚ Ray said proudly. Noted filmmaker, Satyajit Ray, would often retreat here to write his movies and his camera is still displayed there.
This is just one instance of a successful buy; Ray usually finalises deals for his hotels after spending some time on the land or in the property, sometimes without even looking at its balance sheet. There have been times when the deal had almost been finalised and he pulled out because he had a gut feeling that it would be a bad move. ‚ÄúSo far, this instinct has served me well,‚ÄĚ he said.
If there could be one anomaly to this rule, it would be Mayfair Hideaway Spa Resort, Goa that was started in 2010. It was the first property that the company opened outside of North Eastern India.
A beautiful ocean-facing property, Ray said that he invested in it since he was considering an IPO and was advised to show that Mayfair had a pan-India presence. However, once again, he found that the companies involved in the IPO process interferred too much when it came to advising him on how he ought to runhis business, so he decided to call the entire process off.
At the same time, while he will brook no interference, Ray is always open to suggestions. In fact, he claimed that even a gardener in his hotels can walk up to him with ideas on how to improve the landscaping and he will gladly listen and would even implement it, as long as he sees merit in that from his own design perspective.
Currently, Ray is focused on the Kalimpong property, which was supposed to open in July, but ought to open it doors to the public by Q3 2017. Additionally, construction is underway for the Raipur hotel, which too should open by December, 2018. Mayfair will also open its first tea resort at Siliguri shortly.
Its litmus test, however, lies with its upcoming hotel in Kolkata. As Ray pushes into this a metro city outside of North East India, would he able to hold his own against the big daddies of the hospitality business? Will he be able to play ball on their home turf? Being the gritty hotelier that he is, we are sure Ray would definitely have some surprises up his sleeve.