Exclusive Interview with Kapil Chopra, founder of The Postcard Hotel
Shares his view on the concept of transformative hotels and other plans
Kapil Chopra, founder of the unconventional The Postcard Hotel, tells Hotelier India what it means to disrupt the luxury segment in the hospitality industry, how people are his biggest strengths, and his journey from hotelier to entrepreneur
How did the concept of The Postcard Hotel evolve? How have you ensured that the format is path-breaking in hospitality?
There were several factors that led to the real journey of The Postcard Hotel. I was running The Oberoi Group hotels and was in sync with how the world around us was changing. Suddenly, I noticed far more guests checking into The Oberoi Whiteflower Hall Shimla. In fact, the check-ins went up five times in the last few years, and that didn’t happen with any other hotel. The reason was obvious. More Indians are travelling and they are looking for differentiated, experiential travel. There is a lovely Google report which states that Indians will do 2.2 billion trips this year, and here we are always obsessing about foreign travellers.
Even if 5 per cent are luxury travellers and are relevant to The Postcard Hotel, that is almost 100 million people. Let me quote the National Geographic Traveller survey, which states that Indians are taking 5.6 trip a year, against 4.2 trips taken by other international travellers. When I look at luxury hotels in resort destinations, everyone has got into this mould of cookie-cutter hotels. They almost mimic city hotels, except the pool may be bigger and they have landscaped gardens. In India, we have four categories of hotels. The commodity hotels are budget hotels. They give you hot water and air-conditioning.
Indoors at The Postcard, Cuelim
The second category is great product hotels which look good and may be part of a brand. The third category are the luxury hotels, which have great service standards. But they may not be able to promise privacy. Then AirBnB came into the picture, which I consider level 4 of hotels, called experiential hotels. While the product, services and facilities are important, what is more important today is engagement with the local communities. I felt somehow, somebody has to come and disrupt the way luxury hotels are operating. I looked at AirBnB and found that it was not really a disruptor in the luxury segment. I did a slight filter, picking up Goa as an example, and realised the state has 219 properties with rooms over the INR 20,000 mark, which was far more than what was being charged by the best of hotels in Goa. So, I felt the need to evolve a fifth category of hotel that actually encompasses all of these factors. I call it ‘Transformative Hotels’. They offer the best of what the luxury hotels offer in terms of service and experience, and even betters it with the privacy that modern-day luxury traveller is looking for, combined with local experiences. We have a curated heritage walk that we offer at The Postcard Moira, for instance, which helps our guests discover hidden gems, an experience they will cherish even five years down the line.
Can you expand a bit on the concept of transformative hotels?
Transformative hotels would be at the highest pinnacle in terms of differentiation, which is why even in off-season in Goa, The Postcard Hotel command a price of INR 19,000 per night. People are ready to pay a premium for a differentiated experience, for a transformative experience. I think Aman Hotels have done a great job in the transformative space. If you stay with them in Bhutan, you will see the country in a completely new light.
We are looking to build a different narrative for luxury hotels. The problem with Aman, Bhutan is that you pay USD 2,200 per night. How many people can afford that? My thought was, if I am able to do transformative hotels between the USD 300 to USD 700 per night price points, it will attract many more travellers. People want to experience local culture, but they also want to be pampered and taken care of. Guests who stay with us have told us that we have helped them see Goa in a different light. At the transformative hotels we are building, we believe time is your biggest luxury. So, at The Postcard Hotel there is no check-in and check-out time. We have also introduced anytime breakfast. Whatever time you wake up, breakfast starts at that time. In fact, across all our hotels in India, we will offer several such transformative, local experiences. In Mangalore, for instance, we will take you to the middle of the ocean to watch sunrise at 3 am, something you may have never experienced before. These kind of intimate luxury experiences will stay with you five or 10 years down the line.
Why did you choose to debut The Postcard Hotel in Goa?
Actually, our first hotel was supposed to be on a beach, an hour out of Mangalore. It is a site which is zero metre from the sea, but we ran into some issues with it being in the CRZ zone, which have now been resolved. But because of that delay, we decided to debut with Goa. Also, in Goa, we did not have to start with a fresh base, because it has a blend of history, heritage, architecture and culture. Our Moira property is located in a 214-year-old house.
Lobby at The Postcard, Moira
If you look at the global hospitality landscape, and I bring a bit of patriotism in here, Bali is known as the design hotel capital of the world. Goa has the potential to be the next design hotel capital. It has great culture, great historic houses belonging to the Saraswat Brahmins and the Catholics/Christians. It is a unique blend of culture and design, very good food, great beaches, churches and temples. Unfortunately, our tourism policy has encouraged just charter tourists. The state has been converted into a party destination. You will be surprised to know that the biggest FIT (Free Independent Tourist) operators, whose clients live at the Taj palace hotels or the Oberoi hotels, don’t list Goa on their itinerary. Now, with us coming in, they have put Goa on the map. We don’t cater to a group of 20 people, or 40. The FITs we are looking at don’t mind paying USD 500 per night too. We are looking at putting Goa on the global FIT map. Taj and Oberoi have done that well with Rambagh Palace and Udaivilas. We are doing the same with The Postcard Hotel.
Rooms at The Postcard Moira
Do you agree that there has been a change in the profile of travellers coming to Goa, given that it is evolving as a cultural destination, or that the dining scene has matured?
Goa has the highest occupancy rate at 78 per cent. Travellers are attracted by its various offerings. As you rightly said, it has a very evolved dining scene, with restaurants such as Bomras and others, great Portuguese- inspired culture as well as native Hindu culture, fabulous monuments, and a very good and evolving alcohol industry. Someone is doing artisanal feni, there is one of India’s best whiskies being made in Goa. Someone is setting up craft council in India, a listing which will have 20 top craft artisanal enterprises in Goa, from organic food and artisanal feni to The Postcard Hotel, design, fashion and more. This is how verdant the scene is. Making the destination a design capital is possible when everyone comes together and what The Postcard is doing is working on changing the luxury vocabulary.
The Postcard, Velha
How many hotels are you planning to build under The Postcard Hotels brand?
We have three in Goa right now, in Moira, Velha and Cuelim. I am looking at setting up 20 more. I want to be the largest luxury hotel operator in Goa in the next two to three years. We are also looking at several other destinations. We aren’t looking at cities, because it is very difficult to open a transformative hotel in a city. I would build a hotel near the sea; I would do a hotel in the mountains because they offer a transformative experience. I would do hotels in wildlife sanctuaries because I feel people haven’t experienced wildlife in this country. I think Taj has done a great job with palaces, but I want to do palaces because everyone wants to experience a royal lifestyle. I want to do palaces in a very different way, with a different design experience.
The Postcard, Moira
We are going to offbeat destinations such as Dhauladhar mountain ranges in the Himalayas, just before Rohtang Pass with a 47-room property surrounded by three waterfalls. There is another one we are opening in coastal Karnataka, at an hour, 15 minutes’ drive from Mangalore, a two-acres property with 16 rooms. We are looking at Kanha, Kabini, Chikmagalur and Kaziranga, where we have a 1,700 acres property, and even at Sunderbans. We want to be the curator of your happiness, the curator of your holidays. The vision is very clear. In five years, I want to have 50 hotels. In the next 10 years, I want to be India’s most profitable company. I am not increasing the number of rooms; the secret lies in how much value I can add. My third vision is to have stakeholders participate in the success of the hotels. I want to offer my employees have stock options. Let the company get listed, and let employees be owners of the hotels. The fourth vision is to put an Indian hospitality company on the global map. I want The Postcard Hotel to be the Indian experiential luxury hotel that goes to some of best the destinations in the world, where many great hotels are located. I also want to open a hotel in France, and not just in Sri Lanka. I will definitely take a great shot at it. We have the strategy, we have great clarity.
Will you own these properties or will they be managed?
We are either buying up a site or property or taking it on a in long lease. No one wants to sell a palace, so for a palace hotel we will work on a management contract. It is an interesting mix. We will look at whatever works in that destination— either we will buy out, or sign a long lease or do a management contract.
How many employees does The Postcard Hotel have at the moment?
All together less than 300, but growing at a phenomenal rate. Hospitality industry adds significantly to the GDP of the country, and the industry is one of the biggest employers. At Postcard, we also work with the local community. We are all about artisanal, organic, preservative-free food, which we source locally. The freshness of the ingredients adds a lot to the flavour profile of our food. In Mangalore, we offer guests water from coconuts that have been freshly brought down from the tree.
Courtyards at The Postcard, Moira
Destinations such as Sunderbans and Kaziranga, or even the Dhauladhar range do not even have great mid-budget hotels. For someone like you to open in destinations where you are not sure of the access to the location, infrastructure and even the cost of running a hotel, what does it involve? In Kanha, the cost of land is less then INR 10 lakh an acre. I get 10 acres of land is less than INR 1 crore. In a destination like that I can charge INR 23,000 per night because of the destination and the experiences we offer. But we are sitting on Kanha property right now because of the issues of connectivity, which I am sure will improve with new infrastructure being built. Across the country, accessibility is getting better. Kaziranga is now just a two-hour drive from the Guwahati airport and is a great destination to open a hotel in. We are building another hotel just 20 mins from the Navi Mumbai airport, on a virgin beach.
Verdant greens at The Postcard, Cuelim
I love a destination such as Kumaon but no property in the region does more than 30 per cent occupancy. If you are ready to look at long term, there is future in these destinations and you need to intelligently decide where you are going to go first and how far are you going to be from the airport or the train station. In Kumaon, I am looking at several factors, such as the demography of our guests or the accessibility to the destination before I begin working on a hotel. But I don’t mind doing a hotel in a destination as offbeat as Dhauladhar range, which takes a bit travelling to, because we are set in the first apple orchard in the region. It has so much of history and heritage attached to it. In Goa, the plan for a second airport has been put on halt by the Supreme Court because of some environment concerns. But I am not giving up on South Goa because it is a great destination with beautiful beaches, and we are building a property with 700 sq. ft rooms. So, we have to play this very intelligently and take our decisions.
What have been your major challenges while setting up The Postcard Hotel?
The capital is not a constraint for us. The major constraint is posed by lack of clearer policies and the pace at which the infrastructure is being built. We bought a hotel that has been in operation in Mangalore for 20 years, but when we were looking at demolishing parts of it, we are told it lies in the CRZ zone. We had to go to court, we had to appeal to the authorities—all these things delay projects. I would love to see a central authority that does the due diligence and tell hoteliers, all the titles are clear, just come and build. That is the way government can promote tourism. The only challenge for me today is the deliverance of a site, because permissions to build and policy obfuscation are huge issues. It would really help if the states or central government had a policy that clearly demarcates hotel earmarked land. Otherwise, we have moved really fast. Our time of construction or opening is as less as 9 months.
You have said somewhere that you are operating at a profit-level since you started. How did you manage that? What sort of investments are you making?
We are following a very interesting method on how return on capital gets done. Imagine if I have to buy the property in Moira; those 10 acres will cost us a lot of money. We have taken it on a long-term lease, and the lease right now is so low in Goa that I break even within four room nights. And the rest 26 nights are profit. That is our lease asset. In the investment asset, we are buying land in Kanha at very cheap rates and I can build a 20-room super-luxury hotel between INR 12 to 13 crores, and charge INR 30,000 to 35,000 per night. We have also managed to strike very good marketing tie-ups. Several airlines that land in Goa after 5 pm make an in-cabin announcement which states, “Stay at The Postcard Hotel and check-in and check-out anytime’. No hotels offer such facilities. American Express has sent out and emailer to three lakh of its clients about The Postcard Hotel. We have come up with several such brand strategies. One of our key strategies is to look at specific markets that no one has looked at, for instance try and create a new circuit. Why don’t I create a new wildlife circuit in a certain part of India, Say, in the south with Kabini, Wayanad and Coorg? My point is, why should we not develop new destinations? Why don’t I take my guests to Kolkata, and then to Sunderbans, get them to Darjeeling for the tea gardens, take them to Guwahati and then Kaziranga for one-horn rhinos? India has been promoting the same destinations for decades and we need to expand the horizons.
Are you also looking at an IPO at some point?
The best validation of a great brand is an IPO. If I had my way, in the first seven years of operations, we must have an IPO. It takes seven years to build a brand.
What are your biggest strengths as an hotelier and entrepreneur?
Every single hotelier has the same strength. When I establishing The Postcard Hotel, I am doing it for every hotelier who has a dream to build their own hospitality company. What Patu (Keswani) did with Lemon Tree or what we are doing with The Postcard is to inspire people to dream and build a new narrative. India has changed in the last 10 years. It is no longer just about legacy capital; it is also about intellectual capital. If you are hardworking, smart and intelligent, if you never give up, you can build great companies. There are technology companies who have based their success on intellectual capital. We are saying that a bunch of professionals can come together and build a new luxury hotel brand.
EazyDiner was your first project as an entrepreneur. And now, you have launched the Postcard Hotels. What has your journey as an entrepreneur been like?
I have always wanted to be an entrepreneur. When I ran The Oberoi Group as president, I ran it like my own company. Even as a general manager of a hotel, I ran it as if I was the owner of the hotel. I am part of the team who co-founded and executed EazyDiner and I am sure it is going to be a billion-dollar company. The question is, by when? We have grown 10 times in two years. I believe in Jeff Bezos’ (Amazon CEO) theory, which talks about ‘regret minimization framework’. Minimise your regrets. There was space for something like The Postcard Hotel in India and I did not want to ever turn back and think, ‘I regret not doing it’. I read a lot; I draw inspiration from what people say. In my opinion, I should have started this two years earlier and we would have had 25 hotels by now. But I had responsibilities as The Oberoi Group’s president, which is what took time.
Dining at The Postcard, Velha
As an entrepreneur, you look at opportunities and not obstacles. So, the first hotel I bought ran into a CRZ litigation. Instead of being devastated by the setback, I did course correction and opened in Goa. EazyDiner also taught me that growth must not be incremental or linear; it must be exponential. I have learnt that people are the key, the biggest assets, and at the end day, we have some of the finest people working with us, both at EazyDiner and The Postcard Hotel. If the people on the ground are not what they are, my guests would not have had a great experience.
What is your vision for the hospitality segment in India?
The hotels in India are doing a great job. India has such an amazing service culture that even in a budget hotel, you can expect the best of service standards. I think the industry can do much better. If you really think about it, how many home-grown chains do we have and what are the financial health of these companies? I also believe the government should do more for the industry given it is a large generator of employment. I don’t think the government is looking at how travel and hospitality is significantly impacting the economy and employment figures.
Do you think any home-grown hospitality brand has the capacity to be world-class and compete in global markets?
In the luxury segment, I absolutely love the focus that Puneet Chhatwal has brought to the area of development. He is following an extremely aggressive agenda for the Taj Hotels. I think there is a lot of opportunity for homegrown brands to go abroad.