Dusit forecasts a successful Indian venture
Thai hospitality major Dusit is all poised to open its first Indian property by mid-year. Harsh Varma gets down to brass tacks in this exclusive interview with Punam Mohandas.
While the renowned Thai chain, the Dusit Group, is all set to mark its entry into India, for Harsh Varma it’s a homecoming as he has lived away from the country for nigh on twenty years. “This is my first interview in India – it’s great to be back,” says an elated Varma.
As the newly appointed regional vice president, India, for Dusit Bird Hotels, Varma says one hears of so many good things happening in Indian hospitality. “It’s terrific to be back in India and see the changes. A lot has changed, no question, but in the environment, not the fundamentals; those still remain the same – service, service, service.”
The Dusit has chosen difficult climes for its India expansion, however, Varma feels the decision is not really related to the economic slowdown, and that this was a natural progression of growth for the group; the Dusit chain has just entered China, and there are plans for the Americas and Europe shortly.
“The market is so big that any point in time was an opportune time here. If you look at the economy at large and the affluence of the Indian consumer, I think this is the perfect time to enter India, as several other brands too are doing. I think one can ill afford to ignore a huge market like India,” he says.
Dusit Thai Public Company Ltd Thailand, and Bird Hospitality Services Pvt Ltd, have formed a joint venture company in India – Dusit Bird Hotels – which will not only manage all properties that Bird constructs, but will also actively source other partners to whom they can offer management expertise, thereby expanding the Dusit brand in India.
Says Varma: “We will use this company as a vehicle to manage hotels or serviced apartments. The nature of our relationship is such that Dusit will provide the management expertise and Bird will build the hotels – that is the initial thinking at least, and applies to the first six hotels. Is it correct to make this investment in this economic downturn? I think it is. India as a country is enjoying its own economic upsurge.”
On the subject of why Dusit is only managing all its Indian properties rather than going for outright ownership, he clarifies: “We are more than willing to make the investments, but here, we find Bird as an entity is keen to do that and diversify into the hotel business.
If you leave the monetary issues aside, and you see the Bird Group’s desire to expand into hospitality and the desire from the Dusit Group to expand into India, the partnership that has been formed between us is of perfect harmony; there is so much of commonality of vision and mission. I see nothing but success ahead to be honest.”
The group will be establishing its footprints in diverse locations such as New Delhi, Gurgaon, Jaipur, Rishikesh, and Goa, with the Dusit Devarana New Delhi slated to open first, in July this year (it will initially open with 50-keys, going up to 70-80 later).
Varma thinks one has to look at different options for the international and domestic tourist; “India has so much depth, it goes beyond the Gateway of India or India Gate,” he says emotionally. “In spite of being a multi-curry society, it still has a certain romance and allure, which is very beckoning when you look at India from outside.”
Incidentally, the first Dusit Devarana outside Thailand was originally conceptualised in Dubai, but: “Because of whatever cycles the country went through, it is now not on the horizon,” says Varma candidly.
The first D2 outside Thailand is also scheduled to open in India (in New Delhi’s DIAL hospitality district); “That just shows the criticality and importance we show the Bird Group,” emphasises Varma.
Staffing will be done locally to a great extent, but the initial transfer of training and soft technology will come from Thailand. “It’s important we set this up very well from day one. Just because you were working with a large domestic or international chain does not mean you can fit into the Dusit environment, therefore, the mind shift will come through training and exposure” he says.
India and Thailand are both countries that have a tradition of hospitality and rich culture as their legacies. So will the Dusit offerings in India be uniquely Thai? “It will be uniquely Indo-Thai,” he corrects.
“It has to be – there is so much in those two cultures, and we have an opportunity to take both these cultures and traditions and combine them. And I’m at an advantage here between both these countries, because, while I’m proud to be Indian, I have lived for several years in Thailand,” he smiles.
The sobering issue of the worsening scenario of security raises its ugly head. Hotels are very soft targets, and, while in hospitality it is not exactly hospitable to conduct a stop-search on guests, it is very necessary to protect not only staff and customers, but also the investment.
Varma says in Thailand certain hotel chains have now imposed security measures, but not in an in-your-face manner, however, in India one faces different challenges, where one has to be public about having these systems in place, rather than be subtle and go wrong.
“No hotel in the world that can prepare itself for an eventuality like this. You cannot create yourself into a fortress. I am still trying to find a way where I can minimise the jolt,” he says.
Asked whether he would share his ideas for security measures with other hoteliers he says: “It’s conceptual at this stage; I have no hesitation in sharing when it’s crystallised and implemented, because then its public domain.”
He does believe that hotels should collaborate and integrate with each other. Certain services can be contracted and it is common in Thailand, and many parts of Europe and America, to outsource; for example, he says laundry, which is a huge investment, is outsourced in several hotels in Thailand and Indonesia.
“You have to keep evolving, and for that, there should be a synergy. Networking is very critical for any industry but especially so for hospitality,” says Varma.
We now move on to discussing the USP of the brand, and what Dusit brings to India, that isn’t already here. According to Varma, the Dusit Devarana brand itself speaks differently to different people, so it would be difficult to put a specific USP to it. “The investment that Dusit has made in its brand in the last 40 odd years is a learning curve. It has stood the test of time and created a niche for itself. There’s already so much here that it would be incorrect to say it’s a new offering, but what they bring to India will be enormously different from what exists here already.
I understand the strengths of Indian hospitality and the strengths the Dusit has created, and I begin to visualise what it will offer. I think what the other chains offer is terrific, but I’m saying ours will be better,” he says a trifle naughtily.
As to pricing levels for the hotel, he says pricing is related to what’s happening at the given time, for instance, there was a time when Delhi did Rs20,000 which then dipped to Rs12,000, in terms of average RevPAR. Varma is sanguine about this; “As we get close to opening, I would say I’d like to be the leader in RevPAR,” he says.
When asked to name the top five challenges he perceives in the Indian market, Varma chuckles and asks: “Only five?” and then gets down to business. The first, according to him would be, in this sea of manpower, to get the persons who suit both the Indian environment as well as the Dusit brand environment.
Secondly, the race to complete the project the way they need to, and on time – although the latter is a challenge for any project in the world, at the moment in New Delhi there is so much pressure on due to the Commonwealth Games he says, that all the contractors and suppliers are stretched, therefore, to open a hotel in this environment presents a different sort of challenge.
Third on his list is infrastructure, and the way it exists, although he sees a growth prognosis in Delhi. The fourth challenge he perceives is the continued availability of materials and resources, and lastly, would be the growth in the industry itself.
“There are many more hotels coming in; every new or existing brand will make its own proposition and profess to be the best, which is perfectly natural. We don’t pretend to take anything away from them, they have their own brand standards.
We all know the uniqueness of Thai hospitality, and nobody in India is a stranger to Indian culture and tradition; once we’re able to combine these two elements, we have a winning bet.
I don’t want to take away anything from the other companies, I think Indian hospitality is fabulous, but I think we will succeed in redefining how luxurious hospitality is looked at in India. The challenges are huge, but I love challenges.”
I take him up on that by asking him how he ranks the incoming Thai competition making a beeline for Indian shores; Amari and Anantara have both announced their plans for the market.
Varma sidesteps that one neatly by saying that the competition are good hospitality organisations.
“I always have a very healthy respect for my competitors; I learn from what they are doing and do it better. It’s all an opportunity – you see it as a threat only when you do not possess enough drive in you to meet the challenge. I think Dusit will emerge the winner,” he concludes confidently.