Entering The Big League
Busy building its own brand since 2004, MRG Hospitality & Infrastructure is now positioning itself as a serious player by liasioning with Hilton and Marriott
By Pradeep Suvarna
History has proven repeatedly that the hospitality business comes naturally to people originating from Mangalore. So when K Prakash Shetty, founder and chairman, MRG Hospitality & Infrastructure, ventured into the industry in 1993 with a fine-dine restaurant, Banjara, in Bangalore, it did not raise eyebrows.
Nine years later, he opened Goldfinch Hotel Bangalore, following it up with other hotels in quick succession. Today, the company has 10 properties under its aegis.
Most are concentrated in southern India, though it has one in Delhi and Mumbai, each. While the majority operate under the Goldfinch brand, Shetty knew that to capture the spotlight, he had to break into the big league, which would be possible only if he was affiliated with international operators of repute.
Hence, a couple of years ago, Shetty also signed an agreement with Hilton Worldwide to develop a 200-room Courtyard by Marriott in Bengaluru. It will also develop DoubleTree by Hilton, Goa besides setting up Goldfinch Hotel Vashi, Goldfinch Resort Pondicherry as well as Goldfinch properties in Chikmagalur, Madikeri and another property in Mangalore.
“Our room inventory for Goldfinch properties is 344 rooms across all categories, and under our partnership with Courtyard by Marriott Hotels and DoubleTree by Hilton it is 348 keys. We aim to make it approximately 1000 rooms by 2020,” Shetty revealed.
ACQUIRE, NOT BUILD
According to Shetty, brownfield projects are more viable options as constructing a greenfield project requires more capital and time. He added that the development of the hospitality sector depends on several factors, including physical status of the accommodation along with nature of occupancy pattern, room availability and tariff. “At the same time, factors like poor infrastructure, high cost of land procurement and procurement of multiple licences act as business barriers,” he rued.
When it comes to selecting brands to partner with, Shetty has realised that it is easy to be associated with those that share the same ethics and deliverables as MRG. However, global inventory and resource also play a vital role in selection. “Instead of the full-service model, we prefer the customised or limited-service. However, this could vary depending on the demographic position where the hotel will come up,” he explained.
According to him, if the new project is with a well-known brand, then it is more cost and time-consuming, given the need to empanel with its supply chain management. “There are other things that we need to be cautious about, like poor F&B conceptualisation without a proper demographic research, being over-leveraged with expensive capital and doing unnecessary experimentation,” Shetty stated.
To avoid this, both partners ought to be actively involved in the project. As a hands-on entrepreneur, Shetty takes his share of decisions to ensure that all bottlenecks are removed, and also empowers his team to do the same. That, he believes, is the power behind his success.