“Today, once this whole property has been renovated, we have bounced back to the same levels of revenues and profits that we clocked earlier. And this is despite the lease rentals going higher,” said Suma Venkatesh, executive vice president for real estate and development at IHCL in an interview with ET.
“Renovating the property was about drawing from the past, building on it, and looking into the future and creating something that was more appealing to the changing needs of the customers. We didn’t shut the hotel down. It had to be done in phases,” said Venkatesh.
The hotel has 40 suites including five themed suites representing India. Two floors of luxury apartments have also been created for longer stays with fully fitted kitchens and wardrobe spaces. Food and beverage spaces such as Machan and House of Ming have been redone.
“We said 20% of our inventory will be suites. We introduced a special themed suite called the Maharaja suite which was an ode to the pioneer of Indian aviation. That was around the same time when the Maharaja came back into the fold within the group,” said Venkatesh.
“This hotel gets a lot of legal professionals who stay here for weeks for cases and they have their offices in the hotel. So, we created one bedroom, two bedroom apartments. We did not see these in other hotels and there was a clear demand. It was not just renovation but changing the whole accomodation mix of the property,” she added.Venkatesh said the chain also ‘reimagined’ Chambers with help from luxury fashion and lifestyle company Stefano Ricci.“We got things from Italy to create a different kind of a meeting facility. We collaborated with Johnny Walker to do the blue label bar, the cigar lounge. All our pools are now heated and it started with this hotel. The entire poolside area got fully changed in terms of landscaping as well,” she said.
IHCL has also created larger spaces for the wellness facilities.
“As a result of the addition of the apartments, the keys have gone down in the hotel. From 292 rooms, we have 213 rooms now. The entire profile of the guest accommodation area is more luxury driven and more high end to drive the rates. We didn’t have apartments at all. We have introduced apartments,” she added.
Vijay Thacker, MD, Horwath HTL India said in Lutyens’ Delhi, none of the hotels have apartments.
“In that sense, this is new. The only places where there are organized residences is the Andaz hotel in Delhi and then in Gurgaon. With the additional suites and the apartment, besides the fundamental quality lift, the rate gain is expected to be very strong in my view. That’s going to be a positive. The moment you have rate gain, you have profit gain. Because that additional rate premium goes to the bottom-line substantially,” he added.
As per details shared by civic body New Delhi Municipal Council (NDMC) in 2018, the Tata Group company was to pay a monthly license fee of Rs 7.03 crore at 32.50% of the gross turnover to retain the lease for another 33 years. Prior to the auction, it was paying a license fee of Rs 3.94 crore per month at 17.25% of the gross turnover.
Thacker said a lot of companies renovate hotels to bring them up to speed, but IHCL has also looked at what could be relevant for the next ten years, in terms of refurbishments and renovation.
“That is going to be the value gain in terms of higher revenues. It is not just about occupancies, but higher rates. The rates will come in because of the suites and the apartments, particularly the suites. This location does draw a lot of occupancy,” he said.
Venkatesh said the hotel is ‘very critical’ to the group for a number of reasons. “This property has a huge emotional connection with the group. This property was the second Taj Mahal property after the group’s forefathers built the Taj Mahal Mumbai. This is in Lutyens’ Delhi. The hotel is irreplaceable. It is the most preferred place for global travellers and dignitaries. Commercially, this is one of the top five hotels in India for IHCL that earns money. The repercussions for not retaining this would have been big,” she added.
