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The growth of a new hotel chainnews
17 April 2006

M O Koshy, senior vice president, GRT Hotels and Resorts, outlines his group's growth plans, in an interview to Venkatchari Jagannathan.

M O KoshyChennai: He cooked dinner for his whole family as a student. Today, he manages one of the fastest growing hotel groups in the South.

"My father wanted his boys not to be dependent on anybody for anything including their meals. So my brothers and I took turns to cook the Sunday dinner for the family," muses 57-year old M O Koshy, senior vice president, GRT Hotels and Resorts.

What initially started as a family chore later turned out to be a profession for Koshy and his two brothers. This hotelier, who learnt cooking to be independent, now whips up excellent desserts at home. Moreover, when there is an unexpected deluge of guests at home, his wife summons him to chop the onions, something he does with express speed.

After completing his bachelor's degree in botany from the University of Madras, Koshy joined the Institute of Hotel Management, Catering Technology and Applied Nutrition in Chennai. After passing, he joined the Connemara Hotel in 1972 and a year later was heading the newly set up inflight catering division. Subsequently, he headed the Airport Hotel at Meenambakkam in Chennai, which the Connemara had acquired from the Spencer's group. Koshy managed the inflight needs of Air India apart from the passengers.

In 1995 he decided to join GRT Hotels and Resorts as general manager, projects. The company was then building its first hotel, the GRT Grand in Chennai. Promoted by GR Thanga Maaligai, a jewellry shop, GRT Hotels and Resorts has a turnover of around Rs86 crore from managing five hotels - three owned and two under management licence - that have a combined capacity of 399 rooms of which 306 are owned by GRT and the other 93 are licenced. The group owns properties in the business, airport and beach resort segments.

Koshy talks about the hotel group's growth and the future plans that include setting up new hotels and also managing other hotels under the brand GRT Grand and GRT Regency. Excerpts:

What would you list as the success factors of GRT Grand?
Originally this was planned as a 3-star hotel. We added a lot of frills to give good value for money so that it now offers 5-star facilities at 4-star rates. Right from the start, the hotel had 90 per cent occupancy level. Normally a new hotel starts with 60 per cent occupancy, which gradually moves up. We offered quality, value for money, consistency, personal but professional service.

What impresses the first time visitors are: the 8,000 sq.ft big brightly lit lobby and the 100 ft atrium; the two tubular glass lifts and the two levels of car park. The room service and the restaurant Copper Point became a hit with the patrons. At one point of time, guests had to wait for their turn to enter the Copper Point restaurant. Initially the location, T Nagar, was thought to be a disadvantage. But it turned out to be otherwise as it was centrally located and entry and exit from the hotel to the airport / railway station is easy. With the hotel's convention hall in demand, we built a standalone convention centre next door.

What was it like after you declined to renew the management agreement with the Days Inn group?
We signed up with Days Inn mainly to avail a bank loan during the hotel's construction stage. Though we signed the agreement, we ran the hotel. In 1997 when the licence agreement came up for renewal we didn't find the need to renew it.

The group seems to be in an acquisitive mode.
In 2001 we acquired the SPIC group's four star hotel Radisson located near the Chennai Airport and renamed it Radisson GRT. Later ITDC's 5 star beach resort in Mahabalipuram was acquired. Last year the group signed up management agreement with two hotels in Madurai and Kanchipuram thereby signaling its entry into an exciting space.

What is the group's expansion plans?
We will be building a 4-star 200-room hotel in Coimbatore's Avinashi Road. To be designed by a Canadian architect firm the hotel will be ready in two-and-half years time. We are also looking for land in Bangalore and Hyderabad. But the land title is one big issue in these two cities. Our idea is to build our own hotels in big cities and manage the hotels in smaller ones. At Radisson GRT we are adding 60 new rooms. At the business hotel GRT Grand the Copper Point restaurant is being expanded. The GRT Regency hotels in Madurai and Kanchipuram will be upgraded to 3-star status.

Do you plan to take the brand abroad?
We will be franchising the Copper Point restaurant to a Sri Lankan hotel. We received offers to manage some hotels in the Maldives, but declined them, as we wanted to consolidate the gains.

You are now managing other hotels. How do you plan to build your brand in the 4- and the 3-star segments?
Building hotel brands is actually a long-term process. Nevertheless we have hired ad agency JWT to take care of the branding exercise. Part of that is our new logo.

What is the occupancy ratio in your hotels?
The GRT Grand and Radisson GRT has an occupancy ratio of 87 per cent and the Temple Bay GRT has 78 per cent. The two GRT Regency hotels in Madurai and Kanchipuram have 65 per cent and 50 per cent occupancy.

What is the room rent to F&B revenue ratio?
The room rent to food & beverage revenue ratio for us defies the general industry level of 60:40. For us both contribute equally.

With the entry of several domestic airlines, do you plan to enter inflight catering?
The idea did crop up. But we are not looking at it now. While the volumes may offset the low price, the risk of late payments and cancellation of orders even for some minor lapses are a major risk.

It is said that the GRT Grand is the poaching ground for other new hotels. How do you manage staff attrition?
We have set up a training centre. The first batch training was given to the entry level staff like the bellboy. The next batch will be for the supervisors. We have plans to have a full fledged catering institute and the long term plan is to start a college offering MBA degree in hotel management.


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The growth of a new hotel chain