For the third time in a row ITC Hotels has emerged at the top in the Most Respected Company survey in the hospitality segment. What makes this chain such a success story in a sector which has not been doing too well? A weak pricing scenario with a huge room inventory in key markets in the country, as well as a sluggish economic environment may have meant a poor market for others, but it hasn’t put a dampener on business for this company.
Even in this environment, ITC Hotels stands out. It is one of the fastest growing hospitality chains in the country. At present, it has over 100 properties across the country, totalling around 9,000 rooms. Plans are on for further growth and another 8,000 rooms are on the anvil. ITC Hotels owns around half of the total number of rooms under their management.
The hospitality chain is divided into four distinct brands, the luxury segment under ITC Hotels, the upper-upscale five star under WelcomHotel, the upscale and mid-market segment under Fortune Hotels and the leisure and heritage segment under WelcomHeritage.
Responsible LuxuryThe company’s ethos of ‘Responsible Luxury’ is mirrored in all their properties, with ITC Hotels most recently launching the flagship Fortune property in the upscale segment, the My Fortune Bengaluru, and their super premium offering ITC Grand Bharat close to Gurgaon in 2014.
The reason ITC Hotels is consistently recognised as the most respected company, according to Ranvir Bhandari, chief operating officer, ITC Hotels and WelcomHotels, are its people.“People are our greatest strength,” he says, “All our people practices in ITC Hotels are aligned with the values of our organisation. We put the country first, the company second and individual last. This is ingrained in each of our employees.”
The company continuously identifies key talent and then assigns development plans for them. Meritocracy is the biggest driver, much more so than tenure. “Learning and development is something that we pay a lot of attention to, whether it is at the ITC Hotel management institute or at the unit level with our supervisory development programmes,” says Bhandari. He adds that there is constant development because of which people are adding value in so far as their own learnings are concerned. “We encourage them to stretch towards profit optimisation or revenue
optimisation.”
Sense of OwnershipEvery unit has a ‘Khulla Sarkar’, where teams can speak freely with the leadership on what they feel are opportunities for improvement or organisational advancements. Their points are also addressed and everyone gets feedback.“People feel a part of the decision making. The whole idea is to make great innkeepers as well as entrepreneurs. We are trying to make business managers out of everyone,” says Bhandari. “We develop our own timbre. There is a constant bench strength based on succession planning. Every boss is only promoted if he is able to groom at least two people to take over his position. That also ensures that people are constantly being challenged to achieve and also give their best,” he says.
This philosophy is perhaps one of the reasons that, even though average room rates in the business plummeted, segment revenues have increased for ITC Hotels by 4.8 per cent during the year 2014-15. The results were also affected by the gestation costs of the two new properties which opened in the same time frame.
The food and beverages segment has always been a great strength for the company. “As far as food is concerned, it is the consistency of taste, texture, presentation and the recall value of what you have experienced,” says Bhandari. “Each and every recipe down to the ingredients is archived. The purchasing department and the material managers know exactly what the chefs want and they ensure that they do not have any deviation from that — it is a big strength.”
In line with the mother company’s commitment to triple bottom line, the hotel business targets a continuous reduction in energy and water consumption and enhances the use of renewable energy sources, which now account for 58 per cent of total energy requirements of the business. All this falls within the guiding purview of ‘Responsible Luxury,’ which is a motto across ITC Hotels.
With the sector finally looking up, construction is on at Kolkata, Hyderabad and Coimbatore. Sri Lanka will see the first international ITC Hotel, while the Fortune brand continues to be a fast mover in the mid-market to upscale segment. “Nobody gives you India like we do,” says Bhandari. “Our ‘Responsible Luxury’ peg has won many accolades. I think whether we are in India or abroad, our brand will always be a local India company.”
According to Bhandari, ITC has been able to succeed because of the strength of each individual who feels proud to be an ITCian. “That is what separates us from other hospitality companies. People are proud of the brand ITC and what it stands for. They realise that any act or expression of theirs must be aligned to the values of the company and to the brand that they work for.”
bikramjit@businessworld.in
(This story was published in BW | Businessworld Issue Dated 11-01-2016)
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