• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
  • Editorial Calendar 19-20
BW Businessworld

Kempsinki Hotels: No Longer A Ménage A Trois In India

Photo Credit :

 “You cannot buy history – we are hoteliers since 1897.”
“We are exclusively in the five-star luxury category and we are not a supermarket of different brands to cater to 4 star or 3 star categories. “
That’s Kempinski Hotels global chief operating officer Duncan O’ Rourke, holding forth on the luxe quotient of his hotel brand.
So what are they doing in East Delhi? Why is Kempinski’s first property (a mammoth 480 room two tower structure) in India on their own, breaking away from the Leela association, in a locality not known as a setting for a luxury hotel?
O’ Rourke has an instant answer to that one. "We are building for the future", he says, without batting an eyelid. 
“We anticipate that future growth in Delhi is going to come in this direction,” elaborates Ulrich Eckhardt, MD and President India, Middle East and Africa for Kempinski.
Underlining the importance of the Indian market, O'Rourke said: "Apart from India being the largest democratic country with a growing economy and a big middle class another important factor is large number of inbound and outbound visitors." 
Raj Singh Gehlot, Chairman and MD, Ambience  Group, who built the property and invited Kempinski to put its flag here concurs. “ When I did a feasibility study, I found that this was the neighbourhood that was paying the maximum average income tax of Rs 3 lakh in Delhi,” he says. It was paying more tax than South Delhi or West Delhi.  “The money is here, but what was lacking was the commitment of the developers to the area,” he says.
Gehlot, who also owns the Leela Ambience hotel in Gurgaon set within a mall has a ready plan for monetizing this East Delhi property.  He says he has built enough space for offices atop the towering hotel. “I debated a mixed use mall model then opted for an office cum hotel model,” he says.  The idea being he can lease out the space to top companies who could be potential clients at the hotel as well.  The hotel is riding on a very strong F&B offering and focus is as much on F&B and banquet/ MICE revenue as on room revenue.
Gehlot is setting up two more hotels in Udaipur and Gurgaon but has not signed on any brands for those yet.
Kempinski, for its part, is looking to expand in India as well  - but slowly.  The chain set up in 1897 has 73 hotels under its brand name, and will be 88 in 12 months, but O'Rourke says “We are one chain that has put a cap on growth. We want to be known for our exclusivity.”
In India, Kempinski is looking to expand in Mumbai, Kolkata and Kerala and is in talks with developers there.
"We plan to operate three new hotels in India by 2020 taking our total strength to four hotels. We already have a hotel in Delhi," said Kempinski Chief Operating Officer Duncan O'Rourke. 
These hotels will be in Kolkata, Mumbai and Kerala if the ongoing negotiations are successful, he said adding "we generally expect them to be successful. The Kerala will be a resort". 
O'Rourke said the company will follow 'a management contract model' for these new hotels. 
Asked about the break with Leela, O'Rourke insisted the parting was cordial.  “When our contract ended, we decided to go our own ways.,” he said.  
For Gehlot, who has one property apiece with Leela and Kempinski, the dilemma was bigger – which brand would he opt for when two separated for his Gurgaon property (it was known as Leela Kempinksi). Perhaps he tread diplomatically.  Certainly there is no ménage a trois now.  
(With inputs from PTI)