January 2015 | Christabelle Noronha
'We are the keepers of heritage and legacy'
Over the years, the Indian Hotels Company has acquired palaces and heritage buildings across India, and converted them to luxurious hotels that provide guests a chance to indulge in royal opulence and, at the same time, help conserve India’s heritage. The company has continued its legacy in the United States with the acquisition of heritage hotels in prime locations. Exercising care to nurture the inherent character of the buildings and city residents’ pride in them, Taj has created a unique identity for itself in the United States.
Karambir Singh Kang — area director USA and general manager of Taj Boston — and industry veteran of over 25 years, speaks to Christabelle Noronha about brand building, business strategy, loyalty programmes and sustainability initiatives in the United States.
What kind of market does the United States represent for Indian Hotels?
The US continues to be a very important market for Taj and the Tata group. Although Taj has been operating in the luxury segment in mature markets of the world, it is a young brand in the US with iconic hotels in key destinations. The Pierre in New York on 5th Avenue facing the Central Park, has a legendary history and continues to set the standard for unrivalled hospitality. Taj Boston, facing the Public Garden at Arlington and Newbury Streets, is one of the most prestigious landmark addresses in Boston since 1927. And Taj Campton Place at San Francisco is the quintessential boutique hotel at the heart of the Union Square. All three hotels are situated in unique locations surrounded by art galleries, shopping destinations, boutiques and restaurants, near theatre districts and historic sites. The decision to operate in the 5-star deluxe segment in the US is a conscious choice. The luxury segment represents nearly 50-60 percent of the company’s bottom line. An analysis of guests revealed that more than half of our customers at the US properties are Americans, followed by visitors from Europe and the Far East.
Our presence in the US market was a strategic choice. However, a key challenge is that our competitors are well established as they have been in the US much longer. At the moment, we do not have critical mass. Over the last 10 years, our operations in the US have achieved significant progress. The hospitality industry has been growing at 7 percent. We have been keeping pace; last year, we recorded a 20 percent growth in New York despite market challenges.
|Watch how Indian Hotels Company is redefining the hospitality experience in the United States|
Each Taj hotel, wherever it operates, infuses itself into the skyline of the respective city and blends into the very soul of the city. This is a differentiator that distinguishes the Taj. This is best illustrated by Taj Boston, which is an iconic landmark. We did not change the basic character of the hotel when we took over. It is still a very Bostonian hotel. It is akin to the Taj in Mumbai where guests have been coming for generations — they came as kids, got married here, had honeymoons, and now are coming back with their children and grandchildren. Our staff has been here for 20-30 years and remember guests from then; they have deep emotional bonds with them and recognise them when they visit. The Taj Campton Place has its fan following.
Taj is sensitive to the heritage and restoration of its iconic locations — be it the palaces in Rajasthan and Hyderabad, Taj Boston in Boston or The Pierre in New York — over $100 million was spent to renovate The Pierre. We nurture and cherish the legacy and restore these hotels which are iconic landmarks in the city of their birth. We are the keepers of heritage and legacy. Business in the United States is more than about being profitable and successful; it is about being relevant to the city we thrive and operate in.
The timing of Indian Hotels’ foray into the United States was not quite right and there have been struggles in the days since. What will it take to get over the bumps?
If you listen to critics, the timing will never be right. It was not right when Jaguar Land Rover was acquired by the Tatas or, for that matter, when Tata Steel acquired Corus. Acquiring stock to own and operate a company is not the same as acquiring stock for trading — timing is critical only if one is focused on trading. In the long term, to acquire a company and operate it to build synergies is a different ball game. We could have grown in India and stayed within the country. However, the aspirations of the company link to the very essence of the name that the Founder chose to call it. He wanted the world to experience the “Indian” hospitality, hence he named it The Indian Hotels Company. What takes us places is linked to the aspirations of brand India and brand Tata.
How does the company build the Taj brand identity in the United States? Can you describe how loyalty programmes impact business?
We are a young brand in the US and hence building brand identity is important, and loyalty programmes have a distinct role to play in the process. Brand building is a combination of various factors — our locations, unique levels of service, relationships that we nurture with our guests and our relevance in local communities. Guests will choose a brand that is consistent in its messaging and one they are comfortable with. They will choose a brand if they know what it promises and that by being loyal to it they have something to gain. At the moment, we are working on making the ‘Taj Inner Circle’, our loyalty programme, globally relevant. We are competing against some of the best loyalty programmes in the world.
We have 12 of the most exquisite suites in the city of New York. Last year, we launched the Taj Royal Attache programme in the city. Our royal attaches are butlers who are trained at our palaces in India to serve royalty. So we merged the royalty and nobility into the Taj experience and said, “If you come and stay with us, you will have our royal attaches looking after you”. Our guests have taken to the programme and suite occupancy has gone up. An additional challenge is building the Taj brand among employees. In the US, we employ over 1,000 people across the three hotels; only 2-3 percent are from India, the rest are locals. We have to educate them about who are we and why we should be proud to be working for the Taj and the Tatas. We have a focused on-boarding process. Whenever new employees are recruited, we try to inculcate pride about the fact that they are joining a great company. We tell them the story of Tatas, what they stand for, and where Taj figures in the history. Our programme called ‘Spirit of the Taj’ is about sharing the history, stories and culture of Taj, and how we are different from others.
Could you tell us about the corporate sustainability and community uplift programmes that the company runs?
We are part of the First Book initiative that is supported by the Tata Sons office in Washington. Hospitality as a business is a large consumer of natural resources, hence we take our green initiatives seriously. Eighty percent of the lighting in the three hotels in the US is LED-based. We are EarthCheck silver certified. The company has invested in Ecovim machines that convert organic wet trash into first-stage fertiliser, which can be used in gardens, farms, etc. The process has significantly reduced the trash to landfill and the number of recycling pickups, in turn reducing recycling and energy costs. Staff across hotels are encouraged to turn off lights, report defects and re-use and reduce whenever and wherever possible.
Taj Boston has introduced an innovative soap recycling initiative. Most hotels throw away used bars of soap. Taj Boston collects the half-used bars and sends them to an organisation called ‘Clean the World’, which converts them into fresh bars of soap. The new bars are then sent to poor nations where people cannot afford soap.
Fact file: Indian Hotels Company