Rakesh Sarna is CEO of Taj Hotels and Resorts and former group president - Americas for Hyatt Corporation and CCO ¨C International. He speaks to Tom Otley about global expansion, the appeal of the Taj brand any why he is not intimidated by the international brands...

What appealed about the job of CEO at Taj Hotels & Resorts?

I think the brand Taj and the appeal to me as a young boy growing up had a lot to do with it. When I was younger we couldn¡¯t afford to go to a hotel like Taj, but my dad knew my love for hotels, so he would take me to the Taj once or twice a year, but only for a Coke, forget about a meal, that would have been impossible.

So the brand Taj had a special place in my heart. But I¡¯m not sure I would be sitting here today if Taj wasn¡¯t part of the Tata family ¨C founders of the brand.

What also helped was the disease we all suffered from called ego. There was this sub-conscious desire to be a CEO which I didn¡¯t realise until this opportunity came along. My wife and I were planning to leave Hyatt at the age of 60 and retire. I¡¯d been chief operating officer and president, that¡¯s a good run and we both wanted to do some other things in life until this thing came along.

So what did you think needed fixing with Taj?

When I was CCO for Hyatt International, India was the second overseas market for us after China. China did not have a home grown hotel industry, but India was very rich with Taj, ITC, Oberoi, Leela. So when we were embarking on a massive expansion in India we took a good look at all our competitors including Taj, and felt confident that we didn¡¯t have much to worry about going forward. I strongly felt and still feel that we could take Taj and restore it to its former glory and give it its true shape.

Taj is an amazing brand with an amazing legacy, it¡¯s a heritage, but it¡¯s not a culture, and I honestly feel blessed at this age to be able to be given stewardship of a heritage like Taj. So it was very all self-serving to be honest with you. I feel confident that with a little bit of help from the economy we will be able to do some things the owners of Taj will be very proud of. And those owners are not the ones you are thinking about - those owners are the citizens of India.

I spent 35 years with Hyatt in nine different countries, and you always hear accolades about Hyatt. But I¡¯ve never had a brand described the way Taj is described here. The brands love, adore, even worship. Someone said to me ¡°My daughter must get married at Taj, we worship Taj¡±. I didn¡¯t know this when I took the job.

I think Taj deserves to be the custodians of Indian hospitality. I think Jamsetji Nusserwanji Tata gave us the right, and we are grateful to be in the shadow of greatness that has been created by our founders, and I will never be audacious to say Taj will be the best or brightest, but it will certainly be the beacon of Indian hospitality. We are embarking shortly on a holistic journey, which will further define who we are, a journey which will move the conversation away from gleaming shiny new structures and sizes of rooms and move it to the experiences that the guest has, and that again will be the result of the heritage of Taj, because we will create this path of Taj-ness which will seek its inspiration from the nobility of all Indian heritages, and traditions and rituals. It will be a thread of Taj-ness that binds us together.

So is the Taj brand Indian or international when you are opening hotels abroad?

Taj-ness is not Indian. The principle of Taj-ness is to pay homage to where you are. So Dubai will not feel like Kerala or like the Pierre in New York. So there will be hints and shreds of evidence of Taj-ness, but don¡¯t turn up at the hotel in Cape town and expect everyone to be dressed in saris.

Where will you focus your expansion?

I think it¡¯s very glamourous to be in New York, Paris and Cape Town but where Taj needs to be is where our customers come from. A case in point is Thailand. It¡¯s the number one country visited by Indians so we need to be in Bangkok, Singapore, Hong Kong, Shanghai, Muscat, Abu Dhabi and Dubai, but even before that we need more in India.

We need more in Bombay. In Colaba [Mumbai] we have three units, and we have one in Lands End and one in Santa Cruz and we still need three more. We need two or three thousand more rooms in Mumbai alone. And then there¡¯s Delhi and Goa and Rajasthan. It¡¯s no secret that most companies make their profits in between Mumbai, Delhi, Goa, Rajasthan, and maybe second distant a Chennai or a Bangalore. So much as we want to go international, for us we need to get more hotels in areas where it matters. The intra-Indian spending is going to be so big it will dwarf what international visitors will spend.

So what¡¯s the priority, Indian expansion or international?

Firstly, we¡¯re very opportunistic. We are careful where we put our capital at this stage. So management contracts are where we are looking, but again being careful. The right order is relatively simple. Given we don¡¯t have the capacity to invest unlimited capital you¡¯re at the mercy of who comes to you. If you asked me to choose between a hotel in Bombay and Bangkok, it would be Bombay because the yield per room is still higher.

You also have to attract developers to choose you as the brand for their property rather than Marriott or Hilton

This question has taken on a new dimension since the merger of Marriot and Starwood and Accor and Fairmont. There is no doubt that the likes of Marriot and Starwood and Accor are formidable opponents with great global reach. But when it comes to delivering a level of service and nuance of Indian service, Taj is at the top. The level of interest in Taj has increased, not decreased.

As larger brands consolidate and become more powerful so developers may want to be hostage to that powerful conglomerate. They may want some flexibility to deal with someone who¡¯s maybe a little big hungrier, someone who understands the Indian landscape a little bit better, someone who can nurture that relationship and not just become one of 5000 hotels. So there are enough people who would entertain listening to us. For a very long time Taj was more interested in owning hotels, but the respect that Taj has, it¡¯s immense, so it¡¯s not mission impossible. We¡¯re certainly not treated as second class citizens when we go to a pitch.

And attracting business travellers you need a good website and loyalty programme

It¡¯s critical, it¡¯s the oxygen for the business. If you don¡¯t have a presence in the digital world your product doesn¡¯t exist. We have spent a lot of money and we believe we will have a formidable website. It has not been easy, but that is going to be the foundation of our future. A loyalty programme which we have re-launched allows you to earn and burn and is controlled by the members that rewards while you spend. It costs us more money, but it¡¯s the right thing to do. We did it because we want to make sure our guests see we are not taking their business for granted. There are billionaires who will take a trip with two or three stops just because it earns more points.

Taj treats its employees well, but it adds a further expense

There are some things you don¡¯t need to prepare an excel spread sheet for, and making sure people have a work life balance and get proper nourishment and so on is a two-minute decision. So we declared six days off a month, revamped employee dining rooms and looking at everyone¡¯s uniforms. These are the seeds. We will see the fruit later.

How do you differentiate?

Today we don¡¯t, tomorrow we will, when we embark on the journey of Taj-ness. Marriott and the rest and the Indian brands are all great competitors. And every hotel company will tell you it has the best properties and the best culture and the best people. But at the end it is the people who make the difference.? So on the one hand we welcome the international brands because they bring credibility, and standards and new best practices, but we¡¯re not intimidated. The pie is large enough to keep everyone extremely well filled. So it¡¯s about how we treat the dividend of Indian demographics as well. India¡¯s time has come. The question is what do you want to be filled with, and that¡¯s in your own hands. It¡¯s about more than dollars and cents.

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