ON YOUR MARKS, GET SEThi, GO
Given his credo: ‘You have to like being a hotelier to be one’, Sethi says, a successful hotelier is someone who has a combination of strong leadership skills and traits. “Along with it should be the willingness to work hard, take risks and continuously learn and grow, while also being driven by the passion to create memorable guest experiences and the commitment to continuously improve their business and themselves,” opines Sanjay Sethi, CEO and Managing Director, Chalet Hotels Limited. He is quick to add that if not a hotelier, he would be jobless.
Young, suave and handsome, Sethi is one brilliant hospitality entrepreneur who has carved a niche for himself and his company, doing the industry proud with a very focussed and hands-on approach, having worked both sides of the line – hospitality ops and ownership. With an amazing grip on numbers and industry indices, this quintessential hotelier has built some of the finest assets and continues giving shape to Chalet’s vision of being a large and profitable hospitality assets ownership company. And given his relationships, flair, affable attitude and personality, Sethi is well-equipped to build and grow lasting owner-operator relationships so essential to his business. He is still WIP and will scale greater heights in success for his organisation, business, owners and yes, himself. I have seen this Delhite up close and personal with a twinkle and fondness. Chalet is surely in good hands to put it in as much.
Chalet Hotels Limited, over the years, has positioned itself as an aggressive and top-class owner, developer and asset manager of high-end hotels. Though the company’s portfolio comprises nine fully operational hotels representing 2,802 keys across mainstream and luxury segments and commercial spaces, Sethi hopes to set many more benchmarks and learn along the way as it is a journey in progress.
Sethi graduated from IHM Pusa in 1988 where he spent two years after completing his first year at IHM Calcutta. “During these three-and-a-half decades of hoteliering, I have spent 14 years with the Taj Group, a little over eight on my startup where I founded and ran Berggruen Hotels with the brand portfolio of Keys Hotels and Resorts and now over eight with Chalet Hotels Limited,” Sethi quickly takes you through his journey.
“I have loved every moment at work so it is difficult to pinpoint which part of my career I have enjoyed the most. I can, however, tell you that I felt the happiest amongst my colleagues on the shop floor, running hardcore hotel operations so much so that my bucket list includes spending one last year as a luxury hotel GM after I retire from my current job,” he adds. And who has been his idol all this while? “My work idol from very early in life has been my father who worked tirelessly all his life. Over the years, there have been too many people who have inspired me, and it would be unfair to just list a few. I do, however, frequently thank them for what I have learnt from them,” he says.
With a portfolio consisting of some of the finest high-end hotels in key metros across India, Chalet Hotels prefers to invest and operate in the upper half of the hospitality spectrum, says Sethi. “It is a more efficient use of our capital and management time. Moreover, with first-hand experience in starting and running a budget hotel brand in India with my previous entrepreneurial venture of Keys Hotels, I have a fairly good idea of the operating and return metrics of the budget and mid-segment space. Our focus is on upper upscale and luxury segments. Having said that, if we were to see a compelling opportunity for a platform deal in the mid-segment space, we may explore it,” he shares.
Though Sethi feels it opportune time to explore the untapped tourism potential of non-metro cities as an early ‘big-play’ mover, he says, “True that we are very big city, big box hotel-centric but we do not have any specific reason not to be in Tier II cities. Non-metro cities have untapped tourism potential and can offer unique and authentic experiences to travellers. These cities often have rich cultural heritage, historical landmarks and natural attractions. In recent years, there has been a growing trend of tourists seeking off-the-beaten-path destinations and local experiences, which makes non-metro cities even more appealing.”
He adds that they, however, like scale and if a location or market size can deliver enough scale to justify a large hotel and return on management time, Chalet Hotels will be happy to explore the location. “Considering Chalet has not fully tapped the potential of the metros yet, the short-term priority list might look a bit more one-sided. We do have a 311-room Novotel in Pune and more recently, the 80-room resort, The Dukes Retreat in Khandala. We will add 60 per cent more capacity to this resort,” shares Sethi.
With the acquisition of The Dukes Retreat, Chalet has forayed into the leisure hospitality market. Excited about the acquisition of The Dukes Retreat, an iconic resort with a strong connect with its guests over the last four decades, Sethi expresses, “While we do asset manage The Resort in Madh-Marve, the Dukes’ acquisition, is an early step of diversifying our investment in the leisure space. We would like to add more inventory in the leisure segment going forward. With the background of stunning views, our plans include repositioning it through renovation and expansion into a high-end wellness resort with environment consciousness at its core.”
As a part of a people-intense industry, Chalet values and believes people are its greatest asset and has progressive policies in place that are benchmarked at par with global standards. The company’s ethos and work culture have been recognised in the form of several awards and accreditations. “Last year, we were listed as the fourth best place to work by Great Place To Work in the mid-size companies in India and were among the top 10 in India’s Best Places For Women 2022. Gender equality has been a topic of discussion and advocacy in various industries, including the hospitality sector. In recent years, it has been observed that the sector is making conscious efforts to address this issue and believes in the fact that women often bring unique skills and perspectives that can benefit the industry as a whole,” says Sethi.
He feels not only gender diversity but equal opportunity and inclusiveness are also important. “Over one-third of our corporate team comprises women colleagues and over 60 per cent of functional leaders at the corporate office are women. There is no magic trick to getting a balanced diversity in the team. It is all about creating an enabling workplace which has fairness at its core. For me, the only two criteria that matter are talent and attitude,” feels Sethi, adding the company actively seeks to hire and promote women in leadership positions to create a more inclusive and equitable industry to promote gender equality at workplace. In fact, Chalet, under its Sheroes – Expand Your Potential supports its women employees with training and development opportunities.
Sharing details on the best practices to keep employees motivated and satisfaction high, Sethi says, “We believe in transparency and trust which we deliver with regular and consistent communication to our workforce. We regularly communicate our business goals, expectations and updates which help them understand their role in achieving company objectives. In addition, recognising employees’ hard work and contributions can go a long way in keeping them motivated. We conduct regular town halls to apprise them about business updates and recognise them for their contribution towards business success.”
While Chalet Hotels has been practicing good environment practices for decades, Sethi feels they need to give it the next-level push. “I’m pleased with the all-round focus on sustainability and we have charted a robust plan for climate action by committing to the three key goals of The Climate Group with clear targets on Electric Vehicles, Energy Productivity and Renewable Energy. Combine that with our initiatives on waste and water management, removal of single use plastic and our Net Zero initiatives and you get a very strong strategy. We have significantly improved our score this year on The Dow Jones Sustainability Index to 43, from last year’s score of 31,” he informs.
The CEO and Managing Director, Chalet Hotels Limited, has a few suggestions for the Government for better prospects of the hospitality industry. “They need to bring it under the concurrent list of the Government of India, give industry infrastructure status with benefits on lending norms as also to accord industry status to hospitality in all the states and more importantly, give requisite industry benefits, streamline licensing and permit processes that can reduce barriers to entry and make it easier for new businesses to enter the market and reduce costs associated with navigating complex regulations,” says Sethi who believes a hotelier has to be a ‘jack of all trades and master of many!’
Of the opinion that an owner-operator relationship is a marriage with pre-nuptial agreements, Sethi says that though they have ongoing relationships with Marriott and Accor, there’s an upcoming hotel with Hyatt. “Some more hotels are on the way which means that we could have more brands in our portfolio of hotels and resorts. I have personally been on both sides of the table. The company and the Group have had extended relationships with Starwood and Marriott. We tend to understand each other very well and hence have wonderful relationships with the brands and the professional teams that run them,” he says, adding that as the two brands build more, the relationships will further cement with the current partners. He hopes to expand the business through other brands and operators as well. “The choice of the brand and the operator completely depends on the asset, the location, and the segment it caters to,” Sethi shares.
If the Chalet chief is to be believed, India’s hospitality industry has experienced significant growth in recent years, driven by increasing domestic and international tourism, rising disposable incomes and growing demand for business travel. “As a result, both domestic and international hospitality brands are expanding rapidly across the country, with many new hotels and resorts opening in major cities and tourist destinations. It is a crowded brand scape with multiple choices for hotel owners. I believe this creates a competitive but healthy business environment, especially, great for owners and guests!” he avers.
With technology becoming an enabler in hospitality business, how does smart tech leverage guest experience for Chalet across assets and asset classes? He shares, “We have some serious tech in play at our hotels through the initiatives of the brands. For example, the Marriott Bonvoy app allows guests to check-in and check-out on the app itself. Guest phones can be used as keys in most of our hotels. They can also call for services during their stay on the app.”
There has been a discerning positive uptick in the outlook of the domestic hospitality industry be it ARR, occupancy, RevPAR or for that matter any measurable parameter for an owner or operator over the last year as compared to the pre-Covid days, riding on a very strong domestic travel resurgence. And the international inbound has not yet fired like one would have expected. “Make no mistake about this. International travel will come back very strongly. In fact, the air travel numbers indicate that it is already back in the recent month to above 90 per cent of pre-pandemic numbers and I believe the segment has a long runway of growth ahead. Meanwhile, we continue to flourish on the back of domestic demand,” he says, adding strong domestic travel resurgence has created opportunities for investment in new assets and locations, especially in areas experiencing high demand. “However, it is important to carefully evaluate the long-term sustainability of this trend and consider potential risks and uncertainties, such as changes in travel restrictions, consumer behaviour, and economic conditions,” he says.
Sethi shares they consider the risk appetite before making any investment decisions. While the positive uptick in the industry may provide opportunities, it is important to carefully assess each investment opportunity to ensure that it aligns with the company’s long-term strategy, financial goals and risk management approach. The aim is to strike a balance between taking advantage of opportunities in the current market and ensuring that investment decisions are sound and aligned with our long-term business goals.
In June 2022, Chalet Hotels Limited was awarded the contract by Delhi International Airport Limited (DIAL) to develop a hotel at the T3 terminal of Indira Gandhi International Airport (IGIA). Sethi says the Group acted on its stated strategy of building an asset in the NCR. The hotel will be Chalet’s ninth hospitality property in the country and the first in northern India. And in mid-May 2023, Chalet Airport Hotel Pvt Ltd, the wholly owned subsidiary of Chalet Hotels Ltd, signed a franchise agreement with The Indian Hotels Company Limited (IHCL).
Strategically positioned just a short walk from both Terminal 3 and Terminal 2, the hotel boasts of approximately 400 state-of-the-art rooms, bespoke dining experiences and top-notch conferencing facilities. “It was a well thought out decision to choose the ‘Taj’ brand for this marque asset. We look forward to a grand opening of the Taj at the New Delhi Airport in a couple of years,” shares Sethi with a smile.
Just as well as he began the session, relaxed and smiling, he ended it with the same. That sums up the confident and in control Sanjay Sethi.
