Heritage hospitality, the recent fad

Rakesh Mathur, the president of Maharaja Heritage Resorts Ltd, a 50:50 joint venture project between ITC Ltd and Gaj Singh-promoted Marudhar Hotels Ltd, spends nearly 20 days a month in the wilderness of north-east Sikkim.

You could find him on a river cruise down the Brahmaputra in Assam or spot him sight-seeing a mud volcano in the Andamans. After clocking several thousand miles in recent months, he claims to have scanned at least 20 heritage properties this year.

The good news is that all the travelling has paid off. Maharaja Heritage Resorts is close to signing up franchisee deals with properties in Chettinad in Tamil Nadu, Belgaum and Kohlapur in Maharashtra and a property in Agartala in Tripura.

Mathur is even negotiating with the family of a former Tibetan warlord in the remote town of Peling in Sikkim to bring their 200-year-old property under the WelcomHeritage fold, the hospitality brand that his company owns.

"Today most people are looking for larger experience in short holidays, besides other things such as better connectivity by road and air and good infrastructure. Our objective is to design a complete trip and close the gap in the tourist circuits," says Mathur.

As domestic business and leisure travel grows between 20 and 25 per cent a year, the heritage hotels make good business sense. WelcomHeritage, for instance, has taken the number of heritage properties from 18 in 2001 to 36 this year.

"Our strategy is to take the number from 36 to 50 properties this year," says Mathur. Last year, the company clocked a turnover of Rs 28 crore (Rs 280 million), a jump of 21 per cent over the previous year.

The company currently runs a mix of old properties and new hotels at heritage locations, including Judge's Court in Pragpur, Taragarh Palace in Palampur and Woodville palace in Shimla.

It has properties in nine states but does not have a presence in the North-east, Andhra Pradesh and Karnataka. "We don't want to be seen as a northern company and would like to gain footprints in the rest of the country," adds Mathur.

WelcomHeritage charges Rs 10,000 per room as membership fee and five per cent of a hotel's turnover as franchisee and promotion fee. In 10 years, Mathur expects Maharaja to be a Rs 100 crore (Rs 1 billion) company.

But scouting for properties that "reflect India's heritage" is only part of the job. The products have to be constantly marketed in India and Europe.

The company participates in travel marts such as World Travel Mart in London and the ITB travel fair in Berlin. Last year, the company participated in the travel fair in Singapore and attended the Dubai meet in 2003.

The average occupancy rate at the company's heritage properties is 45 per cent with a two to three nights stay. Heritage hotels is a seasonal business, Mathur claims.

Also, the complex state tourism laws, bureaucratic red tape and multiple liquor and loan processing regulations on renovating old properties impede preservation of heritage properties.

For instance, it took several months to convince a state government that a bar license is not a commercial venture but an extension of a service.