This is 4th edition of History of Indian chain hotels that work cohesively as to offer Indian Princely heritage to their clientele. To read the previous edition :
All of these hotels have vastly different history on how they brought up the hotel culture in the fold. ITC hotels started as tobacco company and made their money with tobacco before venturing into hotels. The Taj hotels was started by their founder Jamshedji Tata who was already a rich businessman and wanted to create his own luxury hotel after being spurned by European hotel and he was effectively responsible for bringing end to the hotel.
Story of the Founder
Mr. Mohan Lal Oberoi, the founder of Oberoi hotels is a true story of rags to riches. He is considered Conrad Hilton of India as he created network of 2nd largest Indian chain hotel after Taj hotels during his lifetime.
Mohan Singh Oberoi was born on Aug. 15, 1898, in Bhaun, a small village now in Pakistan. Driven out by plague with his new wife, Ishran Devi, in 1922, he sought work in Shimla, the hill station where the British governed India during the stifling summer months.
Plague, in those days was a terrible killer and people naturally dreaded an epidemic, which often wiped out villages. He saw an advertisement in the local newspaper for the post of a junior clerk in a government office. With Rs 25 in his pocket, he left for Shimla. He flunked the exam but one evening strolling around the hill area, he tried his luck impromptu at the Hotel Cecil, It was owned by the line of Associated Hotels of India.
As he entered, he found the manager in lobby and asked for the job. His well-knotted tie and shiny shoes impressed DM Grove, the manager of Shimla’s best hotel, the Cecil. Later the reigns of hotel changed to Mr. Ernest Clark who became the next manager. The change brought advancement for Mr. Oberoi career as he was promoted slowly to top of the ranks at the hotel.
Once, Motilal Nehru, the father of the first Prime Minister of India, Mr. Jawaharlal Nehru who founded Swaraj party with Mahatma Gandhi needed help with some reports as he was one of the prime guest at the hotel. Mr. Oberoi had to type some documents for Mr. Nehru. Impressed with canny ability of his details and how he accomplished work in time, was tipped twice his monthly salary.
In 1924, Mr. Clark himself became the hotelier and bought the hotel the Carlton from the owners and made Mr. Oberoi his top lieutenant. In 1930, Clarks decided to sell the hotel and made an offer to Mr. Oberoi. In 1930 mortgaged his wife’s jewelry and borrowed everything he could to buy the British owner out. Later Mr. Oberoi was to buy the Cecil as well.
East India Hotels (EIH LTD)
In 1937, he took over Calcutta’s once-elegant Grand Hotel, which had been closed for five years by fears of cholera in its water supply. Borrowing against his Shimla property, he began a renovation program and eventually persuaded the first guest to move in, guaranteeing him soda water to drink and food cooked outside the hotel. He renovated the hotel completely. He made his first manager who offered him the first job at hotel Mr. Grove the manager of the hotel.
With the outbreak of the Second World War in 1939, Calcutta was full of troops. The British Army was frantically trying to find accommodation. He immediately improvised 1,500 beds for the troops at Rs 10 per head for board and lodging. It proved to be turning point in Mr. Oberoi’s career. He prevented the British army from requisitioning the Grand by offering to reserve it for officers and feed them cheaply, though charging extra for women who spent the night. He then wrote to all the liquor merchants in India telling them to send supplies and name their prices. Business was brisk and profitable.The British government rewarded him with the title Rai Bahadur for his services.
Next, Mr. Oberoi began secretly buying shares in what was then India’s leading hotel company, Associated Hotels of India Ltd. In 1944, he arrived uninvited at the annual meeting, carrying his controlling shares in a canvas bag, which he presented to the directors. He added hotels in Kashmir, Chandigarh, Darjeeling, Gopalpur (Orissa).
In 1947, India received it’s Independence which started downward spiral for everyone including Taj hotels and Oberois as Britishers had left India en masse. The beds weren’t assured to be filled as they were in the wars.
On 26 May, 1949, he established East India Hotels, now known as EIH Ltd. The Oberoi Grand hotel was put under the umbrella of EIH.
In 1956, Mr. Oberoi had a grand plan of converting a Palace into a hotel by leasing the Maharaja’s Palace in Srinagar and converted it into the Oberoi Palace Hotel. Oberoi were responsible for converting Palaces into hotels and Taj hotels loved the idea. This hotel provided the main income for the Company till the end of 1964-65. In 1965, the war between India and Pakistan broke out which costed Mr. Oberoi 4 hotels in Pakistan.
In 1955 Mr. Rai Bahadur Mohanlal Oberoi was elected President of the Federation of Hotel and Restaurant Associations of India and in 1960, was given title of President of Honour of the Federation for life.
Joint Operation with International chains
In 1965, he opened Intercontinental hotel (currently part of IHG group) with tie up with Pan Am Airways in Mumbai. The Company started collaboration with Intercontinental Hotels Corporation (IHG), a wholly owned subsidiary of Pan American World Airways, and was linked with Inter continental’s vast and efficient sales net work and was listed on its computerized reservation system known as `PANAMAC’. It is also linked with American Express Space Bank, a
world wide computerised hotel booking system. The partnership came to end 1981 when Intercontinental was sold to Grandmet
Come 1970s, the golden era of Indian hospitality. Everyone started expanding including Oberois. By a scheme of merger approved by the Calcutta High Court, the Associated Hotels of India Ltd., and Hotels Pvt. Ltd., were amalgamated with the Company. By virtue of the amalgamation, the Company acquired Oberoi Grand Hotel, Calcutta; Oberoi Mount Everest, Darjeeling;
Oberoi Maiden’s, Delhi; Oberoi Cecil, Shimla ; and Oberoi Palm Beach, Gopalpur and a suitable plot of land at Chennai.
Mr. Oberoi then began to expand abroad, often taking over management of run-down hotels or raising money from wealthy Saudi Arabians because of India’s tight controls on capital outflows. Acquisitions included the Soaltee Hotel in Kathmandu, the capital of Nepal; Mena House near the Egyptian pyramids; and the run-down Hotel Windsor in Melbourne, Australia.
He opened Oberoi Sheraton (renamed currently as Trident, Mumbai) with 550 rooms and hotel of 30 floors (then the tallest hotel in India) with Sheraton (Now part of Starwood/Marriott). It was later renamed as Oberoi Towers after the participation ended.
Passing of the Torch
Son of Mr. Mohan Lal Oberoi, Mr. Prithviraj Singh Oberoi formally succeeded his father as Chairman in 2002 after him passing away. Although he was CEO from 1984, Popularly known as Biki Oberoi. He also serves as a Director of Jet Airways since March 29, 2004. He passed the torch to his son Vikram Singh Oberoi, CEO and Managing Director of EIH.
Born in 1929, Oberoi was educated in St. Paul’s School, Darjeeling, India, and later the United Kingdom and Switzerland. Biki Oberoi is a graduate in Hotel Management from Lausanne, Switzerland. After finishing his graduation, he decided to travel to France and Switzerland and work in hotels there. It was a useful experience but, though he had spent all his life in hotels. He understood hotels well. He joined family business in 1955.
His elder brother Tilak ‘Tikki’ Raj Singh Oberoi was considered apparent heir of the company. However due to his early death in 1984, he lost his mother within 4 months of that. His father had a stroke in the same year and Biki was promoted to the post of CEO. It was a very turbulent year for him.
Around that time, a leading industry publication, Institutional Investor, had ranked Bangkok’s Mandarin Oriental as the best hotel in the world. Seeing that, Mohan Singh shared a wish with his son: “Our hotels should be ranked the best in the world.” It was a wish Biki Oberoi has not taken lightly.
In the ’70s and ’80s, Biki Oberoi was known to take his own towels and bring along cooks to Indian cities where he did not own a hotel. His attention to detail—and expectation of comfort—was legendary, and Oberoi’s extensive travel had taught him what a world-class hotel looked like. He was aware that not even their own current properties could make the grade as they were old.
In the 1984, Biki Oberoi’s father shared his wish of establishing the best hotel in the world. Biki Oberoi fulfilled this dream by building a luxury hotel. in the mid-1990s, where Oberoi bought 28 acres in the outskirts of Jaipur and built The Oberoi Rajvilas. Within a year of its opening in 1998, the new hotel was ranked among the best in the world.
The Oberoi Rajvillas in Jaipur. The world took notice of it and within a year of its opening in 1998, this new hotel was ranked among the best in the world. Oberoi followed up Rajvilas with similar iconic properties in Agra, Udaipur and Ranthambore (Amarvilas, Udaivilas and Vanyavilas respectively).
Trident and Joint Venture with Hilton
In 1988, Trident brand was launched under EIH with first hotel at Chennai. That property was built by Lakshminarayan Ganesh, a local businessman who is now a director in EIH. It was a five-star hotel but not a luxury property and Oberoi used the opportunity to launch a new brand—Trident.
The vision was to provide luxury business hotels in major cities. In 2003, Hilton International Co & EIH Ltd announce a strategic alliance for co-branding hotels
in India under the Trident Hilton brand. On April 2, 2004, Oberoi Towers were renamed as Hilton Towers.
The partnership lasted just under 5 years where 8 hotels were promoted as Trident Hilton hotels. However, in 2008, when Hilton announced tie up with DLF group for 3 star hotel partnership for brand named Garden Inn, Biki Oberoi felt betrayed. According to him, he saw this as Hilton way of dipping the Trident/Oberoi brand.
Oberoi restructured it properties under 2 umbrellas. Oberoi Hotels and Trident hotels. Oberoi Hotels and Palaces were the prime brand having top end properties and charged 50% more tariff than Trident properties. Whereas all business hotels were renamed as Trident hotels.
Terrorist attack in 2008
On 26 November 2008, Trident was another property after Taj Mahal Palace to be struck by terrorist. Being much larger than Taj Mahal hotel in terms of spatial capacity, the rescue operation at the Oberoi-Trident was extremely slow. The two hotels being interconnected, consist of 800 rooms between them.
Gunfire began at the entrance of Trident with the gatekeeper being the first to fall prey. Two gunmen walked into the reception area and opened fire. Hotel staff including bellboys and hotel management trainees lay injured as the two gunmen made their way to the Opium Den bar, the Tiffin and later the Kandahar restaurants.
It took 40 hours to end the siege. Foreign nationals were reported to be the prime point of target for the terrorists. By the time the siege ended in Oberoi-Trident, 143 hostages were rescued alive and 24 bodies were recovered.
Biki Oberoi was attending an awards function at the Taj Lands End hotel in Mumbai’s Bandra when an associate called him to inform about the attacks. Thereafter, the octogenarian camped himself in the city and oversaw the rescue operations. Later, he became deeply involved with the renovation of the twin properties—The Oberoi, and Trident Hotel—on Marine Drive overlooking the Arabian Sea. It was the first property that he was involved in building.After the 2008 terror attacks, Oberoi would visit the hotel every month till it reopened in a new avatar 14 months later.
The Oberoi, Mumbai, reopened in 2010 and, after a slow first year, it picked up momentum.
Third and Current Generation and ITC
ITC hotels which was third largest hotel chain grew into the second largest in 2010. They kept close eye on competitor and started making bid to acquire EIH. To ward off pressures from ITC Ltd. whose ownership stands precariously close to the automatic open offer trigger at 15%, the Oberoi family divested 14.12% stake in EIH Ltd. to Mukesh Ambani led Reliance Industries Investment and Holding Pvt Ltd. Recently the stake of Reliance was further raised from ITC and it stood at 20% overall for Reliance industries
In 2013, Biki Oberoi who turned 80 himself started looking for heir apparent. He wanted the hotel to stay within family and there were 2 leading contenders.
His son Vikram Oberoi (born in 1964) and his nephew Arjun Oberoi (Born in 1968). After a year of delay, Mr. Vikram Oberoi was honored as new CEO whereas PRS Oberoi continue to remain Chairman as his father.
Vikram, A science graduate from Pepperdine University in the US, he joined the group in December 1993 as a non-executive director and was initially involved in the management of the Rajvilas in Jaipur. He became an executive director in July 2004.
Arjun is a product of the University of Buckingham, and first earned his spurs in the food & beverage committee. Though both stepped into the board room of EIH within a few years, it was only in 2004 that they were made deputy MDs. Later in June 2007, both were promoted as joint MDs. While they continue to be joint MDs, their roles were recently more sharply defined with Vikram being made the head of operations.
The Oberoi group, like the Taj, Starwood and Marriott, is rushing to set up properties, buoyed by an expanding economy and growth in tourist traffic, which has raised the demand for rooms.