In 2011, Sharath Vatsa was in Gulbarga, a smallish town in north Karnataka, for a music event he had organised featuring the singer, Sonu Nigam. The small town had a small hotel. It was modest but looked like it might serve the purpose.
At one point, the famous singer called Vatsa and told him there were no blankets on his bed and could he have one.
They called down and asked for a blanket and a while later, someone laconically brought one to the room. Only, it wasn’t a blanket, it was a bedsheet. The hotel did not know the difference.
When Vatsa asked the hotel manager about it, his response was a retort. Even people like former President and rocket scientist Abdul Kalam and A R Rahman, world famous composer, have graced his hotel during their pilgrimage to a famous mosque in the vicinity, the manager claimed. The subtext was that it was good enough for them, it was good enough for Sonu Nigam.
Vatsa rued that all the hotel manager did was to be defensive and dismissive, rather than be sensitive to his guest’s needs, leave alone getting into an argument about how pilgrims would be less demanding of creature comfort than pop stars.
He came to the realisation that the problem was not mysterious. The huge, well-ordained hospitality industry in India had not reached the small towns — the tier 2 and much less, the tier 3 towns. So, the provincial hotels were managed without specification or style.
For years, Bangalorean Vatsa had eschewed the hotel industry. Although he was a hotel management professional (he graduated from the prestigious WelcomGroup Graduate School of Hotel Administration, Manipal), he was bitten by the need to contribute as more than a cog in the wheel.
Reading Bachi Karkaria’s biography of hotel titan, MS Oberoi, “Dare To Dream”, only fuelled his entrepreneurial ambition and also an obsession with hotels.
His consequent crusades had taken him into event management, one tour of duty in the marketing department of Jet Airways, a stint with a ticketing company and a foray into a facilities management enterprise. (He continues to run the tourism for the Bangalore Palace and Jaganmohan Palace in Mysore with its famous art gallery, for the former royal family of Mysore.)
But the Gulbarga epiphany had him headed back to where he started, hotels.
Sharath Vatsa’s new venture is Deccan Hotels, a hotel management-by-lease operation. Simply, Vatsa plans to take over existing hotels in smaller towns, lease them from their owners and run them completely under the banner of Deccan.
India is expanding sideways. Any growth story in India these days necessarily includes the semi-urban areas of the country. Given the size of this market, and the fact that growth in these areas has only begun, the scope and opportunity are vast.
That said, the only businesses destined to survive in a market where the imagery is one of business falling over each other in a mad scramble for market share, are those that can make a contribution to whatever industry they are in.
In Vatsa’s case, it is easily a matter of taking the nascent tier-2 and -3 markets back to the basics. He looks at these markets — with their sharp increase in business travel and local aspirations becoming more sophisticated — as underserved and lacking in business best practices and values.
It is this gap he has started to address with Deccan Hotels.
The first property he will launch under this brand is a 51-room hotel in the heart of Mysore, minutes from everything. Over the next years, he plans to put up the Deccan Hotel shingle in Shimoga, Hubli, Hassan and of course, in Gulbarga where the bulb went off in his head.
In all, Vatsa is looking to launch 10 properties in the next three years with an exit “at an optimal moment”. (It is not hard to fathom that a business such as this is a natural M&A target for a hungry-for-expansion hotel chain.)
“Yes, the markets are huge and the scope hard to handle, “ Vatsa told Explocity, “but that’s why there are so many types of players and routes to managing hotels.
“There’s the managed-model, the franchise-model and like mine, the leased model but hotels are not merely hardware, or aggregation-software. They are living entities that must speak to the soul of the traveller. The heart of the story lies in the heart of the business – the true meaning of hospitality.”