Back in 1997, when Dilip Kumar Ray bought a 19th century mansion in Darjeeling to turn it into a hotel, he was driven by fond memories of the hill town where he grew up. Horror stories of failed ventures such as the Oberoi Group’s Hotel Mount Everest abounded, but Ray was unfazed.

Starting with just 21 rooms, he has over the past two decades transformed the sprawling summer retreat of the royal family of Bihar’s Nazargunj—a heritage structure built in 1875—into a 53-room hotel straddling an acre on a ridge.

After a packed summer and with at least 10,000 bookings in hand, Mayfair Darjeeling was this year looking to set new records when political unrest dealt a body blow. From June, the hotel was shut for over 100 days due to an indefinite strike called by the Gorkha Janmukti Morcha (GJM), the dominant party.

Political strife isn’t new to Darjeeling. From before independence, the Nepali-speaking Gorkhas have never agreed to be part of West Bengal or to be politically controlled by people from the plains. Historically, Darjeeling was part of the princely state of Sikkim. It was leased out to the British for its “cool climate", according to the deed of transfer from 1835.

The demand for a separate state of Gorkhaland intensified in the mid-1980s as the Gorkhas redoubled efforts to neutralize the ever-increasing political influence of the Bengali elite over Darjeeling. Some 1,200 people died in the Gorkhaland movement in the mid-1980s, until the administration chose to buy peace.

In 1988, the state agreed to grant the Gorkhas partial autonomy in administration by creating the Darjeeling Gorkha Hill Council (DGHC). The experiment would fail within 20 years, leaving Subhash Ghising, once the supreme Gorkha leader, discredited and supplanted by the much younger Bimal Gurung. Years of uncertainty would follow.

But the formation of the DGHC did initially see peace returning to Darjeeling. And with it came bargain hunters in search of business opportunities in what was still a sleepy summer resort. The result: Darjeeling now has some 350 hotels and home-stays, many more than the civic infrastructure can support.

Worse, most do not have the necessary licences to ply their trade, says Joyoshi Dasgupta, Darjeeling’s district magistrate. The unregulated mushrooming of budget hotels has led to congestion and destroyed Darjeeling’s landscape, says Ray, Mayfair Hotels and Resorts Ltd’s managing director.

Hotel Mount Everest is the most notable casualty of the unplanned development that followed the formation of the DGHC. The hotel had to be mothballed owing to acute scarcity of water, which is now perennial in Darjeeling.

Women workers in Makaibari.
Women workers in Makaibari.

The property has a hallowed past: An early 20th century summer residence of a Bengali family from Kolkata, it was one of the early acquisitions of P.R.S. Oberoi, the late founder of EIH Ltd.

An accidental fire in the early 1980s forced the Oberoi Group to suspend operations. Political unrest in the mid-1980s held up reconstruction, and by the time the dust settled and things started looking up, Darjeeling was staring at water shortage.

Decades of lobbying with the state administration yielded nothing and EIH eventually sold Hotel Mount Everest in 2015. “We tried our best," says S.S. Mukherji, vice-chairman of EIH. The property, which is spread over 4 acres and has a majestic view of Mt Kanchenjunga, is still in ruins.

Such is the scarcity that all hotels in Darjeeling have to buy water from what is locally known as the water mafia. During peak season, premium properties such as Mayfair Darjeeling have to buy truckloads—sometimes up to 60,000 litres a days.

Hotel Mayfair.
Hotel Mayfair.

And the “water mafia" , as it is referred to, is reportedly controlled by the Gorkha leaders who until recently ran the Gorkhaland Territorial Administration (GTA)—another experiment with incremental autonomy in self-rule. It came into being in 2012 after the DGHC was dissolved, but lasted only five years.

The GTA was founded with the mandate of expanding and maintaining civic infrastructure in Darjeeling district, which extends from the eponymous town to Siliguri in the plains. The GTA received much more funding than the DGHC and was given much bigger responsibilities.

But the result wasn’t much different. Darjeeling’s infrastructure has hardly improved in the past five years. Binoy Tamang, the emerging leader of the community who now controls the civic body, describes both the DGHC and the GTA as “complete failures".

Amid an intensifying tussle for control over the Gorkha community, Tamang has seized power from his former political boss, Gurung, and is now working as the interim chairman of the GTA. He explains it as an interim arrangement aimed at keeping funds flowing for Darjeeling’s development as the community continues to fight for Gorkhaland.

In his new role, Tamang has identified water supply and road connectivity as some of his priorities, he told Mint in an interview in November. Hoteliers are impressed, but ask privately if Tamang can actually take on GJM bigwigs who were earlier at the helm of the GTA and allegedly milked it for five years.

If Tamang starts fixing Darjeeling’s dysfunctional water supply, he will run the water mafia to the ground, hoteliers say. Similarly, if he turns to improving road connectivity, he will drive the GJM-backed contractors out of business. Tamang is promising path-breaking reforms, but does he have the political heft to carry them out?

Operating a hotel in Darjeeling has always been challenging. With time, hoteliers found ways to deal with them. But the disruption this year may have long-term implications for tourism in Darjeeling, fears Ray. Because several countries declared Darjeeling unsafe for tourists, restoring people’s trust is the first major challenge, he says.

Tea Estate, Shree Dwarika. Photographs by Indranil Bhoumik/Mint
Tea Estate, Shree Dwarika. Photographs by Indranil Bhoumik/Mint

It may take a while, but Ray remains confident that tourism can be revived. Harshavardhan Neotia, a real estate developer from Kolkata, is similarly bullish on Darjeeling. At a slightly lower elevation, within the storied Makaibari tea estate in Kurseong, he is building a hotel to be managed by The Indian Hotels Co. under the Taj brand.

Neotia, who heads the Ambuja Neotia Group as chairman, has been pursuing the project for at least seven years. It was originally conceived as a small property, but after he struck a deal with Indian Hotels, he decided to scale it up to an 80-room hotel, making it one of the biggest premium properties in Darjeeling district.

Over the past seven years, the project has faced several disruptions—the worst this year. Construction had to be halted when it was just about to go full throttle, and it may take up to two years for the property to materialize, not budgeting for more disruptions. “Disruptions are unfortunate, but they have not shaken my love for the hills," Neotia says. “With time, I am sure a political solution to the impasse will also be found."

For now, even Tamang says disruptions are unacceptable, but the old guard of the GJM, led by the firebrand Gurung, is currently lying low. And no one is giving up on the demand for Gorkhaland—in Darjeeling, intense agitations have always been followed by a period of lull.

Another key challenge for hotels in Darjeeling is to seek out new tourists. It still receives a lot of tourists from the UK—elderly people trying to connect with their colonial past. Upscale properties such as Mayfair Darjeeling have thrived on grave tourism but they have not been able to attract the youth.

Neotia is trying to break that stereotype. His hotel under construction is nestled among lush green tea plantations, far from the congested Darjeeling town. He was drawn to it because it is only an hour’s drive from Bagdogra airport, he says. Tea tourism is the future, and plantation owners will join hoteliers in promoting it, says Makaibari’s former owner, Rajah Banerjee.

A key challenge for hotels in Darjeeling is to seek out new tourists. It still receives a lot of tourists from the UK—elderly people trying to connect with their colonial past-

Banerjee had long foreseen the need to create additional revenue streams for plantations to survive. He started with turning workers’ homes into home-stays, but that initiative was aimed primarily at augmenting their income.

Eventually, he transferred around 20 acres on his plantation to the Ambuja Neotia group. It wasn’t easy—owing to restrictions on land ownership in West Bengal, Neotia and he had to go through the tediously slow bureaucratic process of obtaining clearance.

Not surprisingly, no one else has started down that path yet. Some estate owners have started renting out their bungalows to tourists, but it is still a tiny business in terms of capacity. The bandh this year has taken a huge toll on plantation owners as well, and many may choose to explore such options as a hedge against future disruptions amid falling margins in the tea business.

Cost and time overruns in project execution are routine in Darjeeling. And the returns, if measured only by numbers, are not exciting. Mayfair Darjeeling, for instance, could not have survived the four-month forced closure had it not been part of a profitable chain of nine hotels, says Ray. Some 20-odd employees stayed put at the property for its upkeep even when it was shut.

And as far as return on investment is concerned, says Ray, Mayfair Darjeeling is all about a “dream fulfilled (which) breaks even with a tiny margin".

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