The idea of luxury in hospitality has changed: Shruti Shibulal

The hospitality sector, which was battered by the covid-19 pandemic last year, was limping back to normalcy when the second wave hit. Tamara Leisure Experiences, a hospitality company with properties in India and Germany, and part of Infosys Ltd co-founder S.D. Shibulal family’s investments, is eyeing expansion and acquisition opportunities even as it navigates the challenges of the pandemic-led disruption again.

The firm has three brands—The Tamara Resorts, for luxury resorts; O by Tamara, for business hotels; and mid-segment brand, Lilac. In an interview, Shruti Shibulal, director and chief executive officer, Tamara Leisure Experiences, and daughter of S.D. Shibulal, spoke about how the pandemic has redefined the concept of luxury and design in the sector, cost rationalization and future plans. Edited excerpts:

How has the second wave impacted business so far?

The resorts (luxury properties) performed very well even though we were closed for a few months last year. The Tamara, Coorg, for instance, didn’t function for nearly 2.5 months, but still outperformed the previous year of 2019-2020. Unfortunately, the business and mid-segment hotels didn’t do that well. It has been very challenging. We started to notice some disruption in March in our Coorg property. The Tamara property in Kodaikanal has been closed because of the guidelines in Tamil Nadu, under which tourism had to be shut.

The way both the luxury resorts performed in January-February, we were very optimistic. Kodaikanal was looking strong for the summer season. It’s a bit tumultous right now but we also understand the gravity of the situation.

How challenging was 2020 due to the pandemic?

Last year was extremely challenging but also interesting. I feel, till 2019, we were in a fairly startup kind of phase of the organization and now we are in the steering phase. As a brand, we have been able to establish ourselves. We didn’t do any layoffs last year.

As an organization we have always been comfortable with technology, and we were able to utilize that in enhancing our processes and customer experiences. We also innovated a lot in terms of customer offerings.

Any learnings from the pandemic, in terms of operations or strategy?

Many of the assumptions I had were busted and proven wrong during the course of the pandemic. We thought our affordable brand, Lilac, would be our bellwether and would survive everything because of its "value for money" proposition. But the situation turned out to be the exact opposite and we saw the (luxury) resorts tide us over. So we have had to rethink a few things. In terms of customer experience, hygiene has become the focus for the industry, which was long-pending. There’s a bigger focus on cost rationalization in terms of design, and keeping the fixed costs down.

The idea of luxury in hospitality has changed. Some years ago, it would have been marble floors, or Michelin star for food—it was over-the-top. Today luxury is about the experience of local culture and food, sustainable practices, open spaces and even privacy. We have held on to these aspects very tightly in our resorts, and honestly, it has paid us a huge benefit.

What does the pipeline of new projects look like?

We have a niche, Ayurveda-focused resort in Alappuzha, Kerala, under the Tamara resorts category that will be open. We have been postponing the opening, given the situation on hand; but we will, once the situation improves.

We have two Lilac hotels in Bengaluru, and we will open another in Guruvayur in the March quarter of 2021-22. Two more hotels under this brand are in development now—in Kannur and Kumbakonam.

Are you looking at acquisitions to expand?

We are actively looking for expansion opportunities. One of the challenges we have had in recent years in acquiring existing properties is that the valuations have not been attractive.

But there are better opportunities now and valuations are more amenable for us.

For an existing property, it also has to fit into one of our three brands and, being a well-governed organization, we look at properties which are compliant.

We have three hotels in Germany, with a total 490 keys, owned by Tamara and operated by different operators. We are expanding further there as well, and that will be through acquisition of existing properties. In India, we want to expand across the three brands.

In the resort category, we are mostly looking for land for new developments.

We had earlier said that we want to reach 1,000 keys by 2025, and we are on track to do that.