Don't take the Taj out of Taj Mansingh, says Accor Hotels COO

Jean-Michel Casse wants hotel to remain with Tatas, says it has been known as Taj for so many years; hints bringing a new player would be a waste of time and money

The capital’s iconic hotel Taj Mansingh, which is being auctioned by the NDMC, should remain a Taj property, Jean-Michel Cassé, the chief operating officer (India and South Asia) at French hotel firm Accor Hotels said.

Cassé said this is more of his personal view. “I believe this hotel has been known as Taj for so many years and it should remain a Taj. This hotel is so much embedded as a Taj. If you bring a Pullman there what are you going to do? You have break everything, renovate, spend money and the investment is huge. Then you will re-launch. You will lose business as you will spend time in all these. It is a very-very complicated deal to be able to go through smoothly. I don’t know what will happen but I am very eager to see who is going to win there. I still think that Taj will still be there for many years,” he told Business Standard in an interaction.

Accor operates 47 hotels in India under brands like Novotel, Pullman and ibis. Inaugurated in 1978, the 294-room Taj Mansingh has since then been run by Indian Hotels, a Tata Group company. The 33-year lease for the hotel ended in 2011, prompting the capital’s civic body NDMC (owner of land) to seek a fresh auction.  

“We could have participated in the bidding. We have different ventures and fronts here which we could have used to bid if not through Accor to fulfil the conditions. But I never considered that it was an opportunity for us. The minimum guarantee asked by NDMC was bit heavy. We did not go ahead with further thought on it. It (bid process) has to friendly in terms of approach to be attractive to someone,” said Cassé.

Accor plans to bring premium brands like Raffles and Banyan Tree to India. The company is working on leads in India. “When Marriott was doing the acquisition of Starwood and going for volume we were acquiring Fairmont and Raffles and Swissotel and were seen by the market as going for quality and not volume. It has given us more credibility. The leads are materialising. We would love to have a Fairmont in Delhi, Mumbai and Bangalore and we are working on these. We will bring Raffles to India and are in advanced discussion for the first one,” said Cassé.

The first Raffles is expected to come up in Udaipur but it is not going to be a conversion of any historical property. He said it will be a greenfield asset. The company is keen to have a Raffles in Delhi and Mumbai too. There are only eleven Raffles property in the world. “The Raffles in Singapore has 120 rooms and its average room rate is $1,000 per night before it closed for renovation. The average room rate needed here will be $1,000 per night with the kind of investment that will go into it. In Udaipur, some hotels are not far from $1,000 anyway,” he said.

The Indian hotel industry had a ten-year high occupancy of 65 per cent and it is a good sign that demand is getting higher than supply. “It has enabled us to do a rate correction and this year we should be able to correct further. The only way you can grow is to grow average room rate. We will focus on rate improvement,” he added.

Stressing on a need for further appreciation in rates, Cassé said the average price of branded hotels in India is below Rs 6,000 a night which is not even $100. “Go out of India and see how much you will pay at quality hotels in markets like Indonesia and Thailand. Here we have a much better level of hospitality and are giving a wonderful experience to customer at less than $100 and it is shameful. There is margin for many more corrections,” he said.