The Rediff Business Interview/Johne Sharpe

'Indians are very tough negotiators'

Four seasons is the sexiest name in luxury hotels. It recently hit the headlines when Saudi Prince Alwaleed Alsaud, the man with the Midas touch, bought into it. After his enormous successes with Citicorp, Euro Disney and Michael Jackson's Company.

It will hijack headlines again next week, when the first Four Seasons hotel opens in India. In Goa. Quickly followed by Bombay, Bangalore, Udaipur and Delhi.

Johne Sharpe, fabled hotelier and president of Four Seasons, explains why he is so bullish on India in an interview with Pritish Nandy.

How did you first get interested in coming to India? And why?

Four Seasons has been actively interested in coming to India for about 10 years. We see it as a great potential market with lots of opportunity. We are beginning with a resort because there is no highly developed resort industry in India, which is really typical of all of Asia. Compare it to the US where we have the Caribbean, Mexico, Hawaii...

Are resort hotels part of your core competence? I thought you were corporate hoteliers.

Our core competence is luxury, city hotels but we have, over the last ten years, opened some very prestigious resort hotels. Two in Hawaii, one in the Caribbean, one in Mexico, a major one which opened a few months ago in southern California, in Bangkok. Resorts are an important part of our business now.

Why Goa? Why suddenly five major hotel projects in India? Is India so crucial to your global strategy?

We did not suddenly choose to come to India. We were looking around. The opportunity presented itself when we met Captain Nair of the Leela Group and we, initially, decided to look at the rebuilding of the Goa hotel into a world class luxury resort. Since then, we have looked at four more projects. In Bombay, Udaipur, Bangalore and Delhi. It is the opportunity of a lifetime for us.

To move so quickly into such a big and potential market, with a partner who understands us as well as the market. In all our operations worldwide, we consider the people we ally with as more important than the projects we start. We are, therefore, lucky to have such a fine partner with us.

How did you find (and choose Leela Hotels chairman) Captain Krishnan Nair?

The choice may surprise you because he has only this one hotel. The Leela. Many others came to us, with more hotels at their command. But, in our view, The Leela is the most successful hotel in India and perhaps in Asia. So he is obviously a person who understands the market very well and knows what a luxury hotel is. We are very specific that we are in the top end of the business and it is important that the people we ally with understand that.

One hears that India is slow to move. How long did it take you to sign the deal, start to finish?

Captain Nair met our chairman Isodore Sharp (yes, he has the same name as me, minus the 'e') slightly over a year back and we are already about to open the Goa property. Not slow at all, if you ask me. But Indians are very tough negotiators. So that takes a little time. But look at it this way, in a little more than a year, we are on the verge of opening the Goa resort. It has been totally transformed, rebuilt, expanded.

Why did you choose to transform it so substantially? It was a fine hotel and, reportedly, doing well. Did you have to break it down and start afresh, just to prove how sexy the Four Seasons reputation is?

Yes, I agree it was a very successful hotel. But the captain felt, and we agreed, that it was an opportunity to really raise it to an international class, five-star destination resort. I think, frankly, that Goa is a great place. A great destination, a very successful destination. But it is still not at the top end of the international resort market. We are trying to put it there and I believe that we will be followed by others very quickly. Somebody has to be the first to put his foot into the water...

One of the reasons why The Leela is so successful is that Captain Nair takes so much personal interest in managing it. When you have five properties nationwide and you bring in you corporate culture, this personal involvement will slowly vanish. How will you cope with that?

What we bring in, Mr Nandy, is thirty years of experience in running luxury hotels. We will send Indian mangers all over the world to train, learn and come back to run these hotels for us.

Who will run your Goa resort?

A team of around 40 young people.

Your A-Team will have Indians or foreigners?

We will, initially, put in the best people available for the job. We will bring them in from all over the world. Americans, Germans, Indians. In fact, they are all here. The No 1 is a German who was with the Oberoi Sheraton in Bombay in 1973. Peter Jansen. He has an Indian wife and has lived in India most of his life. The No 2 is an Indian national who worked for us in Toronto. Radha Arora. The core team of 10 to 12 people will be chosen very carefully by us. The rest will be young people locally recruited.

After six months or so, we will pick up the core people and take them to the Bangalore hotel. Leaving only two or three behind. The remaining will be replaced by trained Indians, who will then take charge of the first hotel. That is how we will bring in talent and train Indians to take charge out here. We have no intention of hiring what you call expats and putting them here to run these hotels. That is not the way we run our hotels.

What is the kind of investment in these projects?

Goa alone will cost over Rs 500 million. Bangalore will be Rs 2 billion. Udaipur, Rs 600 million. In Delhi, the land alone costs Rs 2.20 billion. Plus, the structure and interiors will cost another Rs 2.2 billion.

You are talking about almost Rs 8 billion. What will be your equity structure?

Leela Venture will hold Goa, Bangalore, Udaipur, Bombay, Leela Hotels will own Delhi.

What about The Leela, Bombay as it exists? Will this hotel remain outside the purview of your collaboration?

Yes. Everything else will be the Four Seasons. One of the strongest brands in the hospitality business worldwide. We will attract people from all over and set standards of luxury that others will come to India to emulate. We will create, in the process, world class hotels and destinations. We are proud of this and equally proud to share this glory with our partner, Captain Nair.

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