Why boutique hospitality is booming

0:11Hello and welcome to The Entrepreneurs on Monocle Radio, the show all about inspiring people, innovative companies and fresh ideas in global business. Today's show is all about hospitality and how to scale without losing a hotel's soul. First, we'll meet a hotelier who set out to redefine boutique hospitality in India and built a thriving group with dozens of locations. I was very clear that I wanted to do hotels with a difference, to be reflective of contemporary Indian culture, and I wanted to express that through art, design, fashion, food, and fun, and music. Then we'll check in with the founder of a hotel brand navigating global expansion.

0:50You can build the most beautiful and most exciting hotels if you don't have the people, then it doesn't work. This is The Entrepreneurs with me, Tom Edwards.

1:06You're listening to The Entrepreneurs. Priya Paul is widely recognized as one of the most innovative hoteliers worldwide, shaping the Indian hospitality industry for more than three decades. As the chairperson of APJ Surindra Park Hotels Limited, she's taken a family business and turned it into a leading name in the boutique space, blending heritage with a fresh contemporary feel. With new hotels opening and more ambitious expansion plans, she's certainly showing no signs of slowing down. I caught up with Priya to hear how she's built a brand that stands out and what it takes to set the pace in a fast-changing industry.

1:43We are now with about 36 hotels across the country. We have a couple of different brands that we've grown and we've navigated the pandemic very successfully. We had record occupancies actually even through that. And it's a very exciting, vibrant company. We did an IPO almost exactly a year ago and that has put us into a trajectory of growth, which I'm going to see the company being transformed over the next few years in many ways. And so it's an exciting time. And I always quite like to sort of look back to look forward. And I often find it really interesting talking to entrepreneurial folk who are leading these big businesses, these huge conglomerates where there's a real weight of history and heritage, as well as so much present day innovation.

2:30Talk to me a little bit about how you navigate that, because obviously, and we might need a little, some of our lay listeners might need a quick history lesson on the background of the business. But it's one of these great stories of a sort of a big storied institution, lots of history, an amazing family story as well bound up in that. But then also dealing with innovation and being future forward. How do you deal with those tensions? If indeed they are tensions for you, I don't know. Yeah. My family story is a family of entrepreneurs. And our family business was really founded in 1910, really in a business which was steel and steel manufacturing of small products.

3:05and my father was one of, with his brothers at that time. And the business then moved on and each one took an entrepreneurial role. And I think that's something that is part of our family, let's say constitution even now. So each family member built businesses, whether it was in steel or shipping and hospitality and other things. My father and uncle, my father Surinder Paul, my uncle Jeet Paul, held the second part of the business together and where my brother, sister and myself jointly own now. And I think that entrepreneurial spirit has really been embedded in that. We've, you know, three of us run the business together, but we're very hands-on in terms of not just the risk-taking, but also, you know, setting the vision for all the companies.

3:52Our activities now are hospitality and restaurants. It's shipping. We are in the dry bulk cargo ship business. We had a very significant presence in tea manufacturing, but we now do tea as an FMCG product and we've just expanded to coffee also. So these are the businesses that we're doing. And then, of course, a large component is the real estate and logistics business. And we have assets across the country, which look at, of course, the logistics and warehousing business, which is huge, and commercial real estate. So I think what has been really fantastic is my sister, brother and myself work together.

4:26We have independence in what we do, but we also coalesce and make decisions together for the family, for the business, and for building it out for future generations too. So I think it's part of us. I don't see a kind of a tension in it. But in terms of being then the steward of brands that people know and love, as they grow, and as you said, the growth trajectory is already impressive, and we can talk a bit about future plans as well. Do you have to be mindful of ensuring that you continue to communicate those core foundational values. It can be to people who you hire as well as to the guests and customers who use your products and services.

5:05Presumably, you have to approach that with some kind of discipline to ensure that even with a pace of change, you're retaining and kind of amplifying those core family values almost beyond brand values. It is. So I think we have a group or a family vision and mission statement. And from that, each of the divisions and companies have their own kind of set out vision and mission statement. And really the one, you know, and that kind of overall and guides the fact that we want people to have a commitment to the business, commitment to results, to be entrepreneurial, to be credible, and of course, to have fun while we're doing business.

5:44So that's very much part of the family. Often overlooked, isn't it? Yes. And that's very important as a family statement that we said, you know, we're not in the business just to make money. We're in the business to also enjoy the process and enjoy, of course, the fruits of it also, finally. So the hotel division, we articulated this vision of leadership through differentiation and with a very clear mandate in the mid 90s that I wanted us to be the pioneers of boutique hotels in India. And that vision and mission statement is something that is and, you know, there's a whole lot of things that go to build a culture.

6:15And that's something that we've been doing since 1994 when we articulated this vision, which was a very, let's say, an early time in the boutique hotel movement. But I was very clear that I wanted to do hotels with a difference. Now, in that time, we had only three hotels. And now we are 36, of course. There have been some interesting developments on the brands, but the brands hold that. So I wanted our hotels to be reflective of contemporary Indian culture. And I wanted to express that through art, design, fashion, food and fun and music. And that's what the brand has stayed true to. And in all its spaces, food and beverage and nightlife is a very important part of all our brands, not just the park hotels, which is our main hotel brand.

6:56But we also have a brand called Zone by the Park, which are across smaller cities across India and have grown to about 22 hotels as of now. I think the brand culture is very well communicated, understood by our team. We feel that innovation and creativity are part of our DNA. And that's something that I think our team loves. And that's what they enjoy about working with us. And that's very important for us in our hospitality spaces, in our retail spaces, that how do we deliver what we call anything but ordinary experiences by using creativity, innovation and really, you know, thinking out of the box.

7:33So that's something that keeps our brand alive and young and relevant. And I think that's really the foundation of our business. And that's how we're going to continue to grow in the future. As I said, we now have about 36 hotels across about 2 ,400 rooms. And we have a plan to double this in the next three to five years. So we have, as I said, the park hotels. We have Zoned by the Park, which are in the four-star space. And then we have a very successful brand of patisserie and confectionery, which has about 100 stores as of now, as of last week. And that's something that's going to grow to about 350 stores in the next three years.

8:11So, you know, we have great plans and we've started, you know, as I said, we've done an IPO just last year. And that was quite an amazing moment because we were 63 times oversubscribed. It was one of the first few big IPOs to come out in the hospitality space for years and something that was watched by all the industry and many now have joined the IPO story. And I think it's helped us to be a stronger from our balance sheet point of view. We've been able to, you're suddenly a public company, everyone's also looking at you. I think it's quite an interesting space and it gives a lot of kind of discipline and responsibility for everybody from me down to the last person.

8:52And I think it's enabling us to do our move ahead with our growth plan. So the first part of that was really to open new hotels and we've opened two hotels very recently. Both are palace properties. One is in Chetanad and Tamil Nadu down south and the other is a 35-suite property in Patiala and Punjab. So both very historic properties, 250 to 300 years old and we really put a different kind of contemporary spin to those heritage properties. And what we are now building out are about 900 of our own rooms across five properties. So that's one in Pune, which is kind of like the Detroit or auto sector of India.

9:36Then another 220 room hotel along with apartments for sale in Calcutta. And another third property in Jaipur. And then we add 100 rooms each in a new tower in our hotel in Bishakapatnam. And another 100 rooms in Navi, Mumbai, which is where the new airport of Mumbai is about to open. So they're all, you know, they're plans that we actually had. Tom, we had these plans in COVID. So it's five years later, and we've started executing the plan. And I'm very, very excited about it. Well, yeah. And I mean, the number, I was going to say the numbers speak for themselves, but actually you elaborate and elucidate on the impressive numbers as well so powerfully.

10:17And like you said, it's amazing to see a business that has such clear convictions and adheres to them so closely and you can see the results. Let's talk a little bit about kind of changing some of the narratives because I think it's interesting you talk about some of these properties and the idea of maybe not getting people off the beaten track per se, but maybe encouraging people to think a bit differently. So maybe they don't go to the place in Rajasthan they've been a couple of times before, but maybe they look at, oh, is there a Punjabi hotel experience that is a little bit different? Presumably when you've got the kinds of levers you have and the potential and the scale, you can really kind of lure or nudge or shove people kind of out of their comfort zone.

10:56Is that part of, you talk about sort of expecting and working with the unexpected almost. That must be lots of fun to do. So you're right. I mean, I'm very excited, particularly about this hotel in Punjab because I'm Punjabi myself, but I've never lived in Punjab. My family actually moved from Punjab to Calcutta in, you know, kind of pre-partition times because business was all in Calcutta, Kolkata as it's now called. So for me, when we kind of won this bid from the government of Punjab to take over this very, very historic fort for the Sikh community, this is the Maharaja of Putyala, the Putyala rulers, it is their historic fort.

11:32In fact, the flame that the family has lit for, I think, 300 plus years is still in the middle of that fort where they come to pray to. So it's a very, very important fort for the Sikh community, for Punjab. And I think it's also a very interesting story for modern Punjab because for far too long, Punjab has had a lot of fractures and issues and you never really saw great stories coming out of Punjab. But the Punjabi culture is so dominant, not just in India, but it's really the narrative all over the world. It's the music, it's the dance, it's Bollywood, it's the weddings, and it's that exuberant Punjabiness or Punjabi-yat as they call it in Punjab.

12:11And I think for me, this is a hotel that wants to celebrate that. And that's what, you know, we have a fun bar which celebrates the Patiala Beg, which was a very historic measure of alcohol. We have fun spaces. And so and I want to celebrate Punjab over here through the music, the art, the culture, the food. You know, one of our restaurant offerings is the food of undivided Punjab. So really tracking down recipes, looking at that and happy to have people contribute from across the world for that repertoire. And I think the hotel has a very unique position in that because this is the first luxury palace hotel in Punjab.

12:49And I think it's going to really establish not just Patiala as an Indian royal destination, but also from a global point of view. And I think I'm very excited about it. It's just about open, though. Talk to me, you talk about that idea of, you know, the destination, the global traveller. If we zoom out a little bit, I'd just love to pick your brain for some strategic insights sector-wide. Obviously, hospitality is an area of enduring interest for Monaco going back years. Tell me a little bit about some of those big sweeping narratives. Priya, where are you anticipating upsurges of visitors to some of these destinations?

13:22Is it internal, external? Are you looking to East Asia? Where are we going with the US international traveller? Maybe that's one for another day. Give me a couple of thoughts about just how things are shaping up in global hospitality terms. So I think India is really on an amazing growth phase. From the economy point of view, we're going to do about 6.8 % GDP growth this year, which is great. But, you know, obviously, we could do much, much better. But there's a lot of stimulus being provided to manufacturing and to other industries there. So I think the next 10 years are going to be fantastic for India as an economy.

13:56We're already number five in the world as our largest GDP economy. and we are projected to be number three in the next five years or less. So I think that's an amazing idea as a big picture. So if you can imagine anything in India, everything is growing exponentially. Okay, and there's the demand that's exponential. I mean, there are weak spots every time in different areas. So if I look at tourism, we have, of course, 10 million incoming tourists. It's just come back to pre-COVID levels, But the government has put a target for about 100 million incoming tourists in the next seven to 10 years.

14:36So that requires a lot of policy decisions, which I think the government is in the process of recognizing, making, doing. But we have almost 300 million internal travelers across many classes of travel. And all of them are using flights now. So we have about 1 ,200 aircraft ordered. So you can imagine how that's going to change the landscape of India. We have people looking at two-star hotels to seven-star hotels. We have technically only 190 ,000 rooms in the recognized and registered sector, but there's a lot of unstructured supply. So we only have 190 ,000 or 200 ,000. We have about 50 ,000 rooms coming up a year that we know of.

15:20So there's a lot of room to build out the hospitality infrastructure. So I see growth happening on the supply side. But I think right now, for the next two or three years, demand is far outstripping the supply. But with more airline capacity, both domestically and international, I think I see that whole pie enlarging. And India is really where it's at. And I mean, I'm hoping the international traveler will come back more strongly in the next two years. But the domestic demand story is very, very strong. Yeah, super exciting. Let me ask you a little bit, because I often talk to entrepreneurial leaders on this program about the kind of day-to-day management, not just of their sort of empires, but of their time.

16:01And they're often people with so many passions, whether it's across their sectors and then art and culture. Now, you have positions well over the years, not just running, you know, hospitality associations, things like this, but all kinds of other initiatives and programs. You have so many passions. I always marvel. How do you make the time? And is it a question of, I don't know, prioritizing? Do you follow your gut with what you're going to be doing today instead of tomorrow? How do you make sense that your schedule management must be an absolute nightmare? How do you keep it all together? Oh, I mean, you know, it's a lot of things to juggle.

16:38But I think I have a lot of interests, as you've pointed out, which is particularly in art, design and fashion. And for me, you know, I feed off that energy and vice versa. So it's very important for me to be present and, you know, see things. So whether I go to Milan for the fair or I go to, I mean, I'm headed back tomorrow and there's the India Art Fair happening. And we're doing a couple of collaborations with them and hosting. My husband and I are hosting a party at home, which is design and art, but at our home. So it's exciting. And those are the things that actually also bring the brand out to so many different customers.

17:13and, you know, it's a juggle. I enjoy all that and it's fun. That was Priya Paul, the chairperson of APJ Surindra Park Hotels. You can find out more about the business by heading to theparkhotels.com.

17:37You're listening to The Entrepreneurs. Christophe Hoffman, a great friend of Monocle, is the founder of 25 Hours Hotels, a brand known for creating unique and vibrant hospitality experiences. With 16 locations in major cities around the world, including Paris, Berlin and Copenhagen, plus their most recent addition in Jakarta. With another opening in Sydney on the radar and his other venture, Bikini Island and Mountain Hotel, it's safe to say Christoph is keeping busy. I caught up with him to talk about exciting trends in hospitality at the World government summit in Dubai recently. Christoph began by telling me about the business opportunities that came from taking to the stage at the event.

18:16I had two very diverse panels, one with only one sparing partner, namely Rainer Stampfer, my dear colleague from Four Seasons. We were talking about work agility. That was very interesting. I liked also to see his point of view. And of course, we are very different, 25 hours in four seasons. It's both numbers. But even or as interesting as the talk was with Reiner, we had a panel right now, about two hours with 50 people from all different sorts of areas of the business. And it was about tourism. And I was really curious to see how 50 people can talk for such a long time and about what they talk.

18:56So that was a really interesting panel. The highlight was when at the end of that panel, the prime minister of Bhutan showed up. And it was really all about happiness about, it was the perfect resemblance of soul, because I was talking about our hotels prior, and I was trying to explain what soul meant to 25 hours and how difficult it is to keep it alive when you grow globally, and you become bigger and bigger. And then this guy showed up and it was just pure soul. And I gave him my business card, asking him if we can do a hotel together in Bhutan. There you go. That's networking. And it's interesting because I think people who know the 25 Hours brand certainly well, it's fun.

19:37They're happy places. How have you done your level best to ensure exactly that, Christophe, that as it's grown and become more recognized, and of course, you have to loose the reins a little bit as you scale, how do you keep that baked in? Is it about, presumably it's partly about how you communicate your brand values to your team, but it's just about people right but that makes it sound maybe a lot easier than it actually is i mean a hotel without people and culture would be no hotel i mean you can build the most beautiful and most exciting hotels if you don't have the the people then it doesn't work and to me at the end of the day it's the soul of the hotel we had maybe a different we didn't have a strategic approach when we were still small of how to tackle culture and how we can create a team of people who are like-minded, 25-hours thinking colleagues.

20:29But somehow it worked. And I think a little bit for, I mean, there's several reasons. Number one, we grew out of one hotel and I was around, my first colleagues were around. So we grew very organically and I was surprised to see how long it lasts to keep that idea of 25 hours alive, even though you are in different cities in the beginning, in German-speaking cities, but now also in Dubai, and we just opened up Jakarta. And for some reason, there's still a common denominator in the DNA. Of course, we screw up many times, and there's like, you know, like things we try, and we give our staff, our employees a lot of freedom to try.

21:09So we're not standardizing anything. and that's probably also something where we created another kind of people and culture, we call it nowadays, dynamic. And the other thing, and that also helped, we were destined not to create standardized products. Every time we created a new hotel, we said, we want to start from scratch. Every time when we got a new project on the table, we said, we don't start before we don't have a narrative, a story of the hotel. We like to compare it with movies. You don't start writing a movie if you don't have a script, or you don't do the movie before you don't have the script.

21:49And it really helped to create another level besides making a beautiful hotel. I would say that many hoteliers, many hotel brands who are either in a lifestyle or luxury segment, I'm not talking about mid-scale, they're trying to do beautiful hotels but what we are trying to do on on top of it is to create concepts so we've actually stole a little bit the existing beauty of the legendary hotels who are there since 100 years and they are natural storytellers because if you go to those hotels so many things have happened over the course of time which give the hotel that identity and every corner tells lots of stories and this is what we were trying to copy and create like kind of fast track into our hotels which we have developed over the course of time and if you go to sometimes it worked better sometimes it worked less if you go to let's say zurich or berlin or also dubai i think we've created a lot of different concepts so that people get inspired and that you have spaces where you feel comfortable and and also spend a lot of time during your day and some other hotels it was a little bit more difficult it's really interesting i think you yeah you really have that sense of 25 hours but then also the place certainly those venues you just mentioned which i know know a little bit i also like the idea of you as a hospitality auteur like in the cinematic approach it's interesting isn't it yeah you can you can you can use that one i keep it yeah of course you can what are you most excited about in terms of big trends and this doesn't have to be just through the prism of the brands that you're the custodian of christoph if we look at hospitality what excites you you mentioned uh rey now we're talking about personalization and how that's going to be such an important part of the whole journey but what in terms of those broad brush trends what are you most excited about just at the moment maybe just today who knows several i i would like to speak quickly about individualization of products once more as we grow i think it'll be much more difficult to stay as individual as we have been when we had probably five six seven hotels i think we have a maybe we have a means of keeping alive on that level but what i really appreciate are those very hyper localized products one hotel in a place like zurich fully dedicated on you know the concept you want to do and i think that's something which will happen more again i hope there will be entrepreneurs popping up which are not only trying to deal with the big brands.

24:23But on the other hand, I think it's also interesting for us. I'm now talking a bit more about Ennismore, the company who we are together with now. Ennismore is growing fast, but they're growing exactly in one segment where we want to be like 25 hours is. And we have found that system of driving the growth based upon still ownership and foundorship. And I think that's something which could become an interesting trend. And then, of course, the other big trend is people. How can we deal with people in the future? And what means education with respect to that? How can we redesign and recreate education, especially in hospitality?

25:06We're just on people, you know, again, across sectors, talking about the critical importance of recruiting the right people, retaining your talents. is that difficult because you know there's nothing more personal than hospitality right in terms of the things that can make the difference yeah and what's the secret because obviously you've got these brands that i think are actually very coherent but how do you impart the values christopher and again as you get bigger i guess you as we said earlier you have to be less hands on so how do you ensure you're managing to communicate those values and finding people who are genuinely receptive to them is it difficult yes i think it's difficult before i come and I don't even know if I have an answer on how to communicate it.

25:47I think it probably works by itself if you do it the right way. I think, I mean, everybody's talking about purpose-driven and I think we need to talk also about regions. If I'm speaking, I'm mostly still speaking about what's going on in Europe. I think it's very different in the Middle East and in Asia. So we're talking about a global business. So you have to always face the local or the regional requirements when it comes to hiring people. I think coming back to Europe, we need a lot more flexibility. We've been the ones who started with the four-day working week, which attracted a lot of people, especially after the pandemic.

26:25It was also a marketing tool, but we also believe that we are not finished yet with just implementing something which incentivizes people to work less. I think we should do also the other way around. We should incentivize people to work more and that leads to much more flexibility. How can you create an HR concept in which you can offer everything for everybody so that you really can also target a bigger target audience in the labor market? And I think last but not least, especially for younger people, we should become even more as we are now a home. Because I think if I start working somewhere.

27:06It's not only about the money, it's about many things, but it's to me also something where I feel at home, where I feel part of a gang, of a community, of something where I'm a little bit proud of, but where I also find my peer group. And I think that should be much more supported. I think we do a pretty good job there already. I think a lot of people like to work with 25 Hours because it's kind of a club, but I think we cannot stop going further on this kind of concept or idea. That was Christoph Hoffman, the founder of 25 Hours Hotels. You can find out more by heading over to 25hours-hotels.com.