| Below the aging porch of The Ashok in Delhi, there stood a post office that no guest of the hotel ever cared to use.
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| The post office shared space with the hotel’s records room, the laundry and the guard’s rest room. Faced with the challenge of turning around India Tourism Development Corporation’s (ITDC) 23-acre loss-making property in Central Delhi, Amitabh Kant, managing director, ITDC, that runs the hotel, decided to make better use of the space.
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| Today, a 6,500 square feet nightclub called Capitol has replaced the post office. Capitol is run by Micky Choudhury, managing director of Infrared Entertainment Ltd. that also owns Velocity in Mumbai.
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| The large cycle stand on the property has also made way for a fancy retail store selling the Bentley brand. That is not all. The hotel’s deserted health club and beauty saloon is being replaced by a day-spa.
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| Mayar India, the Rs 800-crore group with interests in paper and spa products, has secured a 10-year lease to build an ayurvedic spa called Amatrra. Nearly Rs 15 crore has been pumped into the project that will be operational next month.
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| The effort seems to be paying off. The Ashok, which was in the red for many decades, has finally shown a marginal net profit of Rs 2.5 crore. Last year, the hotel clocked a turnover of Rs 54 crore up from Rs 52 crore in 2002.
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| Talking about the initiatives to make Ashoka profitable, Kant says: “The idea was to increase the turnover radically and reduce the capital expenditure sharply.”
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| To augment revenues, Kant first struck deals with private operators to run various restaurants in the hotel.
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| In less than two years, at least five restaurants have been given out on profit-sharing basis. These include Ssteel, Rouge and Mashrabiya, that have been set up by Turkinz run by Amit and Arjun Amla.
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| Today, the city’s only Korean restaurant is located at The Ashok and run by a private operator.
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| Even as the restaurants are doing good business, the hotel management has managed to collect dues to the tune of Rs 7 crore from various ministries. It is also plans to refurbish its popular restaurant The Frontier at the cost of Rs 1 crore.
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| Other than looking at revenue generation, Kant felt it was critical to lift the morale of the staff. “We had to create a sense of ownership while at the same time set targets,” he says.“Our focus has on strengthening the marketing and sales function to increase occupancy,” says Kant.
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| However, some problem areas remain. The hotel’s room occupancy is low at 50 per cent compared to the industry’s average of 84 per cent in the city. “While we have a large inventory of rooms, we’ve seen depreciation as they haven’t been upgraded,” he says.
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| On the cards is a plan to renovate 300 of the 540 rooms in the hotel. The plan includes making The Ashok into a convention destination and link up with the adjoining Samrat Hotel, also run by the ITDC.
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| “We want to benchmark ourselves against the best hotels and prove that it’s possible to turn a place around,” says Kant.
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| But whether the piecemeal efforts will bear fruit remains to be seen as Kant admits that the place requires at least Rs 150-160 crore to be completely resurrected. Till then, the rivals may continue to eat into its share of business. |
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