Four Seasons checks in

After beating entry blues, the high-end hotel brand is planning the third-tallest property in India, apart from other expansion projects

The Four Seasons Mumbai, with its grand edifice in Worli, opened its doors probably in the worst possible period.

With Lehman Brothers sending the financial world into a tailspin in early 2008, travel and leisure across the world came to a near stand-still sending hotel room rates crashing across the globe. That’s when the Canada-headquartered luxury hotel chain went against the tide and opened the Mumbai property.

Being a luxury brand, room rates at the Four Seasons are significantly higher than the average rates charged by other players in the five-star segment. For instance, an entry level standard room for a night will set you back by Rs 18,000 at the Four Seasons against the average five-star rate last year of Rs 11,000, according to consultancy firm HVS. So competitors predicted that the high rates would be a big deterring factor for customers.

They seemed to be correct as Four Seasons recorded average monthly room occupancy of just around 40 per cent. Questions were also raised whether the hotel chain had made the right choice of having a hotel in an area which is dotted with chawls, defunct mills and narrow access roads.

But that’s a distant memory for the property’s general manager, Andrew W Harrison, as Four Seasons recorded an average occupancy of 81 per cent last month — up from an average 68 per cent last year.

“This part of the city is really coming alive. We have fancy restaurants, pubs, bars and night clubs, shopping malls, a lot of investment banks are moving here. The Bandra-Worli sea ink has had a marked affect on accessibility to the area”, he says.

Keeping in mind an extended surge in demand, Four Seasons is putting up two new ballrooms in the property. But perhaps the biggest statement of a rebound in its fortunes comes from the fact that the owners (Delhi’s Jatia family) are planning a huge expansion in the same area.

The 33-storey hotel will soon be dwarfed by a tower that will be two and a half times taller – 84 storeys. It might sport an Aer bar similar to the one present in the current structure, which is also India’s first rooftop bar. The financial details, including the investment for the new hotel, are being finalised. While construction of the two new ballrooms will begin this month, the new skyscraper, which will have office space, service apartments, guest rooms, restaurants and Four Seasons-branded residences, is in the design stage and will be finalised by the end of this year.

When completed, the new building will be the third tallest hotel in the city. The first and second slots will be occupied by the 125-storey India Tower (coming up in Marine Lines in south Mumbai), and the Park Hyatt, which is expected to house 117 storeys.

“We would be going with cutting-edge designers with an equally great food and beverage concept. This will really be an iconic tower in term of its design and interiors. The owners have started dialogue with architects and our design and construction team based in Toronto, who will be working with the Indian team”, says Harrison.

The company is also expanding to other parts of the country such as Bangalore where it had a ground-breaking ceremony last month. Hotel properties are also scheduled to come up in Jaipur, Gurgaon and Hyderabad.

Four Seasons has also signed agreements for managing two resorts in India’s most favourite leisure destinations - Goa and Kerala. These will be in addition to the four resorts which the company manages in places like Mauritius and Seychelles. The properties will be built under tie ups with local developers who will also invest in them, while Four Seasons will manage them and give its brand name.

The Toronto-based management, however, will be more selective than its rivals like Hyatt, Marriott and Intercontinental, in its expansion in India.

“We would have surely liked to have 10 properties up and running by now in India. But we have to be practical: there is still not enough demand for this kind of high-end hotel brand. So it’s important that we have the right location and right partners” Harrison says, adding “Four Seasons is not a mass-market product. We know it’s not for everyone’s wallet. We have a following but it’s in the high premium class”.

Four Seasons is jointly promoted by its Canadian founder Isadore Sharp, Microsoft’s Bill Gates and Saudi Arabia’s Prince Al-Waleed bin Talal.

According to industry estimates, there are around 40 international hotels, which are expected to be operational in the country in the next two years. These global chains are now entering the full range—upper scale, mid-scale, economy and budget. Analysts said India is more profitable for global hospitality firms than the international market. According to HVS Hospitality Services, an EBIDTA margin of 40-50 per cent in India as compared to 20 per cent back home is attracting global hotel chains.