Academic journal article The McKinsey Quarterly

Rolling out the Red Carpet: An Interview with Prithvi Raj Singh "Biki" Oberoi, Managing Director, Oberoi Group

Academic journal article The McKinsey Quarterly

Rolling out the Red Carpet: An Interview with Prithvi Raj Singh "Biki" Oberoi, Managing Director, Oberoi Group

Article excerpt

McKinsey: How did the Oberoi Group begin?

P. R. S. Oberoi: In 1922, my father, Mohan Singh Oberoi, came to Simla to look for a job. Set about 7,000 feet up in the Himalayas, Simla was India's summer capital, the place from which officials conducted the affairs of the Raj. The entire Indian government moved to Simla for the summer months - lock, stock, barrel, and files. Before 1911, they faced a 1,200-mile trek from Calcutta; when Delhi became the new imperial capital, their journey was much shorter.

My father found a job as a clerk at the Cecil Hotel, which was the most fashionable hotel in Simla. Senior British officers and Indian princes made up most of the guests. The Cecil belonged to the Associated Hotels of India, the first - and for a long time only - hotel chain here. My father was the hotel's cashier, for which he was paid 50 rupees a month. He was 22 years old. Hardworking and dedicated to his job, he soon became a capable and trustworthy assistant to Mr Grove, the general manager of the Cecil.

Some time in 1927, Ernest Clarke, an executive in the hotel, asked my father to accompany him to Delhi, where he had just landed a contract to run the Delhi Club. So lucrative was this contract that within two years Ernest Clarke was able to buy his own hotel in Simla. Wanting to concentrate on his Delhi responsibilities, he asked my father to manage it.

Clarke's was nothing like the Cecil. Half the size, it had dilapidated plumbing, gloomy bathrooms, creaking floorboards, and abysmal occupancy rates. Renovating it gave my father a unique opportunity to learn how to build a top-class hotel virtually brick by brick. Within a year, Ernest Clarke had made him an equal partner in the venture.

Around 1933, Ernest Clarke and his wife took a six-month vacation abroad. When they returned, they couldn't believe what my father had achieved. Not only had he refurbished the entire hotel, he had persuaded the Indian army, whose headquarters were nearby, to use it. Junior government officials now frequented the bar. Occupancy levels had shot up to 80 percent.

The Clarkes were so impressed by what my father had done in their absence that they offered to sell him their hotels in Simla and Delhi and retire to Britain. In 1934, my father mortgaged all his assets, my mother sold off her jewelry, and they became the sole owners of the two hotels. The Oberoi Group was born.

What attracted your father to the hotel industry?

The glamor of it all: fine buildings, elegant people, excellent food. For my father, the Cecil epitomized the roaring twenties. Every Saturday, it rolled out a red carpet in case the Viceroy of India stopped by. The Raj had a strong influence on style.

What was the first big leap for the Oberoi Group?

The acquisition of the Grand Hotel in Calcutta. The capital of imperial India until 1911, Calcutta had been the home of the British East India Company for almost 250 years. Its architecture was Western European in style, with mansions and department stores lining the streets. The Grand, a 500-room hotel that looked like an English mansion, was considered to be among Calcutta's most distinctive buildings.

In 1937, disaster had struck. A typhoid epidemic spread through the hotel, killing several guests. The Grand was closed and a receiver appointed. A year later, my father took out a lease from the receiver and set about refurbishing it. The work took a full year. Everything was redone: the floorboards were pulled up, the plumbing was ripped out, and all that remained was scrubbed, swabbed, scoured, and sterilized over and over again.

During the Second World War, the Grand became highly profitable. Calcutta was one of the key transit points from which the Allies shipped troops and supplies out to the battle fronts in Burma, Singapore, and the Philippines. The Grand was only available to officers of the Allied Forces who used it for long-term accommodation. …

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