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Brij Raj Oberoi, founder and managing director of the Elgin Group, with his pets Mickey and Rosé (behind).

The hotel industry's other Oberoi

Or why genes ultimately triumph
By Pavan Lall

The Oberoi name is legend. Family patriarch Mohan Singh (MS) Oberoi practically invented hospitality in India as the founder of the eponymous hotel chain. And, it is said that his son, Prithvi Raj Singh, better known as Biki Oberoi, 82, would fuss so much over detail that an odd-looking jug or a misaligned bathroom tile could bring the roof down. There are few legends, however, about the other Oberoi—who has also set up a chain of hotels in the hills.

Hoteliering is clearly in the genes. The unknown Oberoi—57-year-old  Brij Raj ‘Diamond’ Oberoi—is M.S. Oberoi’s nephew; his mother and Biki Oberoi’s mother were sisters. In fact, uncle MS was the one to give Brij Raj his nickname, Diamond. The uncle’s influence strengthened when Brij Raj trained at the Oberoi School of Hotel Management in Delhi, and then went on to expand Elgin—a hotel set up by his father—into a chain of heritage hotels in the Himalayas in northern West Bengal and Sikkim. He has consciously followed in his uncle’s footsteps: “If M.S. Oberoi could do it, why couldn’t I?”

MS worked in hotels for much of his life, starting “in a small way in a small hill station,” his nephew says. The Oberoi empire was founded on two key takeovers—the Clarke’s, a heritage property in Shimla, in 1934, when he was 36; and the Grand in Calcutta in 1938. MS bought Clarke’s from his manager, who had taken his help to buy the hotel when it was being liquidated. In the case of Grand, an outbreak of cholera had shut it down, when MS saw an advertisement and took it on a low lease. He revived it by providing lodging to the British army during World War II. The rest, of course, is history.

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Brij Raj started out helping his father, Kuldip Oberoi, who had set up the first Elgin in Darjeeling in an 1887 vintage building that belonged to the Maharaja of Cooch Behar. Kuldip Oberoi first rented the place, and later, in 1965, bought it for Rs 3 lakh. Brij Raj, who used to assist his father in the hotel in his school days, entered the business in 1976, on return from training in Delhi. He was all of 20.

Did he come in with any advice on running hotels from his uncle? “Wherever you are, always be the boss.”

Fall of 1976. Wangchuk Tenzing Namgyal, the crown prince of Sikkim, had checked into the Elgin Darjeeling for a football match against the local team. After Sikkim triumphed 3-1, Brij Raj invited Namgyal for a drink that evening. Conversation moved on to the hotel’s décor. Namgyal said Brij Raj had done up the hotel well, especially recreating the cozy, British colonial interiors. “I plan to modernise it soon,” Brij Raj had said. Namgyal was horrified. “No! Never do that. It’s taken decades to build this atmosphere—it’s so personal. Nothing can substitute that.”

A couple of Scotches later, the talk drifted to the state of hotels in Sikkim, which had become part of India a year ago. The government had taken over the Nor-Khill Hotel in Gangtok from Namgyal, and he wasn’t happy with the way the Travel Corporation of India ran it. The hotel, built on five acres of land facing the mountains, had great potential, but it was in a shambles following the change in ownership. “It was a bare-bones, worn-out tourist lodge,” reminisces Nimmi Oberoi, Brij Raj’s wife and director, the Elgin Hotels, who manages staff operations among other things.

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Nimmi Oberoi, wife of Brij Raj Oberoi and director, Elgin Hotels, at the Darjeeling property. The Nor-Khill was acquired by the group in 1976.

Soon after his first visit to Sikkim, Brij Raj called up the state tourism secretary, Jigme Kazi, seeking to apply for a 55-year lease of the Nor-Khill. Sikkim had no tourism infrastructure then; Kazi didn’t even have an office. They met at his house. Within a month, ITC-Kenilworth and the Sinclairs Hotel also bid for the Nor-Khill, but Brij Raj prevailed. “I told the government that I’d undertake renovation, while the others wanted the state to fund it,” he recalls.

He didn’t start off with costly renovations, though. He shipped a truckload of excess furniture, fresh linen, and a cook from the Elgin Darjeeling. Nor-Khill (now the Elgin Nor-Khill) was in business overnight—clean rooms, good food, and beds you could sleep in. Over the next two years, Brij Raj spent around Rs 50 lakh to do up the hotel in Sikkimese style, complete with thangka paintings and murals, bright interiors, and wooden walls decorated with dragons and Buddhist motifs. In three years, it had been turned around completely.

Brij Raj had the appetite for risk, and was also conscious of the fact that Sikkim had no real competition at the time. “It was a gamble backed by confidence,” he says.

At 24, Brij Raj was rolling out his third hotel. A friend had introduced him to an engineer, Puran Deshraj, whose father designed and built the bridge and dams on the Teesta river and lived on a 3.5-acre, six-room home called Silver Oaks in Kalimpong. “If you ever sell it, keep me in mind,” Brij Raj recalls telling Deshraj. Four months on, Deshraj was at the Elgin Darjeeling. “It’s yours for Rs 5 lakh,” he told Brij Raj. The throwaway price was largely because Kalimpong was just a stopover between Siliguri and Darjeeling—not a tourist’s fancy. In three years, Brij Raj was running 25 rooms there, and making profits from the fourth year on. Between Darjeeling and Kalimpong, there are a handful of star-rated hotels such as the RJ Resorts, the Windamere, Mayfair, the Cedar Inn, the Central, Viceroy, and Little Tibet. But Elgin Hotels won by betting on building a heritage brand. “Heritage hotels are a speciality business, every wall has to speak to you,” he says. 

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The Elgin brand today includes four fully-owned hotels with 150 rooms, located in Darjeeling and Kalimpong in West Bengal, and Gangtok and Pelling in Sikkim. It ended 2013 with a revenue of Rs 35 crore, and a gross operating profit of Rs 15 crore. The numbers are small compared to the large five-star chains, but they are creditable, given the constraints of the market: For all their Himalayan allure, Sikkim, Darjeeling, and Kalimpong together are often written off as a very small contributor to India’s Rs 1.4 lakh crore tourism business. 

In Darjeeling and Kalimpong, bloody political turmoil is mostly to blame for the decay of what was once a promising industry. By the ’80s, the Gorkha uprising, the primary political movement in Darjeeling, had turned ugly and started repelling visitors. By 1986, violence and riots brought Darjeeling to its knees. Though compromises have been arrived at since, the hills are far from peaceful. In 2010, political rivals hacked to death Gorkha leader Madan Tamang at the town square. Calls for a full secession continue, and strikes are rampant. In August last year, a 45-day strike hit the town, forcing businesses and residents to stock up on food and supplies, as if there was a war. Larger chains such as the Taj Group, the Leela Group, and East India Hotels (EIH) that owns the Oberoi brand have understandably decided to stay away. (EIH did start the Oberoi Mount Everest in Darjeeling in the ’50s, but after a fire gutted it in the ’70s, it was never reopened.)

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The Elgin Hotel, Darjeeling

Brij Raj is a gritty hotelier. Darjeeling’s uneven water supply, notorious power cuts, and jostling competition (there are at least four hotels within a kilometre) don’t bother him. “I grew up in this town. I’m one of the locals,” he says, switching to fluent Nepalese as a familiar face greets him at the town’s busy Mall square. Otherwise a shy man, he spends as much time speaking to the city mayor as he does to the local club facilities manager, or the waiter serving him the season’s first flush at the café across the street. Those relationships have paid back. Across Darjeeling, hotels, restaurants, and shops have Gorkhaland writ large on their signboards and walls. But not on Elgin’s signature peppermint green walls. Brij Raj says no one ever asked him to put up any signs. “Residents are aware that any disruptions hurt tourism, their daily bread, the most.” Amar Rai, chairman of the Darjeeling municipality, says that recently Bimal Gurung, leader of the Gorkha Janmukti Morcha, which is demanding Gorkhaland state, said in public that the hills would be strike-free here on. That’s good news not just for Brij Raj, but the 400,000 tourists (about 8% being international travellers) who flock to Darjeeling annually.

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The Elgin Mount Pandim, Pelling

As far as competition is concerned, Brij Raj’s intuitive understanding of the market has helped him take small but critical steps to stand apart. By 1995, he had built a 20,000 litre water tank under his dining room, and boilers for each room, for hot water 24x7. “I don’t think any other hotel here has this,” he says. There’s also a fleet of dozen white Toyota Innovas, all flaunting the Elgin’s insignia, run by trained local drivers.

Location is Brij Raj’s trump card. Ashwini Kakkar, executive vice chairman of Mercury Travels in which EIH has a stake, says that Darjeeling and the adjoining hills are fantastic places to run hotels from. There’s the toy train—a global heritage property—and tea estates, and the refreshing mountain air. Kakkar recollects going there a couple of decades ago when it was pristine and the town retained its quaint colonial character. In recent years, however, the jostling concrete sprawl and state apathy have become turnoffs. “Wildflower Hall in Shimla, Ananda Spa in Rishikesh, or Bhutan are better tourist experiences, but they [still] can’t match up to Darjeeling’s views of Mt. Everest and the Himalayas,” Kakkar says.

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The Elgin Nor-Khill, Gangtok

From Darjeeling to Pelling, the road is both idyllic and scary as it meanders through tea gardens, and across the Teesta’s landslide-prone curves. On the way, there is little civilisation save for security checkposts and small tea shops. We arrive at the gates of Elgin Mount Pandim. Every one of its 30 rooms faces the snow-capped Kanchenjunga mountain range and the property is just a few hundred metres below the Pemayangtse Buddhist monastery. 

This is Brij Raj’s most recent acquisition. Bought in 2007, the deal was almost lost to the Mayfair Hotel, owned by Dilip Ray, a former member of Parliament from Orissa, and Brij Raj’s batchmate at North Point School, Darjeeling. Elgin Hotels bid Rs 21 lakh a year for Pandim’s 60-year lease. It turned out Mayfair bid the exact amount. The Sikkim government, however, gave the lease to Elgin Hotels because of its contribution to the growth of the state, as well as Brij Raj’s long-standing experience in hospitality. (Ray is not a trained hotelier.)

Brij Raj, however, is not rushing to grow fast. Given the sort of high-brow clientele that has stayed with him—the Dalai Lama, Hollywood actor Richard Gere, celebrated writers Dominique Lapierre and Mark Tully, and recently, Prime Minister Narendra Modi—he could have easily leveraged banks to roll out half a dozen properties in the past decade. But as the traditional domestic destinations get overcrowded, Elgin Hotels has to spread its wings beyond the heritage niche—and possibly beyond India. 

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The Elgin Silver Oaks, Kalimpong

Brij Raj has it all worked out. There are plans afoot for his first five-star beach resort set on a six-acre plot at Turtle Bay, Balaclava (Mauritius). His neighbours will be the Park and the Westin. He is not bashful about switching segments within India either. “Business hotels are one avenue I want to explore.” He’s looking at developing a couple of acres he owns in Siliguri as a start, and scouting for similar properties in Kerala.

One of India’s best-known hoteliers, who declined to be named, endorses Brij Raj’s easy pace. He says Elgin should grow by two or three locations at a time, not more. “He should look at other hill stations as well. There’s potential for smaller hotels 15 km to 20 km outside Darjeeling, where the company can retain a premium feel at lower costs.” Brij Raj Oberoi will know best. He has the pet name bequeathed by his uncle to live up to.