Inner-View

How different do you think is the business environment here as compared to elsewhere?

We are working in so many different countries. And every time we arrive in a new country, we have an open mind. You cannot go from one country to another with pre-conceived expectations. One has to be open-minded and ready to set in. Nepal is different and so is every other country we have been to.

There wasn’t any problem, but there were a lot of challenges. You have to learn and you have to adapt all the time. There is always a way.

Would you share with us some of your experiences in other countries as compared to those in Nepal?

The only major difference doing business here is that most of the time it is very difficult to find suppliers to supply the goods. Though this is not just here in Nepal. Normally in places I have worked in, suppliers come to you to look for business opportunities, here it is the other way round. There is nothing wrong with that, but it is just something we need to get used to.

How divergent did you find the government policy and the business environment here from what you had expected?

Representing a five-star international deluxe chain of managed hotels and looking at the local market, the five-star market, there was definitely a place for Hyatt to come in. With us, tourism development is an important aspect as well. Obviously, establishment of Nepal Tourism Board (NTB) and the efforts of HAN have also made things easier. They also see the value of bringing in a top fire-star hotel. And this in turn will hopefully benefit the market in so far as it will elevate product standards. The government has spoken often about having quality tourists, though it is still not precisely defined what a ‘quality tourist’ is. But hopefully we will be able to attract quality tourists. In our opinion, a quality tourist is one who comes here for destination tourism and spends high yielding money and benefits from rich culture offered.

There is a perception developed about Nepal being a back-packer’s destination. How is Hyatt going to develop it into a high-yielding tourist destination?

I wouldn’t say that Hyatt is going to develop it. But Hyatt is certainly a brand name around the world that people know of. And when they log on to the web site and search Nepal, they will see the Hyatt name. There may be people who are attracted to Nepal because there is now a brand association. I’m not saying that we are going to be the reason for quality tourism coming into Nepal, but we may very well be the catalysts. The entire perception of Nepal being a back-packer’s destination is fast disappearing. There are more and more international channels like Star, Discovery and National Geographic presenting Nepal as a cultural destination. The change is happening.

The infrastructure and other sectors are still not geared enough to support quality tourism. In this environment, what is Hyatt’s strategy?

Even with the influence of all the five-star and all other hotels, Hyatt is not going to be able to influence the policy makers to change their minds regarding certain infrastructure requirements. There may be other priorities of more importance for them as of now. However, there are certain issues that concern a potential traveler to Nepal... the pollution, the garbage heaps, lack of sanitation, basic needs and requirements of the locals. All of these need to be addressed. Perhaps this will become of top priority for the government one day.

Obviously you have been facing problems, which has resulted in your hotel’s opening being delayed. What have you learnt from the experience and what suggestions would you like to make?

The reasons for delay are numerous. That could be anything from laying of the concrete to bringing in the products - the hardware, the furniture and the like. It is in nobody’s interest to delay the opening of the hotel. It is unfortunate that this has occurred, but the hotel will open in due course. And when it is opened, it is going to be a testimony to what can be done here in Nepal. Delays are inevitable in this part of the world or any part of the world for that matter. I don’t think there is much to learn from this. You can plan and organize as much as you want, but somewhere along the line you are going to have some problem and you will have to realign yourself to get back on track.

The delay has sent wrong signals to the public investors. Representing a major investor in this project, how do you think that the public investors are going to be satisfied in future since they have already lost a whole year?

They have lost a year but the share price has been fluctuating between Rs. 150 and Rs. 170. The share value has already seen an increase of 50 to 70 percent, and with no activity in the hotel. As the manager of this hotel it would be nice for me to say that when the hotel opens, there will be an increase in the share values with all the activities in the hotel. Though I can’t say that for certain, I can definitely endorse that the public investors have made a very secure investment. Hyatt is an international company, and I don’t see that there should be any fear about the investment made.

A lot of planning went into ensuring that the first AGM was going to be a success. We did not expect that many number of shareholders to actually show up. We were given to understand that the turnout of shareholders is usually less than expected. We are grateful to everyone who turned up. And we are obviously better educated for the next year to make sure we are prepared for larger numbers.

Hyatt has to promote not merely this property but entire Nepal in the international tourism market. What selling points has Hyatt been focusing in its marketing?

The promotion of a country is the prime focus of national tourism authorities, for which we are contributing to NTB and HAN. We also feel it is important that our marketing offices around the world are being exposed to Nepal. The major focus of marketing abroad is going to be awareness. You will be surprised how very few people know where Nepal is. It is obviously the responsibility of tourism authorities to put Nepal on the map. What we will do is to ensure that whenever we go into various markets, the Hyatt Regency Kathmandu is featured as the newest property to open up in the Hyatt portfolio. And we will be marketing it especially as a destination hotel with great cultural tourism possibilities.

At the moment we have slots in CNN, Newsweek and other large international publications. We will be working towards getting every bit of exposure we can possibly find from large international networks.

Nepal is undiscovered for a lot of people. We will be focusing on the culture, the heritage, the mountains and the beautiful people of this country.

Your coming into the business has sent a kind of fear among other hoteliers that one more hotel is going to take share from the same size of the pie.

It has to be made clear from the onset that the rates offered by Hyatt are not comparable to anywhere in town. We have a product differentiation from the existing options. We have made every attempt to build a true five-star hotel as perceived internationally. And we have yet to prove our service. We are not yet open, but we have every confidence in the people we have trained.

Looking at the existing rates structure offered by the market, don’t you think it will be difficult doing business?

It may be difficult. But we are trying to create a niche market. It will not happen overnight, but we have to work and plan the market. We would like to assist the entire market by maintaining a higher rate. And if one of us starts the higher rates, hopefully it pulls the rest of the market up. At the moment, everyone is dropping rates. This affects the four-star market who will then have to drop their rates. Once again this affects the three-star and so on. And before you know it, you will get hotel rooms cheaper in a four or five-star hotel than in any of the smaller hotels and lodges. And this is wrong, because it spoils the entire image of five-star hotelry in Nepal.

How do you comment on the reaction across the market that you turned away many qualified Nepali nationals and recruited foreigners instead?

We have not turned people away from jobs. Advertisements had been placed in newspapers both in English and Nepali. The qualifications required had been mentioned in the newspapers. We are an international company committed to assist in the development of our employees. And you can rest assured that wherever possible we have recruited Nepali department heads, assistant department heads and executive committee members. In our company, we have a training system wherein it is the responsibility of the department head to develop his number two. Promotions are done from within the organization. Our intention is to develop our people.

The efforts are there. Perhaps channeling or directing of these efforts has not been done in the right pitch. We are in the 21st century and we have to be more focused. We need to put our infrastructure right. Little things like sanitation, cleanliness, good roads go a long way in a traveler’s perception of the country.

What Nepal is doing from an international perspective is tremendous. I’ve been to various travel shows, and have seen the effort. NTB has made a lot of good inroads and I hope they continue and are successful.

What about the markets that they are concentrating on? For example they are focusing mainly in India, Japan and Europe.

That is fine. The markets we are going to are great. These are markets that have their airlines flying into Nepal. But there are also secondary destinations which we feel are worthwhile. And now when you have such international brand names as Radisson, Crowne Plaza and Hyatt, there is absolutely no reason why we should not be collectively making sure that people are aware of high quality products available in Nepal.

Another big hotel property, Fulbari, has been in business for almost a year but it is still not doing that well. What challenges do you see for such properties?

External factors often come into fore into any business. There have been some unfortunate episodes that may have affected the tourist inflow. These situations do not last. Whatever the reason, Nepal has a lot to offer to the outside world ... any number of such properties will only enhance the tourism potential of this country.

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"Nepal is still undiscovered..."