REPORT FROM EUROPE—Talash Hotels Group is a story of desire, perseverance, mistakes, success and now a planned exit, according to Ravi Kathuria, who leads the ownership and management team along with his brother Sanjay.
Talash’s portfolio contains 13 U.K. hotels, and the company recently placed nine of the properties, with a total of 661 rooms, on the market under the Project Hermes portfolio for a guide price of £29.5 million ($38.7 million), according to JLL’s Hotels and Hospitality Group.
The portfolio up for sale includes Talash’s flagship, the Stoke Rochford Hall Hotel & Golf, near Grantham, Lincolnshire, England. Seven hotels are independents, while six are branded under Accor’s Mercure flag.
Speaking recently at the Annual Hotel Conference and in an interview with Hotel News Now, Ravi Kathuria, CEO and co-founder, said he and his brother “are both net buyers and net sellers.”
“We’re looking to sell but also coming in with a new model,” he said. “We also want to be giving back to people who now are the age we were when we started.”
The story of the company goes back to when Kathuria was five or six years of age, and his mother was a hotel dishwasher. “We saw all these posh guys coming in, when we were sitting on the steps behind the kitchen. The dream was to get some money to buy a hotel,” he said.
The brothers’ first ventures into real estate involved the residential side—Sanjay in London and Ravi in the Midlands, where the latter spent his university allowance on an apartment with his father.
“At university, my friends bought books, but I spent my educational grant money of (approximately) £10,000 ($13,128) on a flat, with my father signing as collateral,” Kathuria said. “I ended with a property that gave £350,000 ($459,480) in 90 days.”
In the brothers’ debut retail asset, their father provided £50,000 ($65,642) to fund a retail outlet in what Kathuria said was a “less-than-great neighborhood.”
“But I got my father’s money back within the first quarter,” he said. “I had some negativity, but sometimes you need that to make you focus on the positives.”
The family’s first significant setback in real estate came when the brothers bought their first hotel, the Falstaff in Royal Leamington Spa, which no longer is in their portfolio. The year was 2007, just before the Lehman Brothers collapse and the start of the Great Recession.
“Our £3.45-million ($4.5-million) valuation dropped to £1.6 million ($2.1 million) in seven weeks,” Kathuria said. “We were sold a product that we should not have been sold, but there was great team who supported us. I was naïve, but we managed to get money back from the bank.”
Kathuria said tough decisions had to be made, but ultimately they paid off.
“At the Falstaff, we had to let go of some staff, which hurt, and we decided to run the hotel ourselves, and that was where our success started as you have to know operations to succeed in hotel real estate,” he said.
The focus from that point on was to find properties that could be turned around, and then to get into the assets’ operations, he added.
Loyalty and risk
Throughout the history of the company, Kathuria and his family have learned a great deal about success in hotels, he said. The top priorities are guests and employees.
“It is important to stay current with markets and to retain a client base,” he said. “Secondly, have loyalty with staff. No one who works for us works for us because of who we are, but what we are. They are not just a number. If someone wants to leave the business, ‘Never stop them,’ I tell my managers. If they do come back, they will come back with full open hearts.
“It is not all just about higher wages and more perks; it is about the personal side.”
Talash’s headquarters has a staff of 30, while there are between 40 and 100 employees in each hotel. But Kathuria said the company is not immune to labor struggles seen throughout the United Kingdom.
“We speak to our staff about what is happening in the economy. … We have found recently we were losing staff to Germany, only because they were paying more than what we were, only 18 pence (23 cents) an hour more, nothing, but I think this is happening all over Europe,” he said.
F&B is also very weak across the country, and in hospitality in general, he said.
“Our growth is with groups, working with them directly, and directly with online travel agencies,” he said.
Kathuria said he and his brother spent a lot of time “showing our personality to our guests before we realized recently that Talash is a brand.”
Talash does have properties in other areas such as Cheshire and Scotland, but most are clustered around the Midlands.
“A lot in the Warwickshire area because I believed as a businessmen I needed to be close to the business, within a 30- or 40-mile radius, but that ended when I fell asleep while driving. The next day we hired a driver, and it is amazing how such a little thing can change everything,” he said. “We are total risk-takers, and if you do not you will not be successful, but, yes, we do take some advice. And it is about unlocking potential.”
That potential could include upstarts, such as Oyo Hotels & Homes.
“It is an innovator, not just well-funded,” Kathuria said. “They represent a real opportunity, especially for some markets in this country that do need a brand behind them. Essentially, it is a tech partner, and I would consider working with them.”