Profit is a wonderful reason to start a business, but passion is a better one. When Aman Nath, a historian, and Francis Wacziarg, a man of many interests and owner of an apparel buying house, were collaborating on a book about Rajasthan, they came upon the ruins of the Neemrana Fort on the Delhi-Jaipur highway. Its erstwhile maharaja was desperate to liquidate his asset, and he asked the duo if they could find a buyer for the fort. They asked around, thought about it and finally decided they would buy it themselves. Nath and Wacziarg purchased Neemrana for ₹7 lakh in 1986, at a time when it certainly cost more than a Maruti 800 (the status symbol of the 1980s) but was still a darned good deal for a fort.
Both men are founder members of Intach, the trust that works for the conservation of India’s heritage, and they bought the fort primarily to rescue it from eternal ruin. The notion of converting it into a hotel and making some money from it came subsequently. It is perhaps this philosophy of conservation first and business later that makes a stay at Neemrana an event. For frequent guests at any of the group’s 25 properties, Neemrana is not a noun but the evocation of an experience so unique that it works better as a verb. “Have you Neemranad?” is how it’s asked.
At its heart, all Neemrana properties are about offering an experience that is as traditional as the building it is housed in. Meredith Abbott, the IT head of a multinational company based out of Atlanta, first stayed at the Neemrana Fort Hotel on the recommendation of her friend six years ago. “Since then, I have found myself coming back every year and staying at a different Neemrana. When I am in Neemrana Puducherry, I completely get the French ethos; when I am in Almora, I feel like I am a ‘memsaab’ on my summer break in the 1930s and so on. The properties are as multifaceted as India is, and it’s a perfect mix of big-company systems and small-hotel flexibility with real India thrown in to spice the mix up,” she says.
“We started our operations with 12 rooms after six years of restoring the façade of the fort,” says Wacziarg of the first hotel. “It took us a year to clear the rubble, in fact. Then we continued our restoration. The number of rooms increased to 18, 24 and so on. When it was all done, we started construction outside the ramparts of the fort. We built the swimming pool, the spa and the gardens. It now has about 60 rooms.”
The first few customers came mainly by word of mouth. Visiting friends would want to see what the two of them were doing with the fort and most weekends were spent picnicking in it. Wacziarg and Nath often camped there under the stars. As its rooms became
operational, friends who had visited mentioned it to their friends, and so on. Since then, Neemrana has restored 24 other heritage properties in various states of disrepair at places as diverse as Ramgarh, Matheran and Puducherry. Today, the group gets at least four proposals a week from owners of forts, palaces and traditional homes, asking if they would be interested in restoring a hotel and running it with them.
One of the reasons for the success of Neemrana — both with international and Indian tourists — is its mix of properties. Nath is well versed with north Indian style of architecture while Wacziarg understands colonial architecture that is mostly found in the south. “Also, we appeal to our target audience because I am a Westernised Indian and Francis is an Indianised Westerner. This helps us cater to the different requirements of our guests,” Nath says.
The properties are usually booked right through the winter months, which is peak tourist season for inbound visitors. Neemrana rates are mostly fixed, and even without discounts to push for higher occupancy, there is a steady stream of visitors pouring in.
Business Models
Neemrana works largely on three operational models. Most properties are not owned by the company — they are taken on lease from the owners. If the owners invest their money in restoring the property, the company gives them 20-30% of the share of profits. If the owners do not have the means to restore, then Neemrana funds the restoration and pays the owners 10% of the share of profits. “Sometimes, the owners do not have another place to live in,” says Wacziarg. “So, we also have a model where we build a house for them. In this case, we deduct the cost of that property from the owners’ share until their new house is fully paid for. The terms and conditions are fairly loose and we work on them depending on various factors.”
In the first case, the tenure of the contract is for 10 years. In the other two, Neemrana insists on a 20-or 30-year contract, depending on the amount of money that has to be invested. Nath and Wacziarg each have a 50% stake in the company. They have, so far, not raised debt but managed by ploughing profits back into the business.
Neemrana is also cognisant about the ecological cost of its business. The company not only sources most of what it needs locally, but also retails its own range of fruit and vegetable preserves in stores located on its properties and, since opening in Coorg, sells its own coffee. There’s also an exclusive retail outlet in Delhi — the idea is to market the Neemrana lifestyle.
Uncommon variety
Neemrana currently has 25 properties in 17 locations. Because the nature of the business is based on restoration rather than construction, the size of the properties is variable. The number of rooms vary from three to 60. In Kochi there are two Neemrana hotels, in Kumaon there are four and in Tranquebar there are five. The company is now in the process of restoring a palace in Tijari in Rajasthan, as well as finalising a deal to restore the ancestral home of Kerala’s father of communism, EMS Namboodiripad, near Guruvayoor.
“We don’t really go just by location,” Wacziarg says. “The hill fort at Kesroli, for instance, is not really at a tourist destination. We see pictures of these properties, read about them etc. But when we go and see them for the first time, we know in less than five seconds whether we will be taking them up or not. We have to feel that desire to restore. It is a labour of love and that is why we have not gone wrong so far.”
Seeing red
Getting the requisite government clearances, though, has been a huge challenge. “We have to get 56 permissions to get a project going,” says Nath. “It’s a full time job. I find it strange when the government says things like ‘single window’ clearance. Because, in truth, it’s like running an obstacle course.”
Corrupt inspectors are another bugbear. “We have had food inspectors come and say, ‘please come to the gate and give us our money’,” says Nath. “We don’t pay anyone money and when someone likes this comes along, I don’t shy away from calling anyone and complaining about it.”
The small size of Neemrana’s properties causes some unexpected problems. For example, it’s difficult to get high quality chefs to work in a small hotel. “Also, sometimes you find that a wall is not painted or something is chipping off in the interiors,” says Arjun Sharma, founder of Le Passage to India, a travel company that caters to inbound tourists. “You can either interpret it as a flaw or you can see it as something that adds to the charm of the place.”
Full house
When it began, Neemrana was a hotel where foreigners came to experience India. Now, as urban Indians’ desire to live a little bit of history grows, the guest profile has expanded considerably. The interest among overseas tourists continues, although the current slowdown has affected their bookings at Neemrana. But, says Sharma, many guests who have gone to one Neemrana property often want to visit others. “All clients looking to experience India find it a best fit. Also, Neemrana offers rooms at tariffs that are somewhere
between luxury and budget. Others either scream luxury or are plain scrummy. Neemrana sits perfectly in between.”
Neemrana’s turnover of ₹30 crore this year may appear modest but is quite significant for a company of its size. In any case, both Wacziarg and Nath share the belief that small is beautiful. “I once met someone from the Oberoi group,” recalls Wacziarg. “He asked me what our turnover was. At the time, it was ₹2 crore. He asked: ‘Per day?’ And I just couldn’t stop laughing when I told him tell him it was per year.”
