Companies

Tatas never say bye

Amrita Nair Ghaswalla Mumbai | Updated on November 17, 2017 Published on October 23, 2012

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The Indian Hotels Company’s unsolicited bid for US luxury hotels group Orient Express Hotels for $1.8 billion appears to have its moorings in an incident dating back to 1903.

A corporate anecdote goes that frustrated at Indians being denied entry into British-only luxury hotels, Jamsetji Nusserwanji Tata decided to build the first Taj hotel in Mumbai in 1903. Today, luxury and opulence are a given at the Taj Hotels Resorts and Palaces, that comprise 93 hotels across India, and 16 international locations.

Orient-Express Hotels owns and manages a chain of 46 luxury hotels in the US and Europe. Friendly overtures by the Tatas for the last five years have now resulted in a bid.

The Tatas have always responded, in a positive manner, to perceived slights to its ability to run the world's most prestigious brands - be it the Jaguar buy or the Orient-Express.

HOTEL SAGA

In 2007, when Orient-Express told Indian Hotels, which owns the Taj hotel chain, that its friendly overtures were unwelcome and potentially damaging, it led to an international uproar, provoking cries of racism from R.K. Krishna Kumar, Vice-Chairman, Indian Hotels.

The letter dated December 10, 2007, was written by Paul White, President and CEO, Orient-Express Hotels.

Speaking to the Time magazine then, Krishna Kumar said: “Paul White could not possibly have drafted (it)... I came to the conclusion that the person who drafted this letter needs counselling”.

White had written, “...we do not wish to be involved in an attempt to improve the performance of your non-Indian properties.

“We believe any association of our luxury brands and properties with your brands and properties would result in a reduction in the value of our brands and of our business...”

JAGUAR PLAY

Also in 2007, Jaguar’s US dealers had opposed even the idea that Ford, Jaguar's owner, could sell the British luxury car brand to an Indian firm, with most insisting the sale would hurt Jaguar's image.

Ken Gorin, Chairman of the Jaguar Business Operations Council, told the Wall Street Journal, “I don't believe the US public is ready for ownership out of India of a luxury car make. And I believe it would severely throw a tremendous cast of doubt over the viability of the brand.”

Though both the Orient-Express and Jaguar's Gorin emphasised later that their judgments were based on business strategy alone, the damage had been done.

Denied entry to the luxe set once again, the Tatas are taking the rebuttal as a challenge, making a second pass for Orient-Express’ famous European railroad line, as well as its swanky hotels, including Rio de Janeiro’s Copacabana Palace and Venice’s Cipriani Hotel.

ALSO READ: >Orient-Express: UK’s Reuben Brothers may counter Indian Hotels bid

>amritanair.ghaswalla@thehindu.co.in



Published on October 23, 2012
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