Getting the basics wrong

There is a saying in the about success in the hospitality industry -there are three things that make a hotel or restaurant successful. Location, Location and Location. But there are things far more important than that which differentiates a winner from an also ran. It’s about getting the basics right.

Over the last decade, we have witnessed numerous outlets in the twin cities which have opened up with great fanfare, only to plod along and then finally down the shutters. Why is it that the so called entrepreneurs get it wrong? To start with, many of the so called entrepreneurs are rich kids born with a golden spoon in their mouth or rich bored housewives who want to show off their business skills. They do not do any market research to start with. After all why face the unpleasant truth. It’s true that there are a few hundred people in Hyderabad who have hundreds of crores to throw away, without much of a bother. It’s these suckers who blow up all the money on hare brained ventures.

Take pubs for instance. I remember the days when one of the first pubs in the twin cities opened up in the form of 10 Downing Street in the basement of Swapnalok Complex in Secunderabad. Soon there was a Paratha Bazar next door and Beer Keller (I hope I got the spelling right) opened up in the form of an old German bomb shelter. A pitcher of beer could be yours for Rs.30 at 10D and snacks starting with the name Chicken cost as much as a packet of potato chips do. Those were the good time, no correct that – it was the greatest of times.

Then came a hare brained scheme of prohibition and 10D got bombed in the literal sense of the word. Cut to 2009 and what do you see. You are likely to see more pubs than medical shops in the twin cities. And how much does a pitcher of beer cost? Well that is almost 10 times what it cost in 1993. What are you paying that for? It’s real estate cost, stupid. You are paying for the jazzed up rents that are being charged by the snazzy pubs. This is why you find more of the young hip crowd drinking away at Sony Dhaba in Bowenpally. There are more high end cars in front of many of the dhabas on the Medchal road than you find in a pub.

Same goes for the high priced restaurants and other outlets that sell everything from designer dresses to international brands. One walk around many of the malls brings out the stark truth. Bereft of shoppers, staffs at these outlets are bored to death. Most of the outlets are just hanging around, waiting for utopian situation – an economic boom. Till then they will give you a flat 50% flat or buy one get three free offers. When the going was good, these outlets sold a shirt sourced for 300 rupees at Rs 1500. It was almost like Ford’s famous selling line – you can have your car, as long it’s black.

Which is why you still find a crowd shopping at Chermas and Chandana Brothers, and not at Benetton or a Brisah. Also why Amul ice creams sell more than Kwality Walls. This is India. Mind it.