Published in Slogan (September 2010)
Byram D Avari, Chairman, Avari Group of Companies, provides insights into his dynamic hospitality business in this exclusive interview with Ayesha Hoda.
Please share with us the success story of Avari Group.
My father started the Avari Group of Companies in 1944 with 100,000 rupees only. He made a profit of 100,000 in the first year and decided to stay in this industry. He built Beach Luxury which became the first hotel to be opened in the country after Partition.
My father also eventually bought a hotel in an open auction in Lahore which he made into Park Luxury and then into Avari, which is there today. And then we built the Avari Towers in Karachi. We also expanded and managed two hotels in Dubai, and one in Toronto (which was closed down).
Now we also have a boutique hotel in Islamabad, Avari Xpress, which was opened recently.
What is the positioning of your hotels and how are they different from other prominent hotels in Pakistan?
We have positioned Beach Luxury as a three-star hotel. Avari Towers and Avari Lahore are absolutely five-star in terms of international standards and six-star in terms of Pakistani standards. There is no other hotel that can match these two properties here. Our business proves that we are the best.
In Dubai, we have positioned our hotels to be four-star. They are five star properties but we don’t want to have a conflict with the sheikhs who own all the five-star hotels. Xpress is also five-star property.
Considering the size of Pakistan’s population, especially its urban centres, we do not have enough hotels in the country. Why is it so?
Actually I think there are enough hotels in the country to meet the present needs. What is required now is more three-star hotels like Xpress with five-star comfort. We are going to develop such hotels in Sialkot, Multan, Rahimyar Khan, Faisalabad, Larkana, Hyderabad and Sukkur.
Do hotels always have to be expensive? Can’t we offer more affordable hotels?
No. I gave you the example of Xpress – it has five-star quality but low construction costs so low cost. We only charge between Rs 5,000-6,000.
We cut on our construction costs by not having bath tubs, swimming pools or banquet halls. There is just one restaurant and split air conditioning units are used.
How have you tackled the challenges posed by the economic recession?
We became lean and mean four months before the nuclear blast because I had the feeling that something was going wrong. We could face the economic downturn because we were already prepared. For instance, we had amalgamated positions like that of cashier and the front desk. We outsource our gardening, transport, laundry, security, etc., that is, a number of our facilities. With outsourcing you don’t have to pay the overheads which you would otherwise. Plus we economize in other ways, like insisting on Economy class for a four-hour trip. And my sons and I also travel Economy because a leader leads the pack.
What about the security concerns in Pakistan with reference to the hospitality and tourism business?
We have had to make a lot of security efforts and invest in this area, but security is never enough. There is only so much you can do.
Security hasn’t affected occupancy so much but it has affected profitability because there is a lot of cost involved in implementing such huge security measures.
What are the current trends and critical success factors in the hotel management and hospitality industry?
Our hotels are ethnic on the outside and contemporary on the inside. We closed the hotel in Karachi for three years and renovated it fully. It is like any hotel in Dubai, Singapore or Hong Kong. We have got wooden floors, glass bathrooms, free Wi-Fi (even in the swimming pool) and all the luxuries you can think of. These facilities make our hotels exceptional.
We are also building a hotel in Islamabad which will be the first six-star hotel in Pakistan. Every room is a sitting room and bedroom put together (a suite), of the topmost quality. We plan to open it by December next year.
What is the future of the hospitality business in Pakistan?
Tremendous. You see, we think of tourists only as people visiting the country for leisure purposes, which is not very frequent these days. But we need to think of developing architectural, medical, educational and other kinds of tourism. That will give a boost to the hospitality business.
How is the Dubai market different from Pakistan?
Dubai is an international market. It was a seller’s market earlier; you couldn’t get rooms. But because of the economic recession, it has become a buyer’s market. Dubai played host to the world but it doesn’t do so any more. So it has become more about killing competition.
At one time, Pakistan was much more competitive but now Dubai is really a killer.
What are your future plans for your hotel chains?
We plan to start a big development in Lahore; we will be putting up three towers once the Islamabad hotel is ready. We have got the plans ready but will only start implementing them once the six-star in Islamabad is three quarters of the way.
Abroad, we don’t have the resources to build or buy but we have the ability to manage. My only requirements are: I will not use any name apart from Avari; my parents’ photographs have to be there; and the Pakistan flag has to be there. We are a family-owned company and proud to be Pakistanis.
What qualities and education should a young man or woman have to follow a career in the hospitality business?
Everyone’s impression of a hotel is synonymous with fun and glamour. But after two months of working in the business, people realise there is no glamour and they leave. People need to be aware that this business involves extreme hard work. It is nothing like a nine to five job. You have to give a minimum of twelve hours. Then you have to smile and be genuine and interested in looking after people.
To follow a career in hospitality at the executive level, you need to have international exposure. You need to have education in the hotel business and became a man or woman of the world.
You bagged quite a few gold medals in Enterprise class yachting in the Asian Games? Do you still follow the sport?
Yes I do. My son is in England and goes for one week every month to yacht racing because he is representing Pakistan in the Asian Games in China in October. He is sailing the Olympic class.
My elder son does ocean racing. He goes in big yachts. He did one leg two years ago of the round-the-world race for three months. Last year, he made a trip to the Philippines and Hong Kong. Now he is going on a round-the-island race in England.
My grandson, who is just 16, wins one trophy every month at the yacht club while racing against us. So the whole family is involved.
Does yachting have a future in Pakistan?
Of course it has a future. The present Rear Admiral Sayyid Khawar Ali, Commander Karachi (COMKAR) is doing a great job. He is President of the Pakistan Yachting Federation. He is taking great interest in the sport and trying to develop it at all levels. He should be commended for what he is trying to do.
You were active in politics at one time? Why did you leave it?
From1982, starting from General Zia ul Haq’s Majlis-e-Shura, I have been in politics. I retired in 1994 because I decided it is politics of vindictiveness. It’s no place for a sane person to be in. But I am still the elected Chairman of the Parsi community since 1989. I have been there for 21 years and I am on a number of trusts. I do a lot of community work which gives me more strength and satisfaction.
How would you describe Pakistan’s current political scenario?
Very fragile. The trouble about Pakistan’s political scenario is that there is no tolerance. Nobody wants to work together for the good of the country.
However, right now, our economic problems are very severe which can lead to more political problems. Due to unemployment, people have moved to sub-poverty levels and this has created a law and order situation. Only if the government generates more jobs can the situation improve.