In 1922, a twenty-three year old boy was standing in front of Cecil hotel in Shimla. He wanted to work as a clerk in that hotel. But due to his appearance, the hotel guard didn’t even allow him to enter. At that time, nobody would have dreamed of this boy not only becoming the owner of this hotel in the future, but building one of the most luxurious hotel chains of India. This is the story of The Oberoi Hotels.
In the year 1898, in the undivided India’s Punjab province was born Mohan Singh Oberoi. He was just six months old when he lost his father in an epidemic. In spite of that, Mohan’s mother ensured that he received education. At the age of sixteen, he went to Lahore for his college education and joined DAV college. And there, two important things took place in his life. First, he learned to communicate in English, and second, he got a part-time job in a shoe factory.
With time, he developed a deep understanding of design and production process. First, he became a supervisor from a nromal worker and then rose to a full-time managerial position. Rising from poverty, Mohan felt that his life has settled now. But then, the story takes a twist. Protests started in entire India against the Rowlatt Act implemented by the Britishers, which negatively impacted many businesses.
After struggling for a few years, the shoe factory also shut down in 1922 and Mohan became unemployed overnight. Coincidentally, during these times, Mohan got married to Ishran Devi and was the father of a newborn girl. Hence, Mohan was desperately looking for work. At that time, he decided to relocate to a city which was to transform his whole life. And that city was Shimla. Shimla used to be the capital of the British India during summers.
Due to which, high-ranking officials and tourists used to frequent there. Hence, it was a perfect city to search for work. But unfortunately, Mohan got rejected in his very first job interview in Shimla. He was walking in disappointment when he found himself in front of a magnificent building. He had arrived at the Cecil hotel, the most popular hotel in Shimla. He saw the high-profile guests and top-notch staff there, after which he was determined not to leave Shimla till he got a job in Cecil.
He took a deep breath and began to enter with confidence, but the guard of Cecil ddn’t let him inside due to his appearance. But Mohan was not going to give up so soon. He waited outside the hotel till the hotel manager came out. As soon as the manager came out, Mohan went up to him confidently and said, “I am looking for a job, sir. Do you have a vacancy at the Cecil?” The manger was deeply impressed by Mohan’s English. The very next day, he got a job in Cecil hotel as a clerk with fifty rupees per month salary.
Mohan’s main responsibility in Cecil was to manage coal supply and stock. Soon, an idea occured to him that a lot of hotel’s money can be saved by using coal dust balls. Not only these balls are cheap, but they can also keep boilers working whole night due to their slow burning characteristic. And water can be heated quickly in the morning just by adding some normal coal. He implemented this idea and the hotel made a huge profit.
Besides this, Mohan also knew typing and shorthand writing. Soon, he started assisting the manager in documentation and letter writing. Seeing all this, the manager promoted him to Guest Clerk and increased his salary too. In Cecil hotel, usually only VIP guests used to come. Mohan used to observe the behaviour and preferences of these guests deeply. Along with this, he had taken many other responsibilities, such as the responsibility of a cashier. This gave him a chance to interact with the guests personally.
Due to all this, by 1925, not only he had become an expert in dealing with the VIP guests, but he had also developed a deep understanding of all the operations of a hotel. Meanwhile, Cecil’s manager decided to purchase his own hotel. He bought Carlton Hotel in Shimla itself, having fifty rooms. Since the manager’s name was Clarks, he renamed the hotel as Clarks Hotel.
He knew that Mohan had developed an exceptional understanding of the hotel industry. Hence he offered Mohan to join Clarks Hotel but not as a clerk, but as a partner. Mohan was now to receive a small portion of Clarks Hotel’s profits. On becoming the partner, the whole responsibility of the hotel had fallen on Mohan. As soon as this happened, he completely transformed Clarks Hotel.
He immediately renovated the hotel, especially upgrading the bar, attracting young government employees. He personally connected with the British officers, inviting them to his new hotel, and offering personalised services. Finally, his wife Ishran Devi ensured that he personally brings all the hotel supplies from the market, so that there’s no compromise in the quality, quantity and price. Due to all this, the occupancy of Clarks Hotel soon doubled, reaching upto eighty percent.
Then, something happened that could’ve caused the hotel to get snatched out of his hands in a go. Clarks’ wife fell seriously ill and Clarks decided to return to England after selling the hotel in twenty thousand rupees. Mohan was very disappointed. The future of the hotel was uncertain in spite of such hard work. And he didn’t have money to purchase it himself. Seeing the situation, Ishran Devi sold her entire jewellery,.
But they still couldn’t collect sufficient amount of money. To arrange the remaining amount, Mohan took a loan on high interest rate from a moneylender in his village. The risk was very high, but he was confident that he would repay the loan by earning profits. At the age of thirty-four, Mohan Singh Oberoi had become the owner of Clarks Hotel. But along with this, he had a huge debt on him. So Mohan and Ishran Devi worked even harder than before.
And reinvested all the earnings in the hotel itself by living very frugally personally. Ultimately, within two years itself he repayed the entire loan amount by running the hotel successfully. One of the main causes of Mohan’s success was his communication skills. He had acquired a strong command over English language due to which, he was not only able to impress Cecil’s manager, but was also able to deal successfully with the guests of his hotel. And today, the importance of English for career success.
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But now, Mohan didn’t want to be limited just to a fifty-room hotel in his life. Now, he wanted to build a whole empire of the hotel business. During this, he came to know that a hotel is available at lease in Calcutta and this hotel was The Grand Hotel. With five hundred rooms, Grand Hotel was the one of the biggest and most prestigious hotel not only of Calcutta, but entire India. This was one of Calcutta’s very first buildings with a hydraulic lift.
And had hosted royal families, celebrities and dignitaries for many years. But recently, due to contaminated water, there had been a typhoid outbreak here that claimed the lives of six people. After this incident, the hotel’s reputation was reduced to dust. That’s why in 1937, this hotel ultimately closed down and its owners wanted to give it on lease. Now, Mohan had two options in front of him.
Either keep running his small hotel in Shimla without any risk, or try his luck by taking a hotel on lease that is ten-times bigger than Clarks Hotel. Mohan chose the second option and took the Grand Hotel on lease at the rate of eight thousand rupees per month. But when he inspected the hotel’s condition properly, he started to doubt his decision. Every wall inside the building was covered wtih a thick layer of dust. The paint had peeled off and the interiors were badly damaged.
The hotel needed a magical transformation in order to revive it. So Mohan took a loan once again and executed a massive clean-up operation without delay in which the hotel’s each and every corner was deeply cleaned. Interiors such as tuppers trees, gilt mirrors, marble pillars and chandeliers were restored. Finally, he personally reached-out to the hotel’s old staff such as chefs, housekeeping staff and porters et cetera and made them join the hotel again.
Because these were the people who knew the hotel the best. But one thing was still to be restored, which was the hotel’s reputation which was damaged due to typhoid outbreak. Mohan decided to totally uproot the problem. He removed each and every pipe and overhead tank installed in the hotel and installed a new, modern plumbing system. Also, he established a new practice in which he himself inspected the hygeine of his entire staff.
Early in the morning, such as nails, hair and uniform. Eventually, a word spread among people that not only Grand Hotel is offering more premium services than before, but it also is hundred percent safe. And thus, the occupancy in Grand Hotel started increasing within next two years. But as the situation started to get better, another setback presented itself, World War II. With the beginning of the war, Calcutta had become a base for thousands of soldiers of the army.
And British needed a lot of space in order to accomodate these soldiers. So, in addition to many other buildings, the British passed orders to take Grand Hotel in their possession during the war. Had Mohan lost this hotel after so much hard work and investment, he could have become bankrupt due to non-payment of his loans. So, he took courage and convinced the British general that if army managed the accomodation and food of the soldiers on its own, the army would have to spend twelve rupees per soldier every day. But Mohan could manage everything at the price of ten rupees per soldier.
Which could save the army a lot of money. Luckily, the general finalized the deal. But now Mohan had to anyhow run the hotel profitably while charging a very low price. Mohan used his brain and safely removed and stored all the all the luxurious interiors of the hotel and replaced them with sturdy and cheap interiors. He even replaced king-sized beds with camp cots. In addition to this, all the luxury services were removed.
And replaced with basic services. In order to maximize the occupancy, beds were put up wherever possible. Even corridors and courtyards were converted into dormitories. Ultimately, Grand Hotel with a capacity of 1400 people started accomodating 4000 soldiers. Which meant, a revenue of 40 thousand rupees per day. Going by all these strategies, by the end of 1945, Mohan had earned crores of rupees. And now, Grand Hotel had opened for normal customers once more.
After the grand success of Grand Hotel, Mohan had a new goal even bigger than before. Entire India. He wanted to own a hotel chain in India. So, he determined himself on acquiring Associate Hotels of India, that is, AHI. AHI owned eight most luxurious hotels of India, including Cecil Hotel of Shimla. The management of AHI had deteriorated with time and many of their hotels were in loss.
Mohan started buying the shares of AHI stragically from time to time using his profits and eventually, he acquired controlling stake. Mohan had now become owner of the eight most luxurious hotels in India, including Cecil Hotel. The same Cecil Hotel, where he was denied entry. There was only one aim in Mohan’s mind. To make his ten hotels even better than international-level luxury hotels. And to achieve this, he had an amazing master plan.
In 1952, he planned a world tour, in which his aim was to go to world’s topmost hotels and study them deeply. In this tour, he stayed in top hotels like Dorchester Hotel of London, George V Hotel of Paris, and Hilton Hotel of Puerto Rico. He used to carry a notebook and pen while staying in each hotel and took detailed notes on each hotel’s layout and operations. After studying twenty-five hotels in three months, he had collected notes worth hundreds of pages.
On returing to India, he made major improvements in everything such as kitchen layout, room design, public area design, menu design and room service of his hotels on the basis of his learnings and achieved international-level standards. In 1955, Mohan observed that there are many such historical places in India where kings and emperors once resided, but nobody resides there today. He saw a great opportunity here.
So, he decided to take these palaces on lease by negotiating with the royal families. First of all, he converted the Gulab Bhawan Palace into a hotel, which belonged to the Maharajah of Kashmir, Hari Singh. And thus, India got its first real palace hotel. Looking at his continued success, by 1970, the Oberoi Group started to feel that they have become undisputed king of Indian luxury hotel industry. But then, a group enters the story.
That emerged as the biggest challenge for the Oberoi Group. And this group was the Taj Hotel Group. Till 1971, Taj had only one hotel, their Taj Palace Hotel in Mumbai. But then, they opened their first hotel outside Mumbai for the first time. They converted Lake Palace of Udaipur into a hotel. Then, they started Rambag Palace in Jaipur. In 1976, they entered Delhi by purchasing Fonseca Hotel. In this way, by 1980s, Taj Group had opened its hotels.
In almost every prominent city of India. Oberoi knew that if they have to really pose a challenge toTaj Group, they will have to open their hotel in that city where Taj had its flagship hotel which means India’s financial capital, Mumbai. In 1970s, Mohan decided that he would build a hotel from scratch at Nariman Point in Mumbai. This hotel was to have five hundred rooms and with thirty-four floors, it was to be one of the tallest buildings in Mumbai in those times.
The total budget of the project was seven crores, but with time, the cost of the hotel reached upto twenty crores. Oberoi Group had taken a loan for this project and there came a time when the interest payments of just one day had reached upto one lakh twenty thousand. Due to such a huge financial pressure, the finances of entire Oberoi Group began to get affected and it seemed that the construction would have to be stopped. But then, at the age of seventy-two, Mohan himself.
Camped in Mumbai for six months and ensured that the hotel gets completed on time. The hotel got operational in 1973 and things started to get normal for Oberoi Group. But then, Oberoi sustained another blow. Indira Gandhi announced emergency in India in 1975 which caused an economic downturn in the country and there was a drop in foreign and domestic travellers. This impacted hotel industry the most.
The debt of Oberoi Group increased to such an extent that they faced a pressure to even sell-off their hotel in Mumbai. But Mohan did not let that happen. During this time, he noticed that a civil war has begun in Lebanon due to which many high networth individuals of Arab countries, who used to visit Lebanon for business or leisure, began to come to Mumbai instead. Mohan recognized this opportunity and prepared a master plan.
He made two hundred of his hotels staff learn Arabic by giving them a crash course so that they could communicate with the Arab guests effectively. He printed hotel documents such as room service directory, menu cards et cetera into Arabic scripts. He modified the whole food menu and added Arab dishes to it. Due to these strategies, Oberoi Hotel became the first choice hotel for the Arab guests and in a few years Oberoi not only paid-off his loan,.
But also generated huge profits from this hotel. With this success, Oberoi Group had established itself as India’s most prominent luxury hotel chain and Mohan Singh Oberoi had successfully dealt with the biggest challege of his life. He said that we should never accept anything that is second-best. And with the same philosophy, he built Oberoi Group. Today, with its thirty-two luxury hotels,.
Oberoi is not only one of India’s but world’s finest hotel chains. And the most important thing is that behind building this business empire worth thousands of crores, is a man who himself used to be a hotel clerk once. If you liked this video then I suggest you to watch this video next.
