It is time for the change of guards in ITDC. This is hardly an event to talk about in normal circumstances. But, unfortunately, things are not normal in the country's largest luxury hotel chain group, boasting as many as 26 owned properties, six joint ventures and one managed hotels, mostly in prime locations. The public sector corporation's current CEO, Anil Bhandari, may not agree, its hotels division produced during the last financial year the worst performance in memory.

Its most lucrative business, operating duty-free shops in six Indian airports, is most likely go out of its hands this year after ITDC's extended contract with the Airports Authority of India (AAI) expires. And, its tours and travel division is in a mess. But, Bhandari is unfazed. ITDC insiders tell me that Bhandari, whose present term as ITDC chairman ends next month, is trying hard for another extension. And, that is causing concern to many.The first of all, the ITDC chairman got the job under highly unusual circumstances. In the Public Enterprises Selection Board test, his name was the fourth in the merit list. Yet, he got in because of a mix of his luck and enterprise. He was appointed only for two years. Subsequently, he managed a three-year extension, which expires on September 30. So far, he managed to survive various allegations of corruption and investigations into them. Like most of his predecessors, he is believed to have made strong political connections, which is common in the hospitality industry. They say the best way to reach one's heart is through one's stomach. Free dining, wining and lodging are some of the standard weapons applied to forge friendship. And, such friendship can only breed corruption. Not long ago, a Welcomgroup executive established an excellent rapport with a former prime minister by catering to the latter's culinary tastes during their innings in a state capital. When the politician moved to Delhi to become the PM, the concerned executive was soon transferred there by the company to establish its proximity to the supreme political power. Honestly, I have no personal knowledge about Bhandari's political connections. But, I am told by highly knowledgeable sources that even his departmental minister, Srikant Jena, did not find it easy to have some of his ideas implemented to improve the image and working of ITDC. Jena, also a parliamentary affairs minister, had little time to pursue the matter.

A disinformation campaign is already on about ITDC's "excellent performance." The campaigners say the corporation's hotels division had earned a pre-tax profit of Rs 45 crore out of the division's turnover of Rs 200 crore. Thus, the profit as a percentage of turnover is very attractive. They also site the example of the fantastic profit earned from the six airport duty-free shops at Mumbai, Delhi, Calcutta, Chennai, Trivandrum and Goa. The pre-tax profit was close to Rs. 30 crore out of the turnover of Rs 78 crore. But, what's not being told is ITDC's lowest ever room occupancy rate at below 50 per cent, last year. Other competitors like the Taj group posted a turnover of over Rs 600 crore and Oberoi over Rs 440 crore. Taj's pre-tax profit was over Rs 200 crore and Oberoi's over Rs 154 crore. Even a single hotel unit like Hyatt or ITC's Maurya Sheraton in Delhi earned as much profit, if not more, as ITDC's 33 hotels put together managed to do. Even Taj Bengal, a comparatively new hotel, had reportedly made a profit of Rs 22 crore.

In terms of the variety and stocks, ITDC's duty-free shops in Indian airports are probably among the worst if compared with those in Dubai, Singapore, Bangkok, Hong Kong and Colombo. Both the business and profit potentials are very big. But, insiders allege that "constant leakage" from these shops are preventing their business growth. I am told some of the global players are interested in running these airport duty-free shops in India and offered `excellent terms' to AAI for the contract. As for ITDC's business through Ashok Travel & Tours, I am told its PBT, last year, was a measly Rs 30 lakh against the turnover of Rs 23.65 crore.

Fortunately, for Bhandari and most of his predecessors in ITDC, the management efficiency did not appear to be an important criterion for holding their office. Last week, a top Taj group executive told me in Calcutta that the biggest challenge in the hotel business is "to continuously stay young while its managers grow old." A successful hotelier must try to constantly implement trendy and innovative ideas to attract customers used to glamour and paparazzi. The concept is practically missing in ITDC hotels. A visit to ITDC's most prestigious property, Ashok Hotel, in New Delhi says it all. Senior executives are interested more in pleasing important politicians and bureaucrats than the guests who pay good money. Some of these executives and unit heads have established strong political connections.

In the past, the government tried to bring in professionals like Ram Laxman and Rajan Jetley from outside to head ITDC. But, they were unable to adjust themselves to the new environment, to befriend politicians and bureaucrats for their survival. Jetley tried seriously to change the culture and achieved some success in this regard, but left soon for a more attractive assignment in Air-India when he found how difficult it was to change things in ITDC. Paradoxically, the government today is talking about selling its majority stake in ITDC. It is like a man selling his every material possession to take Sanyas to teach a lesson to local burglars. Are there no level headed people in the United Front and the opposition to save an institution like ITDC built in the Nehru era in this 50th year of India's independence? Shouldn't they join hands to protect this highly potential business legacy from political manipulators? The simplest way to begin the exercise is to make sure that politicians and bureaucrats pay for their meals in ITDC. And, not vice versa.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.