CGH Earth Swears by Conservation as Business Strategy

Kochi: Truly incredible! The journey of CGH Earth Group cannot be described otherwise. Beyond hospitality business, what they practice is a unique philosophy – to extend the luxury of being local to the core. A really difficult idea to comprehend, but for members of the first family of hospitality in Kerala, it is in their blood.

The story began way back in 1988. While on a holiday in Lakshadweep, the then Prime Minister Rajiv Gandhi decided to privatise the picturesque Bangaram Island. Leading hotel brands submitted proposals quoting crores of rupees to develop the Island as a destination in a phased manner. But, in October 1988, the authorities gave the go ahead to a proposal which said: “Keep the Island as it is; don’t spoil it with a hotel.”

Of course, responsible tourism was something unheard of in this part of the world then. The term luxury soon got a new definition in hospitality industry. The tariff of the hotel matched the premium price in India at that time. But, its marketing brochures proclaimed: ‘There are no telephones, TVs, newspapers, air-conditioning, hot water, room service, multi-cuisine restaurants or swimming pool.’ Apparently, it was trying times for the Group. What gave them confidence to move ahead with their ethos was the response of the people who came back after their first visit: “Keep the property as it is, even if the price is increased.”

The rest is history (see timeline). Now, after 27 years, the industry is emulating what CGH Earth Group has stood for in different ways. For CGH Earth, the journey continues strictly adhering to its core value of ‘being with nature.’ It now owns 17 eco-luxury properties – nine destination hotels in Kerala, two in Pondicherry and one each in Tamil Nadu and Lakshadweep and two wellness centres each in Kerala and Karnataka. With an inventory of 350-plus rooms, CGH Earth has a turnover of Rs. 110 crore and staff strength close to 1,300.

Into its 61st year in hospitality industry, CGH Earth Group is now in the process of restructuring the family business under a mother group to be called ‘The Dominic Brothers.’ In an exclusive interview with Destination Kerala, members of the second and third generations of the renowned Kuruvinakunnel family field questions on the imminent business expansion, their future roles and responsibilities and how to sustain the unique hospitality model they pioneered in the changing times.

Excerpts from the interview

How are you going to transform your family business?

Jose Dominic: Family business must transform itself. We have to induct capital and talent. Everything should be done in a professional way. Now that our next generation has joined the business, it is time to take brand CGH Earth – which is unique and still young – to pan India and global levels. Coming under a larger umbrella, to be known as the ‘Dominic Brothers,’ we will have different business units – hospitality, air catering and property development. Hospitality will further be divided into destination hotels and wellness centres. All new properties will have professionals in key positions. Members of the family will take the role of entrepreneurs of separate businesses. We are in the early stages of this process.

Thomas Dominic: The plan is to expand our footprint to other Southern States like Karnataka and Tami Nadu, and to go north-west and north-east. We are looking at destinations like Madurai, Trichy, Tanjore, Rameshwaram and Nagercoil in Tamil Nadu, and Belur, Hampi and Halebidu in Karnataka.

Michael Dominic: We are planning to raise capital through private equity (PE) to make this expansion plan a reality. We have been moving ahead with the support of smaller bank loans so far. But to create larger infrastructure, we require bigger capital investment. We will start by sourcing private equity to the tune of Rs. 300 crore for three projects – Tanjore, Rameshwaram and Hampi – and will finally go for an initial public offering (IPO) in seven years. There is a timetable for this. We have begun talks among the core group. We also need an agreement among the shareholders.

George Dominic: The Group actually stumbled upon the air catering business, Casino Air Caterers and Flight Services (CAFS). We started in a small way and later moved to Nedumbassery (Kochi International Airport). Now, we have presence in Kochi, Kozhikode, Chennai and Mangalore. We will open a new facility in Jaipur shortly. The plan is to open 10 facilities in the next 24 months in tier two and tier three cities. When we inherited some property from our late father, three of us – Jose, George and Thomas – ventured into property development – JGT Living Spaces. Once the project was over, we made that a part of our corporate business. That will be a new growth engine for the Group.

How is the succession planning happening?

Jose Dominic: Each of them has got specific portfolios and they will report to the respective head of operations. In that way, we are working on areas in which we have to infuse professionalism. We are strongly convinced that our family business will become highly successful. Each member of the family is going to be a resource. The advantage that I have as a family member in the business is that they will not quit and run away.

George Dominic: With the entry of the next generation there came the ability to think out of the box. That is the biggest gain that we have had. The opening of Curry Tree restaurant is the best example. If they were not there, we would have definitely missed such great opportunities.

The Confident Gen Next

Mridula Jose: The company is futuristic and the brand itself is so ahead of its times. Being involved in product development, part of my role is to question everything, to take diverse perspectives, look for various options, and in that way, there has been quite a lot of brainstorming too.

Dominic Joseph: Food is something I have ventured into and I am a trained chef. CGH Earth is a great opportunity and it has very good concepts. After being in the US for six years, I thought I would bring back my ideas to help the business.

Joseph Dominic: I have been associated with the family business for the past six years. And, I look after projects and maintenance and am in-charge of the Pondicherry and Karaikudi properties. It is a knowledge-sharing phase. There is not much of a generation gap.

George Joseph: Having completed my F&B studies from IHM, Aurangabad, I joined Spice Village, Thekkady. Now, I am the GM of Casino Hotel, Willingdon Island. I am focusing primarily on managing operations.

How do you plan to sustain this unique model of hospitality?

Jose Dominic: CGH Earth is not just brick and mortar. It is entirely a new philosophy. We believe luxury is not about ostentation but rather experiencing a truly memorable holiday. For us, staying local and providing experiences which are as local as possible are the most important things. We took a philosophical position that the customer is not the king but the environment. After that it’s the local community of each destination. We are reiterating and revalidating the values of the community by adopting their architecture, lifestyle, cuisine and providing employment to the local people. Just like the Catholic Church and the Communist Party, we take ownership of the philosophy that we have adopted and we also share it.

Be it domestic or inbound tourists, we are seeking the Alert Independent Traveller (AIT). The AIT exists in every individual; the sense of inquisitiveness to find the unexpected and quest for a sense of wonder. We stumbled upon this construct by Danish professor Peter Aderhold who did a survey on why people chose a particular destination for holidaying. He then put tourists in two different baskets. One was the ‘SSS’ – Sun, Sand and Surf; and the other was the AIT. His survey revealed that 90 per cent of the tourists fall in the SSS category while AIT and others contributed 5 per cent each. Since we have such a spontaneous destination here in Kerala, we realised that the AIT construct will give rewards. For the SSS, we need to be highly developed and robust in infrastructure facilities, which we are not. Now we have realised that there is enough five per cent out there to meet our growth requirements.

George Dominic: On the marketing side, non-negotiation of tariff was the cornerstone of success for CGH Earth. When CGH Earth came in, the price we fixed was what we believed we should get. At that time, selling of rooms was based on who could offer better price. We also took a very bold decision to stay away from rewarding the best performing tour operator or travel agent. Be it a big travel company or someone who takes one room in a year, we charged the same rate from both of them. Hence, we always ensured that there was a level playing field.

Sidarth Dominic: Except Eighth Bastion, we follow ‘own and operate’ model in all our properties. Either we own the property or take it on lease and we operate them. However, we only operate Eighth Bastion wherein we are being paid a fee. Going forward, that will be our business model and we are in the process of understanding this model, which is the most followed global model.

 In your interview to Destination Kerala earlier you said tourism is the only alternative left for Kerala. How do you assess the situation now?

Jose Dominic: That position only gets reiterated. You know, Kerala’s foray into tourism began in the early 1990s. Till then tourism in India remained confined to the golden triangle – Delhi, Agra and Jaipur. However, in Kerala, tourism was considered to be a kind of embarrassment, luxury, bourgeoisie activity and something that does not fit in to the development agenda. But, as time passed, tourism proved to be otherwise.

I said it then and I say it now that the Red has made Kerala Green. It has kept the smoke stacks out of the State. Kerala remained less polluted, socially integrated and agrarian. Therefore, it has made Kerala available for new industries of which tourism is one. The State Government’s role has been quite extraordinary. In the initial growth stage, Kerala was a destination created by small entrepreneurs. This went side by side with the State Government’s strong promotion of the destination.

Regulatory Hurdles

Surely, our model is capable of explosive growth. And, we think Kerala is the best basket. But we are planning to explore other States that are more accommodative and more facilitating than Kerala.

Liquor policy is seriously impacting Kerala. MICE tourism is out of question. The 10-pm closure of bars is ridiculous. Now, you give beer and wine licence for hotels which are not five-star. It is slap on the face of Kerala entrepreneur. That means you are supposed to build only five star hotels if you want liquor licence. What is the logic? If you are trying to become Goa, you are dead. Kerala is Kerala because of the strength of the uniqueness of its offering. ‘Keralathinte Thanima’, the originality of Kerala; that is not five-star. Hopefully, the Supreme Court will save the tourism industry in Kerala.

George Dominic: Kerala is also one of the highest taxed States in India. So, the dependence of government on Kerala tourism for development is very high. Yet, it does not get half the priority which some of the other sectors are receiving. It is tourism which proved that Kerala also can. It is only tourism which has created jobs in villages, cities and in the backwaters. However, the politicians are not aware of the role tourism has played in the development of the State. Here, the battles are being fought not against market rivals but against your own policy makers.

CGH Earth Growth Story

1954: Dominic Joseph Kuruvinakunnel, 34, ventures into hospitality sector as Manager of the Malabar Hotel, Willingdon Island, Kochi.

1967: Dominic Joseph builds Casino Hotel in Willingdon Island, Kochi with 32 rooms.

1977: Jose Dominic, Dominic’s eldest son, a chartered accountant working in Mumbai, returns to assist his father run the hotel.

1988: Casino Group sets up hospitality facility in Bangaram Island, Lakshadweep with a loan of Rs. 25 lakh from the State-owned KFC.

1991: The Group expands by setting up Spice Village, Thekkady, a mountain tribal village reimagined for the AIT.

1993: Launches Coconut Lagoon in Kumarakom and Spice Coast Cruises on Vembanad backwaters.

1996: The first beach property of the Group, The Marari Beach Resort, comes up at Mararikulam.

1998: Resurrecting a Victorian shipbuilding yard, the Group opens Brunton Boatyard Hotel at Fort Kochi.

2004: Casino Group of Hotels announces rebranding to CGH (Clean, Green, Healthy) Earth.

2005: Introduces first exclusive wellness destination Kalari Kovilakam, Kollengode.

2007: Ventures into Tamil Nadu, opens Visalam, a 15-room heritage property in Chettinad.

2008: Enters Karnataka by opening SwaSwara Gokarna, an idyllic beach resort.

2010: Enters Pondicherry with Maison Perumal, a restored Brahmin residence on Perumal Koil Street.

2015: The number of properties climbs to 17 with the launch of Beach Gate Bungalows in Fort Kochi and Vanavasa at Brahmoor in North Karnataka.

The First Family of Traditional Kerala Hospitality

Jose Dominic

MD and CEO, 64

Truly an AIT. Loves experience holidays but hates ostentation. Among his countless travels across the globe, cherishes his trip to Nagaland and Manhattan the most.

George Dominic

Executive Director, 61

Loves to travel in the company of friends. Tasting wine from around the world is his hobby. Also, likes to enjoy different varieties of cuisines while travelling.

Thomas Dominic

Director – Projects, 58

Loves travelling to Eravikulam, Lakshadweep and Leh as he feels nature is still in the purest form there. Outside India, he likes to visit Bali again and again.

Michael Dominic

Director – Finance & Operations, 49

A typical AIT. Interested in nature holidays to remote locations. Of the destinations covered so far, he enjoyed Eravikulam the most.

Sidarth Dominic

Director – HR, 47

Loves to travel to places where nature is still pristine. Passionate about trekking in the Himalayas. Italy is his favourite international destination.

Mridula Jose

VP – Product Development and Marketing, 35

Always open to new concepts of travel holidays. Loves to learn about different cultures. Planning a trip to Peru.

George Joseph

AGM – Operations and GM – Casino Hotel, Kochi, 32

Loves adventure holidays. Likes to meet and interact with people on travel. Cherishes his trips to Cuba and Bali.

Dominic Joseph

AGM – F&B, 32

Foodie. Always combines holidays with food. Loves to travel wherever there is good food. In search of new and different types of culinary preparations.

Joseph Dominic

AGM – Projects, 31

Generally prefers to spend holidays in metros but loves experience holidays as well. Enjoys spending time in Dubai and cherishes travelling to Bali.