Abad: A Hospitality Brand for All Seasons

Kochi: Kerala, God’s Own Country, is a kaleidoscope of bewitching beaches, exotic hill stations, vibrant wildlife sanctuaries, serene backwaters and bustling, yet calm cities. However, there are only a few hotel chains that have presence in all these destinations. And, Abad Hotels & Resorts is one among those which touches almost all these tourist hotspots. One would expect the owner of 11 hotels and resorts to be overweening and effusive about the business and his achievements. But Riaz Ahmed, MD, Abad Hotels & Resorts, is unassuming and soft-spoken. Clad in a striped blue shirt and sporting a disarming smile, he sat in his modest wood-panelled office on the first floor of Abad Plaza in Kochi and answered our queries with sincerity and conviction.

The son of a seafood merchant who made a fortune in the export business, Riaz ventured into the capital-intensive hotel business decades ago without doing much homework. Thirty-five years after launching the first hotel at Chullickal in Fort Kochi, and investing around Rs. 500 crore in the hospitality/tourism sector in Kerala to-date, Riaz is now readying his 11th property coming up in Wayanad which will be launched at SATTE (South Asia Travel and Tourism Exhibition) at New Delhi in January 2018. Brookeside Lakkidi will be a 30-room property which is spread over an area of six-and-a-half acres. The Group had purchased an existing property and is refurbishing it into a breathtakingly beautiful resort at an investment of Rs. 18-20 crore.

Riaz Ahmed, MD, Abad Hotels & Resorts, is the son of a seafood exporter who ventured into the capital-intensive hotel business without doing much homework. But he never had to look back. However, in the process of setting up properties one after the other all over Kerala he made it a point not to compromise on values like quality and customer care. As the head of one of the most popular brands in hospitality in Kerala, Riaz opens up to Destination Kerala on the group’s journey so far, future plans including going for an IPO, challenges posed by ‘over-tourism’, impact of GST and a host of other issues.

Riaz belongs to the Memon community, who had to leave their homeland Kutch in Gujarat following a drought in the early 19th Century. His grandfather, Osman Mohamed Hashim, started focussing on fish products and established Abad Fisheries in 1931. The Abad saga began when the first consignment of sun-dried shrimps was sent to Ceylon and Burma, then a part of British India. “The name Abad, which in Urdu means ‘prosperity’, was actually the telegraphic code assigned to the maiden venture, Ibrahim Mohammed Hashim and Brothers,” says Riaz. Though the going got tough for the export company during the Second World War, when a shipload of consignment was bombed at sea, it managed to bounce back and scale new heights. Much later, the fourth generation took over the reins of the business and the Group began to diversify into new domains. The first step in this direction was the setting up of Hotel Abad at Chullickal in 1982. That was followed four years later with Abad Plaza at the then 70-feet road (MG Road) in 1986, and 12 years later with Abad Atrium in 1998.

“The hotel in Chullickal was a bold initiative, which was started with the aim of providing accommodation to people visiting Mattancherry and Fort Kochi areas. The Group had managed with internal cash flows till the opening of Abad Plaza, and as we started to expand the hospitality business, we had to depend partly on borrowed funds,” Riaz reveals the Group’s story. In 2000, Abad Hotels & Resorts took on lease Copper Castle in Munnar and Palmshore in Kovalam, and when the lease expired, acquired its own property ‘Harmonia’ in Kovalam in 2008. In 2015, Abad picked up Copper Castle from Mather Group and invested in refurbishing the property. Abad is the pioneer of computerisation in hotel industry in Kerala and was among the first hotel chain that had computerised the Central Reservation System (CRS) and set up Channel Manager for linking reservations and online portals. Riaz says he is happy about the Average Room Rate (ARR), which is marginally climbing, and average occupancy above 70 per cent with steady F&B revenue.

Launched as part of diversification of family holdings beyond the seafood business, Abad Hotels & Resorts now brings in more than 50 per cent of revenue for the Group, which also owns Abad Fisheries and Abad Builders.
Abad Fisheries is one of the largest processors of quality quick frozen seafood in India with 11 accredited and certified factories with production capacity of 300 MT per day and four public cold stores with a capacity of over 12,000 MT.

The first real estate project of Abad Builders was a six-storey apartment complex with 12 units built on 15 cents of land at P T Usha Road, Ernakulam, in 1995. In the last 22 years, Abad Builders has delivered over 4 million sq.ft. of premium living spaces across 37 completed projects serving 3000 happy families. The Group has around 1,600 employees, of which over 500 are with the various hotels, 77 with Abad Builders and 1000 with Abad Fisheries.

Riaz has served as President of Indian Chamber of Commerce, Chairman of Federation of Indian Export Organisation, Kerala and President of Kerala Travel Mart (KTM) Society. Interested in charity and social work, Riaz is the General Secretary of Kerala Muslim Educational Association, which runs several professional educational institutions, and the Trustee of Abad Charitable Trust.

Excerpts from the interview with Riaz Ahmed

You have created several sought after properties, each with a different feel. What is your success mantra?

Undoubtedly, we can say that it is the personalised service that we offer at each and every property which makes it more special. Since it is a service industry, the success depends on the approach of the employees, right from the security guard to the bell boy to the manager to the owner. We make sure that our ideas are communicated properly to the employees and also provide proper training to them. We ensure that the customer gets more than what he or she pays for. The success of Abad is the result of the values enshrined in its corporate culture which include zero compromise on quality, commitment to offering value for money and unyielding emphasis on customer care.

The lion’s share of online reservations of most of the hotels comes through third-party travel sites compared to the ones made through one’s own website. How do you see the role of travel aggregators?

We have allotted some rooms of Abad Pepper Route in Fort Kochi to OYO and Airbnb. The three-bedroom Abad Serviced Villa at Light House Beach, Kovalam is also marketed by Airbnb. Any online aggregator can sell our products at our rate. Our channel manager makes sure that they do not undersell them. Now, around 30 per cent of bookings are made through online route. In the long run, it may become 100 per cent and transform the entire booking pattern. But at present, there is space for group bookings and packages since many travellers, especially those from Gujarat, have special requirements to be met, which can be managed only on an individual basis. We cannot depend on a single source any more. As far as hoteliers are concerned, aggregators are helpful.

What are the needs of today’s guests compared to those when you first started? Has the growing global economy changed aspects related to F&B and hospitality experience?

Thirty five years ago when we started, travellers had fewer choices. They would come and take whatever was available or book a property which was more convenient or the one which looked good. But the travellers of today are totally different. They are aware of the latest trends in hospitality and they visit review sites before booking a hotel. Hence, it is of utmost importance that we maintain a good, positive online reputation to succeed in this business. Customer reviews are very important. There are a lot of honest and genuine reviews happening, but at the same time some of the travellers are taking it as an opportunity and threaten hoteliers that they would do harm by posting negative remarks/reviews if not granted freebies, which is an attitude that needs change. The guests’ tastes have become more sophisticated. Value for money is the buzzword now. People are expecting more than what they pay for. For example, for an average customer, free WiFi is no longer a luxury. It is important for the hospitality industry to grow and meet the expectations of tech-savvy travellers.

Greek island of Santorini, Cinque Terre on the Italian coast, Machu Picchu, Mount Everest and the ‘tourists go home’ boards in Barcelona and Spain, are all capping the number of visitors. Are the declining climatic conditions at our popular tourist hotspots a warning to go for such regulations? Over-tourism is becoming not just a sustainability concern but also a reputation issue for tourism. What can the travel industry do about it?

The reasons for over-tourism can be many; from lack of government understanding about the negative impacts of tourism to absence of careful planning. There is another side to it. Though we feel that at present there is a proliferation of rooms, the increase in room inventory will be beneficial in the long run and help the industry grow further. However, the carrying capacity of a destination plays a vital role in this. In a city like Kochi, addition of rooms will not create much issues as it may help travellers during a conference or a sporting event. However, in destinations like Wayanad and Munnar, which have low carrying capacity, it is not wise to add more high-rise buildings. It is sad there are no strict regulations in these fragile places regarding construction of resorts/hotels. Only after the entrepreneurs get all the required permissions and invest all their money to create infrastructure, they are served notices to demolish or reconstruct the erected buildings. This is not the right way to deal with it. There should be strict regulations which do not allow buildings of more than two storeys to come up in Munnar, Wayanad and Thekkady. There may be limitations for the government to take such measures. So it is better to have a special body which can take such decisions and make sure that the stakeholders follow them.

Too many tourists impact the environment and nature badly. Responsible Tourism is a wonderful concept, but we have failed miserably in taking the message to the general public. As part of the nine-point agenda of KTM, we are engaged in beach cleaning activities extensively in Fort Kochi, Varkala and Kovalam. However, after cleaning the premises if we return the next day we can see heaps of waste and sewage in the area. This needs to be addressed. The government should give proper training to the general public and create awareness about the need to keep public places clean and respect nature. Though we know that plastic is harmful, we still are not able to get rid of bottled water. Unlike the Western countries, which guarantee the quality of tap water, we are still not in a position to convince the tourists and the locals that our tap water is safe. Waste management and sewage treatment are urgent areas that we need to address on a war footing if tourism industry has to survive.

What are your expansion plans?

Abad Hotels & Resorts has plans to launch three more properties in the next five years and go public in the same time span. The hospitality division also intends to open serviced villas at smaller niche destinations across Kerala.

The last few years have been very difficult for the hotel industry with several midscale and upscale hotels slipping into the red. Is the situation improving or can we expect more blood letting?

Abad was not affected much during the liquor policy flip flop, but there was a nominal loss in the business because of the overall drop in MICE bookings. Kerala has great potential. Around 80 to 90 per cent of our business comes from domestic tourism, and looking at such a big market anybody can easily say that the future of tourism in Kerala is very bright.

We have excellent officers in Kerala Tourism like V Venu IAS and P Bala Kiran IAS. They are committed, knowledgeable and, more importantly, willing to interact with the people in the business. They are actively involved in all the activities, including the KTM. This unity and understanding and supportive ecosystem are the major factors behind our success. Compared to other state governments, our Government has performed well and supported the industry players with all its might. The current problem is that we have given a lot of expectation to the travellers and we could not live up to that.

In your view, how is GST and demonetisation impacting business?

We are a cash-based economy. Nowhere in the world one would get to see 28 per cent GST on food. Though it has been reduced to 18 per cent, I feel that perishable products like food should not be taxed more than five per cent. When we talk about the high GST rates, those who speak for it come up with suggestions like we can claim reverse input credit. But how are we going to get reverse input credit for food, labour, gas cylinders and vegetables? In this context, there are higher chances of food prices going up.

Demonetisation was a failure with no sufficient proof of black money being brought back to the economy. It would have been better if it was done in a gradual manner. People would have accepted it in a more sensible way. Rather than demonetisation it is demonisation that is happening now, which is more dangerous.

How do you manage to recruit the right employee?

It is hard to find and recruit quality employees who meet the skill requirements for their position, and those who are willing to stay for a long term. Without an available source of skilled and unskilled labourers, we will struggle to reach our business target. Abad also runs Sterling Institute of Hotel Management, which was established in 2004. Sterling offers a three-year graduation course affiliated to Annamalai University and a one-year diploma course. Those students who join us after studying at Sterling also, serve only for a short period, learn the required skills and then opt for a job abroad. There are plenty of opportunities for hotel management students in IT, cruises and other allied sectors. Today, it looks like we are training them to go abroad and make a fortune for themselves!

How does a day in your busy life look like?

My day starts at 6 am with the daily prayer, exercise and a session of brisk walking. I read daily newspapers and watch news on TV channels before going to the office at 8.30 am. Normally, I return from the office at around 7 pm. After reaching home, I spent some time with the family and watch TV news and discussions. I also spare some time for reading, checking mail and preparing for the next day before going to bed.

Riaz uncle is a great human being and has always been a mentor to me. Though I have done my MBA, all what I have learned was through his mentorship. Assisting him in almost all the meetings and events – both domestic and international – have helped me a lot in handling clients, stakeholders and employees. He has always advised me to be conservative in business approach and collaborative with the team. I started working with him almost eight years back and there’s still lot left to learn from him.
Jibran Asif
Director, Abad Hotels & Resorts

Hospitality Bouquet

  • Abad Turtle Beach at Marari in Alappuzha has 29 premium cottages sitting adjacent to the sandy beach.
  • Abad Copper Castle in Munnar has 40 rooms offering breathtaking views of the Kanan Devan Hills.
  • Abad Whispering Palms at Kumarakom, located right on the banks of the Vembanad Lake, has 53 garden and lake-facing suites, cottages and three bamboo villas with private pool. It is a Greenfield property and has received Pollution Control Board awards for two consecutive years.
  • Abad Harmonia Beach Resort at Chowara in Thiruvananthapuram has 35 rooms and cottages with all modern amenities. The Green Leaf-certified ayurvedic centre provides authentic wellness and treatment solutions.
  • Abad Metro in Kochi is a true business class hotel which has 37 rooms and a multi-cuisine restaurant.
  • Abad Green Forest in Thekkady has 38 jungle rooms and 12 jungle cottages. The Golden Mile, the path that leads to the sanctuary, starts from Green Forest.
  • The flagship hotel of Abad Group, Abad Plaza, located in the heart of Kochi, has 80 elegant rooms and a rooftop pool.
  • Situated adjacent to Abad Plaza, the Abad Atrium has 52 centrally air-conditioned superior rooms. The rooms surround a central atrium with capsule lifts providing the ambience of a garden hotel.
  • Hotel Abad at Chullickal in Fort Kochi is the first hotel launched by the Group in 1982. The hotel has 19 guest rooms and a specialty seafood restaurant.
  • Tucked away in a quiet corner of the heritage area of Fort Kochi, Abad Pepper Route is a 10-room bed and breakfast hotel with a warm and friendly ambience.
  • Abad Serviced Villa at Light House Beach in Kovalam is a bed and breakfast concept hotel.

ABAD FISHERIES

Established in 1931, Abad Fisheries is today a leading processor and exporter of frozen seafood. In the 60s, the company moved from canned shrimp to frozen seafood and, from contemporary block freezing technique to IQF products in the early 80s. It shifted to fully panelled and air conditioned factories with in-house pre-processing facilities in the early 90s. It exports the widest range of high quality crustaceans, cephalopodes, molluscs and other fish products. ‘‘With newer methods of freezing, storage and transport, we have kept pace with the trends in business and grown to become one of the top exporters of seafood. When I joined my family business in 1970, India’s exports stood at Rs. 50 crore. Now, it has touched Rs. 40,000 crore employing around three million people across the country,’’ says Anwar Hashim, MD, Abad Fisheries. A school for promotion of best practices in the seafood industry in collaboration with the UK-based Billingsgate Seafood Training School of Fishmongers’ Company is also being run by Abad. Wild Fish is the newest addition to the basket.

ABAD BUILDERS

Founded in 1995, Abad Builders is Kerala’s first CRISIL-rated real estate developer with ISO 9001 certification and ISO 14001 certification for Environmental Sustainability. Under the enterprising leadership of Dr. Najeeb Zackeria, MD, Abad Builders has become a brand name that is widely relied upon in land identification and acquisition, project planning, marketing and execution. Having completed 34 projects with a built-up area totalling over 4 million sq. ft., Abad Builders continues to stand at the forefront of Kochi’s real estate market. Abad constructed The Bay Pride Mall in Kochi in 2005, which is the first mall in Kerala. The company also has dedicated divisions for property management and interiors. “Every Abad property comes with a great location, high resale value, serene neighbourhood, best of amenities, tastefully laid out landscapes, and flawless design and architecture, all of which spell a quality living space that is not just a home but a complete way of life”, says Dr. Najeeb.