The Accidental Hotelier
The Chairman of Shree Naman Group and part owner of Sofitel BKC on his start in hospitality.
JAYESH SHAH, the Chairman of Shree Naman Group, confesses that he got into hoteliering entirely by accident. “It was probably in 2004 or 2005, when I came to BKC. The hotel (Sofitel BKC) happened in maybe 2005-06. It happened, as in most cases in my life entirely by accident. The Accor guys were looking to put up a hotel in BKC. There was a tender which had come out. This plot (where the hotel is currently standing) was to be tendered and got cancelled. Accor went back. After a year, it got retendered and they were again very interested,” he began by telling us. By then, AccorHotels (Accor then) were making enquiries and were told the man to know was Jayesh Shah if they wanted to put up a hotel in BKC.
“This was just before Christmas. Ashish Jakhanwala, Uttam (Dave) and Gaurav (Bhushan), filled the tender without meeting each other, just while speaking on the phone for this plot, and the rest is history. They asked, Boss do you want to do it? I am a crazy guy and I said you match me dollar to dollar and we can go ahead. They said we’ll invest and then I knew this is serious,” he added.
“I was the first person to come into this (BKC) area as a developer. This area is predominantly institutions, who made offices for themselves. In 2004-5, the government for the first time, decided to allot land to developers with the idea that they would build up a base of not just large institutions, but small offices, and SMEs to come and do business. They had opened five plots and I won four of them, letting my friend win the fifth,” Shah recalled.
Even getting into the real estate business was accidental, according to Shah. “I used to invest in properties. A school buddy of mine was a developer, settled in the US, who came to Mumbai and wanted to do something here. I helped him out and he insisted that I keep a share. It happened by accident. Unfortunately in 1998, my friend passed away and I was a full time developer from them, I had no choice, otherwise I would have lost everything”.
He confessed that since was his first project and AccorHotel’s first Sofitel in Mumbai, they went a bit wild and overspent. The result was a crazy landmark.
“Now we are slowly getting into a few projects in Mumbai as well as other parts of the country. The (new) Mumbai hotel is nearly complete and we will open in eight or nine months. It’s a budget hotel. We have just acquired some land in Goa for a hotel, which will be our next hospitality project,” he informed when asked about of his further involvement in hospitality, adding that AccorHotels would always be his preferred option, but he was technically open to other brands as well.
To anyone wanting to invest in hospitality, Shah has a stern warning: “The hospitality industry doesn’t make money. I got into it because it was supposed to be my legacy for the next generation”. He added it was a bit like having Rs 1000 and deciding to leave Rs 100 for future generations. “You leave the money aside. You create iconic structures and institutions and leave them for the next generation. That was the whole idea as far as I was concerned,” he added.
Finally if you were planning to get involved in a hospitality project, this doyen of real estate said it was, “not a good idea to try and do it on your own. The construction fees is a huge challenge in India. If you see, nobody is investing in green field projects anymore. Even hotel funds don’t mind paying a premium to get into ready hotel projects. The risk is too high, time taken is too long, a lot of problems. Even for a developer like me, who understands, it is still a huge challenge”.