Taj Lake Palace, Udaipur: A record hotel business partnership of 50 years
When JRD Tata and Maharana Bhagwat Singh gave Udaipur and the hospitality industry a new lease of life.
Business decisions often make history. Pioneering business decisions have the power to trigger economic growth, transform urban landscapes and make an impact that lasts for generations, not just decades.
It was 1971 when Jehangir Ratanji Dadabhoy Tata, better known by his acronym JRD, as the Chairman of Tata Group, decided to sign on the proverbial dotted line to accept Lake Palace Hotel in Udaipur on a long-term lease management for Taj Hotels from the former Royal Family of Mewar.
It proved to be a visionary decision that gave the 400-year-old city of Udaipur – where the soul and spirit of the redoubtable Maharana Pratap still reigns – a new lease of life.
Writing in the prestigious Family Enterprise Quarterly – of the Indian School of Business’ (ISB) Thomas Schmidheiny Centre for Family Enterprise in its July-September 2022 issue – Prof John Ward and Prof K Ramachandran portray a vivid picture of the macro-environment of 1971. “The abolition of privy purses and special privileges by the Indian government in 1971 posed a major challenge to erstwhile royal families. They lost revenues that were essential to maintain their palatial properties and discharge moral responsibilities as custodians of their community,” the case study noted.
“The 75th descendant of the Mewar family, Maharana Bhagwat Singh Mewar, addressed this challenge by converting their summer home, the Lake Palace, into a heritage hotel. This was a pioneering effort that led to the conversion of many other royal properties into hotels,” it said.
According to ichltata.com, it provided an interesting dot to join: JRD’s decision to partner with Lake Palace Hotel in 1971 marked the first foray of the Taj Hotels away from Bombay, now Mumbai.
Since 1903, The Taj Mahal Palace Hotel has been defining the picturesque sea-front promenade from the Gateway of India to the Radio Club and its distinctive pier. For over 60 years, The Taj Mahal Palace became not merely a luxury hotel but a cultural hub, an exclusive venue where Bombay’s elite, who celebrated their personal and corporate ceremonies. Now, in 1971, the Tata Group Chairman took a bold decision to make the first move to Udaipur, a sleepy heritage-city which did not even have regular air linkages with Bombay or Delhi!
The ISB case study (titled ‘India’s Mewar dynasty: Upholding 76 generations of service and custodianship’) underlines the existential challenges faced by Maharana Bhagwat Singh. “The economic distress due to abolition of the privy purses and the voluntary responsibility as ‘custodians’ to take care of the people dependent on the properties encouraged him to undertake this conversion. However, this transformation from being the royals to hoteliers was not easy. They lacked professional skills to manage the business. Hence, Bhagwat Singh approached the Taj Group of Tatas in 1971 to operate the hotel on a lease basis. This association completed its 50 years in 2022. Lake Palace emerged as India’s most unique luxury palace-hotel,” it noted.
To mark the 50 years of business association, N Chandrasekaran, Chairman, Tata Sons, visited Udaipur in October 2021. While he thanked Shriji Arvind Singh Mewar, Chairman and Managing Director of Lake Palace Hotels & Motels Private Limited, for entrusting Tata Group’s Indian Hotel Company Ltd. (IHCL) with the palace, he acknowledged the architectural marvel and illustrious history of the island-palace on Lake Pichola.
Business historians admit that the IHCL partnership with Lake Palace Hotels & Motels, now in its sixth decade, is India’s longest-running business partnership in the Indian private sector. It has surpassed the celebrated collaboration between the Hero Group of the Munjal Family and Honda Motor Company of Japan which lasted for 26 years, between 1984 and 2010.
In the interviews recorded, for the preparation of the ISB case study, Shriji Arvind Singh Mewar admitted that, without the Taj Group’s resources and expertise, the Lake Palace Hotel would not have achieved the iconic position it has today.
“Taj Lake Palace is a legendary icon of Udaipur. IHCL restored it sensitively to preserve its timeless elegance and its unique history, while blending it with the conveniences of modern luxury. We are delighted to have this long standing and successful relationship with the custodians of Indian hospitality. My family and I look forward to this continued association and enhancing the region’s tremendous tourism potential,” he said.
On the contribution of tourism and allied industries to the city of Udaipur’s economy, while there is no comprehensive validated data, industry experts in 2022 put the figure at Rs 5,000 crores or approximately US$ 700 million.
Almost 30 per cent of the population is directly impacted by tourism, making it 30,000 families through informed estimates.
In January 2022, the number of daily air flights to Udaipur were 15; with air passengers almost touching the 1 million-mark in the pre-Covid era.
The same goes for the number of hotels: the luxury hotels include Taj Fateh Prakash Palace, Shiv Niwas Palace, The Oberoi Udai vilas, The Leela Palace, Raffles Hotels and Resorts; at least 8 upscale hotels including Radisson Blu, Radisson Green, The Trident, The Lalit, Ramada, Devigarh among others.
Old-timers, working in Taj Lake Palace Hotel in the 1970’s, recall the chartered flights from Bombay and New Delhi that brought high profile, high net-worth guests to the hotel, often in a hot and sweaty state. Telephones were a battle of nerves while the power supply added to the challenges of hospitality on a daily basis.
Not just Udaipur, the state of Rajasthan and India, benefitted from JRD’s decision to bring authentic royal palaces into the ambit of luxury hospitality. The Rambagh Palace in Jaipur was soon to become the next palace-hotel in the Taj Group’s bouquet of offerings by 1972. It made Jaipur, the capital-city of Rajasthan, into a global destination, a status it continues to hold with over 3 million passengers every year through its international airport.
“It is not a truism that generations have benefitted from the decision of my illustrious grandfather Maharana Bhagwat Singh and JRD Tata,” said MrLakshyaraj Singh Mewar, Executive Director of the HRH Group of Hotels, Udaipur said.
“Besides the former royal families, which converted their palaces in Jaipur, Jodhpur, Bikaner, Jaisalmer, we must salute the grand old men of the hospitality industry like JRD Tata, MS Oberoi, Capt Nair, PRS Oberoi and Ratan Tata, who ‘built’ hotel-chains across Rajasthan, brick by brick. They created the infrastructure and marketing blitz which gave Rajasthan’s tourism its identity, profitability, and sustainability. Today the most prestigious global hotel brands are here, sinking their roots in our soil, thanks to the tough work of this earlier generation,” he said.
In 1992, JRD Tata was bestowed the Bharat Ratna, the highest civilian award of the country; he is the only industrialist to have been honoured by this award.
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