royal orchid hotels

about hotel industry

1. Royal Orchid Hotels BY :HARNOOR SINGH , PUJIT ,PIYUSH KOLI

2. Introduction of the owner Mr. Chender Baljee BORN : SHIMLA AGE : 68 YEARS OLD QULAFICATION : B.COM & MBA [IIMA] HE CHOOSE FAMILY BUSINESS INSTEAD O F JOB

3. This is a Real story of Mr. Chender Baljee ,who worked hard for three decades to establish “Royal Orchid’ a 150 crore Hospitality Business Certain factors are really not under our control and sheer bad luck may strike again and again leading to repeated failure. Repeated bad luck, litigation, strikes, debt, 9/11, SARS all these factors delayed Baljee’s IPO happening by 21 years. Enormous amount of patience we need to keep for success to come in our life.

4. Chender Baljee’s Journey of Business Initially Mr. Baljee  joined his father’s business at Shimla, but left that very soon. Then he started a restaurant called “Fascination” in Shimla. He started his first hotel as “Harsha”. He took the risk to start the hotel business in off-season period. He subsequently started two restaurants and a bakery

5. Challenges “ Harsha ” was doing well, but “ Fire in belly ” compelled Mr. Baljee to do something more. He tried to file his company’s prospectus for an IPO . Unfortunately at the same time the market crashed . His restaurants closed due to some lease issue. The hotel staff went on strike . He has to sell his bakery unit to meet the cash needs. Subsequently, the lease of Harsha hotel expired and Baljee  had to take bank loan to buy it. Baljee then bid for a land near airport and after facing lot of ups and down, he built a  5 star hotel.

6. Simultaneously on family front he has to struggle hard   in terms of money as his son went to US for education. All such situations forced Baljee to borrow more and more money . Fortunately, in 2001 the Royal Orchid hotel was finally launched but this to followed with misfortune in terms of shock of 9/11 . This affected occupancy of hotels. He had debt to repay and at the same time his two sons studying abroad.

7. Steps taken to overcome challenges Careful money management and cost control helped in recovery. Baljee did everything in honest manner, he never defaulted on any financial institution payment or salaries to employees. Honesty and good relation and his track record allowed him to get loans at lower interest rates. 2003 gave Baljee success and ‘Royal Orchid Central’ got its birth. In 2004 Baljee won the contract of the hotel METROPOLE.

8. Introduction of company By 2004 turnover of Baljee’s company was 15-16 crores. In March 2007 , Royal Orchid Revenues stood at 125 crores and PAT (Profit after Tax) at Rs. 35 crores Baljee’s 27 year old son Arjun (Hotel management graduate from Combell) is handling an independent project – setting up a budget hotel chain called ‘ PEPPERMINT ’. His Younger son Keshav (24 year old, graduate of Wharton and ISB) looks after new projects and sources deals.

9. LESSON LEARNED C alculated risk Be focused Always be motivated BE optimistic Always be honest to yourself and people around you .

10. Advice to Young Entrepreneurs: Follow your passion and success will follow. Learn the business you want to get into for a couple of years. Be prepared to make sacrifices. Enjoy your business; this will take care of everything.