Vithal Kamat is an engaging speaker. When I speak, I speak from the heart, he says.

He buys the
affection of most audiences he addresses, be it a classroom full of management students, or the staff
at any of his many hotels. Its a trait that is necessary in his line of business, where building a bond
with the customer is extremely important.
Kamat, now the Chairman and Managing Director of Kamat Hotels India Ltd, is a second-generation
entrepreneur. His story really began with his father Venkatesh Krishna Kamat, who had raised some
money to begin the familys first restaurant, Satkar, in 1954 in Mumbai. Kamat joined the family
business early after his father had a fallout with his business partner. I have grown up seeing and
understanding how to run restaurants with my father. And I have learnt the art of hospitality from my
mother, who treated guests at our home with the highest respect and affection, he says.
Tough times
However, as is unfortunately the norm in most family businesses in India, there comes a point of
infliction when there is no option but to part ways. Kamat and his two siblings had all been a part of
the family business headed by his father. Though Kamat had been a major driver of the business
growth, a family feud resulted in him being excommunicated from the core restaurant business in the
mid 90s. The business of restaurants, along with the other associated businesses, was divided
between the brothers.
Kamat was left with nothing but a debt of Rs. 200 crore, and no easy way to pay it off. All the other
businesses barring the under-construction hotel, The Orchid, had been divided amongst the family,
and Kamat was left hanging by a thread.
In his book, Idli, Orchid and Will Power, Kamat writes about all the options he considered. He went
back to people he had lent money to, people who were likely to lend to him when he had nothing to
offer as collateral. He even contemplated suicide.
If you meet him today, you cant help notice how passionate Kamat is about The Orchid, which is
located near Mumbais domestic airport. After all, their destinies were entwined from the day his family
business broke apart and he was left in the lurch.
The Orchid had been his idea. Even as the family wanted to keep their focus on restaurants, Kamat
bought the Airport Plaza and renamed it Kamat Plaza, the name under which it operated for a few
years. Today, in its avatar of The Orchid, the hotel is the highest contributor to the overall turnover of
the company and, naturally, very close to Kamats heart. In a note, ICICI Securities estimated that 85
percent of the contribution to the companys topline is from its key operating region Mumbai that
includes The Orchid along with another business hotel.
Kamat tells us that The Orchid was Asias first eco-friendly hotel and that gave it its competitive edge
over others. The practices we followed then have become mandatory in the hotel industry now, but
we were the first to enter the ecotel space, he says.

The hotel has won awards for being the most environment-friendly hotel and has been recognized by
eco certification agencies as well.
The cause of eco-friendliness is also one that Kamat loves to talk about. In fact, his business card has
a basil seed in it. Besides the fact that tulsi is considered holy, even if someone disposes the
business card, there is a seed that can give birth to a plant somewhere, he tells us.
Talking growth
Besides The Orchid, the group also has under its wing the luxury class Lotus Resorts in locations like
Goa, Silvassa and Konark, as well as heritage hotels like Fort Jadhavgarh in Maharashtra, and the
VITS line of business hotels in Aurangabad, Nagpur, Pune, Nashik, Delhi and Bhubaneshwar. More
hotels are on the cards, Kamat reveals.
Besides hotels, the group also has a catering training institute and manages hotels on a contract basis
within the country. We are looking at a minimal capital expenditure now, Kamat shares. The
hospitality group, which was first listed on the exchanges in 1994, is increasingly focusing on
managing hotels. We may bring a partner on board, dilute equity and focus on managing hotels, he
says.
In 2010, the company issued shares to private equity partner Clearwater Capital Partners. Earlier this
year, Clearwater made an open offer to acquire up to 26 percent of the paid-up equity share and
voting capital. This has been delayed though, and as of now, the promoters have a 51.7 percent stake
in the group.
One of the causes of concern for the company is its debt burden. As per its financials, the company
had long-term borrowings of over Rs. 448 crore at the end of FY12. Rashes Shah, a hospitality
analyst at ICICI Securities says Kamat Hotels needs to reduce its debt burden by one-third. Their
current debt is 2.5X equity, he says.
On his part, Kamat says, We maintain a gross operating profit of about 40 percent. That, he says, is
the industry average. However, Shah says, During peak times, the company is maintaining an
operating profit margin of 35 percent but during lean times, this comes down to about 20 percent on
an average.
The companys turnover as of March 31, 2012, was over Rs. 157 crore.
Besides the focus on managing hotels, Kamat says he often receives enquiries from other countries to
set up hotels in partnership with The Orchid over there.
We had started working on a project to set up a hotel in Johannesburg, partnering with a local
hotelier. However, that project is on hold, he says. There is also a plan to take the peninsular cuisine
restaurant at his hotel, The Vindhyas, to China later this year.
The winning edge
Talk to him about whether the economic conditions have slowed down the business and he denies it.

He says that tourism has not suffered because of the economic conditions. According to him,
domestic tourism has instead grown, helping the business. Commenting on this, Shah says, Post2009, the Kamat group has seen a slowdown in demand. Moreover, competition from new players has
made them lower room rates too.
Kamat explains this differently. He says that he has been ahead of the competition in understanding
the pricing conundrum for domestic travelers. He tells us that he keeps his room prices slightly lower
than competitors, whom he welcomes, as competition breeds better quality. We ensure that our staff
is friendly and keep trying to implement innovative ideas to keep our customers coming back, he
says.
Kamat, now 60, spent a few early years of his life traveling to a number of countries and working at
different restaurants. Today, he speaks 14 languages and has documented his experiences of
marketing and expanding his business in his book.
This fondness for documenting has also been implemented at his hotels. He documents standards of
conduct and service at The Orchid and all the other properties of the group in India. If we leave it to
one person to teach another person then its tough to maintain standards. If an employee knows 80
percent, he will be able to train another with 60 percent and so on, he explains.
Besides the lessons he has learnt at The Orchid, Kamat picked up a number of lessons while being a
consultant to others in setting up hotels. He claims to have helped set up over 400 restaurants and
hotels around the world. I have learnt my lessons on other peoples money, he laughs.
Many who meet Kamat are left with a sense that they have just met a hotelier unlike any other. His
personality can be best described as mostly jovial as well as always combative and aggressive. The
latter traits are understandable. Kamat is, after all, a 4th degree black belt in karate and heads the All
India Karate Federation.