The landmark Daspalla Hotel and the down-to-earth personality of the man who built this 100 crore business, are matters of pride to Vizag. As we walk into his office, his table stacked with books, files, and papers, we meet the Founder and Managing Director, M Raghavendra Rao. Welcoming us with an easy smile and the famed Daspalla Coffee, he narrates the story of one of the city’s earliest hotels to Jaya Siva Murty.
“I came to Vizag in 1981 with the idea of building a hotel.”
Hailing from the village of Amudarlanka in Krishna District, the journey of his work had begun much before 1981. Educated up till intermediate, some of the enterprises he worked on ranged from prawn processing, fertilizer industry and few other industries, whereby he converted a dying unit into a profitable one. The idea of working in the hotel industry came in the late 60s, driven by a common interest in food and the lucrative market. A group of friends and relatives came together to set up Navayuga Restaurant in Tenali in 1969 and when that worked well, they opened Geeta Café in Guntur in 1974. The success of the two drove further the idea of building a hotel in the city of destiny.
“We came to the city because it was on the brink of development.”
The decision to come specifically to Vizag was based upon the great potential it had during the 80s as well. Vizag was developing into a popular business center at that time, and the Steel Plant was also developing. Hotels were few and far between with prominent names including Dolphin, which had just opened and was doing well. Then there was a successful mix of a few big and small players. And so, getting together with family and friends here, the partnership resulted in Dasapalla Vizag. With construction work beginning in 1981, the hotel opened its doors to customers in 1987. Slated as a three-star hotel that caters to the middle-class segment, Daspalla Vizag came about with 72 rooms, 2 restaurants, and 2 conference halls. Perhaps it was their market research or focus, but efforts paid off and the hotel saw 80% occupancy by the end of the first year itself, establishing the financial worth of their decision. A decade later the hotel was expanding with more rooms, mini halls, and restaurants. Simultaneously, the group’s presence was growing in other parts of the state as well. Jaya Residency was established successfully in Kakinada with 54 rooms and is still a popular name. Tycoon and Daspalla Heritage were set up in the year 2000 for Vizag along with the Daspalla Executive court. Daspalla Hyderabad was established as an upscale hotel in Hyderabad in the year 2010.
“The hospitality industry and the city has grown over the years.”
The growth of the hospitality industry in the city has been parallel to the city’s growth itself, he shares. The initial hotels, Sea Pearl (which became The Gateway Hotel), GrandBay, Hotel Apsara (today’s Green Park), Sun and Sea (known as The Park). still stand today, with improved markets. New entrants showcase the potential the city still has. Also, the sum of the total hotel rooms surpass 5000 and are growing in the city. The population has also grown from 3 lakhs back then, to 25 lakhs today. In the coming decade, the importance of Vizag will increase, he reflects. In fact, he adds that this is still the second biggest when one looks at a combined AP. With developments like the corridor and increase in connectivity, Vizag Tourism has a huge potential in the coming years and will be a city of destiny for many domestic and international tourists.
“We started with the objective of targeting the middle-class segment and meeting their expectations.”
Talking about the importance of market research, he shares that the success of Daspalla was largely based on that. With the city having a large segment of salaried people, only a few of them would go for high expenditure. Keeping this middle-class and upper-middle-class segment in mind, Daspalla was set up as a three-star hotel. The meal plans and food menu were tailored to what they relish. Rather than following the trends that many standalone restaurants bring about, Daspalla comes across as traditional in outlook and is renowned for the food it serves. Even today, food festivals and additions to the menu are carefully executed without letting go of the much-loved dishes. Challenges are there in every business, and Rao shares that in hospitality both qualities of food and service are key ingredients. Modernising is a must, and Daspalla has revamped itself thrice to keep up with the changing times.
“We set certain standards, and those continue till date.”
Even today the group of friends and family manages the enterprise, and takes decisions backed by research. Geeta Café operates as Geeta Regency, has retained its place as one of the finest hotels in Guntur. Their newest entrant, the Hyderabad Daspalla is a high-end experience based on that market. Talking of trends, he shares that affordability has increased across the segments when compared to the past. Today parking has become an important factor of consideration, unlike the early days. Also, the customer’s knowledge has grown and people want to try new globalised cuisines from different countries. He also foresees that the market will improve once IT comes in, bringing with it a new set of people. What hasn’t changed, however, is the group’s focus on quality and quantity standards. And so, even if people choose to stay in a larger hotel, they do make it a point to visit Hotel Daspalla for a meal or two.
“From starting small to becoming a 100 crore business and employing 1500 people are milestones.”
The fact that Daspalla gave employment to over 1500 people, is what Rao marks as a milestone. Their future is also in safe hands, as the next generation is gaining competency and taking the market in its hands. The Hyderabad and Vizag operations involve his sons-in-law, while other branches are looked after by other family members and friends.
“Work hard and go forward with a goal for success.”
Comparing his style of entrepreneurship to the current generation of entrepreneurs, he shares that many enter into an enterprise because they have the money or some interest. However, it is important to study the market thoroughly before entering. Success is possible if an entrepreneur is willing to work hard and work with a goal. Reflecting on his early days, he shares how they would work for 13 to 14 hours every day, especially during conferences. The many tourism awards they have won is proof of that. More importantly for Rao, the satisfied smiles of most of the customers have brought him and the group happiness. Speaking of the days to come, he shares that they don’t have any specific target in mind. However, adding a hotel in the capital region of Amaravati is on the cards. Seeing the group grow by 10-15% would bring him the joy he shares, given the conditions of the competitive and volatile market. Speaking about the city, a beachside resort is what he has in mind too.
With Hotel Daspalla having become a household name, it is reflective of the city’s innate character. And, even though hotels big and small may come and go, this is a name that will stay forever, and we only have one person to thank for this. It was Raghavendra Rao and his team that set this thought to motion and made it a landmark reality.