On course for continued success

Sep 18 2006 By Graeme King, The Journal

Hotelier Mukesh Chawla started out relatively late in the business world, but is no less ambitious or impatient to expand than a career entrepreneur, as he told Graeme King

It is maybe not a conventional route for an entrepreneur to follow, but a background in occupational therapy certainly does not seem to have held back Mukesh Chawla from achieving his business goals.

Having arrived in Britain less than 30 years ago, Chawla - now 51 - has built quite an empire, which is shortly set to breach the £10m turnover barrier.

And this is someone who likes to be very much his own man, asking not to be styled as an Asian businessman, simply a businessman who happens to have been born in Asia. He stresses that he has not relied on connections with the Asian business world to make his hotels a success.

The story of Chawla's career begins back in 1979, when, as a 23-year-old graduate, he arrived in the North-East to take up a job as an occupational therapist.

Always ambitious to progress, Chawla climbed the ladder in his work at the Hunter's Moor hospital for what was then Newcastle Health Authority, to become head of department.

But after a few years there, he recognised the potential in developing care homes for elderly people.

Chawla bought his first care home at Bedlington, Northumberland, in 1989 and grew the chain to six within a few years, before selling out to national operator Advantage Care in 1998 - though his family still retains an interest in two homes in Northumberland.

On exiting the care business, Chawla and his wife Rani entered the hotel industry, making The Grand Hotel in Hartlepool their first purchase, though they no longer own it.

Chawla says: "I was always ambitious. I went into business even before I left Newcastle Health Authority. I was using my experience to set up the care homes.

"I eventually sold out at a premium and decided to diversify into the hospitality sector. I could see the potential in the sector. It's not dissimilar to the care home sector as it's a property business which deals with customer care."

Having bought the Grand in Hartlepool the novice hotelier started to look further afield.

The second purchase was a hotel serving the corporate market in Manchester, the Old Rectory in the suburb of Denton, then there was the distinctive Craiglands Hotel sat high above Ilkley in West Yorkshire. Then it was Mere Court near Warrington in Cheshire, before the George Washington Hotel and Country Club at Washington, County Durham, in 2003.

And Chawla and his Ailantus team are currently in negotiations to acquire another hotel in the North-West.

"Total turnover is currently around £8m, and with the acquisition of the new hotel, it will be £10m," he says.

Ailantus is also ploughing a lot of money into the George Washington, as the Chawlas look to double turnover over the coming years.

They are having a new 1,000-seater function room built, along with investment in a new golf clubhouse and extra food and drink outlets.

Chawla says: "When we bought this place, it was under-performing. The golf course was run down, so we put in investment of £2m to improve it, and to improve the bedroom stock, and that has really helped us to increase occupancy.

"We needed new drainage and new treatment of the greens, and we have invested quite heavily in new equipment.

"Golf club membership has risen considerably too. When we took over, it was down to 300, but this year we are aiming for 600. I know the potential of this course - it is a long 18 holes, par 73, and I believe it is a championship quality course, and the feedback from golfers has been very promising.

"In three years here, we have been able to totally refurbish 80 of the 103 rooms, the restaurant has been changed and upgraded, and the bar has been upgraded too. We have a good general manager who takes great pride in the product, and a super green-keeper.

"We sell a lot of food now - that has done very well for us. Every night of the week, we can be doing 200 covers. It's corporate business, weddings, leisure weekends - people wanting to go to Newcastle."

The entrepreneur recognises that his business, as well as benefiting from investment, is fortunate to be operating at a time when demand for hotel rooms in the North-East has never been greater.

As the popularity of Newcastle and Gateshead in particular have soared, so the George Washington has prospered, and there is relatively little competition which can offer the same combination of facilities.

Chawla says he provides a high quality hotel, with a golf course, within a short distance of Newcastle, Gateshead and Sunderland, while other hotels with similar facilities are much further out in the country.

He said: "We are close to the city and in a built-up area, while Matfen and Slaley are quite far away from the city, so it's a different market for them.

"Previously the quality was not there at this hotel, but now we have established a very good rapport with local companies and the market is really good. People's own experience of the place, across the board, has improved."

Ailantus has pursued a policy of significant investment to ensure all its hotels provide high standards.

Besides the George Washington, the Mere Court near Warrington and The Old Rectory in Denton, Manchester have both benefited from investment, and are now very popular for events and weddings.

And over the Pennines in West Yorkshire, another of the company's outlets is proving influential too. Chawla says Craiglands, which stands high on the hills above the town of Ilkley, just below the famous Ilkley Moor, is quite a significant player in the local economy for that corner of the county.

He says: "In Ilkley, we do a lot of weddings with 500 to 600 people, and when there is a wedding on, Ilkley town centre is booming.

"If there is a weekend when we don't have an event, it's much quieter. So our business is important to the town."

The future of Ailantus lies in further growth, Chawla says, hinting at more acquisitions, though he has not said where these might be.

But he is hopeful that the business will remain in the family. Wife Rani is already an integral part of the business, and their son is currently at university - apparently with a business career ahead of him. Daughter Kavita is a doctor.

Chawla says: "I hope my family will come into the business. My son Neel is currently at the London School of Economics, and hopefully he will be joining me in the business. I have been the prime mover in the business and my wife Rani has assisted me wherever possible."

Ever the entrepreneur, Chawla has recently agreed a deal to sell some of the land at the front of the George Washington to local housebuilder Bowey Homes. They are to build a small estate of houses on the land, which lies in the heart of Washington, and the proceeds will allow more cash to be invested in the hotel.

Chawla said: "Bowey Homes are going to develop 18 houses in front of the hotel. The land will be sold to Bowey on October 30. The proceeds from the sale of the land will be used in the hotel."

Chawla says he is proud of the company he has built and is keen to develop it still further. As with many entrepreneurs, he is largely self-taught, and says he has not even sought the obvious support available in the Asian business community in the North-East.

He says: "I'm a businessman basically, who happens to come from Delhi. I've learnt to be a businessman over several years.

"I've not taken any advantage of being Asian. Most of my business comes from the host community - probably 99%. But you do have to have the right approach, you have to take calculated risks - all business is a risk.

"You just need to keep the costs under control, provide quality, give customers more than what they asked for, and you find success."

CV

* Born: 1955, Delhi, India.

* Career: 1978 Occupational therapist, Newcastle Health Authority

* 1981 Promoted to head of occupational therapy department, Hunter's Moor Hospital, Newcastle.

* 1989 Acquired first care home, Holmside in Bedlington

* 1998 Acquired first hotel, The Grand in Hartlepool.

* 2003 Acquired George Washington Hotel and Country Club, Washington.

Questionnaire

What car do you drive?

I actually don't have a car right at the moment, but I'm getting a Mercedes delivered next week.

What's your favourite restaurant?

I don't have one as such, but if I eat out, it's British or Italian restaurants in Newcastle.

Who or what makes you laugh?

Jokes. I like cracking jokes.

What's your favourite book?

I don't read much - don't have the time.

What's your favourite film?

Not one in particular, but I like a mix of British and Bollywood films.

What was the last album you bought?

I can't think of one, but I do like Bollywood music.

What's your ideal job, other than your current one?

I have been an expert witness is personal injury cases, and I do enjoy that litigation work.

If you had a talking parrot, what's the first thing you'd teach it to say?

Just `Hello.' It's important to welcome people in the hospitality industry.

What's your greatest fear?

A downturn in the economy.

What's the best piece of business advice you have ever received?

To look after your key staff.

Worst business advice?

I can't think of any - I must have ignored it.

What's your poison?

I tend to drink soft drinks, but sometimes a Bacardi and Coke or a good glass of beer.

What newspaper do you read, other than The Journal?

The Sunday Times.

How much was your first pay packet and what was it for?

I got £260 per month as an occupational therapist.

How do you keep fit?

I go to the gym.

What's your most irritating habit?

I have business in my mind all the time - I find it difficult to switch off.

What's your biggest extravagance?

Clothing.

Which historical or fictional character do you most identify with/admire?

Captain Kirk in Star Trek. It's amazing how many things in that show are now in the real world.

And which four famous people would you most like to dine with?

Bill Clinton, Jimmy Carter, and maybe some Nobel Prize winners.

How would you like to be remembered?

As a caring person.