Bickson quits as Indian Hotels chief, Hyatt's Sarna to take over
08 August 2014
Raymond Bickson on Thursday put in his papers as managing director and chief executive of Indian Hotels Co Ltd, just a year after he was given a five-year extension of his term.
He will be replaced by Rakesh K Sarna, 57, a hospitality industry veteran who has in the past spent more than three decades with Hyatt Hotels.
The board, which met on Thursday, accepted Bickson's resignation effective from the end of August. The sudden resignation and almost-immediate announcement of a successor came as a surprise to many.
The resignation comes barely three weeks before the company's annual general meeting, scheduled for 27 August.
Bickson, 59, who has been at the helm of affairs at Indian Hotels, which operates the Taj Group of hotels, for more than a decade, will return to the US to ''pursue professional interests elsewhere'', a release issued by the company said.
Born in Hawaii, Bickson was handpicked in January 2003 by the Tata group's then chairman Ratan Tata and given the mandate to take the Taj brand abroad. He is also known to be a close ally of the company's former vice-chairman R K Krishna Kumar.
But the company's three US hotels, including New York's luxurious 189-room The Pierre, which the company bought in 2005, failed to make money, thanks to the global economic meltdown after the Lehman crisis. The three hotels in the US alone posted a combined loss of nearly Rs155 crore during the previous financial year, according to the latest annual report of Indian Hotels Company Ltd (IHCL).
Last month, the company took steps to cut its losses abroad and sold off its 100-room property in Sydney, Australia, for Rs180 crore.
IHCL said that it intended to focus on the Asia-Pacific region, particularly China, where it will manage two luxury properties under the Taj brand.
In 2013, Bickson's contract was extended by the company, despite a section of shareholders voicing their displeasure over IHCL's poor financial performance at last year's annual general meeting.
According to the annual report, Bickson's annual commission was increased 75 per cent to Rs2.01 crore last financial year, even as the company incurred a loss of Rs590.50 crore on a standalone basis. Under the new contract, Bickson's salary and perks were lowered 8.5 per cent to Rs8.38 crore, but this was more than compensated by a steep rise in commission; and the company's total payout to him increased to Rs10.4 crore.
In 2013-14, IHCL's losses increased 113 per cent to Rs590 crore from Rs277 crore the previous year. Income during this period remained nearly flat, at Rs1,977 crore. By comparison, in the same financial year, rival Oberoi Hotels made a profit of Rs50 crore on a revenue of Rs1,157 crore.
IHCL will bank on Sarna's international expertise for global expansion as the group has been trying to get a foothold in areas beyond Indian boundaries for several years.
''Sarna has had an international upbringing. He moved to Canada as a young adult and completed his diploma in hospitality administration from Ottawa,'' said an IHCL release.