KGH Group: Hospitality Growing Bigger

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--By Gaurav Aryal
Rajan Sakya, CEO, KGH Group
Rajan Sakya
CEO, KGH Group
The KGH Group has recently revamped rooms and interiors of its signature hotels, Park Village Hotel and Resorts and Kathmandu Guest House. According to Rajan Sakya, CEO of KGH Group, 60 rooms of five star facility were added on each hotel in the year 2012. Sakya says that rooms were upgraded in accordance with the demand of clients and growing competition to offer quality service.
Renovation work is also ongoing at Aqua Buzz Unlimited, a hotel located in Koshi. Sakya admits that the hotel is not doing impressive business at the moment but he is optimistic that Koshi will emerge as a tourism hub when the Banepa-Bardibas highway gets completed in the next two years. He says that the highway will shorten the distance between Koshi and Kathmandu and will increase tourist flow to the area.
Expansion Plans 
The KGH Group plans to add new properties to business in the years to come to their current line-up of eight hotels and three travel agencies. According to Sakya, the group is planning to establish two new hotels within the next two years. He says one will be in Kathmandu while the other will be in Koshi.
Karna Sakya, Founding President of the group wishes to see the business he established to be passed on to the future generation. Rajan Sakya, his youngest son also expresses commitment to continue the business and says, “Tourism is the industry where we have expertise and long-time experience. The next generation will also be involved in the same field as we do not have any plans to venture into any other sector.”
When making plans for the future, young Sakya says that the overall business climate of Nepal makes it difficult to make long term plans. So, he says the group has been only making plans for the short term. Sakya reveals that the group plans to streamline and standardise the quality of its services offered throughout the properties of the group as well as its management style. For this purpose, he says, the group is adopting a corporate model of running business that will centrally control all sister concerns it owns. 
Clientele and Occupancy 
The morale of tourism entrepreneurs is getting a boost with the rise in tourist flow after the insurgency. Sakya is also content with the number of clients his chain of hotels has been able to attract. He says that the occupancy level has been satisfactory throughout the year.
According to Sakya, Park Village Resort is primarily targeting conferences and seminars, and so 60 per cent of its clients are Nepalis while the rest are foreigners. Similarly, guests at the Kathmandu Guest House are mostly adventure tourists and it is an all-season hotel with 100 per cent foreign clients. Likewise, 80 per cent of clients at the group’s hotels in Pokhara, Chitwan and Lumbini comprise of foreigners.
Management strategy 
The KGH Group has been operating under the family business model since Karna Sakya ventured into the tourism and hospitality sector almost 48 years ago. “We are not running our business similar to a professionally managed five star hotel. Though we have professional hotel managers to look after a particular hotel, we have shouldered the responsibility of running the business and we are happy with this style because we believe we have the expertise and experience of several decades,” explains Rajan Sakya.
The Sakyas, however, are planning to corporatise the group in the next one to two years. The group plans to set up a corporate head office in Kathmandu with a team headed by a General Manager. Sakya says that the corporate office will centrally control the accounts, internal audits and central purchasing. “This model is being adopted to standardise the quality of services and products used across all the properties under the group,” he says. 
Human Resource Management
The KGH Group has not only created employment for 650 to 700 people but also has been meeting a social responsibility in hiring employees. Sakya says that the group hires women under the shelter of Maiti Nepal, a non profit organisation dedicated to help victims of sex trafficking. 
As women from the organisation find it challenging to reintegrate into society after being rescued from brothels, the KGH group has tied up with Anuradha Koirala (Founder and Director of Maiti Nepal and also a winner of CNN Heroes of 2010) to provide them with job opportunities in all of its properties, says Sakya.
Similarly, the group prioritises hiring employees from underprivileged groups and communities. Sakya says that the group gives preference to those who have returned after working abroad. He gives an example of a recent recruitment of 10 employees who had returned from the US and the UK. He also reveals that the employee turnover at the group is quite low and some of the employees have been with the company for even decades.
“We have maintained a very good relationship with employees and so, we do not have problems with the human resource management,” he states about the company’s relationship with its employees.
The KGH Journey
The journey of the KGH Group began when Karna Sakya, Founding President of the group established Kathmandu Guest House in Thamel, 48 years ago. Sakya recalls that Thamel was nothing more than a paddy field then. Thamel, the tourist hub of today grew around the hotel which started with 13 rooms.
Sakya, a government employee then, used to work at the department of forestry and was not satisfied with the working environment. Brought up in an affluent family, he never felt that he had to take up a job to make his living. A traveller himself, he says that one must be able to comprehend what tourists want in order to run a tourism business and adds: “Tourism is a business of dreams and only a dreamer can delve deep into this sector.”
His expertise as a forester and environmentalist is reflected in the hotels of the group. He has always prioritised the harmony between buildings, nature and the culture of the locality where the hotel is built and it can be witnessed in any of the sister hotels of the group. Sakya says he never developed a property on a leased or government land and all land where hotels are built is owned by the group.
When the country was at the peak of insurgency, the group never took a break. Rather it expanded into new projects and purchased land that helped it achieve success that it had never seen earlier. Today, the group has eight hotels and three travel agencies and is about to mark its golden jubilee in two years’ time.

C Pal Singh

I would like to get in touch with Rajan Sakhya..... Kindly drop me a mail on the above mentioned email.