22 November 2018 12:45:13 IST

A management and technology professional with 17 years of experience at Big-4 business consulting firms, and seven years of experience in high-technology manufacturing, Rajkamal Rao is a results-driven strategy expert. A US citizen with OCI (Overseas Citizen of India) privileges that allow him to live and work in India, he divides his time between the two countries. Rao heads Rao Advisors, a firm that counsels students aspiring to study in the United States on ways to maximise their return on investment. He lives with his wife and son in Texas. Rao has been a columnist for from the year the website was launched, in 2015, and writes regularly for BusinessLine as well. Twitter: @rajkamalrao

The key is to keep the customer happy

The Indian service sector is yet to understand that customer is the king

Pristine blue waters of the western Caribbean Sea. A shore line that is protected as a marine reserve. Warm weather beckoning residents of cold weather countries such as the United States, Canada, and the United Kingdom. Hundreds of thousands of young, able, low-cost workers to perform numerous service jobs to cater to the lazy.

This cocktail is the vibrant tourist hotspot of the Yucatán Peninsula at the eastern end of Mexico. Nestled at the bottom of the oil-rich Gulf of Mexico and a few miles west of Cuba, is the Caribbean Sea, a vast expanse of the Atlantic Ocean and home to some of the world’s favourite tourist destinations, including Cancún, Belize, the Cayman Islands, Jamaica and Aruba.

We landed in Cancún on a short flight across the Gulf from Miami. The infectious vacation bug had bitten us even before we boarded the plane. Everyone was happy, dressed in shorts, wearing sunglasses and sandals. The escalator going down to the arrivals hall was broken. No one fretted or fumed as we entered a sea of people snaking their way, Disney-style, to a score of immigration counters, where hapless officials hastily stamped passports.

Exiting the baggage area, we were greeted by Cancún’s tourist industry — loud and over-helpful. A van was waiting to whisk us to our resort where we were pampered again. Women getting out of the van were treated with a rose from a handsome young Mexican worker, making them wonder when their husbands last indulged in this renowned expression of romance.

Wide variety

All-inclusive resorts, like the one we stayed in, are standard fare all over the Yucatán. You prepay for the entire stay — ground transportation, food, drinks, room, most resort attractions, and the room mini-bar. The human mind is wired to be greedy when something is presumably made available ‘for free’. When was the last time you went to an all-inclusive buffet and only consumed your daily caloric diet?

The first thing we did when we entered our gorgeous room was to deposit our wallets and passports in the in-room safe. We would need these again only on the day of our return. A sophisticated wrist band identified us as one of about 5,000 guests at the resort — the band had a chip which acted as our room key. The property was so vast that chauffeured golf-carts plying paved roads were the standard mode of transportation — to go from hotel room to one of eight heated swimming pools, the water park and, of course, the beach.

Generosity was everywhere. You went to a pool and, even before you found a chair to sit on, an attendant would be ready with several bath towels. A roving waiter would stop momentarily to get your drink order, which would be served to you in the pool, if you wished, refills even. Desserts of every variety were neatly arranged at the back of the pool, waiting to be tried. And when you got tired, you only had to exit the pool to have a passing golf cart pick you up and deliver you back to your room.

Catering to whims

The resort’s investment in its spa infrastructure must easily run into tens of millions of dollars. The large, heated pools and Jacuzzi, the steam sauna, the ice sauna and the dry sauna were so opulent that only the extremely wealthy could ever dream of experiencing them. But, at the resort, anyone with a wristband could feel as royal. Spa treatments were included for a small, additional fee and were definitely world-class.

The main lobby was as busy as an airport lounge but without the chaos. There were different restaurants catering to different cuisines — Lebanese, Asian, Italian, Mexican, French, Peruvian — and a massive buffet that offered food of every variety. Your wristband identified that you were a legitimate guest, and, once your name was entered into the system, you would be seated to have a wonderful dining experience. Dishes on the menus did not have prices, freeing you up to indulge — perhaps even over-indulge. Each restaurant had its own full, wet bar, not to mention nearly 50 bars all over the property. And you guessed right, all drinks, any number, any kind, were included as part of the deal.

The wide lobbies were filled with vacation planners sitting in front of computer terminals getting you out of the resort to hit the area’s tourist attractions — swimming with the dolphins, jungle tours with zip lines and ATV rides, sailing, kayaking, water sports, and that quintessential experience of jumping into the cold waters of a cenote (a natural sinkhole).

It is not easy to meet the expectations of 5,000 travellers, each of whom has paid nearly $750 a night (retail) to lose themselves in this fantasy of an experience. When people save up their hard-earned dollars to spend in a week, they expect to be pampered to no end. The miracle here is the way the hidden hand works so well, getting every cog and cam to turn at the right speed, at the right time, in a well-oiled exposition of administrative design and efficiency that clearly has no parallel anywhere else.

In truth, however, most people rarely pay retail. These resorts operate under the age-old time share model, in which people 'buy' the rights to purchase discounted weeks of all inclusive stay by paying a flat membership fee one time. The flat fee is hefty — more than $15,000 — and each discounted week is sold at $350 a night. For the resort operator, the flat fee alone amounts to selling a high-end hotel room at a price of $15,000 x 52 weeks, since, ordinarily, a single membership is entitled to only one week of vacation a year. No hotel room costs $780,000 to build, so the operator's profit margin is extremely high.

But what about the operational expenses of the food, the wine and the 24x7 service? These are cleverly covered by the weekly discounted rates of $350 a night plus the 16 per cent service fee on any transaction at the resort. A man's haircut lists at $69 — and this is given to the guest 'for free'. But the 16 per cent service fee — of $11.20 — is charged to your credit card, a price not very different from a man's haircut in the United States where barber labour rates are higher. As is the saying in Las Vegas or Monte Carlo, the house always wins.

Indian counterparts

India has blue waters and pristine beaches. The coral islands in the Andaman Sea number more than 500, which, while being off-limits for the most part, could be the perfect destination for world travellers. The weather, too, is perfect. And inexpensive labour, imported from the impoverished States of India’s North-East, is a ready resource. But what Indian companies lack is the skill to run a large organisation of dedicated worker-bees whose only goal is to keep customers happy. This is not like taking an IT service request and getting off the phone 20 minutes later, after solving a technical problem. This is catering to each and every whim of 5,000 demanding customers who need to earn back every dollar they have paid.

When Prime Minister Narendra Modi announced five years ago that he would continue the ‘Incredible India’ campaign to attract foreign tourist dollars, he probably was not thinking in terms of the scale of these massive companies on the Yucatán. While this piece describes goings-on at just one resort, what is fascinating is that there are more than a hundred such resorts clustered in 20 miles of beach. And each doing its best to outdo the other in the most difficult commercial enterprise of all: keeping customers happy.