When the news came out that nine of the fifteen hotels of the government-owned India Tourism Development Corporation had slipped into the red last year, I fixed a meeting with a senior director to know what the corporation intended to do about it.
“It is, indeed, a serious situation,” he agreed sombrely.
“So, what are your revival plans for the nine recalcitrant ones?” I asked.
“No, no, you have got it all wrong,” he replied. “We are worried about the six who showed profits. They are the spoilers.”
“How so?”
“You see, profitability is an aberration in the public sector. We are comfortable with losses. We have a standard list of over a hundred probable causes to explain them away. But profits are difficult to rationalise. The ministry will ask us all sorts of uncomfortable questions about how the profits were achieved and accuse us of not following standard operating procedures. The leftist politicians will accuse us in Parliament of copying private sector methods and betraying public sector interests. The unions might start demanding a profitability bonus. Quite a screw-up, really, this non-standard performance of the six hotels.”
“I can see your point. So, how will you be correcting the situation and ensure the profitability disaster is not repeated in the six units?”
“Well, for starters we plan to withhold the annual performance bonus of the top managers. We will also induct managers from the highest loss-making hotels into the profitable ones so that they can bring in the best of practices that can ensure losses, such as indulging in heavy capital expenditure to expand capacity without any demand in sight.”
“Aren’t you going to make use of outside expertise?”
“That is also in the works. A public sector enterprise which has been admirably consistent in its loss-making has been requested to depute a couple of their senior managers to advise us.”
“Are you referring to Air India?”
“That’s right.”
“How about private sector know-how?”
“Oh yes, we have already approached the promoters of Kingfisher Airlines for this purpose.”
“Any other tactics that you’ll be adopting?”
“Well, I can’t disclose much at this stage since we have just recently taken up the issue. However, many avenues of action are being contemplated. For example, there is a suggestion that we should induct more politicians on our board. That should certainly hit profitability. But I can assure you that this situation will be a short-lived blip and in the next couple of years we should be safely back to the stability of annual losses for all our hotels.”