AVARI (A) MBA

Avari Group: Organizational Values and Crisis Leadership – Case A

In 2010, Avari Group was approaching the end of six decades of successful operations.

While reflecting on Avari Group’s past successes, Byram D Avari, the Chairman of the Avari

Group, was reflecting on group’s future. On the one hand he was wondering how successful

his sons - Dinshaw and Xerxes – would be in bringing up another generation of leading

entrepreneurs. And on other hand, he and his two sons were thinking about a dilemma

being faced on their lifelong employment policy in Avari Group.

Avari Group was established by Byram Avari’s late father, Dinshaw Byramji Avari, who

founded the organization on the core values of respect, honesty, life-long employment (no

retirement) and equal opportunities for people from all religions and backgrounds to

grow. In recent years, due to low business opportunities and low growth, most of the 5-

star hotels in Pakistan were reducing headcounts in their organizations. But the Avari

family was rethinking their lifelong employment policy on the one hand and on the other

hand they were thinking about different growth alternatives to handle this business crisis.

1.0 Brief Introduction to the Avari Group

The Avari group started its journey almost immediately after Pakistan came into being in

1947. Starting initially from a small hotel in Karachi, the group currently owns and

operates one 3-star and two 5-star hotels in Pakistan. It also manages two 4-star hotels in

Dubai. The group has also ventured into real estate. It owns and operates office complexes

in Karachi and Lahore under the name, Avari Plaza. Currently, an international standard 5-

star, all-suite, 417 room hotel is being constructed in Islamabad, which is scheduled for

2013.

The author developed the case for class discussion rather than to illustrate either effective or ineffective handling of the situation. The case, instructor’s manual and synopsis were anonymously peer reviewed and accepted by the Case Research Centre (CRC) for its 1st ‘AJMC International Case Conference 2011,’ at the Lahore University of Management Sciences (LUMS), May 24-26, 2011. All rights are reserved to the author and LUMS. © 2011 by Nasir Afghan.

Noman, 12/18/12,

How successful; sons will be in ent. Dilemma faced on employment

The group has also gained a lot of exposure to the air travel business. Avari Travel Agencies

(ATA) are the general sales agents for American Airlines for the past two decades; and also

remained the general sales agents for Canadian Airlines International for around 23 years.

Like the hotel business, the group has gained a lot of respect in the air travel industry and

ATA has won numerous sales achievement awards from both its clients.

Spencer is another brand name that the Group carries. Spencer Pakistan has been

operating since 1948 as a holding and real estate management company, owning a number

of properties in Karachi. Since 1991, Spencer-Pharma is emphasizing on the production of

generic medicines as well as getting tolling/outsource assignments from multinational

companies.

The Avari Group has also experimented in the fields of Power Generation and

Communications. At the moment, the primary focus of the group is on managing/leasing 3-

star and 4-star hotels in Pakistan and on signing managing contracts for targeted hotels in

the Middle East.

1.1 Hotel Industry Overview

1.1.1 Introduction

The hotel industry in Pakistan caters well for the basic needs of any client. Both food and

accommodation are of very good standard. Nevertheless, due to uncertain political

conditions and unrest, tourists do not often prefer Pakistan when choosing a place for

vacation. Business travel is expected to increase as economy grows with the passage of

time. Overall though, due to lack of security for tourists and travelers, the hotel industry

has suffered in the past. On average, the share of foreign guests in hotels has increased to

roughly 35%. Worldwide, the hotel industry has a direct linkage with the tourism industry.

The tourism industry at present is among the fastest growing industries in the world and


is also a major source of foreign exchange earnings. In general, this industry is a potent

agent for economic development around the globe. The service sector in Pakistan is

growing rapidly and tourism falls under services. In addition, as more and more people

move up the class ladder, they have more leisure time and thus would have a positive

influence on the industry. In Pakistan however, this industry is still in the growth stage

and has not been accorded a lot of importance. This being stated, the country does have a

lot of potential and with the present government policies, one can be quite optimistic

provided the international scenario is favorable.

1.1.2 Geographical Distribution

The need for internationally acclaimed chain hotels so as to bolster tourism and

investment, and consequently the economy, was felt soon after the country’s

independence. In subsequent years, several big hotel chains entered the market such as

Avari (formerly Hilton and Ramada), Pearl Continental (formerly Inter-Continental),

Sheraton, Marriott and Serena.

However, most of these players have restricted their presence in the main cities of Pakistan

namely; Karachi, Lahore and lately, Islamabad. The geographical distribution of these

hotels, with the respective number of rooms, is enumerated below:


Table 1

Total Number of Rooms Available in all the 5-star Hotels in Pakistan

City Avari Pearl Marriott Sheraton Serena Regent Beach

Karachi 218 290 219 407 - 413 80

Lahore 186 559 - - - -

Islamabad/

Rawalpindi

417* 193 150 - 392 -

Bhurban - 190 - - - -

Quetta - - - - 140 -

Peshawar - 52 - - - -

Faisalabad - - - - 144 -

*Avari Islamabad - new project

Source: Avari Hotels’ official reports.

The hotel business is an integral part of the tourism industry, which today ranks among

the three fastest growing business sectors in the world. It is a major source of foreign

exchange earnings and a powerful agent of economic development. The tourism industry

and hotels in particular, are a major source of direct and indirect employment too.

Contrary to popular belief, tourism is a capital-intensive industry. It demands investment

in the construction of hotels, motels, lodging houses, chalets, camping grounds, rest houses

and youth hostels. Similarly, restaurants, athletic and health clubs, amusement parks,

playgrounds and last but not least, an efficient and comfortable transport system is also a

necessary ingredient of a successful tourist destination.

Strong growth was witnessed in the hotel industry between 2003-2006 especially in the

city of Islamabad. There was significant excess demand during the peak seasons. That had


also rekindled investor interest in the industry. The reason for the industry re-bound is

best understood in the context of the country’s economic recovery and improved

international profile in that period. The above led to the following major developments for

the hospitality industry in Pakistan: intra-country and international corporate travel

increasing manifold; Pakistan in general and Islamabad in particular (then and now) are

housing international community members involved in the on-going reconstruction in

Afghanistan; US Aid and the World Food Program have increased their presence and

activities in Pakistan; the Kerry Lugar Bill has seen an influx of US citizens to administer

the program (with many more expected); earthquake relief activities generated an influx of

NGOs and other foreigners; and improved political and trade relations with India between

2003-2006 yielded considerable incremental travel between the two countries then; even

2010 saw an increase in occupancy due to the devastating floods, which brought in

international NGOs and others foreigners.

1.1.3 Average Occupancy

Revenues in the hotel sector are almost 70% dependent on occupancy levels, which

generate income not only from guestrooms but also other sources such as food, beverages,

laundry and other service-related hotel departments. Hotel revenues are positively

correlated with occupancy levels.

The table below provides a basic comparison of the occupancy levels between Avari Hotels

Limited and Pakistan Services Limited:

Occupancy Level

2008-9 2009-10

Average (Avari) 57.66% 57.86%

Average (PC) 49.55% 53.93%



Figure 1

Client Mix

The client mix of the hotel industry is made up of the following segments:

Source: Avari Hotels

Ltd, 2009.

Typically, corporate clientele have provided the bulk of hotel revenues in Pakistan. These

payments accrue not only in the form of room and food & beverage revenues from

corporate travelers, but also from conference/meeting rooms utilization, demand for

which grows annually in line with the pace of economic activity in Pakistan. For instance,

between 2003 and 2006, the demand grew at almost 15% per year. Yet another avenue of

corporate revenues, quite significant in the case of Avari (the head office of both Unilever

and Dubai Islamic Bank are based in their Karachi hotel), comprises of rents received in

relation to office space permanently occupied by companies within hotel sites.

With Pakistan’s support of the war on terror and generally improved international image,

substantial foreign traffic has also begun flowing to the country. Indeed, scores of

foreigners from the international donor community with responsibilities in Afghanistan

are operating out of Islamabad. Foreigners for the earthquake rehabilitation in the

northern areas of Pakistan are also operating out of Islamabad. The 2005 peace initiatives

and then increased interaction with India had a positive impact for the industry.


Unfortunately, due to an increasing friction in ties, this inflow of Indian tourists, business

people and, Sikh Yatris (given that Punjab is the home to many Sikh religious temples and

shrines) has dried to a trickle. Other triggers for growth in the hotel industry are the

international cricket team tours, the forthcoming World Cup in 2011 and the Basant

Festival in Lahore - which used to be attended by leading Indian & Pakistani actors, artists,

and tourists from overseas.

Table 2

The client mix for Avari Hotels and Beach Luxury Hotel in 2009-2010

Nature Avari Towers Avari Lahore Beach Luxury

Corporate/Conferences/

Meetings

79% 79% 72%

Airlines (layover) 1% 1% 1%

Government 5% 5% 10%

Diplomats 10% 10% NGOs 12%

Long Staying Guests 5% 5% 5%


1.1.4 Competition in the Industry

Avari Group’s hotels have consistently competed successfully against peers over the

decades and, as such, it is reasonable to assume that the trend shall continue in the years to

come.

The table below provides a basic comparison of occupancy levels between Avari Hotels

Limited and Pakistan Services Limited:


Table 3

Comparison of occupancy levels of different hotels city-wise

2008-09 2009-10

Avari Lahore 54.53% 55.33%

Avari Towers Karachi 60.80% 60.40%

Average (Avari) 57.66% 57.86%

PC Lahore 53.00% 47.34%

PC Karachi 49.76% 42.89%

PC Rawalpindi 52.00% 61.20%

PC Peshawar 36.00% ---

PC Bhurban 57.00% 64.28%

Average (PC) 49.55% 53.93%


Table 4 below compares the profitability between Avari Hotel Limited and Pakistan

Services Limited:

Table 4

Profitability comparison

Performance for the Year Ended June 30, 2010

Avari % of Sales PSL % of Sales

Sales and Services 1,131,010 4,238,232

Cost of Sales and Services 694.278 61.39 2,698,003 63.66

Gross Profit 436.732 38.61 1,540,229 36.34

Other Income 127,080 11.24 339,339 8.01

Administrative & Selling

Expenses338,443 29.92 1,092,180 25.77

Operating Profit 225,369 19.93 766,310 18.08


Financial Charges 69,038 6.10 161,173 3.80

Profit Before Taxation 156,331 13.82 605,137 14.28

Taxation 7,893 177,205

Profit After Taxation 148,438 13.12 427,932 10.10

Total number of guestrooms 324* 1306

* Due to 98 rooms being closed at Avari Towers for renovations.


Table 5

Year-wise income statement for Avari Hotels

Amount in PKR Million2007 2008 2009

Total Revenues (sales and services) 1,057 948 1,025

Cost of Sale & Services 635 600 678

Gross Profit 422 348 347

Administrative Expenses 294 294 321

Operating Profit 179 112 150

Financial Charges 68 46 75

PBIT 111 65 76

Tax 5 5 5

Profit After Tax 106 61 71


With Avari Hotels having only 422 operational rooms (in actuality, 324, due to the shutting

down of 98 rooms at Avari Towers for renovations) compared to the 1,306 room capacity

enjoyed by Pearl Continental Hotels, Pakistan Services Ltd benefits from the economies of

scale, thereby reducing overall Operating Expenses.


1.2 Forthcoming Hotels in Islamabad

In 2006, the following were optimistically promoted by sponsors and the Government

alike:

Quote: The hotel industry remains widely untapped in Pakistan. Given Pakistan’s

continued economic performance improving ties with India, on-going reconstruction in

Afghanistan and the earthquake affected areas, the hotel industry is expected to continue

strong demand, especially in the capital city. Islamabad is the gateway to the northern area

of Pakistan, Afghanistan and the Central Asian States; it has seen tremendous demand for

hotels. Due to the lack of hotel facilities as per existing demand in Islamabad, the guest

room business is flourishing. Moreover, adjacent cities, especially Lahore, share some of

the burden of hotel requirements subject to availability of Islamabad - Lahore flights or in

other cases easy accessibility through the motorway. Some of the forthcoming hotels in

Islamabad are:

1.2.1 Centaurus Hotel Islamabad

This will be the first of the 7-star 350 suites hotel in Islamabad, Pakistan, and is expected to

break ground on the hotel portion after four years (2011). The project is located in Sector

F-8 between Jinnah and Faysal Avenue. The project is a combination of a residential plaza,

corporate offices and a shopping mall, thus, success of the project depends on cash flow

from the sale of apartments, offices and shops.

1.2.2 Intercontinental Hotel

The Intercontinental is also going to launch its 190 room hotel in the close proximity of the

Marriott Hotel in Islamabad. This project was expected to be operational by June-

September 2008.

1.2.3 Avari Islamabad


The Avari Group has started to build a 5-star (417 rooms) hotel in Islamabad. This project

is expected to be operational by 2011.

1.2.4 Other Expected Projects

Serena is also expected to launch its 2nd phase five years from now which will be a 200

room (approximately) hotel. Serena is looking for a composition similar in combination as

that of Centaurus that is a combination of apartments, a shopping mall and an office

complex; however the hotel is not expected to begin commercial operations until 2011.

Moreover, Bismillah Group of Faisalabad is also looking at the possibility of a 300 room

hotel near convention center, which is also expected to break ground after four years.

2.0 History of the Avari Family

2.1 Dinshaw Byramji Avari

Dinshaw Byramji Avari, born in 1902, was brought up and schooled in an orphanage - he

would also teach younger children of the orphanage in the evening. Working his way

through a number of ups and downs in his life, he went on to do his B.Com and joined the

Sunlife Insurance Company of Canada as a clerk to the Chief Executive. His talents showed

from the very beginning. After achieving the highest sales for a continuous eight months in

Bombay, he was sent to Karachi in 1929 to open up the company’s branch there. Soon he

was made in-charge of the provinces of Punjab, Sindh, Baluchistan, NWFP and Afghanistan.

He was also the first to get a Chartered Life Underwriter (CLU) certificate in Asia.

Not being able to progress any higher, with an energy and passion to achieve more, he

diverted his attention to other opportunities. He bought the Bristol Hotel from an English

couple in 1948 by mortgaging his wife’s jewellery, his own life insurance policy and

borrowing money from friends. In order to gain expertise in hotel management, he made it

binding upon the previous owner in order to close the sales deal to train himself and his


wife for a period of six months. Dinshaw worked very hard to make his infant business

work. He would do all the chores, from room maintenance to purchasing food items from

Empress Market at 4am. The knowledge he gained from his predecessors combined with

his own business acumen, eventually paid off and Bristol Hotel became a business success.

The success of Bristol made Dinshaw realize the potential for high class hotels in Karachi.

Benefiting from the slump in property prices after the partition of the subcontinent, he was

able to buy a cheap piece of land in Karachi to build the Beach Luxury Hotel . His selection

of a relatively isolated area for building the new hotel made everyone skeptical of the new

venture. However the new hotel was more successful than expected and the 35 room space

became insufficient for the number of guests that kept showing up. Tents had to be erected

outside the hotel to accommodate the surplus guests. Soon enough, the hotel had grown

into a 150 room 5-star (for its time) property. Beach Luxury was home to many

innovations and was the first in Pakistan to serve buffet style dinners to its guests and also

the first to serve Chinese food in Pakistan.

By 1962, Dinshaw had gained a lot of experience in the hospitality business. This was the

time when he made one of the most critical business decisions of his career, i.e. the

purchase of Nedous Hotel in Lahore through the highest bid ever made in the history of

property auctions, i.e. Rs. 12.15 Million. The new project was named Park Luxury Hotel. In

1978, the Avari Group of hotels made their first collaboration with an international hotel

management company, and hence Hilton International converted Park Luxury Hotel to

Lahore Hilton. Realizing the synergies between the hotel business and the air travel

business, Dinshaw started the Avari Travel Agencies in the same year.

While the Lahore Hilton was being developed, Dinshaw envisioned the construction of the

tallest building in Pakistan, and came up with the idea of constructing Avari Towers in

Karachi. The project faced many hardships including floods, devaluation of the Pakistani


Rupee and many other infrastructural issues, but it finally materialized in 1985. Avari

Towers housed the first Japanese restaurant in the subcontinent. The first challenge faced

by the new venture was the decline in the demand for 5-star hotel accommodation in

Pakistan. To cope with this issue, Dinshaw decided to develop 150,000 sq. feet of office and

shop space around Avari Towers and named it ‘Avari Plaza.’ The plaza was able to attract

the offices of many multinational corporations and airlines.

Dinshaw dealt with capital constraints by introducing the concept of receiving advance

rents. Having the expertise in running hotels, Dinshaw decided to run the Avari Towers

himself unlike Lahore Hilton which was managed by Hilton. However, to attract

international clientele, Dinshaw licensed the Ramada name under a franchise arrangement.

Dinshaw was known to be a visionary and could foresee where the money and opportunity

was. He instilled his values in the organization in the form of documented policies. He gave

special importance to successor development and always emphasized the importance of

giving complete independence to the upcoming generations of managers. In his words:

“Rules are meant for donkeys and mules and children of schools.”

While he kept struggling all his life to make his way up in business, he never let his social

and community involvement relax. His social initiatives involved establishing the Rotary

Club of Karachi as well as setting up the Karachi Parsi Anjuman Trust Funds (see Exhibit 3

for a complete list of organizations Dinshaw was associated with). He attributed his

motivation to the Zoroastrian motto:

“Contented with what I have but discontented with what I am.”

Dinshaw died at the age of 86, his son Byram Avari took over as the new Chairman.

2.2 Byram Avari

Byram Avari joined the business of his father after doing his MBA from IBA-Karachi. He

started by working at the lowest level. His first assignment was to peel potatoes in the


kitchen. He then moved on to working as the PA to the General Manager Beach Luxury. He

would open the GM’s mails and accompanied him everywhere to take meeting minutes and

would assist him in everyday tasks. In a similar, gradual manner, he worked his way

through different levels of responsibilities in the hotel. He then worked side by side with

his father to build the Lahore Hilton and completed the Avari Towers himself. He was then

appointed Managing Director and continued in this position until his father’s demise at

which time he became Chairman & Chief Executive. (See Exhibit 4 for CV details).

In business as well as in all other aspects of life, Byram was deeply impressed by his father.

However unlike Dinshaw, he was not a risk taker. The president of Hilton International

once compared the father and son as:

“Dinshaw is an old man with a young thought; while his son is a young man with conservative

thought.”

Over time Byram became aggressive in venturing into new businesses, and under his

tenure the Group took full control of Spencer & Company, Spencer Pharma and started

Spencer Powergen Company of Pakistan Ltd. However, this venture faced a technical

knockout by the Government of Pakistan and could not reach completion in spite of

financial closure being achieved. Byram had a very flexible approach towards his

employees, because his father used to say to him; “We look after the poor because we were

once poor too.”

One of his employees recalled an incident:

“Once an employee filed an application for 40 days paid leave as his mother had died. The GM refused

because the rules allowed for only 30 days of such leave. When the issue got to the notice of Mr.

Byram Avari, he directed the GM to approve the application, and added that the rules could always

be changed by the top management because their purpose is to help employees in every way. From

there onwards, all the policies of the Avari Group were made to suit the employees.”


Byram always saw his father as his best friend and wanted to become the same for his

children. Therefore he used to take his children along whenever he had to travel. He

considered such contact critical for building a strong bond with the children and an

opportunity to inculcate family values in them. He took family ties to be of utmost

importance, preceded by nothing. He set a tradition of having a family dinner every Sunday

which every family member had to attend. No one was allowed to make any other dinner

commitments for Sunday. The tradition is still religiously followed in the family.

Like his father, Byram also considered trust and independence the key features of

succession planning. While they were kids, he showed his sons the cupboard where he

kept his cash, and allowed them to take the money they required instead of asking for

pocket money. As children they were required to take permission before getting money

from the cupboard, however the condition was removed as they grew up. Byram

considered this exercise very useful in developing the trust he wanted to have in his

successors.

His father had built an environment in Avari where someone could join the group as a

peon, but, based on the abilities, could rise to the managerial and even directorial ranks . It

was believed that such a system would result in producing an extremely loyal and ever-

motivated human resource. They developed an environment where there was no concept

of retirement. If employees wished to work after the age of 60 they could do so on a

contractual arrangement. When they were too old to be able to work, they received their

last drawn monthly salary and medical benefits for the rest of their lives. The policies

developed by Byram and his father paid off in the form of extremely low attrition rates. A

large number of employees of Avari have served the organization for over 30 to 40 years.

He insisted that he would never lose interest in family business and community work:

“Like my father always said – If You Rest, You Rust and if You Rust, You Die."


2.3 Dinshaw and Xerxes Avari

Following the footsteps of their father, both Dinshaw and Xerxes (See Exhibit 5 for CV

details) did an MBA from IBA-Karachi. They had started doing summer internships in the

hotel while they were in high school. The internships helped them become familiar with

the different sections of the hotel and to learn how work was done at the lowest levels.

Their father also kept them generally abreast with Group happenings over dinner, which

went a long way in easing the transition and continuity of actions when they started

working eventually.

Dinshaw formally joined the business in 1990 and Xerxes followed in 1991. In the first two

years all three of them used to sit on one large table, where they would share every piece of

information with each other. After two years in the same room, they started sitting with

their father in the next room (which didn’t have a door) so that they could listen to his

business conversations and he could ask their opinions. They also acted as secretaries to

their father, accompanying him to the organizational meetings and handling his official

correspondence. Initially they were doing all sorts of work, however their interests got

streamlined after some time – Xerxes started dealing with financials, budgeting, tax, new

projects development and renovations at their hotels, while Dinshaw looked after the

group marketing, operations (the GMs reported to him), Information Technology, Security

and Human Resources. Jointly with their father, Dinshaw and Xerxes looked after the

development of new hotels. According to Dinshaw, they never had any job description.

They had developed most of the managerial and business skills while working on the job

and most importantly, their father had been the best coach and mentor for them.

According to Dinshaw, their future aim would be to continue to manage the Avari family

business as true family business, based on the core values of caring, honesty and respect

for others, encouragement for diversity and sharing their wealth with their employees. As

Dinshaw stated: “Treat everyone how you would like to be treated.”


At the same time, Dinshaw was of the view that they would never allow anyone to take

advantage of them or take their soft image for granted.

3.0 Avari Group – Core Values

The Avari family rejects the impression of trying to run a seth organization. They see their

business as a family-owned enterprise, managed in compliance with the corporate rules

with an extremely professional organizational culture. The core values depict a deep

spiritual side of the business leaders with a strong focus on social development. Byram

became the head of the Parsi community in Karachi after the death of his father in 1988.

The Avari family’s core group philosophy is; employee compassion, welfare, motivation,

growth, development & loyalty (of both staff & management). This philosophy is one of the

primary goals of Avari’s organizational policies & procedures. Pakistan’s nuclear tests in

1999 preceded a painful slump in the hotel business, combined with a hike in import

prices. Many hotels underwent major downsizing in that period, however Avari Group

decided not to follow suit. They announced a salary cut across the board at all managerial

levels only which was welcomed by the employees after they were taken into confidence

about the circumstances. The situation improved in a matter of three months and the

group rewarded its management staff by giving special bonuses on top of the

compensation for salary cuts.

Dinshaw and Xerxes attributed their ability to stay together and run their business

successfully to the strong family traditions. At the same time, they endorsed the

importance of professional management, professional education and on-the-job training

for the development of achievers in management. With their house right on the hotel

premises, they came to work before office time and worked till late in the evening.

According to Dinshaw; “While living in the same big house, and having individual space, we

learn how to look after each other and share our issues and understand each other better.”


In addition to the career development opportunities and financial incentives, the brothers

consider mutual respect to be one of the main reasons for employee retention. According

to Xerxes:

“In the workforce there are a number of employees who joined Avari even before we were born. We

have been treating them as uncles since childhood. Now that we have become their bosses, we see no

reason in not giving them the same respect. In fact we treat all employees with respect because that

is how we get respect in return. Agreed that a bit of arrogance comes with power, but whenever we

realize our mistake, we make it a point to go and apologize to the employees, and this only adds to

our regard in their eyes.”

4.0 Succession in the Future

Dinshaw and Xerxes have an approach towards succession planning that contrasts with

their father and grandfather. They plan to send their children to universities abroad for

professional education. According to them, they have come to a stage where strategic

issues should bother them more than the operational issues. They have highly skilled

operational managers reporting to them. In their successors, they want to develop the

competencies that would help them better manage the corporate office. After completing

the university education and before joining the family business, they would like their

successors to work in a large international chain of hotels, preferably as assistants to the

CEO. Above all, they try to inculcate in their children the importance of the value system

that holds the Avari family together. While they like their families to enjoy their own space

at home, they make sure to take all business decisions in consultation with each other and

their father. They want to pass on the same sense of belonging to their next generation.

The brothers foresee a bright future for the business not only due to opportunities coming

up for further success and development, but also due to a firm belief in God and the


philosophy; “Whatever happens, happens for the best; whatever happens, happens the way

God wants it to happen.”

In the words of their father: “God does not look at the oratory of your prayers how eloquent they

are, nor at the arithmetic how many they are, nor at the logic how methodical they are, but He looks

at the sincerity, how spiritual they are.”

5.0 Future Challenge

In December 2010, Byram D Avari, the Chairman of Avari Group along with his sons

Dinshaw Avari and Xerxes Avari were having a meeting to discuss the Avari Group’s

lifelong employment policy. In 2007, 2008 and 2009 the hotel industry was facing a major

challenge in Pakistan. Due to the poor law and order situation, economic problems and the

ongoing war on terror on Pakistan’s soil, most of these hotels were experiencing low

occupancy and decline in the business activities in the hotel industry in all the major cities

- Karachi, Islamabad, and Lahore.

Several top hotels in Karachi and Islamabad were reducing the headcounts. The challenge

Avari Group was facing, according to Byram; “We are a values-driven organization, we exist

and survived because of our core values but now it is becoming very difficult to keep our head

above the water.” All of the top leaders including Byram, were worried as they were facing

the real test of their core value. One option was to change the lifelong employment in order

to save the organization.

On the other hand, the real test of the organization was how it was holding and keeping the

sprit and core value intact during the crisis situation. In that weak economic time, these

core values were put to a real test.


Exhibit 1

Avari Organizational Chart


Exhibit 2

Avari Family Tree


Dinshaw X. Avari (Jr.)Byram D. Avari (Jr.)

Fourth

Generation

Exhibit 3

List of Organizations Dinshaw Byramji Avari was associated with

The Karachi Parsi Anjuman Trust Funds, as Trustee and Chairman from 1985 to 1987.

The Jehangir Rajkotwalla Baugh Trust, as Chairman for 11 years.

The Parsi Hew Year Celebration Committee, as Chairman for 30 years.

The Young Men's Zoroastrian Association, as Chairman for 10 years.

The Jehangir P. Dubash Health Culture Institute, as Chairman for 34 years.

The Rotary Club of Karachi, as Founder Member and Founder President.

The Pakistan Sea Scouts, as Treasurer.

The Deaf & Dumb Centre at Karachi, as Founder President for 13 years.

Society for Prevention of Cruelty to Animals, as Member of the Managing Committee

for 45 years.

Founder President of the Pakistan Hotels Association from 1948 to1987.

Bai Virbaiji Katrak Charity Funds, as its Chairman for the last 25 years.

Director of Pakistan Tourism Development Corporation for 6 Years.

Sind Red Cross/Red Crescent Society as a Member of the Managing Committee from

1941 to 1987.

Director of Premier Bank for 8 years before Nationalisation, and a Director of Spencer &

Company (Pakistan) Limited for 15 years.

Member of the Managing Committee of the BVS Parsi Boys School and Mama School

Vice President of World Association of World Federalists, English Speaking Union, the

Pak-Kuwait Friendship Association and numerous other social and community projects.

Justice of the Peace from 1941 to 1988


Exhibit 4

Byram D Avari (Justice of Peace) CV

CURRICULUM VITAE

NAME By ram D Avari (Justice of Peace)

ADDRESS Beach Luxury Hotel. M. T. Khan Road, Karachi, Pakistan

BORN February 07, 1941

STUDIES B. Com. LLB

Diploma in Business AdministrationDiploma from Cornell University, USA - Hotel ManagementSenior Certificate from Trinity College, UK (Music-Violin)

APPOINTMENTS : Honorary Consul of Canada

BUSINESS : Chairman- Avari GroupAvari Hotels Ltd. - Avari Towers Karachi/Avari LahoreAvari International Hotels Limited-Hotels at Dubai & TorontoAvari Travel Agencies (Pvt) LimitedBeach Luxury Hotel (Pvt) LimitedBeach Brewery (Pvt) LimitedSpencer & Co. (Pakistan) LimitedSpencer Pharma (Pvt) Limited

Spencer Powergen Co. of Pakistan Limited

SOCIAL & COMMUNITY: Chairman- Karachi Parsi Anjuman Trust Fund (1990)

Chairman - Parsi New Year Celebration Committee (1988)

President- Dastur Dr Dhalla Memorial Institute (1998)Trustee - Jehangir Rajkotwalla Baug TrustSenior Vice President - English Speaking Union of Pakistan (2000)Patron-Karachi Sea Scouts Council(1998)General Body of Strengthening Participatory Organization (SPO) 2006Senior Vice Chairman of Minority Advisory Council, Punjab (2006)Trustee, Board of Trustees, Karachi Port Trust (2006)Honorary Member, World Zarathushti Chamber of Commerce (2007)


SPORTS Gold Medal in Yachting in VI11 Asian Games, Thailand 1978Gold Medal in Yachting at IX Asian Games, India 1982Runner-up at World Sailing Championship, Canada 1981Runner-up at USA Opens National Sailing Championship 1981Manager/Captain Pakistan Team, South Asian Yachting Regatta Sri Lanka 1978Winner of Lipton Trophy 1979Winner of State of Ontario (Canada) Sailing Champion 1981Winner of Canadian Inco Regatta 1981

DECORATIONS : President's Gold Medal January 1979 PRIDE OF PERFORMANCE MEDAL (Yachting) Govt of Pakistan Award 1982Pakistan Commemorative Postage Stamp issued December 31, 1983 (with Byram & Goshpi Avari in Enterprise Sailing Dinghy CORPORATE EXCELLENCE AWARD 1999 HAMDARD INSTITUTE OF MANAGEMENT SCIENCES (Chancellor Mr Justice Ajmal Mian, Chief Justice of Pakistan) Presented by the President of Pakistan in March 1999

CLUBS Member, Karachi Boat Club/Sind Club/Yacht Club/Golf Club/SKAL ClubKarachi Parsi Institute/Honorary Member, Karachi Caledonian Society Life Member, Pakistan Red Crescent Society

PAST Member, Parliament (Majlis-e-Shura), Government of Pakistan 1982-85 Member, Parliament - National Assembly of Pakistan (1988 upto 1993) Federal Parliamentary Secretary for Planning & Development National Assembly '91) Pakistan Delegate to the United Nations General Assembly 38th Session 1983 Member, Federal Advisory Council for Minority Affairs (1984) Member, Standing Committee of Parliament (National Assembly) 1991, on Culture,

Tourism, Youth Affairs, Sports, Planning and Development Member, Advisory Committee for the Dept of Archaeology, Govt of Pakistan (1992) Member, Federal Government Standing Committee "Industry" 1982-85 Commodore, Karachi Yacht Club (Three Terms) 1976, 1979, 1980 Member. Film Censor Board of Sind 1978 to 1981 Founder 1st Vice President, Asian Yachting Federation 1978-82 Member - Managing Committee, Adult Deaf& Dumb Centre Chairman, Pakistan Hotels Association (Three Terms) 1981, 1982 and 1983 and Vice

Chairman (1986/87) President, SKAL Club of Karachi (2 Terms) & subsequently on Managing

Committee Member, Committee for arranging Annual Finances for Parsi Charitable Hospital 1st Vice President, PAT A - Pacific Asia Travel Association (Pakistan Chapter) Board of Governors, Pakistan Institute of Tourism & Hotel Management

1981/82/83 1st Vice President, Karachi American School 1981 to 1986 Member, District Social Welfare Committee South - Karachi 1984-88


Member, Federal Planning Commission - 7th Plan Tourism 1988-1993 and Perspective Plan 1986-2006

Member, Karachi District Peace Committee 1987 Chairman, Association of Owners of Hotels Operated by Hilton International

Worldwide 1986-88 Chief Warden of Civil Defence for District West, Karachi 198 7-89 Director - Pakistan Gulf Economist Member, Federation of Pakistan Chamber of Commerce & Industry Standing

Committee on Tourism & Hoteliering 1984-86 Leader of the Delegation for negotiations on behalf of the Government of Pakistan

with Suzuki Motor Company of Japan February 1989 Member of Prime Minister Benazir Bhutto's entourage to Malaysia for Commonwealth

Heads of Government Meeting (CHOGM) - October 1989 Member of Prime Minister Nawaz Sharif’s entourage in 1992 to Uzbekistan Member of Prime Minister Benazir Bhutto's entourage to Turkmenistan and Ashgabad in Member of Delegation from Pakistan of the "Canada-Pakistan Business Council" to

attend meetings at Montreal, Ottawa and Toronto to develop investment interest in Pakistan (November 1989)

Member - Ministry of Finance, Advisory Council for Finance Budget 1989-90 Managing Trustee, Karachi Parsi Anjuman Trust Fund 1983/Trustee since 1982 Vice Chairman, Pakistan-Kuwait Friendship Association 1987 to 1990 Member, Board of Directors, Spencer & Co (Pakistan) Ltd 1976 & then from 1989 Member - Public Accounts Committee of National Assembly (1989) Member - Federal Advisory Council for Ministry of Commerce (1989) Member, Federal Advisory Council for Ministry of Finance (1989) Vice President, Pakistan Hungary Friendship Group in the Pak. Parliament 1990 Member, Federal Government Hotels & Restaurants Advisory Committee (1979) Member, Board of Directors, Zeal-Pak Cement Factory Limited (1989) Member, Managing Committee, Young Men's Zoroastrian Association (1982-1991) Member, Resources Mobilization & Tax Reforms Commission (1991) Member, Advisory Council of the Pakistan Association for Computer Education in

Schools (PACES) 1987 Member, Board of Directors, Pakistan Special Olympics (1989) Member, Rotary Club (Main) President - Jehangir Peerozshah Dubash Health Culture Institute (1989) Vice President - English Speaking Union of Pakistan (1989) President - English Speaking Union of Pakistan (2000-2004) President - Pakistan-Kuwait Friendship Association (1990) Vice President - Dastur Dr Dhalla Memorial Institute, Karachi (1982) Manager, Pakistan/Bangladesh - Canadian Airlines International (19..-2000) Member - Divisional Minority Committee, Karachi (1981) Member - Pakistan Maritime Museum Advisory Board Executive Committee of Pakistan Sports Board, Islamabad(1999) Judges Committee of 7th World Zoroastrian Congress Awards 2000 (May 2000)


President - Friends of a Cleaner Sea, NGO (1996) Vice President - International Hotel Association South Asia (1984) Member, Government of Sindh Co-op Housing Authority (1983) : Member, Advisory Board of Citizens-Police Liaison Committee (CPLC) (1997) Member, Central Board of Film Censors (1998) Member & Vice Chairman, Minority Advisory Council, Govt. of Punjab (2000) Member, Advisory Board of Ministry of Minorities, Culture Sports, Tourism & Youth

Affairs(2001) Member, Advisory Council, Ministry of Industries & Production (2003) Member, Managing Committee - Pakistan-Kuwait Friendship Association (1990)


Exhibit 5

Dinshaw and Xerxes Avari CVs

CURRICULUM VITAE

NAME DINSHAW B AVARI

STATUS Married (two children)

ADDRESS Beach Luxury, M.T. Khan Road, Karachi 74000, PakistanTel: 92-21-5611031 Fax: (92-21) 5610673 & 5610674Email: [email protected]; [email protected]: dinshawskype

D.O.B . July 14, 1967

STUDIES LLB (1997)B.B.A. (Hons) (1988) / M.B.A. (1989)London Chamber of Commerce Accounting (Elementary)

BUSINESS Director- Spencer Pharma (Pvt) Ltd (formerly Fisons)- Avari Travel Agencies (Pvt) Limited- Avari International Hotels Limited – Avari Dubai

MEMBER Balloting sub-committee, Karachi Yacht Club (2000-present)Joint Secretary – Young Mazdayasnian Zoroastrian Association (1991- present)

PAST Chief Executive - Spencer & Co. (Pakistan) Limited(Work) Chief Executive- Beach Brewery (Pvt) Limited

Director - Spencer Powergen Company of Pakistan Limited Member- Chambers sub-committee, Sind Club, Karachi (2006)Member- Catering sub-committee, Sind Club, Karachi (2005)Treasurer-Management Association, Institute of Business Administration (1988)Treasurer-Marketing Association, Institute of Business Administration (1987)Joint Secretary – Pakistan Parsi Collegiate Association (1985)

PAST Honorary Secretary, Honorary Sailing Secretary & Honorary Secretary Trophies – (Sports) Karachi Yacht Club (2009-10)

Vice Commodore & Honorary Treasurer, Karachi Yacht Club (2008-09)Personnel sub-committee, Karachi Boat Club (2007-2008)


mailto:[email protected]

mailto:[email protected]

Honorary Sailing Secretary & Managing Committee Member – Karachi Yacht Club (2003-2005)Member- Managing Committee – Karachi Yacht Club (1990-91)

CLUBS Royal Ocean Racing Club, UK / Karachi Yacht Club / Karachi Boat Club / Karachi Sind Club / English Speaking Union (ESU) / Young Mazdayasnian Zoroastrian Association (YMZA) / Pakistan Parsi Collegiate Association (PPCA)

SPORTS Participant in Royal Hong Kong Yacht Club’s ‘Rolex South China Sea Race’ – April 1-5, 2010 (from Hong Kong to Subic Bay, Philippines) on

“Calamansi” (Skipper: (Steve) Ho, Chin Wah)Participant in Clipper Ventures “Round the World Race” on Leg 4 (Fremantle-Singapore-Qingdao) (January 1, 2008 to February 16, 2008) (Skipper: Simon Bradley)Participant in the Enterprise Worlds’ Sailing Championships, Cornwall, U.K. (1992)Participant in the Enterprise Worlds’ Sailing Championships Bombay, India (1991)Participant in the Enterprise Worlds’ Sailing Championships, Sudbury–Canada (1981)Participant in Southern Asian Yachting Regatta, Sri Lanka (1980)Winner of Southern Asian Yachting Regatta, Karachi (1979)Winner of Pakistan Junior National Sailing Championship (1979)Participant in Pakistan Junior National Sailing Championship (1978)

INTERESTS Sailing / Scuba Diving / Swimming / Water Skiing / Reading / Movies


CURRICULUM VITAE

NAME: XERXES B. AVARI

STATUS: Married (three children)

ADDRESS: Beach Luxury, M.T. Khan Road, Karachi 74000, Pakistan

Tel: (92-21) 5611031 Fax: (92-21) 5610673 / 4

DATE OF BIRTH: August 25, 1968

STUDIES: Master of Business Administration (MBA)

Bachelor Business Administration (BBA Hons.)

High School Diploma – American School, Karachi

BUSINESS: Executive Director - Avari Group

- Avari Hotels Ltd.- Beach Luxury Holdings- Spencer & Co. (Pakistan) Limited- Spencer Pharma (Pvt) Ltd - Avari Travel Agencies

SPORTS: Sailing - Asian Games Guangzhou China – Represented Pakistan

in (Participated) 470 Class (2010)

- Asian Games Doha Qatar - Represented Pakistan in

470 Class (2006)

- Asian Sailing Championship Doha Qatar - Represented

Pakistan in 470 Class (2006)

- 470 European Championship Gdynia

Poland (2005)


- 470 World Championship Cadiz Spain (2003)

- Asian Games Busan Korea - Represented Pakistan in

470 Class (2002)

- 470 European Championship Dun Loghare Ireland

(2001)

- 470 World Championship Balatonfured Hungary (2000)

- Enterprise World Championship Porthpian, UK (1992)

- Enterprise World Championship Bombay, India (1991)

- Enterprise World Championship Sudbury, Canada (1981)

Swimming - 1st Place American Inter School (Broke own Record

which stands unbroken) - 1996

- 1st Place American Inter-School Championships (Broke

Record) - 1995

- 1st places in various entries – Sind Club Galas

- 1st places in various entries – Karachi Parsi Institute

PAST: Member Managing Committee of Karachi Yacht Club.

CLUBS: Karachi Yacht Club / Boat Club / Sind Club / Skal Club / Parsi Institute /

YMZA

INTERESTS: Soccer, Volleyball, Snorkeling, Water-Skiing, Wind Surfing.


Exhibit 6

Avari Group – Timeline of Important Events


2010

1937

Dinshaw Byramji AvariAcquires Bristol Hotel

1946

Dinshaw Avari acquires land and starts

to build Beach Luxury Hotel in Karachi

1962Nedous Hotel in LahoreBought by Avari Group

and Converted toPark Luxury Hotel

1978Lahore Hilton is completed and opens

1985Avari Towers in Karachi is Completed

and opens

1988Dinshaw Dies and Byram becomes the New Chairman

1990 - 91Dinshaw (Jr.) and Xerxes

Join the Business

1948

Opens Beach Luxury Hotel

1995

Management Contract for Avari

Dubai is signed & Hotel opens

1997

Management Contract for

Ramada Hotel Toronto

Airport is signed & Group

takes over hotel on

Management


Documents

AVARI (A) MBA