India is a land of diverse cultures and traditions. Tourism in India is one of the most sorted and demanding area undertaken by the Government of India. Thus, the tourist department takes several steps to ensure tourists from various parts of our own country and other countries. With rise in number of tourists in India there has been an increase in the number of international hospitality brands. In an interview with FIHL, Vilas Pawar, CEO, Choice Hospitality (India) Ltd shares the success story of his brand.
Ramanjit Kaur (RK): What inspired Choice Hotels India to take the franchise route to expand the brand?
Vilas Pawar (VP): Choice Hotels International was established in 1930. It is one of the largest and successful chain of hotels in the world, with over 6,000 hotels and 10 brands in different segments of the industry. Choice Hospitality (India) Ltd is the master franchisee of Choice Hotels International. Choice Hospitality (India) Ltd was established in 1987 with an objective of setting up a ‘value for money’ accommodation for the budget conscious business and leisure travellers in metros and tier II cities of India.
RK: What practices and initiatives have you introduced in Choice Hotels India?
VP: Our spectrum of services include -
RK: How many franchisees do you have and in which all cities?
VP: We currently operate over 30 hotels across 21 locations with another 15 under development, offering a wide rage of services to its consumers. For instance, we have three in Chennai. Ahmedabad, Pune and Mumbai have two hotels each while on the other hand a number of cities like Bengaluru, Chiplun, Corbett, Faridabad, Gurgaon, Haldwani, Hyderabad, Jaipur, Lucknow, Manali, Nashik, New Delhi, Shimla, Tuticorin and Vijayawada have one Choice Hotels each.
RK: What support do you provide to your franchisees?
VP: We provide our franchisees with brand affiliations from full service (upscale) to limited service (mid-scale) hotels. We share the intellectual property right with our franchisees, which include logo of the hospitality giant, copyrights and patents (if any). We also offer a range of services that comprises reservation system, sales and marketing, human resources and quality assurance inspections. We provide highest return to our franchise owners against the other brand segments of the hotel industry.
RK: What is the break even period for ‘Choice Hotels India’ franchise?
VP: The break even period depends on various factors. It can vary from location to location. Generally, the break even is based on cost per room, brand name and location. With minimal overheads, the mid scale segment is completely suitable for India. Our cost per room is more economical and ROI is much faster. The properties are able to deliver good earnings with less risk.
RK: What are the challenges that can be faced by a franchisee in this business?
VP: While taking up a franchise, a franchisee must be willing to make sufficient investment of financial resources and time in the business. This is because; a new business usually takes time to ensure proper visibility and positioning of the product or service in the market.
RK: Any advice for the young entrepreneurs?
VP: Many real estate developers and other industrial players are venturing into the hospitality business by partnering with multinational hotel chains to get better management and marketing functions. For an entrepreneur, it is necessary to work deliberately towards developing business projections based on market feasibility.
RK: What are the company’s future plans in terms of expansion through franchising?
VP: Company has plans of coming up with over 15 hotels in the next two years. These hotels are planned to be built in various destinations such as Bengaluru, Karla (Pune), Greater Noida and Delhi.
Recently, we have introduced Quality Inn Sabari Resorts, Kodaikanal and Quality Inn, The Mayflower in Tuticorin. Apart from this, we have signed a Sleep Inn in Delhi under the franchise and marketing agreement.