'Asset-light' Has Proven to be a Winning Strategy for us: Chander Baljee, Chairman and Managing Director, Royal Orchid and Regenta Hotels
Investment by global as well as Indian investors is continuing and growth in Tier 1 and Tier 2 cities is intensive.
ROYAL ORCHID and Regenta Hotels (ROHLTD) is one of India's fastest-growing hospitality brands, managing a portfolio of over 58 properties across 38 locations. Royal Orchid and Regenta Hotels is a renowned and trusted brand with a growth plan to reach 100 hotels by 2022. In an exclusive interaction with BW Hotelier, Chander Baljee, Chairman and Managing Director, Royal Orchid and Regenta Hotels talks about the performance of the industry, the role of smart technology in the industry, new disruptors, and their impacts.
Your take on the current scenario in the Indian hospitality markets?
The industry is doing well. All key indicators; demand, supply, and revenue are in green. Investment by global as well as Indian investors is continuing and growth in Tier 1 and Tier 2 cities is intensive. Tier 3 and Tier 4 cities are also seeing expansion. 'Asset-light' has proven to be a winning strategy for us and there's now a strong focus on hybrid management and franchise models. Flexibility is key as it delivers agile business models that require less investment and faster break-evens. Technology leads the way for all genres of businesses: international, domestic, chain-brands, standalone players and now the unorganised sector too. It's a carnival kind of feeling - we have all types of players marching together, and we're all moving forward.
What has been your biggest challenges in recent times?
I would say GST and demonetisation posed active challenges. There was certainly a negative impact; not just on the hospitality industry, but on the economy at large. Perhaps there was a lack of clarity which caused confusion, we're in a much stronger position today. The state-of-industry is better and we're glad the government has taken cognizance of our challenges and taken corrective measures. The new norm of 5% GST on banquet and F&B business is great, it makes hotels welcoming; just like they're meant to be. Challenges at the state and city level, however, remain the same. Licencing, renewals, and registrations are still cumbersome.
In your view what are the new disruptors in the hospitality industry and their impact?
Disruptions are a constant in the industry. Disruptions help us build-better, upgrade, improve, optimize and eventually succeed. A decade back, in the years between 2003 and 2008, serviced apartments were a disruption. They required no licensing, they paid electricity at residential rates and mostly, had no debt. The industry was taken by surprise, or say, 'disrupted'. Then came social media, then suddenly; so many unbranded stand-alone hotels became 'bookable', thanks to Oyo and Treebo and the likes. Disruptions will always continue. The ultimate goal of hotels is to create an ecosystem where guests love to stay, dine and celebrate, and the biggest disruption today is technology in terms of guest experience. Technology today is the biggest disruptor, and disruption is the biggest enabler.
What do you see as the role of smart technologies in the new market?
Smart technologies help us connect better with our guests. We're actively looking to integrate AI enhancements to upgrade our guest experience in terms of bookings, 'at-hotel' experiences, and to better the entire customer lifecycle journey in terms of communication. We're moving from a 'transaction-based' relationship to an 'intensely involved' relationship with our guests before they check-in, during their stay and after they check-out. Our guest feedback and loyalty program is undergoing massive upgrades and we'll soon be rolling out best-in-industry platforms. ML (machine learning) is going to help us generate savings and optimize our back-of-the-house operations and VR (virtual reality) will give guests an immersive experience of some of our signature leisure properties in Karnataka, Goa, and Rajasthan. These are exciting times.
In your view how is the industry going to perform over the next five years?
We're very optimistic about the next five years. The demand for accommodation and banqueting options is set to rise, the supply is well-matched and we're poised to deliver great experiences in order to cater to newer markets as well as newer market segments. The industry as a whole is upbeat and the sentiment is bullish.
How do you intend to re-energize your enterprise in the next five years?
We're looking to operate 100 hotels by 2022. Growth will come based on new asset-light business models which we have deployed - franchise, management and leased. While we strengthen our presence in Tier 1 and Tier 2 cities, our focus to create experience-based hotels and resorts in historic, pilgrimage and wildlife sites continues to be strong. Our hiring strategy focuses on including more market-attuned, younger talent. We're committed to delivering strong results for our shareholders and investors. Our infrastructure, network and experience enable us to easily set up and profitably run ancillary business models like outdoor catering and cloud kitchens, and a lot of impetus is being laid on developing these verticals.
We will continue to give back to the industry through free of cost online as well as classroom courses which we provide under the Presidency College of Hotel Management, for upskilling and making young hospitality aspirants employable. We aim to upskill and train 10,000 aspirants by 2022. We'll also continue to support the underprivileged through several CSR endeavours that we run across the country.
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