Boutique Hotels are Picking up Momentum and Attracting Customers in a Huge Way: Zia Sheikh, Chairman and Managing Director, Svenska Design Hotels

In an exclusive interaction with BW Hotelier, Zia Sheikh, Chairman and Managing Director, Svenska Design Hotels talks about challenges in the industry and future plans.

SVENSKA HOTELS is part of Swedish conglomerate, Svenska
Holdings AB, which is a privately held group based in Sweden with presence in 16 locations across 6 countries around the world. Svenska hotels launched its operations in India with opening of two properties in Mumbai and Bangalore in early 2011. Currently, Svenska has a collection of 40 beautiful boutique hotels across the country, under a mix of owned, managed, leased and affiliated properties. In an exclusive interaction with BW Hotelier, Zia Sheikh, Chairman and Managing Director, Svenska Design Hotels talks about challenges in the industry and future plans.

Can you tell us briefly about Svenska Hotels from start to now and the idea behind the brand?

We are a European hospitality chain from Sweden with curated collection of India’s finest luxury boutique lifestyle hotels. Our mission is to make people feel special by providing our discerning business and leisure travellers with highly personalised experiences.

What has been your biggest challenge in the recent times?

As we are often both owners and operators of hotels, greenfield development of hotel properties in India is our biggest challenge given the various licenses and approvals that are required to develop a hospitality project in the country, which often results in inordinate delays and project cost escalations. As an operator, we engage with owners on various models, ranging from revenue-share leases to management contracts to brand franchises as well as affiliations, in which we do co-branding with owners and help them with sales, marketing, branding and distribution of their boutique hotels both through online and offline models, both domestically in India as well as internationally. 

In your view what are the new disruptors in the hospitality industry and their impact?

Aggregation and disruption in the industry has worked primarily in the budget and lower-mid-market spaces. Since Svenska only operates in the upscale segment, we haven’t really faced challenges from aggregators like Oyo, Treebo, Fabhotels and other such players. Even AirBnB hasn’t really impacted our business since they are primarily oriented towards rooms/ accommodation business while Svenska provides an end-to-end guest experience, including value-added features and facilities such as in-room dining, private butler service and the full range of restaurants, bars and banqueting/ conferencing solutions to our guests, clients and patrons.

What do you see as the role of smart technologies in the new market?

We believe that while smart technologies will surely have a major influence on the hospitality industry, like so many other industries however, hotels need to tread cautiously while implementing cutting-edge technologies for two key reasons. First, often the customer isn’t ready for such technologies and rather than technology being an enabler to improve their experience, it can be an impediment and result in confusion/ irritation/ complexity for the guests if its not intuitive. Secondly, given the rapid pace of technological advancement, hotels also have to make these investments carefully given the high rates of obsolescence associated with high-tech, which might result in write-offs and eventually the guests having to bear the costs of such investments. 

In your view how is the industry going to perform over next five years?

I am very optimistic about the Indian hospitality industry’s prospects over the next five years. While currently the sector is facing challenges due to the overall economic slowdown in India coupled together with global macro-economic factors as well as outbreak of Coronavirus in China and other adjoining countries, resulting in travel fears especially to Asia, but longer term, my outlook is positive. This is primarily due to the following key reasons. First, very limited supply is coming to the market, even as the existing supply is getting absorbed based on the consistent demand growth. Secondly, there is an overall trend towards branded hotels and accommodations, resulting in consolidation in the market, with the branded players benefiting from this as independent hotels and lodges are facing competitive challenges and increasingly realising the value of sales, marketing, branding and distribution that branded players bring to the table. Finally, I believe that new concepts like boutique hotels are picking up momentum and attracting customers in a huge way, given the differentiated experiences they are able to offer apart from the fact that guests are increasingly preferring for their hotel to be close to their place of work/ interest rather than spending time in commuting.  So small hotels, conveniently located, are fast becoming the preferred option.  

What are your future plans and how do you want to position Svenska Hotels in the next five years?

We are continuing to expand our footprint in India as we are very positive about the potential of the country, especially in the emerging tier 2 and 3 towns and cities that have the spending power as well as latent demand, but not got the branded supply currently. We are focusing on these smaller towns that are starved for options. This year we will be opening our owned 5-star hotel in Kakinada, which will be the best and biggest hotel in that town, which is amongst the first Smart Cities and undergoing rapid expansion and growth. We have also partnered with various hotels across many different leisure and business destinations in the country, ranging from Bilaspur and Siliguri to Chandigarh and Bhubaneswar as key emerging business hubs, apart from beautiful leisure hotels that are hidden gems in locations such as Guhagar in the Konkan belt and Kannur in Kerala. Currently we have 30 hotels operational across India and targeting to end this year with 40 hotels.

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