Moving away from being just a dull, room focussed development, mid-segment hotels are emerging as trendy properties that provide all the comforts and convenience at an affordable price to the discerning consumer, asserts Suresh Kumar, CEO, Fortune Hotels. He also dwells on the increasing trend of mergers and acquisitions, and talks about how Fortune Hotels remains steadfast in cementing itself as a first class, full service business hotel in the Indian marketspace.
We understand that the market is under stress and a number of hotels are looking to sell-out. What is the reason for this crisis? How can this situation be averted?
Majority of the businesses that do not do well are the ones operating without a structured business plan involving detailed systems, marketing plans, forecasts and budgets. It is essential to know where you are headed and how you’re going to get there.
As all experienced hoteliers know well, operating a hotel is serious business. Hotels operate 24/7/365 and require expert management across multiple functional areas, including hiring, training, marketing, accounting, customer service and asset management.
With the complex nature of hotel operations, eventually the people who succeed are the ones who can match their strategy with the ever-changing ‘Indian Business Environment’. The key to success will always be adapting the right strategies that are in line with the emerging trends.
What are some key trends in the mid-market space? How is the market shaping up for the segment? Where is the business coming from?
While traditionally the Indian hotel industry had only focused on the luxury hotel segment, not surprising, therefore, is the gradual change in scenario over the period with Branded Hotel Chains venturing aggressively into the mid-market to upscale segment. While this segment has provided an investor with a model which is suited to his capital deployment capability, it has also opened up interesting and economical avenues for both the corporate and leisure traveler to enjoy comfort and convenience at an affordable price. Mid-market hotels are no longer dull, room focused developments. They are emerging as trendy, designer properties focused on providing facilities including well-connected location, clean rooms, high speed Wi-Fi that are considered essential for the millennial traveller.
The industry is robust and the next few years will see more growth in this segment of the market. As a group, we take pride in having developed a much-needed product/service design to cater to this emerging demand in the market.
It is a time when diverse industries are witnessing increasing numbers of mergers and acquisitions to create more traction in the market. The latest such development happened when Sarovar Hotels was bought over by the Louvre Group. How do you see this impacting the mid-market space in India? How does it impact your business?
The process of mergers and acquisitions has gained substantial importance in today’s corporate world. Like any other industry, mergers and acquisitions in hotel industry is driven by the restructuring need of business organizations in the face of increased competition in the domestic as well as global markets. It serves as a strategic choice for organizations to achieve larger size and faster growth in market share, thereby becoming more competitive through economies of scale.
Though the trends in mergers and acquisitions in India have changed over the years, it definitely seems like a concept which is here to stay for a long time to come. There is bound to be a lot of competition and eventually people who are going to do well are the ones who can catch the pulse of the ‘Indian business environment’, thus translating the dreams of both the investor and the consumer into reality.
What is the expansion strategy for Fortune Hotels? Could you talk to us about hotels in the pipeline and destinations where you would be basing them at?
We plan to work towards taking further our vision of unfurling a Fortune at every 180 km by concentrating on Metro, Mini-Metro, Tier I and Tier II cities across India. In the next few years we see ourselves consolidating our position as the top player in the ‘first class, full service business hotel segment’ and to be recognised as a provider of consistent quality products and services, thereby perceived as the premier “value” brand in the Indian hospitality scenario. The chain has extensive expansion plans and we are looking at being a 90 hotels strong chain in the next couple of years.
Since the last year there has been an addition of 2 new hotels to the bouquet of Fortune Hotels, Fortune Park Sishmo in Bhubaneswar, our first hotel in the State of Odisha and Fortune Miramar, the chain’s third hotel in Goa. The coming months would see more hotels opening up around the country, including Durgapur, Jalandhar, Lucknow, (Mashobra) Shimla, Srinagar, Vadodara and Vellore are some of the locations where projects are under various stages of development.
Our Development team is continuously looking at suitable opportunities to penetrate further in different locations across the country.
A number of industry insiders have iterated that the domestic leisure segment is, and will continue to be, the backbone of business for the industry. How much do you agree with this assertion, and does it hold true for your company as well?
In a growing economy like India, people are breaking away from traditional methods and lifestyle. They want to explore all that is new, all that life has to offer. It is a borrow-and-spend culture now as against save-and-spend culture a few years ago. Also, the unprecedented growth in domestic leisure tourism due to the burgeoning Indian upper middle class population are the driving factors behind this ever increasing demand.
The Fortune Hotels operates different brands under its umbrella, namely ‘My Fortune’, ‘Fortune Select’, ‘Fortune Park’, ‘Fortune Inn’ & ‘Fortune Resorts’; each brand catering to different categories of guests. All our brands are growing and witnessing excellent consumer response. The ‘Fortune Resort’ properties located at popular holiday and leisure destinations like Mussoorie, Port Blair and Ooty offer excellent holiday getaways for families and cater to both the ‘mid-market and upscale segment’. Other popular holiday destinations where the chain has its presence incudes – Goa, McLeod Ganj, Jaipur, Jammu, Kolkata, Tirupati & Madurai. Fortune Hotels will have 2 more opening up, in leisure destinations, in this year in Srinagar and Mashobra (Shimla).
At Fortune Hotels, distinctive flair is complemented by warm and personalized service, superior technology, insightful comforts, fine dining and a genuine feel for the authenticity of the destination.