How To Deal With a Tough Market
With hotels still struggling to grow average rates, advisory consultants such as Hotelivate will have a larger role to play. Rashmi Naicker in conversation with Manav Thadani.
Hotelivate will shortly complete one year of its existence. Could you shed some light on the highs and the lows of the journey so far?
On December 18 (which coincides with the 10th Hotelier India Awards night) Hotelivate celebrates its first anniversary. Itâ€™s been an exciting journey and our short-to-medium term plan of retaining our market share across all our businesses has worked. In fact, we are happy that we were able to push up our fees considerably by providing a more focussed and superior quality bouquet of services. This helped us improve our overall top lines, which are currently healthier than they were before. This growth is coming primarily from our newer services that were never our past strength, such as asset management and revenue management.
During its initial onset, what were some of the key goals and deliverables charted up for Hotelivate?
Hotelivate was conceptualised as a full-service hospitality consulting service provider that would go beyond just feasibilities and valuations. We wanted to explore new markets, new services and customise our offering for our new-age customer, who has evolved over the past decade. Our goal was to be the â€˜go-toâ€™ advisors of our clients at every step of the way during their hospitality lifecycle. Today, we have clients who are retaining our firm for feasibility studies of their new projects, valuations of their â€˜under-constructionâ€™ assets, as well as for asset or revenue management of their existing portfolios. They seek our help in their executive search needs and retain our firm for their hotel buy or sell requirements. Our ability to provide solutions at all stages of their business makes Hotelivate a rather unique consulting firm.
Through this period, what have been your learnings from the industry?
Consultants, in many ways, are similar to doctors and lawyers. Once you get comfortable with an individual or they become your trusted advisor, then itâ€™s difficult to go elsewhere. Just as you will follow your doctor to any new hospital he/she may be associated with, we learned that our clients were willing to continue their journey with us in our new avataar and the brand name was not as important as the senior team that provided the consulting solutions. The brand equity of my partnersâ€”Natwar, Achin, Saurabh and Meghaâ€”was what mattered more than the business cards they carried. Therefore, by keeping the original team, our intellectual capabilities remained intact and our customers recognised this fact.
What have been some of the significant milestones achieved by the company?
As a new business entity we have become much more social-media savvy. We also tweaked and, hopefully, improved HICSA and HOSI as our platforms. We have launched our Hotelivate Revenue Management Services and believe this will be a large part of our business going forward. Another area of focus has been our investment advisory services and we will hopefully have a few announcements in this regards. The strategic advisory business has been focussing on operator search and brand contract negotiations as well as brand valuations with far more zeal than was the case in the past. The hotel leasing model, too, has picked up and our offices are working several such mandates.
Having dealt with hoteliers and the hotel industry across various verticals, what are three of the most crucial points that still pose a challenge?
From an industry perspective I believe the hotels in India are still struggling to grow average rates sufficiently. Many hotel brands are also facing challenges in performing to the levels the owners want, and this growing disconnect is fuelling our business of asset management and revenue management. As the market gets tougher and more competitive, clinical and unbiased research as well as advise would create the true differentiators between average and good performing assets.
What are youexpansion plans?
We will continue to focus on growing all our services and potentially adding a few team members in Dubai next. We have doubled our clients in asset management and will likely do the same next year. Revenue management too is our growth model and we will potentially see triple digit growth. The strategic advisory and executive search businesses will grow by way of geographical expansion in South East Asia and/or the Middle East over the next 12 to 18 months.
Are you worried that HVS is back in the form of HVS Anarock?
Two decades ago, we had lots of competition, and yet we slowly crept our way to the top as hotel consultants. Ultimately, the market will reward only those who are good and I strongly believe that we must respect all competition as it pushes us to be on our toes. All my partners thrive on a good challenge and we perform best when put in a competitive environment. Personally I have two small mantras. Be the best Trusted Advisor you can be, and when it comes to competition, never be afraid of your shadow.