Varsha worked as an investment banking analyst at Goldman Sachs before switching to journalism. She started off at Business India and later moved to Forbes India where she writes across industries and companies but has a bias towards startups, technology and the FMCG sector. She was a national level athlete and now enjoys running half marathons.
The Wyndham Hotel group recently announced the addition of three new hotels in India under the Ramada and Ramada Encore brands – an 84-room resort in Kumbhalgarh, Rajasthan, a 64-room facility in Jalandhar, Punjab, and another in Lucknow, Uttar Pradesh. With 8,000 hotels in 77 countries, the Wyndham hotel group claims to be the largest hotel company in the world. Forbes India caught up with Deepika Arora, the group’s regional vice president for Eurasia, on Wyndham’s broadening Indian footprint and how technology is affecting the business.
Q. The Wyndham group recently added three new hotels to its India portfolio under the Ramada and Ramada Encore brands. You now have a total of 28 properties across India. What has been your strategy in the country so far? Our strategy is very bold yet very simple. What we do is we try and build wherever we feel we have the right partners. From just three or four operating properties in the country six years ago, we now have 28. We’ve grown our footprint by sticking to the franchise model. At the end of the day, I may have in-depth knowledge, I may know the markets very well, but the guy who is spending the money to build a hotel in that market is the guy who knows more than me. So we go in with the right partners and build hotels in as diverse locations as we can. I’m not sure our competitors would go out and take that bold step of building a hotel in Kumbhalghar or Darjeeling or Lonavala. We would do that because my partner says I am doing it.
If you look at our presence currently, we’re there in almost every tier 1 and tier 2 city. Business destinations will always do well, but we’re keen to also develop into leisure markets like Darjeeling, Lonavala and Kasauli. We’re also looking at religious destinations like Tirupati and Dwarka because such places will continue to be mobbed. By 2019, we should have 50 operational properties across India.
Q. How is technology affecting the hospitality industry and how are you making sure Wyndham stays ahead of the curve, rather than falling behind? Twenty years ago, there was zero online and now 60 percent is dependent on online. So technology of course is the most important part of our business. And it’s ever evolving - you blink and it changes. From online it’s now app, from a 15-minute booking cycle its now a 5-second booking cycle. So we need to make sure we’re making the right investments to stay ahead of the curve.
We’re the first global hospitality company of our scale to roll out a cloud-based central reservations and property management system, helping economy and mid-scale hoteliers more effectively and efficiently manage daily pricing and inventory. Sabre’s software-as-a-service (SaaS) SynXis model is the most stable in the industry and evolves as technology progresses, meaning our hotels will always have access to the most current technology. Migrating to SynXis CR also means that we can focus on our core strength – being the world’s largest hotel company, rather than trying to develop our own proprietary technology. Q. With the onslaught of Airbnb kind of offerings is the full-service hotel dead? It’s a very big pie and everyone has their share. The model on which Airbnb works is completely different to how a hotel works. That segment has its own set of consumers and we have our own. What we give our customers is a nice clean room which is brand compliant. We give them an assurance that we maintain a certain quality and we ensure that once you check into the hotel, it’s a secured environment, which I’m not sure you will get in an Airbnb kind of offering. So my segment is one who wants these three things. But there are other consumers who want to explore out of this.
Also, while the Airbnb model has been a huge success in American and European markets, I’m not so sure whether it’s been successful in India or in Asian markets. India at this point is still dependent on labour – we need a bellman, we need someone to carry our luggage to the door. And we are able to cater to that mindset because we have cheaper labour. So we’re dealing with mindsets and a cultural bend. Hats off to them [the Airbnb’s of the world] for what they have done. I’m sure there is a consumer out there for them. But is that the consumer we are targeting? No. Otherwise we would not have 50 million active members on our loyalty programme. That’s the power of our brand. Q. But what about reaching out to the millennials or the new-age customer? Are you having to rethink your strategy? There are a lot of other things one can do to target these customers into your hotels, without changing the whole segment or business model. My millennial guest is not bothered about how luxurious the hotel is. He is seeing whether he gets a good Wi-fi connection, whether the brand marketing talks the way he talks. So we’re working on a brand transformation that fits for every consumer and every guest, while at the same time focusing on nice clean rooms. To target the millennials, I am getting products to which they can relate to more, which they can talk more about. We’re completely revamping the Ramada look and feel. For millennials, it’s all about the selfie. So we’re creating moments for them as ‘selfie moments’, where they can say, “This is my selfie in the hotel”. We’ve got apps, we’ve got great marketing options for millennials, in terms of promotions.
Q. Finally, how is the recently announced liquor ban going to affect your business? There are two ways to look at it. One is the intent of the government, which is very positive. The intent of don’t drink and drive is something I believe in and we follow as an abiding law. But the implementation of that intent needs to be defined. What does it really mean to us? Which at this point of time is very unclear. If it means not serving liquor, it doesn’t make sense. Look at foreign tourist arrivals which has actually gone up by 16.5 percent. The whole tourism industry gets affected when you do this. The classic example is Kerala. The tourism actually went down when they stopped the serving of liquor [in December 2015 when the State upheld a Supreme Court ruling giving states governments a free hand to curtail or ban the consumption of alcohol to protect public health]. My hotel in Allepy suffered for a bit. But then they said, okay, if you’re a certain classification you can serve alcohol, and if you’re below a certain classification, you can’t. But there was a drop in tourism. So if it’s not implemented for the intent it is meant to be for, it is going to affect us. We all know the current government is very favourable to tourism. They want tourism to grow because it is adding a lot to the GDP of the country. So there has to be a way out to stop what is happening right now, so that there is less suffering. What we would not want is somebody coming from a long flight, just wanting to have a glass of wine with his dinner and not being able to do so because of this ban, which is not serving the intent of don’t drink and drive. There is a lot of lobbying happening from our industry colleagues too. At some point I think it will be heard and the right decision will be made.