Increased focus on domestic tourism and corporate travel is expected to drive the growth of the midscale segment- Vilas Pawar

Can you take us to a flashback of your career journey that lead you to where you are now?

My career journey started way in 1986, when I graduated from the prestigious Institute of Hotel Management, in Dadar, Mumbai.

I embarked my professional journey with Taj Group of Hotels in Mumbai and worked with them for three years. Thereafter, in the year 1989, I got an opportunity to work with Hyatt Regency Delhi, as an Assistant Manager Food & Beverage and worked my way upwards to be appointed as the Assistant Director of Food and Beverage in 1993. I worked with the Hyatt till 1995.

In the year 1995, I was approached by TGIF (Thank God it’s Friday) to join them as their President & CEO for India. An offer & challenge that I readily took. We introduced the American casual dining concept to the country. This was an eight-year-long journey, with the key goal of setting up and establishing the brand and its restaurants across the country. TGIF, as it was fondly called, became a rage across the country soon after its launch. We popularised the “Happy Hours” concept, which was truly value for money. The restaurant chain was known for is wide and amazing cocktails, ambience, large portions of food, appetizers & desserts. All this clubbed with the casual memorabilia in its interiors and super friendly staff & service to match it all.

In the year 2005, I got the opportunity to join Choice Hotels India as their CEO (Chief Executive Officer). I continue to spearhead and grow the brand & the operations of the company in India to date.

What have been your milestones in your time with Choice Hotels?

I have had many milestones and accomplishments in my tenure with Choice Hotels India. I take great pride in the fact that we have a cordial work environment and are an employee-friendly organisation. The interest of our franchisees is of paramount importance to us. In this effort, we streamlined the services and deliverables towards our franchisees and have implemented standard operating processes for our franchised units. To make the business more profitable, we guide the hotels towards better costs management, sales, distribution and marketing strategies. We impart effective training tools for better operations. Today, our portfolio size is of 34 hotels with 16 more in various stages of construction which is a milestone for the company.

How do you think Choice Hotels has changed the dynamics Of Indian Hospitality Sector?

Choice Hotels is one of the largest lodging franchisors in the world with over 7000 hotels worldwide and a legacy of over 85 years. In India, we have a presence of 34 hotels across tier 1, 2 and 3 markets primarily in business cities. The growth in the corporate sector, setting up of SEZ’s and micro cities along with growth in corporate travel and domestic tourism has bolstered the popularity of mid-scale hotels. More corporate and leisure travellers are seeking branded value for money accommodation. Our guests look for value for money accommodation with the promise of hygiene, security and efficient services. In addition, our hotels offer a range of guest room amenities and services on-premise including free WI-FI. We are the first company that introduced global brands in midscale space in franchising in India.

What’s your Vision for Choice Hotels in the times to come.

To make Choice Hospitality India as the country’s leading midscale hotel company and be the preferred brand for asset owners to associate with. We work with our franchisees on their road to success.

How do you think Mid-scale segment of the hospitality industry will evolve in the coming years’ post-COVID?

Increased focus on domestic tourism and corporate travel is expected to drive the growth of the midscale segment in the post-COVID era. Domestic travel restrictions have been eased, which will thus lead to a gradual recovery in both domestic leisure and business travel across the country. Post covid era would drive the already value-driven customer towards the full-service Midscale hotels.

A growing number of travellers are expected to seek ‘experience’ at Midscale hotels, which would offer them a better value proposition. The growth of this segment will also be fuelled by the rising demand from business travellers as companies continue to impose cost-cutting measures. Historically, the business composition of our hotels have been primarily domestic and we expect faster recovery.

As COVID becomes a new normal, the travel would resume and we expect the corporate segment to start performing. For now, a large share of our business is emerging from the social segment and staycations with some traditional sources of business starting to perform.

International tourists coming to India is still not on the table,  how does this affect your business model? and moving forward, What will be your strategy to bring business back to your hotels?

The hospitality industry has gone through many crises before and recovered. The truth is the pandemic is temporary and shall pass and the industry will brace itself for the new changes. International travel is likely to recover in the coming months to a year irrespective of the discovery of a coronavirus vaccine by then. Once the government eases restrictions on flights people are likely to travel. Fortunately for us, our segment of hotels used to get most of the business from domestic source markets, we expect this demand to improve, thereby improving the occupancy levels for our hotels. 

In preparation for these times, we had worked on key initiatives to strengthen our business. The initiatives were both designed to equip our hotels with tools on cleanliness protocols, much required when we start welcoming guests again and simultaneously also making efforts to increase our channels of distribution and effective communication. We launched our worldwide program “Commitment to Clean” which helped in increased hygiene protocols at the property level and faith-building with end customers and intermediaries.

Choice Hotels has over 30 hotels on a franchise model, What kind of challenges did you face with franchise owners in the past six months and how did you resolve them? 

We faced challenges of lockdown as most of the hotels were closed. We were sympathetic towards our hotels. Travel was reduced , we are working and empathising with our owners by coming with attractive promotions and deals and rebuilding our businesses .We continue working with our owners to grow their business as we tread these times  to their road to recovery.

Fortunately for us, the industry expects the mid-scale segment to recover fast owing to attractive pricings, smaller inventories and lower operational costs. The learnings from COVID will also help in aligning our future Midscale hotels to a more efficiently built product as contactless needs will lead to smaller public spaces, fewer restaurants and enhanced technology, all of which will help in reducing the capital costs while increasing revenue-generating areas like rooms and providing better returns on investment. Our long term commitment with franchisees and our ongoing efforts to provide value supported by the technology, distribution channels and choice programs would help hotels navigate through these rough times. 

You had some expansion plans scheduled for the year 2020, is that still on track?

Presently we have 34 operational properties across the country. Under our expansion plan we have 16 properties in different stages of construction. Yes our plans are on track, just delayed due to Covid.

What kind of occupancy trends are you currently seeing, and how do you see the situation evolving?

Currently, after lockdown, we have achieved 25-30% occupancy across our hotels in India. We expect the occupancy to go up to 45-50% by March 2021. If all goes well we should see the situation normalizing by the end of next year.   

With several hotels using F&B and staycations as a way do generate some business, what will be the strategy of Choice Hotels on this aspect?

All our hotels are midscale hotels and are more accommodation -centric, hence F&B is not our forte. However some of our hotels, which have F&B as their strength are all doing home deliveries and takeaways. This will continue with attractive pricing and efficient deliveries. Our hotels are witnessing demand for social events, corporates from some industries like financial, pharmaceuticals, audit companies, logistics have started travelling.  

What role do you think Social media and online marketing will play in the coming day?

Social media and online marketing are becoming a key driver in all industries in times to come. The tech-savvy consumer in today’s day and age visits the property virtually and reads the reviews before making an informed choice to buy in the product. Social Media influences the buying decision and is used as a vehicle to reach customers all over the world.

Digital Marketing is a low-cost tool employed for gaining mindshare and supplemented with digital spends to achieve better business for the organisation. We use social media towards brand building, sharing our achievements and communication on our organisation and promoting the hotels.