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Hyatt Corp‘s confidence in our management abilities validates our strength as a management company

Monday, November 11, 2019, 15:48 Hrs  [IST]

From Shanti Maurice Mauritius to Nira Alpina St Moritz Switzerland and from Oniro Mykonos Greece to Ananda In the Himalayas in India, Shanti Hospitality owns and operates a unique collection of bespoke luxury boutique hotels around the world. It also has a robust portfolio of owned and managed hotels in India, with nine owned and four managed properties. The hotel company launched a new vertical called Shanti Hospitality Management Services Pvt. Ltd., a turnkey hospitality management company, more than a year ago which is gaining a lot of traction from the market. The decision of Hyatt Corporation to certify Shanti Hospitality Management Services to manage the Hyatt Regency brand in India is a great validation of the company's capabilities. P Krishna Kumar in an interaction with Sunil Ghadiok, Director, Shanti Hospitality finds out the company's future plans in the region.

Q Could you throw some light on the Shanti Hospitality and its different verticals?
Shanti Hospitality is the parent brand and has various verticals under it, the principal ones being Nidra Hospitality and IHHR. Shanti Hospitality grew quite quickly in terms of its own hotels as well as management verticals.

Shanti Hospitality has a portfolio of over 2000 keys across 24 hotels globally. In the region, the Shanti portfolio comprises 12 properties out of which 9 are owned and 4 are owned by others but managed by us. Aloft Kathmandu is the latest in our managed portfolio.

Management vertical is something new that is Shanti Hospitality Management Services Pvt. Ltd. As a management services vertical,

we offer wide spectrum of services for asset owners. We have the capability to get involved from the project stage in terms of advice on development of the project, to get the viability done; destination valuation was done in terms of potential, etc. Having done that, the next step is to advise the owners as to what kind of property to make at the location and the kind of brand to use. Then of course, at the development stage, we help the owners to build the hotel as per the brand specifications so that they do not falter on the product they make. Put together, we execute the entire project for the owner.

Subsequently, we are quite strong in terms of operating properties. Our strength lies in overall management, revenue management, sales and marketing including social media marketing and all the operating departments. We do third-party management for owners. Overall, our role in identifying and advising to owners in terms of hotel development and branding and then hand-holding for the signing of the franchise agreement between the owner and the brand and then the operating agreement. Our agreements are dove-tailed with the brand agreements so that at no stage the owners have to worry about the brand promises. We try to marry the brand ethos and owner's expectation and create a connection which is so important for a smooth long-term relationship.

Q You have a robust portfolio of owned assets as well as managed assets. What is your focus going to be in the future?
We already have a sizeable investment in own hotels. In our portfolio in the region, we have nine own properties and four managed properties. A good combination of own and managed properties is always good. We already have developed adequate skills to manage assets. Therefore, the focus is on Asset Light going forward. It has been our endeavour and we have been successful that all our owned and managed properties are branded properties. We don't have any home-grown brand in our portfolio. The intent is to work across brands to offer owners the right fit for their assets rather than get brand agnostic.

After all, Hyatt Corp's decision to allow management of our Hyatt Regency properties in India to us speaks volumes about what this vertical has achieved so soon as far as our skill sets are concerned.

Q How spread out your footprint in the region and how do you plan to fill the gap?
Our major focus has been in the north, but now we are started stepping out and looking at South and West. We are present in cities like Bangalore, Hyderabad, Ahmedabad. We have just signed Hyatt Place Vijayawada. We have signed Four Points by Sheraton in Dehradun, and Hyatt Regency in Ghaziabad which is a year away from opening. We are looking at Mumbai quite closely. We now have a bit of cluster approach so that we have hotels in every region in a cluster so that we can share the strengths among the hotels in the cluster as well as deliver better value to the asset owners.

Q What is the sense of the independent non-branded hotel inventory waiting to be tapped for branding in the country, as not many new investments are not happening in the sector?
There is huge inventory of hotels which are non-branded. We see serious potential there. With the consolidation of brands in India, independent owners are started seeing value in brands. We try to mentor those property owners to look at branding themselves, get the conversion done, and establish standards and specifications thereby drive better return on investment. I am a strong believer that the next big magic is to happen in Tier II and III cities, and that's where we need to introduce brands.

Q You said you work closely with diverse brands. But what prohibits you from working with Indian home-grown brands?
Yes, there are some powerful Indian brands like Taj, Lemon Tree, Sarovar, etc. in the market. Brands like Taj is no more Indian brand but international. But somewhere, I feel that Indian asset owner prefers international brands on the top than Indian. As long as the international brand is not hitting his bottom line severely, he finds value in an international brand.

Q There are a lot of talks about business and economic slowdown. What is the sense of the market you are getting and how is it going to impact in the short and long-run?
There are mixed reports from economists and analysts as far as the health of the economy. I strongly believe that this phase is temporary and the market will bounce back sooner than later.

The impact so far has been marginal. There hasn't been much impact on the demand side. In contrast, the devaluation of rupee against dollar has actually helped the cause of leisure and resort properties as far as international business is concerned.

The hotel businesses suffered the brunt of the last recession in 2009 largely due to supply overruns. But the demand always chases supply that was our experience in the past.

The current market situation might impact room rates temporarily. But it will recover ground in the long term.

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