Treebo Hotels set to grow its India footprint across 40 cities by year end

Treebo Hotels, a franchise budget hotel chain, after tasting initial success with 85 hotels in 17 cities in India, is looking at growing their footprint to 200 hotels in 40 cities by year end. The hotel company which just completed a year of operations has been able to carve a space of its own in the budget hospitality space.  Talking to TravelBiz Monitor, Siddharth Gupta, Co-Founder, Treebo Hotels, said that they have been able to exceed their growth expectations in the first year and able to gain trust and confidence of hotel owners.  

Across 85 franchised hotels, Treebo currently manages an inventory of 2,300 rooms. Counting an average hotel inventory of 25 rooms, Gupta is hopeful of reaching minimum of 6,000 rooms under the Treebo network by the end of this calendar year.

Distinguishing Treebo from the ‘aggregators’ of budget hotels, Gupta said that the hotel company works on the same model of franchisee-franchisor relationship that larger brands like IHGs and Marriotts of the world works with. “We are not an aggregator or distribution partner for hotels. We are brand partners for hotel owners. We are responsible for both, driving business for owners as well as ensuring consistent service for the customers,” he explained. “Our relationship with all channel partners, including OTAs is very good. This helps us to deliver consistently high occupancies to our hotels,” he said.

Talking about combining technology and service elements to deliver total experience to customers, Gupta said that while they cannot compete with main stream hotels on the “talent front”, at Treebo Hotels they try to fill the void with the help of technology.  “We are a digital hotel. We function with the mind of an engineer and heart of an hotelier.  For us technology is the means to reach the end, i.e. service,” he said.

Gupta said that while individual hotels might look in terms of their location, room size, colour schemes, etc., they try to incorporate ‘standardization in terms of core aspects” of customer experience, like safety, hygiene, etc. across properties. He said that the company might look at introducing “sub-brands” for hotels with different specs in future.

As far as funding was concerned, Gupta said that they are an “efficiently managed” hotel company with “good cash position” currently, but might go for funding in future as and when need arises.

Essar Oil plans to roll out 5000 pumps in next 18 months

Essar Oil, India’s second largest private oil refiner, plans to nearly double its petrol pumps to 4,300 in next 18 months, a senior company executive  said.
“We have 2,225 petrol pumps now which we will increase to 4,300 in next 18 months,” Essar Oil’s chief executive officer (CEO) retail Madhur Taneja said.

The retail network expansion planned is on franchise model and will entail an investment of about Rs.2,500 crore by the pump owners. “We were the first private company to enter fuel retailing business when we in 2003 opened our first petrol station,” he said.
After diesel price was deregulated or freed from government control in October 2014, the expansion was restarted and network has reached 2,225 now, he said.

“We saw sales volume increase from 700,000 kilolitres in 2014-15 to 1.67 million kilolitres in 2015-16 and we hope to continue to grow at over 100% this year as well against an industry growth of 7-7.5%,” he said.

India’s first private sector petrol pump came up in Maharashtra only about 13 years ago in 2003. Essar Oil was therefore the first private company to enter petro product retailing in India at a time when the government was experimenting with the idea of deregulated oil pricing by freeing up the price of ATF.

Through the course of this regulation regime, Essar Oil, in a bid to keep its retail ambitions alive, provided financial support to its franchisees through various schemes, thus helping them in tiding over the difficult times. This earned the company the dealers’ trust. In October 2014 when diesel prices were completely deregulated, and private retailers like Essar Oil were given a level playing field with their PSU counterparts, the company already had a network of about 1,400 retail outlets. Over the last two years, Essar Oil has been on a ramp-up drive to create a larger retail footprint across the length and breadth of the country. Many outlets in its existing network were revived and work began on launching new Essar Oil pumps.
Today, Essar Oil has a pan-India network of 2,200+ fuel stations, while an additional 2,800+ stations are in various stages of commissioning.

Essar Oil has an asset-light business model. It pioneered the concept of setting up retail outlets using the franchisee-owned, franchisee-operated model wherein the dealer leases his land to Essar for 30 years and invests in setting up the entire infrastructure of the outlet. Essar focuses on enhancing franchisee business by supplying high quality petrol and diesel at competitive rates.

Vegetarian restaurant chain Saravana Bhavan to open hotels

Chennai based vegetarian restaurant chain Saravana Bhavan is planning to open hotels chain in India.

The group is soon launching a hotel in Chennai followed by many other openings.

The South Indian Restaurant chain which has entered 20 countries with over 63 outlets in these countries and about 37 in India will be focusing on hotel part of the business for coming fiscal.

“We will not be opening more restaurants this fiscal, this year will be focused on hotel openings,” said Shiva Kumar, MD, Saravana Bhavan.

Adding to the opportunity the brand is seeing in India, Kumar added, “In India there is plenty of scope and growth and our brand has lots of potential to grow as people like eating south Indian food.”

Keys Hotels to grow via the franchise model, management deals

Keys Hotels is staying away from building its own hotels and has decided to expand through franchises and management contracts to shield itself in a slow market. Having invested in seven hotels, the chain has now set its sights on smart cities such as Visakhapatnam, Calicut and Jaipur to grow through franchises and management contracts with almost 70 new hotels planned in the next 12 months.

Vikas Chadha, Executive Director & Chief Financial Officer, Keys Hotels, said: “Looking at the current market, we will now be expanding mainly through our budget and mid-market brands like Keys and Keys Lite. We will continue to take over unbranded properties and convert them under our brand as long as we get the right location mostly in tier II markets where there is lack of branded hotels.”

In fact, most of its added hotels would be in the budget and mid segment rather than its premium brand of Keys Prima. “The majority of our hotels would be under the Keys Lite brand in the budget segment with only a couple of them under Keys Prima since it is not easy to find luxury properties which can get converted,’’ he added.

With 20 properties and 1,800 rooms across brands like Keys (mid market), Keys Lite (budget) and Keys Prima (upper mid market), the hospitality company has been mainly catering to the business and corporate sector.

“Almost 70 per cent of our revenues come from the corporates to whom we also sell directly and also through OTAs,’’ he added. Becoming asset-light through franchises and management contracts is also expected to help the company reap profits.

Keys Hotels is promoted by Berggruen Holdings, a New York-headquartered proprietary fund, and has been present in India since 2006. “The fund was set up specifically for entering the Indian market under the Keys brand and has already invested $100 million in India,’’ added Chadha.

Lacoste to expand in non-metros; aims 10% sales from online channels

The Indian unit of French clothing firm Lacoste hopes as much as 10% of its sales to come through ecommerce channels, including its own recently launched portal, in the next 18-24 months.

The company, which currently doesn't sell its products on any third-party online platforms in India, is also in talks with ecommerce firms as part of its strategy to tap the online opportunity, Lacoste India Chief Executive Rajesh Jain said.

It is in advanced talks with at least two major e-tailers to open exclusive Lacoste stores on their platforms. Jain declined to name these companies, citing confidentiality agreements.

He said Lacoste would start selling its products on only those marketplaces that can offer it a premium, no discounting environment.

He expects Lacoste India to start selling on the marketplaces in the next two months.

According to Jain, the French company expects 3-5% of sales coming from the Lacoste official website and 5-7% from the e-tailers with which it would tie up.

Sports & Leisure Apparel, the licensee company of Lacoste in India, manufactures 95% of apparel at its Noida facility. The remaining 5% is imported.

The sports-inspired brand is looking to expand through franchise network.

Lacoste India has 49 brick-and-mortar stores. About 10 of these are franchised outlets and the rest are company-owned.

Lacoste, which entered India in 1993, started opening franchise stores just one-and-half year ago and it is now betting big on this strategy. In the past financial year, Lacoste opened seven stores out of which four were set up partners. In this financial year, all the six stores it plans to open would be through the franchise route. It also wants to expand beyond the metro cities.

"We wanted to leverage our presence now. So far we were expanding only in metros. But we saw some good retail real estate development in some tier I cities as well. So we thought of expanding into those markets. It makes sense for us to ideally have a local partner in these cities who understands the local customer needs and tastes," said Jain.

From now onwards, the company will focus more on opening franchise stores in non-metros, where the store size is small. It will open company-owned stores at important locations in metro cities, where it may not make commercial sense for the franchisee because of the huge investment required, he said.

Across the globe, Lacoste sells products in eight categories and, in India, apparel is the largest selling category for the brand with an about 89% share, followed by footwear at about 8%.

French luxury label Longchamp to debut in India

French luxury leather goods brand Longchamp has announced its India entry and will open its first store in New Delhi this week. DOIT Retail Brands has bagged the master franchise rights for Longchamp in India. 

Leather goods major Longchamp was founded in Paris in 1948 by Jean Cassegrain and is still owned and run by the Cassegrain family. "We wanted to partner with a global fashion brand and were looking for synergies. 

Longchamp already has a loyal clientele in India and was scouting for an Indian partner. Its products are universal, simple and sophisticated and cater to a wide audience. The brand has maintained its luxury values of craftsmanship, creativity and quality. We are delighted to bring the brand to India," said Radha Kapoor, founder and director of DOIT Retail Brands. 

Longchamp owns more than 300 exclusive stores globally and retails from another 1500 points of sales. It is famous for its iconic leather handbags, luggage, shoes, and other fashion accessories sold at retail stores like Selfridges and Bloomingdale's besides its own stores. Kapoor said the company is scouting for a second location in Mumbai and is keen on Palladium. 

"Real estate costs are high and there is a dearth of quality real estate. We would like to take it slow with Delhi and Mumbai and we may look at other locations like Chennai and Bengaluru going forward. The brand is in the affordable luxury space and considering the footfalls, malls make more sense than high street," she said. Kapoor said the brand could be positioned somewhere between Louis Vuitton and Michael Kors. 

The 1,000 square feet store at The Emporio mall in New Delhi will retail Longchamp's bestselling products like Le Pliage Heritage, Penelope, Roaseau and Le Pliage Cuir bags along with other accessories. Longchamp announced annual sales of 566 million in 2015. It stated its revenue grew 15% in Asia, and the Asian market contributed 25% to overall sales. 

Yellow Tie Hospitality to launch Genuine Broaster Chicken in India

Food and beverages franchise management company Yellow Tie Hospitality has tied up with US-based Genuine Broaster Chicken to launch the brand across 40 outlets in the country by the year-end and will invest USD 3 million till 2018 for expansion.

Yellow Tie Hospitality plans to launch the brand first in Mumbai, followed by roll-outs of franchise outlets in Kolkata, Hyderabad, Gurgaon, Surat and a few more cities in the first three months, it said in a statement here.

The brand will be served exclusively in different franchise formats with an authentic menu by the company, the statement added. Currently, Genuine Broaster Chicken is present in 36 countries across the world. "Broaster Chicken has been an integral part of America's food heritage for the past 60 years. Therefore, we felt it was time to introduce this to Indian consumers, filling the gap in demand and supply for better fried chicken," Yellow Tie's Founder and CEO Karan Tanna said in a statement. Along with its brand promotion, Yellow Tie Hospitality aims to augment the food startup industry by giving entrepreneurs a chance to scale their business through collaborations, he said. "With Broaster chicken, the customers enjoy delicious fried chicken, which is of far superior quality, uses less oil and retains natural chicken moisture. We are very bullish of our products in India," Bill Loeffelholz of Genuine Broaster Chicken said.