Hitting Bull's Eye With The Mid-Market Segment Dart

Sarovar Park Plaza gets into rebranding with the no-frills, limited service, three-star Hometel brand on its mind. Reema Sisodia zooms in.

When Anil Madhok is asked about Sarovar's beginnings, you can see nostalgia creeping into his visage. The manager director of Sarovar Hotels looks back with a lot of satisfaction and says, "We began our journey in July 1994 and the last decade has gone by well considering that we started with no money at all."

According to Madhok, the hotel was conceived to fill the void in the mid-market segment. 'There were hotels on two ends of the spectrum. Ten years later, the vision of targeting the mid-market segment has become a trend. Our strategy to tap smaller towns and cities has worked in our favour," he adds. With the Sarovar brand expanding steadily, Madhok found it hard to appear modest. "Today, I can say with pride that our brand has its presence across the length and breadth of the country," he said.

Sarovar Park Plaza Hotels & Resorts, now re-branded Sarovar Hotels, is a multi-brand hotel management company in India with interests in business, leisure and religious destinations. The company manages, franchises and markets 32 hotels and resorts under various brands encompassing three, four and five-star categories like Park Plaza, Park Inn, Sarovar Premiere, Sarovar Portico and Hometel. It is also associated with the Indian School of Business (Hyderabad), corporate hospitality services at Poorva Sanskritik Kendra, a New Delhi government initiative and Club Mahindra Holidays.

While Sarovar Hotels continues to be the master franchisor of the Park Plaza and Park Inn brands in India, it will also launch its domestic brands considering that the robust economy has fuelled enormous demand for domestic hotel brands. The group portfolio now comprises Sarovar Premier (its domestic five-star brand), Sarovar Portico (its domestic three to four-star brand), Hometel (three-star no-frills brand), Park Plaza and Park Inn.

Mid-Market Branding

Madhok feels that the mid-market segment in India has been evolving rapidly, which has led many Indian hotels and international companies to introduce their budget brands to the Indian market in a hurry. "There is a lot of scope for international hospitality companies to set up shop in India since there is still a dearth of luxury hotels and quality budget hotels here. And given the rate of our economy, there would be far greater demand and scope for budget hotels in the future since both inbound tourists and corporate traveller figures are on the increase," Madhok expresses.

Under its new phase of rebranding, the first resort to be signed on is The Solluna Resort, nestled within the protected reserve forest of Jim Corbett National Park. The Resort is operational and is undergoing refurbishment, after which it will be rebranded as Solluna Sarovar Premiere.

Riding on the 'no-frills' wave, its newly-launched Hometel will focus on "the proverbial bottom line, continued development of staff with an intricate understanding of the needs of the Indian market". Sarovar Hotels has moved a step further with Hometel its no-frills limited service three-star brand, which Madhok feels is one category that has huge potential.

"Hometels across the country stand for professional hospitality service, quality accommodation, hygiene, security and facilities at par with four and five-star hotels. The brand provides the budget-conscious business traveller with basic quality, contemporary facilities at affordable prices," he says. The first Hometel is expected to open in Bangalore by the end of 2005 while others are being planned in Gurgaon, Hyderabad, Jaipur, Mumbai and Pune. Having said that, Madhok hopes that this strategy will catapult the company to the heights it seeks to attain.

Other economic events like the new civil aviation policies, increased liberalisation of the Indian economy, augmented disposable incomes, growth of other industries, and competitive air travel rates have only gone to underline the importance of focussing on the mid-market segment.

Franchise v/s Ownership

Madhok elaborates on yet another trend gaining prominence within the Indian hospitality industry. "Most hotel companies have taken the management and franchise route with only a few opting for complete ownership. It is not possible to expand one's portfolio without taking the management and franchise routes. Most large chains own few properties and grow via the management and franchise arrangements."

Though Sarovar is predominantly a management company, it is actively looking at owning properties. However, nothing has been finalised yet. This is at a time when most companies are opting for management contracts rather than ownership. "We have toyed with the idea of getting into ownership but there is nothing concrete. We are also looking at running leased-out properties," he said.

Going international is not what the company aims to do in the immediate future. The focus right now is on the domestic segment.

Madhok firmly believes that mutual respect, long-term partnerships and strong ethics and integrity are essential to achieve ultimate success. "We believe that collaboration is key to mutual success and growth. We are working towards developing world-class systems and a training culture to satisfy customers.

Sarovar Hotels aims to extend the same hospitality experience in every city across India so we constantly endeavor to evolve into a progressive organisation, which extends equal opportunities of growth and progress for all its employees and partners with continuous training and counselling," he says.