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| Best Western hotel chain moves to East India |
| Devjyot Ghoshal / Kolkata Oct 13, 2009, 00:42 IST |
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International hospitality chain Best Western will be adding two hotels in eastern India after establishing 11 properties across northern, southern and western India.
The hotels, one being in Kolkata, will be added to its total this financial year.
“We not only want to capitalise on the business circuit in the region, but eastern India will also become the gateway to other countries in South-East Asia,” Best Western India’s President & COO, Sudhir Sinha, told Business Standard. Best Western has over 4,000 independently-operated and affiliated hotels worldwide. It is looking at the second property in Jamshedpur or Ranchi.
“Looking forward, we want to have 3-star and 4-star properties in cities such as Cuttack, Paradip and Siliguri. Also, considering land prices are at their lowest ebb, this is a good time to be here,” Sinha added.
The firm will look at converting an existing hotel in Kolkata to the Best Western brand. It is, however, scouting for partners for new projects in Jamshedpur and Ranchi. “A greenfield project gives us more control over the hotel design, thereby allowing us to construct specifically for the brand. A new build also helps maximise revenue, as the product, service and positioning can be tailor-made,” Sinha explained. The Best Western chain operates either on a franchisee or a management-fee basis. In the case of a franchisee, a one-time joining fee and percentage of the topline is taken, over a 10-year contract period. In the management-fee model, a certain percentage of the bottomline is paid by the partner as a fee.
“This is not a capital intensive model and there are no specific investments that we make, apart from those for systems and training. This gives us a significant amount of flexibility, as well as scalability,” Sinha said.
On publicity, Sinha said Best Western would enter into joint promotional campaigns with other service providers to push the brand across to its target audience, the regular business traveller. “We are in talks with a number of airlines to create a combined promotional effort. We would also like to look at credit card firms and car rental companies, with whom we have tie-ups internationally,” he said.
Assailing fears of a supply-demand mismatch in the domestic hospitality industry, Sinha asserted that a slump in demand for hotel rooms was a temporary affair.
“If you consider the fact that the number of rooms available in India is less than what you have in Manhattan, in the long-term there will be much more demand than the available supply. Traffic has gone down because of certain incidents, but things are picking up,” he said.
East gets new hotel management institute
The master franchisee of the Best Western brand in India, Cabana Hotels Management Pvt Ltd, will establish a hotel management institute, along with a 100-room hotel, in Bhubaneswar. This will be the brand’s maiden foray into the education sector in the country.
“There is a shortage of good hotel management education in eastern India, which we want to address. We have already acquired eight acres and the entire project will entail an investment of about 30 crore,” said Best Western’s President & COO Sudhir Sinha.
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