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‘Introducing hostels as an extension of budget hospitality has been phenomenal’

From one ‘Social Hotel’, Hostel, in Fort Kochi in Kerala in 2011, Vedanta Wake up! currently has presence in six locations and aspires to expand their brand presence to 100 locations in next three years. Rishabh Gupta, Founder, BHV shares the concept and vision behind the venture with HOSPITALITY BIZ

Wednesday, July 1, 2015, 17:00 Hrs  [IST]

Rishab GuptaQ.What is the concept behind BHV and how relevant is this hospitality concept in India?
A.Vedanta Wake up! is a technology enabled business aimed to disrupt the budget hospitality space in India by achieving the unique combination of scalability, profitability and most importantly -standardisation of both product and last mile service delivery to the consumer. The business model revolves around aggregating, standardizing and operating unbranded, under utilised and under marketed properties.

Historically, hotels which offer a good product and standardized service tend to be fairly expensive and those that offer affordability more often than not will offer some standardization of look & feel but will severely lack in service. Indian hospitality has never experienced a marriage of a) affordability (Rs. 500 in our case), b) standardization (of product and most importantly service delivery to the guest), c) technology integration so as to make the booking and check in to check out experience seamless, d) design and e) a great social experience. It was about time the Indian consumer got value for his money.

Functionality at Vedanta Wake up! forms the cornerstone of the consumer experience. A consumer can take many features of our hotels for granted which are lacking even in established brands in India. Clean hot water throughout the day, air conditioning, free wi-fi, spotless linen, toiletries, a sumptuous breakfast, security and most importantly spotless housekeeping are guaranteed at every property operated by Vedanta Wake up! In fact, so strong is our value proposition and promise of service delivery that we offer refunds to any guest who feels let down by the lack of any of these amenities.

We also put a lot of emphasis on design. Budget hotels in India have taken the design sensibilities of the Indian consumer for granted. Design isn’t just about look and feel, its also about functionality. We have interior designers from some of the top design schools working with us to constantly innovate and improve the look and feel of the hotels. The fact of the matter is that great design isn’t a function of spending ridiculous amounts of money, it is about simplicity and attention to the little details that make for a wholesome guest experience. We want to be a yardstick for the budget hotel industry when it comes to design - at every Vedanta Wake up! the consumer should expect an environment where we have strived for excellence.

Q.How was the journey so far for BHV in India since you set up your first 'Vedanta Wake up' unit in Kochi? How did you try to bring in the element of standardisation in your product offering considering the target market?
The entire experience of introducing hostels as an extension of budget hospitality has been phenomenal. Foreigners are well versed with such a type of accommodation but that was never our target market. The product is designed for Indian travellers, we wanted Indians to experience this genre of budget accommodation. At 500 bucks a night, we offer our guests not only a great product but give our guests the opportunity to experience a social environment like never before. On a daily basis we organise early morning walking tours of the city, yoga sessions, bar crawls, movie nights, live music, etc. – and all of this at no extra cost to the guest!

Since this genre of accommodation did not exist in an organized manner at the time we conceptualised the product, there were no existing industry standards for hosteling. We personally wrote virtually every manual in the Company through our first hand learnings of running Vedanta Wake up! properties.

The marketing messaging went through multiple iterations so as to explain this wonderful value proposition to travel agents and guests. We explained that the ‘S’ in hostel stood for ‘Social’ and that we are everything that a budget hotel should be with the added social element, thus ‘Hostel = Social Hotel’. We also started talking about how our guests could ‘Discover New Friendships’ while staying at Vedanta Wake up! hotels, thus shifting the focus from the physical product to talking about the experience of staying with us.

We have integrated various technology solutions in various aspects of the business. Unlike the West where larger international chains such as Marriott, Accor and Hyatt which lead the charge for solving industry wide problems, our observation is that there is no dominant industry leader in the budget hospitality space in India. Many of the best available existing tech solutions are abysmal to say the least. We are now working to change this where not only we but the entire industry will benefit from our solutions.

Trying to find a solution to the problem of budget hospitality in India has been challenging, but we are very confident that if we peel enough layers of the onion off, we will certainly arrive at a very elegant and simple solution. All that is required is time, energy and focus.

Q.What is the process of picking up destinations and units for Vedanta Wake Up? What is the business model you follow with property owners? What are your future plans in terms increasing your footprint?  Your investment plans? 
Our mission is to be present in over 100 towns and cities within the next 2-3 years. We have a very strong pipeline of properties which we have begun adding to the current portfolio. Because the numbers stack up pretty well, we have chosen to take properties on lease and book all revenue on our own books. There have also been many enquiries from property owners to franchise the brand or get into revenue sharing agreements.

Q. Marketing and distribution is a major challenge before smaller budget properties in the crowded hospitality landscape. How did you overcome this challenge initially and over the years? What is your distribution strategy?
We have developed 18-20 sales channels over the past three years through which we are fed bookings. Because of the lean operating model, we have achieved a low operational breakeven - our new properties churn out profits fairly quickly. Again, this is unique to the budget hospitality space which typically takes years to achieve operational breakeven because of their inefficiencies such as high staffing ratios, ridiculously high capex and lack of focus on the consumer.

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