‘Always value relationships and invest in human capital’
THE BUSINESS and the landscape of travel and hospitality industry has significantly evolved, especially in the past three years. From a late adopter of technology, the industry has tremendously accelerated its tech embrace. And the pace of change, with continued growth across aspects like shared economy, a digital nomadic community and mainstreaming of metaverse, is only going to get faster. “While travel experiences remain a play of five senses for me, the jury is out there to see how experiential can the digital world become. The power and relevance of relationships shall prevail equally so in the physical as well as the digital world,” says Saurabh Rai, Executive Vice President, Preferred Hotels & Resorts - South Asia, Middle East, Africa and Australasia. He is quick to add that the millennials and Gen Zs need to value and nurture relationships as they are one of the keystones of the industry.
Rai’s stint with Preferred Hotels & Resorts started as Director of Global Sales & Development for India and Middle East in 2008. A year later, he was promoted as Regional Director of India and given additional responsibilities when he was made the Regional Director of South Asia & Middle East. His strong leadership skills and astute business acumen led to him taking over as the Executive Vice President, South Asia, Middle East, Africa, and Australasia in January 2016 in the organisation. Ever since, the brand’s development across the region has been phenomenal, with its portfolio growing from two to 29 and strengthening its relationships with partners like The Leela Palaces, Hotels & Resorts; ITC Hotels, Katara Hospitality and Palazzo Versace Dubai.
Preferred Hotels & Resorts (PHR), for close to five-and-a-half decades, has been representing the finest and most diverse global portfolio of independent hotels and independent hotel experiences. Over this period, Preferred Hotels Association, created when 12 North American hoteliers decided to join hands in 1968, has undergone a few changes in its avatar and rebranding. However, since 2015, there has been one master brand, Preferred Hotels & Resorts with five distinctive collections that allow one to craft their own inspirations as they navigate the world in search of new opportunities and memories. Today, PHR is the world’s largest independent hotel brand representing 650 hotels, resorts and residences across 80 countries.
Sharing his views on how can independent hotels differentiate themselves, stay relevant and ensure profitability in a world of fierce competition from established global and domestic hospitality chains, Rai says, “The segmentation of hard brands, well-known domestic brands and independent hotels itself is not as prominently differentiated as it used to be historically. The lines have blurred over time, and they have entered into each other’s space as we see with the hard brands’ introduction of independent portfolios. Clearly, they have been attracted to the independent space and have been convinced of its relevance to have made that entry.”
Likewise, the independent ones have pushed their way into the business that traditionally was largely owned by big brands by advancing rapidly on aspects like architecture, product, design, locations, service, experiences, gourmet, wellness and sustainability, opines Rai who began his career with The Oberoi Hotels & Resorts and thereafter moving to The Imperial New Delhi where he headed the sales and marketing initiatives. “In many cases, the independents have surpassed big brands and established their dominance around the world. Perfect examples from PHR’s own portfolio include The Leela Palaces, Hotels and Resorts, The Fullerton Hotels, Montage Hotels & Resorts, Nordic Hotels & Resorts that are absolute leaders in their markets at the luxury level and are highly revered, awarded brands consistently holding prominent spots in global award listings,” says he, adding it is an even playing field now and independents will continue to stay relevant as long as they maintain authenticity and unique charm while ensuring the highest level of service.
“Profitability has got little to do with whether the hotel is in the branded or independent space. Instead, it’s to do with efficiency of operation and effectiveness of doing business. It’s about maximising topline, managing costs efficiently and executing the brand promise. Working with a partner like PHR helps regional groups and standalone hotels compete with the infrastructural strengths of large brands and gain global visibility without having to invest themselves in expanded infrastructure like loyalty, technology, global sales and marketing, among others,” he opines.
Acquiring new members is a two-way exercise at PHR. “One is where we are constantly scouting for relevant prospects by assessing the market, keenly watching new construction pipelines, new hotel openings and renovated products, especially in markets of strategic importance to us, be it large business cities or relevant leisure itinerary destinations. Two is whereby we get contacted directly by interested independent hotels that we assess basis objective and clearly laid out qualification criteria. Then, we scale our regional group partnerships as these brands grow, like the ones I named before, and additionally others like Tokyu Hotels in Japan and The Last Word Intimate Hotels and Safari Camps in Africa,” he avers.
BUILDING RELATIONSHIPS
With a wide network of sales, marketing, distribution technology, regional teams engage and collaborate with member hotels across 36 key offices worldwide. PHR’s sales team is spread across the globe with domain expertise across corporate, leisure, groups and MICE segments that drive business into its member hotels. “We participate in most industry events and tradeshows and organise multiple segment-focussed and geo-focussed roadshows every year that our member hotels are invited to be a part of for direct relationship building with clients and media partners. We manage a formidable number of corporate accounts and RFPs and have our own proprietary programmes for corporate and leisure to channelise incremental business into our hotels. Our global strategic partnerships in meetings space and with travel management companies help get our hotels priority access and visibility,” says Rai.
PHR has thoughtfully curated marketing campaigns, some with an assured return on investment guarantee for its member hotels. “Since the pandemic, our campaigns have been highly localised or regionalised, recognising the dominance of domestic and short haul travel. We invest in meta search on behalf of our member hotels in a way that complements their own investments,” explains Rai adding that on the technology front, PHR is one of the largest hotel brand partners worldwide of Sabre/ SynXis, with access to priority product information and tech support. “We provide a fully consolidated and seamless end-to-end electronic distribution platform to our hotels and have multiple cost saving opportunities to provide either a relevant product or a service,” he says.
INCENTIVISING EVENTS
On how Preferred Hotels & Resorts is helping its member hotels leverage the return of weddings and MICE, Rai shares, “It is definitely an important segment and we have an expert global Group sales team to feed leads into our member hotels and work with them for closure. Our strategic partnerships with meeting planners and corporate accounts helps generate business from this segment.” Preferred also has its own proprietary meetings platform, PHGMeetings.com, to showcase product and special offers. “We incentivise bookers through specially curated I Prefer Planner Rewards programme and then we attend groups-focussed events and roadshows like IMEX to represent our brand and member hotels and also facilitate for them to participate with us,” he says.
LOYALTY PROGRAMMES
Rai feels a global loyalty programme that an independent hotel is part of is one of the assured ways of reaching an ever-growing segment of travellers around the world. “It is a cost-effective way for independents to garner direct bookings than rely heavily on third parties like OTAs. Another important benefit, especially as it relates to I Prefer is a points-based programme. It serves as an effective tool during corporate RFP contracting, given the preference of corporate clients to stay at a hotel where they can earn loyalty points during business trips, which they can then burn on leisure trips globally,” shares Rai.
RECOVERY PERIOD AND FUTURE
Regarding recovery, the EVP, Preferred Hotels & Resorts - South Asia, Middle East, Africa and Australasia, says their success is directly and proportionately related to this one factor. “There has been staggered recovery. Some markets and destinations bounced back quicker with favourable government and travel policies, return of air capacity and a well-coordinated effort between government, tourism bodies, airlines and hotels. We have closely monitored these trends and have acted swiftly by identifying outbound business and the right destinations to plant that business in. The key has been to successfully catch each business segment at the forefront of the recovery curve,” he explains.
Sharing his advice to independent hotels to make the most of this period of recovery, Rai says it is critical to invest in human capital including recruiting, training, motivating and upskilling as it is the team on property that are the true enablers of service promise of the brand. “Going forward, access to high quality talent across levels is likely to remain top challenge for service industry globally. Having a skilled and inspired team on property is a huge differentiator,” he avers, adding they should next invest in brand. “This includes overall investment in communicating your brand story across audience groups via marketing, communication, PR, social and digital. It’s not enough just to have a good product; you’ve got to be able to tell your story with an impact,” Rai says.
Third, advises Rai, is investment in product. “We know hotels have been cashflow fatigued coming out of Covid so there is additional pressure. With a resilient V-shaped bounce back of the travel and hospitality sector, investment in product is critical. We are observing some very high occupancies and rates in many countries and cities around the world, particularly in leisure destinations. Hotels cannot afford to compromise the overall value promise which simply is a function of the price they charge versus the product and service experience delivered. At some stage, the market is going to stabilise and then only the brands that delivered good, consistent value over a period of time would be able to retain customer loyalty,” he explains.
The independent hotels, he opines, need to make a positive impact on environment and community to watch carbon footprint and integrate sustainable practices in overall business. “Not only is this critical, the traveller fraternity too is becoming increasingly sensitised to the concept of conscious travel. Hence, this will be the mantra to doing and growing business on go forward basis. Finally, and equally important is continued attention to experiential travel. This has been the home zone for the independents – it’s highly localised, bespoke and immersed in spirit of the destination. Therefore, one must retain authenticity, tap into creativity and deliver fresh and enriching experiences of place, people and product,” he concludes.
