Committed to Give Value and Build Customer Base Gradually: Raj Rana

CARLSON REZIDOR and the Eros Group introduced Faridabad’s first upper upscale property, the Radisson Blu Faridabad at a meet the press event recently. The 124 room hotel was built at a cost of Rs 175 crores (including land cost) according to Akshay Sood, Director, Eros Group, who added that the entire project was built in three years.

The hotel also offers meeting facilities with state-of-the-art technology and a pillar-less Grand Ballroom that accommodates up to 1,000 guests.

Speaking to BW Hotelier on the occasion of the hotel launch, Raj Rana, Raj Rana, Chief Executive Officer, South Asia, Carlson Rezidor Hotel Group began by explaining why decide to build a five star in Faridabad.

“When we did the feasibility report, we found that because there was no hotel in this positioning in the area, there was a lot of untapped demand. It would, however, be wrong to expect that suddenly in the first year itself, the hotel would be doing gang buster business. What we have to realise is when we do demand analysis, we segment the demand clearly in terms of room rate, positioning and food and beverage,” Rana began by telling us.

Food and beverage demand is definitely present in Faridabad. The aim was to get the corporate business in the area to accept the rates that a five star deluxe property commanded, he added.

“It’s a question of slow progress and inviting the corporate customers to the property and have them examine the difference and then build loyalty. We believe we will be successful in this endeavour,” Rana said.

On the subject of room rates, he said, “there is no clear benchmark as far as ARRs are concerned in Faridabad, since we are the new game in town. We have no competition in our segment within 15 or 18 kilometres. This may provide us with a first entrant advantage. It's a process where we have to educate the market as to why we are charging a certain rate”. He added that the aim was to go after the customer who was willing to understand the value of the product on offer and pay for the five star amenities.

“We do believe that the hotel will settle down in a position within the (Rs) 6 thousand average that is commanded by our hotels in Noida and Ghaziabad. As demand grows, because there is no new supplies in this segment here, there is potential to take the ARR higher,” he said.

“If you build a solid hotel and you have a long term vision, then that hotel's positioning will scare off the competition for the next many years and therefore help you build a base business. Once the base business is established, you enjoy more stability and longer period of returns. The hotel will continue to ramp up well and for the longer term give steadfast results,” Rana said while explaining the vision of bringing a five star hotel in Faridabad.

Whether it be Katra, Guwahati or Indore, first entrant is a core strategy of Carlson India-wide—the company has gone into cities as as the first International brand where there were no hotels, he added.

But challenges did exist, Rana said in conclusion, “Faridabad as a city is more industrial than fortune 500 or just pure commercial space and indeed we have seen that if there was more high grade commercial space, it provides better diversification than pure industry. That does not mean pure industry does not have any demand or need for a five star segment. The Indian clientele is very aspiring. We are committed to give value and build a loyal customer base gradually”.