The Spree Hotels scion, Keshav Baljee, ventures into a new vertical with ZiP Rooms to take the brand to newer heights. INTERVIEWED BY BABITA KRISHNAN
What is the concept of ZiP Rooms and how did it come about? How does it sync with the physical presence of Spree?
As part of the industry, we realised that there were a lot of entrepreneurs who were exceptional hotel operators. But due to the downturn, they were struggling on two counts: one is the obvious shrunk volume and competition; and two, the inflated costs. Being a chain, as their partners, we were equipped to solve these. Taking a franchisee route, we could create a mutually beneficial platform, where we get strong local brands and partners and they strengthening their business by increasing brand awareness to a national level through our sales and marketing and the recently launched App. Simultaneously, as we are growing and tying up with reputed brands on a national level, we are able to reduce the cost of procurement and standardise the procurement. So ZiP Rooms came about with the premise to create a platform for hotel owners and in the short duration of its existence, we have more than 40 hotels on board pan-India.
Is ZiP Rooms independent of Spree?
It is a Spree Group venture and has been built on top of the underlying strength of what Spree had already put together over the years.
As a part of ZiP Rooms, will the hotels retain their individuality?
We co-brand the hotels; the property is branded as ZiP but also retains its existing identity. We are a hybrid of a soft brand and a franchise. Branding the hotel is important for people who travel from across the country to identify with the service and a good stay experience at a ZiP Rooms property. This assurance is very important in the budget space, where a lot of things can go wrong.
How to you assure your clients?
We spent a fair bit of time researching how to assure travellers, both corporate and pleasure, since we want to target all segments. We want to give them the assurance that when you stay at ZiP Rooms there is a certain baseline quality of service as well as product that you will receive anywhere you go.
Lately, the digital space has completely changed the way hospitality is approached. Would you agree with this?
Though I am a traditional hotelier, I am also a computer engineer. I have been predicting that hospitality is going to change and we must change with the advent of new technologies. Mark Andreessen very famously had said that software is eating the world and it must happen in hospitality as well. Digital, right now, is being used primarily to help us search; to solve discoverability problems for hotels, and that is very important because what can’t be discovered, can’t be sold. If you can discover better then you can make more informed choices and that is a large part of the battle. The next step is to figure out how can we actually use technology to ensure better quality assurance, service delivery, product sanitisation, etc. To actually deliver what you are promising requires a fair bit of technology as well.
Who are your competitors in this space?
There are a fair bit of platforms — some having raised funding and some others growing. It is too early to say who will be a competitor. We are positioning ourselves with much more than just sales and marketing and co-branding platform. Right now, nobody is offering what we are to a hotelier, which is a fairly compelling value proposition because we stand along with the independent entrepreneur running his hotel to support him. We believe that this is the future of hospitality — providing local experience, local flavour and a very strong personal touch, which is missing in large chain hotels. If we can strengthen the hand of our local partners with some of the SOPs, training, cost savings, additional discoverability and sales and marketing networks, then we can certainly give the property a chance to compete on an even footing with some of the bigger chains. With platforms like ZiP Rooms, travellers will find an increased number of stay options in a city and this choice will benefit everybody.
As a digital platform, you don’t have physical properties and are tapping the unsold inventory of a hotel. How is your solution any different from an OTA or the hotel’s own website?
I think the difference is that we partner with the hotel on a very holistic level. The idea is to try and get a substantial increase in revenue or even decrease in cost; then you double the profit margins instantly. We are identifying the hotels that have the mindset to ensure that customer service and quality is maintained. Because mindset cannot be changed. We partner with a hotel for all of the inventory, but they also have the option to sell it as well. Though we are here to obviously fill up the unsold inventory, we are not just a room platform. We also partner with them for food and beverage as we believe that is also a very important aspect of the business.
Another very important differentiator is that we are the only hoteliers who have actually entered this space; and hence we are able to look at it from a very holistic perspective.
So the digital aggregator business will only get bigger?
It is a tricky situation right now. I have been an individual hotel entrepreneur and I can empathise with what a hotel entrepreneur is going through. Many digital space players are coming in for the short-term, to sell the inventory now. But what happens when the markets improve, will the hotel owners continues these partnerships? My guess is they will cut their ties and move on and that is not a very sustainable business for the digital platform. On the other hand, at ZiP Rooms, we want to strengthen each other’s brand by working together in a more holistic fashion. We help the hotel achieve certain standards and drawing from our operating background, our team of trained experts are there to assist in any emergency.
As a customer what is my experience from the ZiP Room App and the property?
First of all, what you see is what you get — you are assured that we are showing you accurate pictures with correct description. Two, you can blindly book any room and you are assured that you will have basic ZiP Rooms promises fulfilled at every property. These are the promise of clean and hygienic bathrooms, bedrooms, hot showers, unlimited breakfast and unlimited Wi-Fi. What we are trying to do is to aggregate business class hotels to provide an assured level of service to the customer.
So Spree is working on two verticals now?
Actually our focus has shifted entirely to ZiP Rooms. But what we are doing is that when hotels approach us for management, we will continue to evaluate those on a strategic basis but the entire Spree portfolio and ZiP Rooms has been combined. So now ZiP Rooms is the platform for hotel owners and Spree is the management partner. Though if a partner wants either/or, that is also possible.
The whole idea is to position ourselves as hoteliers entering the digital space and also as hoteliers who are looking at partnering with other hoteliers to benefit each other. ZiP Rooms, in essence, is a platform by hoteliers for hoteliers.
