COVID-19 was not kind to Signum Hotels, but then again it was brutal to many other hotel companies. The company manages 14 hotels in India and seven overseas. Out of this, only six are currently operational. The rest, shut temporarily during the pandemic, are expected to resume operations later this year.
Nonetheless, Mehul Sharma, Founder and CEO of Signum Hotels is focusing on the silver lining in this dark cloud, rather than the hard times the company underwent. He is re-evaluating the brand’s business strategies to put it back on the growth path. And it starts with footprint expansion.
“In India, we are currently at various stages of discussions for managing hotels across destinations, including Goa, Chennai, Bengaluru, Chandigarh, Agra, Amritsar and Jaipur,” Sharma revealed. “The nature of these upcoming properties would be a mix of business and resort hotels in the upper upscale segment.” This optimism aside, it is quite evident that it will take quite some time for things to go back to normal. Even then, recovery will occur faster in some business segments as compared to others.
Brands like Signum Hotels, therefore, have to proffer a strong proposition for large scale, as well as medium-scale hotel investors and developers. After all, most of them seek faster and better ROI with a shorter gestation period for their investment.
Sharma stated that Signum is ideally positioned here. “We are probably the only hotel company that offers profit assurance in the second or third year down the line. are unable to deliver certain profits, then we contribute from our side,” he stated.
Signum also works on annual minimum guarantees. It not only ensures the OPEX breaks even but also collaborates with owners to give a reasonable amount of ROI on the capital invested. “We operate on a lean and mean structure with a < 1 room to staff ratio. Backoffice operations are largely centralised and taken care of by the corporate office. In addition to reducing overall hotel costs, this brings in more profitability for the owners,” Sharma added.
STANDING OUT
Though COVID-19 affected the hospitality industry tremendously, it still remains an overcrowded landscape. Making a brand stand out is crucial, especially now when customers are spoilt for choice and are fastidious about what they choose.
Fortunately, the pandemic opened the doors for Signum Hotels’ international expansion. It signed up deals in the US, Serbia, Israel, Greece, Russia and Dubai. This was primarily because many hospitality players and brands wanted to exit these markets due to cash flow challenges amidst declining revenues.
“We saw this as a great opportunity to move into the international market and partner with hotel owners who were no longer associated with any brand. This strategy worked perfectly for us and we set up offices across the globe to further expand under a management agreement operating model,” Sharma stated.
With over 30 employees, Signum operates offices across Delhi NCR, Bengaluru, Canada, San Francisco, Dubai and Belgrade. Each administrative centre is led by a regional head who drives the brand’s development and is also responsible for the group’s expansion plan in the entire region. They try to highlight the brand’s USP, which is focussed on experiential stays.
“It boils down to picking the right hotels at the right locations and creating local experiences. We promote local tourism and encourage local people to work with us. Thus, we boost the indigenous culture, while keeping technology at the core of our operations,” Sharma claimed.
COMING OF AGE
Signum Hotels and Resorts calls itself a new-age hotel management firm offering specialised services to hotels across Asia Pacific. While this might seem to be a mouthful, Sharma maintained that the company’s offering distinguishes it from other players in the industry.
“Run by a team of seasoned hoteliers, Signum boasts of a strong footprint in terms of sales and marketing. Our in-depth understanding of the hotel business along with our uncompromising focus on cost control in hotel operations sets us apart,” he asserted.
The company has a centralised procurement processes aimed at reducing cost and effort at the property level. It also launched its own academy where it trains people and absorbs them into its own hotels. This gives it an edge, not only in terms of quality of resources, but also in reducing payroll cost.
The company offers complete management and re-branding services for a property – right from signage, marketing collateral, elevated architecture and design elements to technology. This includes using artificial intelligence that reduces its payroll cost by 5% to 6%. It also offers loyalty programme rollout, HR practices, PR, sales and marketing as well as operational SOP creation and implementation, employee training, etc.
In short, Signum takes over all aspects of a hotel’s operations and re-aligns these to its brand standards. Sharma claimed that the company never compromises on tech integration and brand standards. “Our loyalty programme, which is a subsidiary of Flipkart, is also very unique. Our retention offers make it very exciting for people to come and stay with us,” he added.
AT YOUR SERVICE
A quarter of the international tourism to the United Kingdom is for business purposes, which has given the country’s serviced apartment industry a big impetus. Working professionals and even students prefer this accommodation type for their short or long-term relocation. This explains why Signum Hotels has 22 serviced apartments in London.
According to Savills Research, while the serviced apartment category has been affected by the crisis wrecked by COVID-19, it showed a degree of relative outperformance as compared to standalone hotels. Eyeing this trend, Signum now plans to get into the service apartment space in India too.
“Our room inventory in service apartment, called Signum Courts, at London is about 180. We are looking at this model very aggressively in India too, across cities like Chennai, Bengaluru, Mumbai,
Pune, etc.,” Sharma revealed.
The idea with this accommodation model is to secure business from a long-term perspective. He noted that though this segment is stressed at the moment, but the demand for safe, clean and hygienic long stay spaces is here to stay. Signum Hotels aim to fill this space with competitive and value for money pricing.
Moreover, the brand has other aggressive expansion plans for the Indian and overseas markets. “Within the country, we are eyeing great locations, especially across tier 2 and 3 cities with both business and leisure hotels, and resorts. Internationally, our focus markets for expansion include Africa, Canada, Eastern Europe the US and the UAE,” Sharma maintained.
While the industry awaits a consequential rebound in hospitality demand, Signum Hotels is busy laying out plans for a flourishing future. The current wave of disruption has driven a lot of distress in the hotel business. At the same time, it has created the perfect playing field for partnership with hotel owners keen to negotiate terms that are viable for all stakeholders involved. And Signum Hotels does not want to miss a beat!
