Sidharth Gupta, co-founder and CEO, Treebo. Treebo announced its entry into the premium four-star segment with the launch of the first Medalio Hotel in Udaipur. Sourcespoke with Sidharth Gupta, co-founder & CEO, Treebo about his company’s latest move. Spelling out why Treebo decided to venture into this segment, Gupta said it was a combination of market opportunity and their capabilities. He specified three main reasons—First, India is progressing and Indians’ affordability is improving. With 65 million households getting added to the upper middle income segment in India by 2030, this segment will constitute 52 percent of all consumption in India. That’s massive and cannot be ignored. Treebo wanted to introduce an offering catering to this segment. Second, from an asset owner perspective, there was a clear gap in the market where there were hardly any credible brand options available for assets having less than 50 keys and Gupta’s company wanted to change this and become the preferred brand partner for those owners in joining this lucrative mid-market segment.And third, in their journey since 2015, Treebo has developed a powerful set of capabilities across operations, sales, technology, and design and construction, along with a strong market presence and relationships.Hence, it felt like a natural extension for them to deploy these capabilities outside of our core economy segment as well, he specified.“We use a mix of operating models. For the Medalio brand we will be operating the hotels ourselves on revenue share, lease, or management contract basis. For our economy segment brands, Treebo and Itsy, we work on the man-chise model, which is a hybrid of management and franchising. We will use franchising very carefully and selectively for Medalio since we want to guard the guest experience tightly. We have a strong in-house team of hotel management professionals who will look after these hotels,” he said about how he is juggling his company’s various brands.The mid-market segment sits adjacent to the economy segment that Treebo has operated in for the last ten years. Gupta believed that their existing capabilities gave them a valuable headstart in operating in the mid-market segment. The Medalio brand’s debut property, Medalio Resort Udaipur Shobhagpura, in Rajasthan. “We have an operations team of 100+ hospitality professionals, a pan-India sales team of 120+ members, centralised revenue management expertise, a powerful direct sales engine, cutting edge technology, unmatched data-driven insights about 120+ cities across India – all of which will go a long way in supporting the build out of the Medalio portfolio. But most importantly, it is our understanding of guest needs and preferences, which we have developed from nearly a decade of serving guests who have now graduated from the economy segment and looking for a more premium offering, that will help us create the right experience under this brand,” he said. After their Udaipur opening, the company would soon be launching more Medalio properties in cities like Delhi, Gangtok, Chandigarh, Prayagraj, amongst others, Gupta said, adding that there was a strong pull from asset owners for the brand and they were grateful for that. Finally, on the question of whether the Medalio brand would be a competitor to the recently launched Park Inn and Suites by Radisson of which they were a franchisee, He said, “While the price points of both brands might be similar, the asset size requirements for each brand clearly distinguishes them. For Park Inn & Suites by Radisson, assets need to have a minimum of 50 keys, whereas for Medalio, we work with assets having 20-50 keys. So they are completely non-overlapping. It was always our conscious strategy to have our own mid-market brand as well as work with licensed brands to be relevant to assets across the spectrum of sizes”. “Radisson is a hugely respected and well-established brand. Partnering with them gives us the ticket to play for larger assets while staying relevant for the smaller assets through our own brand. Obviously, the capabilities required are common for both and that’s where our synergies come from. That’s what makes us well positioned to play in this segment,” he added.
Published On Dec 19, 2024 at 10:00 AM IST
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