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Tag: hotels

  • The Rise Of The Patel Hotel Owners And The Motel Business In The USA

    The story of Gujarati motel owners in the United States is an inspiring example of hard work, smart business, and strong community support. It shows how they started small and grew into a big part of the hotel industry, making a huge impact on the American economy.

    Asian American Hotel Owners Association (AAHOA), founded in 1989 represents over 36,000 hotels, employs more than 1.1 million people, and adds over 1.5% to the U.S. economy. Its members spend over $50 billion every year and own properties worth $1 trillion.

    The surname Patel is synonymous with motels so much that there is a light-hearted joke prevalent in America that the Patels have their own “Patel Motel Cartel”. Now let’s delve into the origins of how it all began – the story of Gujarati motels in the United States.

    Kanjibhai Desai: The King of the Motel Business

    It all began in 1942 when a man named Kanjibhai Manchhu Desai left Gujarat in search of new opportunities.

    He was joined by two Gujarati farmworkers, and they took over a 32-room hotel in Sacramento, California, after the property’s Japanese-American owner was forced to report to a World War II internment camp.

    Soon Desai moved to the Hotel Goldfield in San Francisco, where he also enlisted the help of other immigrants from Gujarat. The Immigrant and Nationality Act of 1965 also acted as a catalyst for this process, as now more Gujaratis were allowed to pursue their dreams of settling in the United States.

    Other Gujaratis also followed, not only from India but also from other parts of the world. Most of them moved in as refugees from Uganda when their dictator Idi Amin ordered to expel of around 55,000 Indians who were living there, and a majority of them were Gujaratis.

    They soon found a new home in the various districts of America. Some Gujaratis also came from other parts of the world, like the United Kingdom, Pakistan, etc.

    By the 1980s, the second-generation kids of these immigrants started expanding the frontiers of their parent’s businesses. For example, they acquired furthermore motels to build their chain of motels across various states.

    They made further renovations and this led to even more revenue. By 2007, they owned around 21000 of the 52000, a staggering 42% of the US hospitality market.

    Desai’s contributions to the motel industry and the Indian American community have been widely recognized. In 2003, he was inducted into the American Hotel & Lodging Association’s Hall of Fame, and in 2006, he was posthumously awarded the Ellis Island Medal of Honor for his contributions to the hospitality industry and the country as a whole.

    Gujarati-Owned Hotels in the USA

    Gujaratis are a prominent ethnic group in the Indian-American community and have a strong presence in the motel industry. The Gujarati-American Hotel and Motel Association (GAHMA) represents a significant number of Gujarati hotels and motels in the United States.

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    Key Factors Behind the Rise of Gujaratis in the Motel Business in the United States

    Strong Community and Family to Rely On

    The Gujarati Patel community shares a strong bond, be it with their friends, family members, or anyone within their community. This can be symbolized when Kanjibhai Desai encouraged his community to enter the hospitality business with the quotation: “If you are a Patel, lease a hotel.”

    It is widely reported that they trusted a fellow community member so much that they would give them when needed a “handshake loan”. These types of loans do not involve any sort of collateral, no strict payment schedule in the form of installments, or anything they can pay whenever they want.

    They also took the help of their partner and children, to help them run the daily operations, and if these were not enough, they also called their distant relatives from India to aid them for free. This was different, unlike say other American owners who had to pay out a significant portion of their revenue in the form of wages to employees. Thus, the Gujarati motel owners made the motel their own home.

    This statement by Gary Patel, a small motel owner in Michigan, explains the gist of the whole paragraph,

    “About 40 percent of the Patels know each other, through friends or family, so when you buy your first property, there is someone to help you with the down payment, someone to be a partner.”

    Strong Work Ethic

    Gujarati motel owners strongly believe in “Athithi Devo Bhava” as in Guest is God. So, these Gujarati motel owners would work hard to ensure their customers faced no issues during their stay and if they somehow had, it, such as say the pipes being clogged, or say any other basic issue, they would rather learn how to fix that issue on their own, instead of hiring a third-party vendor to cut costs.

    They were ready to do the dirty, unglamorous work to attain their goals as they saw the long-term benefits.

    Strong Business Acumen

    Gujaratis have a strong business acumen that is they always look for better opportunities and capitalize on the right moment.

    This can be explained by this statement of Vinay Patel, a second-generation immigrant who currently owns a full-service Holiday Inn in Sterling, Washington where he said that his parents built one hotel and sold it, then built another and sold it, and they repeated this chain of buying motels at a low cost and selling them at a high cost.

    The Challenges Gujaratis and Patel Owners Had To Face

    • One of the biggest obstacles they had to face was racism and xenophobia. They were not accepted in their society and had to face taunts about how they were of an “inferior race” and so on.
    • White motel owners, especially in the rural parts of America, had to put up signs with “American Owner” and so on. But they managed to overcome all of these through their hard work and determination.
    • Running motels has become more expensive due to higher costs for maintenance, utilities, and staff. Patel hotel owners face labor shortages, making it hard to find and keep skilled workers. This has increased staff duties and pushed owners to find new ways to hire and manage workers.
    • Patel hotel owners must manage their online presence through travel websites and reviews. They need to keep good ratings, check reviews, and update their profiles, which takes time but is important.

    They made a lot of efforts to get along with the local community, they contributed a lot of their profits to the educational institutions, hospitals, etc, which won them a lot of faith. Now the second-generation and beyond immigrants are integrated with their society as a whole.

    The Patel Hotel Owners: Who Owns the Most Hotels in the USA?

    The Patels first entered the hotel industry in the 1940s and 1950s, with many family members immigrating to the United States to pursue business opportunities. Over time, they developed a reputation for providing affordable and comfortable accommodations to travelers, particularly those on a budget.

    The Patels are not a single entity, but rather a large extended family with many branches and business operations. However, they have a number of traits and strategies in common that have contributed to their success in the hotel industry.

    For example, they often purchase and operate lower-cost hotel brands, such as Motel 6 and Super 8, and tend to focus on owning and operating multiple properties near one another.

    Overall, the Patel family’s success in the hotel industry has made them an important part of the business landscape in the United States, particularly in the budget hotel segment. Let’s explore the incredible journey of Chan Patel and his inspiring success story.

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    Chan Patel: A Success Story

    The story of Chandrakant(Chan) Patel is a good case study that enunciates all the major reasons why Gujarati motel owners have succeeded. He came to the United States in the 1960s for his higher studies and soon got a job as an executive at the now-defunct domestic airline Braniff International. He also married and had four children and life was going smooth.

    In 1976, he bought Alamo Plaza Hotel Courts Dallas, in addition to his job as an executive. He was the first Indian hotel owner in Dallas. During the lunch break of his job, he would man the front desk during that time and give a helping hand to his wife to do laundry for the customers and other odd jobs.

    Gujarati owned hotels in USA
    Chandrakant (Chan) Patel – First Indian Hotel Owner in Dallas

    Soon he found it tough to maintain both tasks, and while he had to sacrifice his personal life, he also realized the benefits he was having. He saved a lot of money in terms of rent, utilities, and phone bills because he was staying on his property.

    He never felt bad doing small jobs because of the various gains he made financially. He wanted to focus on getting more revenue, so he took the bold risk of quitting his stable job as an airline executive.

    Soon, his income doubled from the 35,000 dollars he was earning from the airline job and the motel business in USA grew exponentially like he had 13 motels under him by 1987 from the one he had eleven years ago.

    After that, he passed this business to his sons and began a new venture of starting a bank, which he did by the name of State Bank of Texas, which was to help immigrants get affordable loans for their new businesses. This bank also became a successful venture and by 2018, it was seen as one of the top 100 community banks with assets less than 3 billion dollars in America.

    Chandrakant Patel is thus a success story who personifies all the reasons for how Gujaratis have succeeded.

    They have been depicted in various forms of media. The 1991 Denzel Washington-starrer “Mississippi Masala” is about how a Gujarati couple and their daughter had to leave Uganda and how they assimilate with African-American culture when they decide to settle in Greenwood, Mississippi as refugees.

    Patel Hotel Owners
    Life Behind The Lobby Book

    Noted author Pawan Dhingra has also published a book titled: “Life Behind the Lobby: Indian American Motel Owners and the American Dream” in which he focuses on all these details about the Patel Motel Cartel in detail.

    Surat to San Francisco
    Surat to San Francisco

    Indian American author Mahendra K. Doshi highlighted the important role of Patels in the U.S. hotel and motel industry, tracing their roots to Gujarat. His book “Surat to San Francisco” explored their inspiring journey, documenting how this community rose to shape the American hospitality sector.

    Patel Motel Owners: Future

    Future Outlook for Patel Motel Owners:

    • Sustainability Efforts: Patel owned hotels are expected to adopt eco-friendly practices as environmental concerns grow. This may include improving energy efficiency, reducing waste, and saving water to meet new standards.
    • Global Growth and Partnerships: Some Patel hotel owners may expand their businesses beyond the U.S. into new markets and tourist spots. They may also partner with local businesses and attractions to offer unique packages, making their hotels more appealing to travelers.
    • Better Loyalty Programs and Services: To meet trends like remote work and digital nomads, Patel Motels may offer long-stay packages and work-from-hotel services. They will also improve loyalty programs with rewards to keep customers coming back.

    Conclusion

    In conclusion, the motel business in USA is a dynamic and rapidly growing industry, and the Gujarati community has made a significant impact with their entrepreneurial spirit. The Patel Hotel Owners are a prime example of this success, with an impressive portfolio of hotels that have made their mark on the industry.

    Despite challenges, their continued growth and exploration of new business opportunities serve as a motivation to others in the industry. The Patel family’s success is a testament to the power of hard work, dedication, and a willingness to adapt and innovate in an ever-changing business landscape.

    FAQs

    How many US hotels are owned by Indians?

    One out of two US motels or hotel businesses is owned by Indian Americans.

    Who owns most hotels in USA?

    Wyndham Hotel Group owns the most hotels in the USA, the company has over 9000 hotels in over 95 countries, with roughly 893,000 rooms.

    How many hotels are owned by Patels in USA?

    Asian American Hotel Owners Association (AAHOA), founded in 1989 represents over 36,000 hotels, employs more than 1.1 million people, and adds over 1.5% to the U.S. economy. Its members spend over $50 billion every year and own properties worth $1 trillion.

    Which is the first Indian owned hotel in USA?

    Kanjibhai Manchhu Desai is believed to be the first Indian to own a motel in the U.S. He bought the Goldfield Hotel in San Francisco in 1937.

  • The Current Insights and Challenges Faced by OYO Rooms

    Back in 2013, a college dropout spotted the untouched opportunity in organizing India’s budget hotels while travelling through the country. His startup has reached up to 3.5x growth in revenue when it was valued at 10 Billion dollars in October 2019.

    It’s easy to guess that OYO Rooms, a thriving venture by a young entrepreneur Ritesh Agarwal, is being spoken about.

    The funding marks OYO’s presence as India’s most successful unicorn. OYO has successfully raised a whopping $4.1B, as of August 20, 2021. The company has marked its footprints beyond India—in China, Malaysia, Nepal, and the UK. Here’s an insight into Oyo Rooms subsidiaries, growth and the challenges faced by Oyo.

    Oyo Rooms – Latest News
    Oyo Rooms – Growth, Expansion and Valuation
    Oyo Rooms Subsidiaries
    Oyo Rooms – Funding
    Challenges Faced by Oyo Rooms

    Oyo Rooms – Growth, Expansion and Valuation

    Ritesh Agarwal
    Ritesh Agarwal, Founder

    In 2012, Ritesh Agarwal launched Oravel Stays to enable the listing and booking of budget accommodations. After months of research and experiencing various bed and breakfast homes, guest houses, and small hotels across India, he pivoted Oravel to OYO in  May 2013.

    OYO partners with hotels to offer world-class guest experiences across cities. Shortly after launching Oravel Stays, Ritesh Agarwal received a grant worth $100,000 as part of the Thiel Fellowship from Peter Thiel, which greatly contributed to shaping his startup.

    OYO Rooms currently houses 17,000 employees globally, of which approximately 8000 are in India and South Asia. OYO Hotels & Homes is now recognized as a full-fledged hotel chain that leases and franchises assets.

    Over a span of six years, the startup expanded globally with thousands of hotels, vacation homes, and millions of rooms in hundreds of cities in India, Malaysia, UAE, Nepal, Brazil, Mexico, UK, Philippines, Japan, Saudi Arabia, Sri Lanka, Indonesia, Vietnam, the United States and more. It is even valued higher than the renowned  Taj group of hotels and Oberoi hotel chain.

    As per the DRHP filed by the company recently, the total income of OYO, which stood at Rs 13,413.26 crore in the previous FY20 fell by nearly 70% in FY21, standing currently at Rs 4,157.38 crore. All of these can be pointed out as the adverse effects of the pandemic, which restricted the Indians largely to their homes. However, it is important here to note that the company saw a massive 70% contraction in losses though.

    The losses of Oyo became as less as Rs 3,943.8 crore in FY21 when compared to the loss of Rs 13,122.77 crore in FY20. This is due to the reason of the huge fall in the expenses of the company, which was recorded at Rs 22,800.12 crore in FY20 and came down to Rs 6,936.07 crore. The company’s expenses on employee benefits also drastically declined by 63% to Rs 1,742.12 crore in FY21, from Rs 4,765.28 crore in FY20 because of numerous layoffs.

    The business that undoubtedly bore a considerable amount of the brunt of the pandemic is looking to rise again after the lockdown relaxation this year 2021. Oyo took its first step towards growth by raising funding from the American software giant, Microsoft, as part of strategic investment.

    Along with Microsoft, Oyo has a set of other strategic investors, which includes Chinese ride aggregators Didi Chuxing; South-East Asian ride-hailing giant, Grab and Airbnb, American online marketplace for lodging, tourism, and homestays.

    The total valuation of OYO is $9.6 Bn, as of August 20, 2021, after the company raised $5 Mn from Microsoft.

    Oyo Rooms Subsidiaries

    Oyo Rooms have acquired 8 companies to date. Denmark-based data science firm, Danamica was the last company that was acquired by OYO on September 2, 2019, at $10M, after which Oyo acquired Direct Booker on May 9, 2022. The Croatia-based hospitality service provider has more than 3200 homes with it and has serviced 2 mn+ customers so far. The acquisition of the Nikola Grubelic and Nino Dubretic-founded company is expected to strengthen Oyo’s presence in Europe, especially in Croatia.

    Acquired Date Amount
    Direct Booker May 9, 2022 –
    Danamica Sep 2, 2019 $10M
    Leisure Group May 1, 2019 $415M
    Qianyu Islands March 26, 2019 –
    Innov8 Coworking March 15, 2019 $30M
    Weddingz Aug 13, 2018 –
    AblePlus Solutions Pvt. Ltd. July 10, 2018 –
    Novascotia Boutique Homes March 18, 2018 –

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    Oyo Rooms – Funding

    Oyo has raised a funding of $3.1B in total, as of January 13, 2022. The company raised $29.72Mn in funding on January 13, 2022. Oyo previously raised an undisclosed debt financing round on December 16, 2021. The Ritesh Agarwal-led company raised its Series F round worth $5Mn on 20th August 2021, which was led by Microsoft. The company has seen 22 funding rounds to date.

    Softbank Group, Lightspeed Venture partners, Airbnb, Sequoia India, Microsoft, Chinese Didi Chuxing, Garb, and more make up the lead investors’ panel for OYO.

    Date Stage Amount Lead Investors
    January 13, 2022 Secondary Market $29.72M Qatar Insurance Company
    August 20, 2021 Corporate Round $5M Microsoft
    July 29, 2021 Corporate Round – Microsoft
    July 16, 2021 Debt Financing $660M –
    March 11, 2021 Debt Financing $200M Softbank Vision Fund
    Jan 6, 2021 Series F $7M Hindustan Media Venture
    Dec 10, 2019 Series F $1.5B Ritesh Agarwal, Softbank
    Nov 30, 2019 Debt Financing $6.73M MyPreferred Transformation
    April 1, 2019 Series E $75M Airbnb
    Feb 14, 2019 Series E $100M Didi
    Dec 7, 2018 Series E $100M Grab
    Sep 25, 2018 Series E $1B Softbank Vision Fund

    Oyo is currently eyeing an IPO soon for which the company is likely to file its Draft Red Herring Prospectus (DRHP) within the next 10 days, according to the reports dated September 23, 2021. The company is looking forward to raising around $1 Bn through its IPO round, which will consist of an offer for selling shares from the existing shareholders along with some fresh issues of shares.

    Oyo has shortlisted 3 investment banks – JP Morgan, Kotak Mahindra Capital, and Citi eyeing its IPO that is to be worth over $1 billion, as per the last reports on August 9, 2021. The hotel and hospitality industry was among the most affected industries due to the strike of the Covid19 pandemic.

    Now that the world is unwinding, this industry has the potential of witnessing a record recovery. This is also the reason why the software giant, Microsoft is planning to invest in this sector, and Oyo will not lose out on this opportunity of receiving the much-needed funds from Microsoft, which is why it is gearing up towards an IPO.

    Furthermore, OYO has allegedly decided to proceed with a domestic IPO, however, they would also keep other options open.

    Oyo has filed its Draft Red Herring Prospectus (DRHP) along with the details of its upcoming IPO round on October 1, 2021. The hospitality giant is looking to raise around Rs 8430 crores, which will be consisting of an offer for sale (OFS) of Rs 1,430 crores and a fresh issue worth 7,000 crores. SoftBank Vision Fund will offload shares worth Rs 1,328.5 crores and shall be standing as the biggest beneficiary of the OFS whereas, Global Ivy Ventures and China Lodging Holdings will be selling Rs 23.13 crores and Rs 51.62 crores worth of stakes respectively.

    Oyo might raise close to Rs 1,400 crores with the help of a private placement in a pre-IPO round before the listing. This might reduce the size of its IPO to Rs 7,030 crores.

    The upcoming IPO of OYO is on the back foot. This is because the Federation of Hotel & Restaurant Associations of India (FHRAI) the regulatory body of the hotels, has written to SEBI, charging the company over alleged fraudulent and unfair business practices, as reported on October 26, 2021.

    Oyo was earlier charged by FHRAI for the ‘anti-competitive’ measures that the company has embraced, with the Competition Commission of India (CCI). Furthermore, FHRAI also noted that an investigation by the anti-trust body is still pending and in its advanced stages. Besides, the company has also significantly failed to disclose the information.

    According to the hotel’s regulatory body, Oravel did not make a fair disclosure on the nature and consequence of the CCI-directed investigation and in turn, “has tried to confound investors by conflating irrelevant issues relating to the interim reliefs sought by RubTub Solutions Private Limited (Treebo) and Casa2Stays Private Limited (FabHotels)”

    All these are reasons enough that the IPO of Ritesh Agarwal-led Oravel Stays will more likely be rejected because no past incidents where a company was under the CCI probe have been allowed to go ahead with the IPO.

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    Challenges Faced by Oyo Rooms

    Despite the shiny, successful exterior, OYO’s reputation has been dubious soon after its founding. OYO’s work culture raises questions about the proficiency of its business, according to financial filings, court documents and interviews with 20 current and former employees along with the others familiar with the startup’s operations.

    Unethical growth strategies

    OYO offers rooms from unavailable hotels, those that have halted its service, according to the company’s chief executive and nine of the current and former employees. This boosts the number of rooms listed on OYO’s site.

    Thousands of rooms are from unlicensed hotels and guesthouses, its executives have acknowledged.

    To save the trouble from the authorities over the illegal rooms, OYO sometimes provides free stays to the police and other officials, according to nine of the current and former employees and internal WhatsApp messages, as viewed by The New York Times.”

    Having a huge base of unmarried couples, a scheme involved workers at properties run directly by OYO conspiring to keep the guests checked in after they left. The workers then cleaned and resold the rooms for cash to other guests and nabbed the money, says an ex-worker.

    Complaint of unpaid dues

    OYO charges extra on hotels while refusing to pay the amounts to the hotels, which they claimed they were owed, according to the interviews with several hotel owners and employees, legal complaints, and emails viewed by The New York Times. Some hotel operators have filed criminal complaints against OYO, which said it retained payments. Aditya Ghosh, OYO’s head of India operations, dismissed the argument as “noise,” he said, “the disagreement is about the penalties we charge on customer service failure”.

    Protests by hotel owners

    Independent protests by small-scale hotel owners are surfacing up in mid-tier towns like Pune, Kota, Manali, Ahmedabad and Jaipur as well as Delhi and Bengaluru. They claim that OYO has been eluding them of their promised returns and minimum guarantees by imposing a ream of charges, often without informing them. Many of these charges are not specified in the contract between the owner and OYO.

    The protestors state that OYO’s accounting and auditing process, and the penalties associated with petty faults and errors, are so heavy that they sometimes find themselves owing money to OYO at the end of the month.

    Covid-19 Impact

    Almost every business suffered a lot due to Covid-19, OYO was not any different. The hospitality business suffered a lot, and the occupancy rates of the hotels slow down due to all the lockdown curbs imposed by the Government. Even after the lockdown was over, people were being cautious and were avoiding travelling, so naturally, the occupancy rates were not increasing.All the restrictions created a negative impact on the revenues of the business

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    Conclusion

    Despite the hurdles, OYO has broadened its horizons beyond the bounds of India as well as just hotels. “Anyone who’s tried to innovate and attempted creating large organizations has faced bad press; Mark Zuckerberg, Steve Jobs, Elon Musk, Bill Gates—so I think he’s in the regal company,” said Ankur Nigam, a partner at KPMG. “I don’t think it’s fair to judge whether he’s a good leader. What’s visible is that he’s managed to build a $5 billion company and nothing succeeds like success”.

    Oyo happened to be one of India’s most gifted startups. It witnessed its valuation jump to $10 billion in 2019. Additionally, Ritesh Agarwal also had in his hand 30% of the profits. However, belonging to the hotel and hospitality industry, Oyo also happened to bear the brunt of the coronavirus pandemic. This is the sole reason why it saw a drop in its valuation in 2020.

    The unicorn startup was valued at $8B by the Hurun Global Unicorn Report 2020. After the last funding round led by the software giant, Microsoft, Oyo’s valuation jumped $9.6 Bn, as reported on August 20, 2021. Oyo has bigger plans upcoming that the company feels too early to disclose.  

    It’s one thing to think of business tactics, and another to be morally wrong. OYO should realize the fact that integrity is what makes the pillars strong in the long run. If it loses its ethics in the first few successful years, it’s impossible that the company would ever be remembered for any good.

    Diversification of its humble beginnings as a budget hotel chain, Oravel Stays—the entity that owns and operates the OYO brand clearly aims for the sky and has accomplished triumph in the last five years to mark its eminence.

    FAQs

    What is the problem with Oyo?

    Oyo rooms is facing challenges like protests from hotel owners, Complaints of unpaid dues and unethical growth strategies.

    Is Oyo losing money?

    Although Oyo has managed to narrow its losses from ₹12,799 crores in 2020 to ₹3,929 crores in 2021. The revenue of the company has plunged rapidly during the Covid-19 pandemic.

    Who are Oyo’s competitors?

    OYO Rooms’s top competitors are MakeMyTrip, ClearTrip, Yatra, Treebo and Fabhotels.

  • Business Model Of ITC Limited: How Does ITC Make Money?

    The height to which a business can be taken is sometimes hard for the eyes to meet. Some turn out to be pro at this, whereas sum ends up with nothing on this earth.  Several factors together build up to make a successful business stand; it becomes tough and competitive to keep all the elements simultaneously. Some minds prefer sticking to one type of business. On the other hand, some reasons go a step ahead creating various branches on which their business runs.

    Likewise, ITC limited is one that comes under the second category. With utter determination, it has become a well-renowned brand that pops up in nearly every advertisement that we come across. Not just stopping at one-way success, ITC made sure that it ends up ruling its domain. So here in the lines which follow, we will be sailing through the functioning and execution of the ITC limited.

    About ITC limited
    Business Model of ITC
    What is unique in the business model of ITC
    How does ITC make money?
    Conclusion
    FAQs

    ITC Limited Business model analysis

    About ITC limited

    1910 being the birth year of this highly established company, Kolkata in West Bengal houses its headquarters. Generally, ITC can be simply understood as a multi-industry company with its working hands in more than one business field. And that too is confined to single geographical coordinates, instead of growing with many locations in hand. However, the source of these hands is familiar with Sanjiv Puri as the chairman and managing director of this company breaths.

    Areas of operation

    The Indian subcontinents being the central arena to work on. Which further have countries like India, Nepal, Bhutan, Sri Lanka, Bangladesh. Besides that, the Gulf countries also get a taste of their business.

    Essential products and services

    ITC Products
    ITC Products

    As stated earlier, ITC is no one business company. Hence there’s a wide range of products this company houses. Because of this wide range of variety, it attracts the masses and meets the needs at large. If we go on having a quick look over the list would start from ;

    1. FMCG products: The light hectic free products from packaged food, household items, cosmetics, items we need daily, etc. Its fast-moving products include brands related to personal care products such as Fiama, Vivel, and Superia, stationery products such as Classmate, packaged food products such as Aashirvaad, Lychee Flavour, Bingo!, Sunfeast Dream Cream biscuits. Matchsticks and incense sticks such as Mangaldeep are also included under ITC’s products.

    2. Apparel: With fashion being a significant component in our lives, it was a good move on the part of ITC to have a competition in this too. John Players, ITC’s apparel brand, serves its customers with quality formals, casuals, denim, and accessories.

    3. Cigarettes: Named the tobacco company in its early days, cigarettes and tobacco were ITC’s initial products. Wills, the globally renowned cigarette brand by ITC, also serves its broad audience with designer wear, formal wear, casual wear, evening wear apart from cigarettes. Other popular cigarette brands include Scissors, Classic, Gold Flake, Flake, Insignia, Navy Cut, Briston, etc.

    4. Hotels and resorts: It’s one of the best investments, no doubt. ITC also holds its name under the list of premium hotels. Welcomhotel, ITC Hotels, Fortune Hotels, and Welcomheritage Hotels are the premium brands of hotels. These hotels have over 100 hotels spread across 70 destinations.

    5. Agribusiness: ITC ranks second in providing agri-products which include feed ingredients such as soya meal, marine products such as prawns and shrimps, food grains such as wheat, barley, maize, processed foods, and coffee.

    6. Paperboards & Packaging: ITC’s paperboard products include paperboard, specialty paper, graphic paper, and others. Apart from this, ITC provides printing services for both Indian and international clients.

    7. ITC Info Tech: ITC also provides business-friendly technical solutions related to manufacturing, banking, finance, travel, and healthcare.

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    Target audience of ITC

    Fixing a confined group to such a massive range of products and services is somewhat nearly impossible. With its diverse ability to produce constantly keeping the variety in front, it draws every pair of eyes and ears irrespective of the age group. That too from every field possible.

    Day by day, ITC is extending its services and targeting audiences from every age group. ITC has to go hand in hand with the people’s choice, which varies with every square kilometre. Thus, to suit every individual’s need, the company is always in a constant state of polishing itself. It makes sure that it takes people of all ages under its production umbrella in a way that makes room for everybody’s needs.

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    Business Model of ITC

    ITC Limited Logo
    ITC Limited Logo

    Hence, to build its revenue without any hindrance, the company has a beneficial business model on its table. ITC makes sure that it produces something new to attract the audience. This way, they would be drawn like magnets, end up investing in the latest products in the market.

    To get people to know about the new launches, it also never lags in displaying those. Along with that, back in the company’s production house, there’s always constant research about the mass. It helps in designing their upcoming innovation according to the audience’s feedback.

    To carry on the smooth functioning of the company, the resources have to be rigid. The infrastructures, physical inputs of the employees, transportation, and storage are valuable resources. These also include a set of experienced workers who know the mass from a closer perspective. And thus, insist on producing what should be the following product. These resources are like the pawns of the company. As a group, they contribute a significant amount to the revenue bar of the company.

    The customer gets a symbol of the wise company not to remain put with the profit from a particular segment. Likewise, ITC, by being an all-friendly company thinks about, the needs of every age group. Also, people of every geographical region. Every human should feel the essence of its products. Be it an urban or rural,  a small town or big city, ITC makes sure that the products reach every hand that searches for them. Hence, getting inputs from all directions helps the company with better motivation and finance as well.

    ITC being such a vast organization has the best value services for its customers. As it is confined to a single sector of producing, the customers are provided with a variety of offers and reasons to visit the company’s doorstep. The central bullet point is that all these services root from a single branch.

    To sell its products, ITC never falls short of platforms. It is evident that for such a vast project, several stations would be required to enter the market. Thus, the online distribution network is a convenient way. Apart from that, all sorts of apps designed by or for ITC do the job. It attracts, gives ideas, and makes aware people of the existence, efforts, and production of ITC. All these factors shape the business model of ITC.

    What is unique in the business model of ITC

    Starting from consumables to household items and paperboards, ITC does its best to satisfy its audience. A hard-to-count bunch of products brings ITC its title of being the most renowned producer. Apart from a small loophole of producing tobacco, the rest of its products are high on demand always.

    There’s no doubt that ITC has a robust network when it comes to the delivery of products. Production, storage, and delivery of such large quantities would sit on a vast expanse of land. That, too, ITC has well-taken care of. It is making sure that its products reach the assigned location in the minimum time possible.

    In the initial days, ITC diversified its resources and extended its business across many different sectors. It helped it create its brand presence which ITC utilized while entering into the FMCG sector. Moreover, ITC’s diversified business has led to reduced costs of outsourcing. The interrelation between its businesses has helped it grow and establish itself.

    How does ITC make money?

    Breaking down the streams of revenue, cigarettes contribute to about 77% of its revenue generation. On the other hand, paperboard & packaging contribute about 7.3% to the payment. Looking at other products, their agri-business contributes about 7.0%, hotels contribute about 4.3%, and FMCG products contribute about 4.0% to their total revenue.

    Conclusion

    Starting from scratch as a tobacco-producing company to being the ITC limited, this company has come a long way. Striding past innumerable competitors, it has gained what many dreams. Nevertheless, ups and downs are a combo pack that comes with every business. But with the amount of build-up ITC has already created, it would be a sweat-drenching process for any company to snatch the market from ITC. We, as consumers, with great delight, pick up the products of ITC without any second glance, which makes it even more invincible.

    FAQs

    What is main business of ITC?

    ITC Limited is an Indian conglomerate with diversified businesses in Fast Moving Consumer Goods comprising Foods, Personal Care, Cigarettes, Apparel, Stationery Products, Incense Sticks, Safety Matches, Hotels, Packaging, and others.

    What is the revenue of ITC?

    According to the 2020 update, 52,001 crores is what the present revenue of ITC stands for.

    Who is the CEO of ITC?

    Sanjiv Puri was appointed as the CEO in February 2017 and continues with his post to date.

    How much debt does ITC have?

    329.35 crores are the debt amount ITC has, as recorded in March of 2021.

  • Breakthrough in the Travel Industry: Tale of Trivago

    What makes a startup idea remarkable is its potential to solve a problem and make people’s lives easier. The issue does not have to go unaddressed; the question is how effectively it can be addressed. Many company models are based on this notion. With that in mind, allow me to share Trivago’s amazing startup story and its business model with you.

    About Trivago
    How was Trivago started?
    Founders & core team
    Business model of Trivago
    How does Trivago earns Revenue?
    What makes Trivago unique?
    Competitors of Trivago
    Trivago: Challenges and plans
    FAQ

    About Trivago

    Trivago is a multinational technology company based in Germany that specializes in internet-based hotel, lodging, and metasearch services and products. It was Germany’s first hotel search engine, and it is now one of the country’s fastest-growing businesses, with profits doubling since 2008.

    Expedia Inc. holds a majority of the equity in the firm. A hotel search company with the main objective of changing the way people search for and compare hotels online. It also offers hotel advertisers to promote their brand on the Trivago website providing them access to a broader target audience who visits its website.

    How was Trivago started?

    Earlier, booking a hotel used to be complicated. There used to be frauds and people were not able to get better deals. Looking at this problem gave rise to new startups such as Expedia, Orbitz, etc. that allowed customers to compare prices and get the best deals.

    People liked this idea and these startups quickly gained traction. Rolf Schrömgens, Peter Vinnemeier, and Stephan Stubner saw this as an opportunity and they came up with this new hotel aggregation site which they named Trivago.

    It was founded in 2005 in Dusseldorf, Germany where its headquarters are. It was first established in a garage. It was like a bootstrapped company with very little external capital and on going away with little steps and small steps forward. They grew very slowly in the beginning but eventually gained momentum.

    Trivago has evolved from a €1.4 million seed investment to become one of Europe’s most renowned unicorns. Today, they have 3 million hotels and alternative accommodations, search through more than 250 booking sites, active in more than 190 countries on 54 platforms, 33 languages, and more than 100 filters that you can apply to your search.

    Founders & core team

    Founders:

    • Rolf Schrömgens
    • Stephan Stubner
    • Peter Vinnemeier
    • Malte Siewert

    Trivago’s core team:

    • Axel Hefer – Chief Executive Officer (CEO)
    • Anja Honnefelder – Chief People Officer (CPO)
    • Matthias Tillmann – Chief Financial Officer (CFO)
    • James Carter – Chief Product and Technology Officer (CTPO)
    • Alexander Forstbach – Chief Data Officer (CDO)

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    Business model of Trivago

    Customer segments:

    Trivago has 2 types of customers. The first type includes partners like hotels, online travel agencies, and media who promote their products on the Trivago website. The second type is guests like travelers who compare offerings and pricing before making a purchase decision to book their desired hotel.

    Key partners:

    Hotels, online travel agents, and guests are among Trivago most important partners, but so are media and advertising firms, payment processors, and investors and stakeholders.

    Key activities:

    Based on key resources, Trivago acts as a platform for hotel brands to display their offerings and customers can find what they want. It manages guest and hotel networks, develops its products, and conducts sales and marketing.

    Channels:

    Trivago main channel is its website, although it communicates with brands through the sales team. It promotes its services through its web-based social networking pages, TV, and web-based advertising.

    Value proposition:

    Availability:

    The Company promotes transparency by allowing users to contribute to the content on its website. They can add content to hotel and cabin brand portrayals, complete missing brand profiles, and change profiles for quality assurance.

    Personalization:

    The platform encourages personalization by allowing firms to customize their profiles in a variety of ways.

    Convenience:

    Users can search for a variety of alternatives and narrow down results using hundreds of filters available on the platform.

    Brand/positioning:

    Because of its success, the site has developed a strong brand. It receives 120 unique visitors every month, indicating that it has a large user base. Trivago is one of Germany’s best and fastest-growing startups, with its advantages multiplying since 2008.

    Customer relationship:

    Trivago is an entirely automated platform, thus users have very little or no engagement with the team. The site’s FAQs answer the majority of questions, and email support is available for personal assistance.

    Key resources:

    Trivago most valuable assets are its website and application through which customers can search for hotels. Its highly trained workers are another crucial resource for maintaining and updating the website. In addition, being a startup, it is reliant on investor funding, which raised $53.8 million in December 2010.

    Cost structure:

    Technology setup and running costs, personnel pay, sales, and marketing divisions all contribute to the overall cost structure.

    How does Trivago earns Revenue?

    We know Trivago doesn’t offer tangible products or has no tie-ups with other hotels. So you might be wondering how it makes money. Here’s how.

    Listings:

    Trivago charges commissions to online travel agencies for promoting their services and hotel rooms on the Trivago website.

    Services:

    Trivago earns revenue by managing the listings i.e. the presence and visibility of hotel brands on their platform. For this, they have a feature known as Hotel Manager PRO wherein hotel brands need to pay the subscription fees.

    Cost Per Click:

    Trivago links itself to other websites like Oyo and Make my trip. When people visit the Trivago website and want to book their desired hotel, they get redirected to the hotel’s website.

    Trivago is promoting the hotel’s products and services and driving a sale for them. They are referring it to customers and in turn charge commission for doing the same. This is known as affiliate marketing or Cost Per Click (CPC) wherein they get paid whenever customers click on a link of that hotel’s website and their entire revenue model is based on this.

    A customer is referred to the website of the advertiser when the user clicks on the deals present in the search results. Trivago charges money for every referral. This model is known as the Cost-Per-Click (CPC) model.

    What makes Trivago unique?

    Compared to other hotel search engines, Trivago’ USP is its product focus: hotel search. It doesn’t offer other features like car rentals or booking flights just the hotel price comparison making it less confusing for customers. It benefits Trivago as well such as:

    • They have no conflict of interest.
    • Can focus on developing their products.
    • Be committed to helping hoteliers compete and travelers locate their desired hotel.

    Competitors of Trivago

    The top three competitors of Trivago are:

    Tripadvisor:

    Trivago’s main competition is Tripadvisor. It is a publicly-traded firm based in Needham. The company was founded in Massachusetts in the year 2000 and works in the travel agency business. It employs 1745 people more than Trivago. Tripadvisor has revenue of $366.5 million dollars higher than Trivago. It has raised a total of $3712.8 million, which is higher than Trivago.

    Booking.com:

    Booking.com is another major competitor of Trivago. It was created in 1996 and has its headquarters in Amsterdam. It’s in the field of web-based software. It brings in $6798 million dollars more than Trivago. It employs 19,466 people more than Trivago.

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    Trivago: Challenges and plans

    The impact of the coronavirus outbreak on the travel sector has been catastrophic. Countries are still fighting the dreadful pandemic, but communities and economies are slowly rebuilding and recovering.

    The recovery process for the travel industry will be complicated but let’s see how Trivago faced these challenges and how it will reposition itself for the post-pandemic era.

    In the fourth quarter of 2020, Trivago’s earnings and revenue plummeted. It lost €12.3 million in adjusted EBITDA, compared to a profit of $70 million in 2019.

    Despite this considerable decline, Trivago saw this as an opportunity to innovate and bring back the old and think about the new customers as well. Instead of promoting the most popular destinations, they started promoting the hidden gems i.e. smaller cities that are not on the top of your list.

    The destinations from where you start keeping it shorter or local trip. This is their new product launch i.e. new local trip offerings which are more inspirational compared to their core product which requires you to know where you want to go.

    This recent diversification beyond traditional metasearch and new launches will help them target a broader audience and not just the ones looking for hotels at low prices. They are working on the second big release and will be coming up with new product launches.

    Final Thoughts

    Being one of the world’s most burgeoning hotel search engines, it has made it possible for us to find the best hotel at the best price. The company is focused on reorganizing and streamlining its business in light of the current volatile tourism industry. I must say, Trivago nailed the market demand and came up with a fantastic startup concept that was not just our desire but also the urgent need of the hour.

    This was all about Trivago and its business model.

    FAQ

    Who is the founder of Trivago?

    Rolf Schrömgens, Malte Siewert, Peter Vinnemeier, and Stephan Stubner are the founders of Trivago.

    Is Trivago an Indian company?

    No, Trivago is an German multinational company that specializes in internet-related services and products in the hotel, lodging and metasearch fields.

    Who are the competitors of Trivago?

    Trivago competitors include Booking.com, Tripadvisor, KAYAK and Expedia Group.

  • Zostel – The one with the Flashback of Hostel memories

    Do you enjoy traveling? Is your top priority safety and sanitation? You’ve found your ideal hotel, but is it out of your budget? In this scenario, you might consider staying in a Dharamshala, but their surroundings aren’t appealing. They do have a lot of rules so you may be wondering if it’s worth it to spend the money.

    In light of this predicament, the concept of a “hostel for backpackers” was established. It’s similar to what we have currently in terms of hostels (assuming you are still in college and have come from outstation). There are shared rooms, a common dining room, and a variety of enjoyable activities and games with no or little constraints. In a nutshell, a youthful euphoria has persisted.

    Solo travel and backpacking have become popular in this new era. We can now quickly learn about new places and obtain useful information by reading blogs or social media updates.

    A startup called Zostel has a similar concept. It is the first hostel chain-based startup in India.

    About Zostel
    Zostel – Latest News
    Zostel – History
    Zostel – Mission and Vision
    Zostel – Tagline and Logo
    Zostel – Products and Services
    Zostel – Business Model
    Zostel – Revenue Model
    Zostel – Challenges
    Zostel – Funding
    Zostel – What makes it unique?
    Zostel – Competitors
    FAQ

    About Zostel

    Zostel is like a hostel that provides a home environment with all of the necessary conveniences at an affordable price. Budget travelers, particularly those aged 18 to 40, can find safe, hygienic, and affordable lodging at Zostel.

    They have air-conditioned dorms, both mixed and female-only, where rooms may be booked at a competitive price of 500 per night. It has an actual house with beds, a shared space with gaming, a spot for campfires, open mics, and other activities where they may socialize.

    Every Zostel is unique since local aspects are taken into consideration when constructing the ideal city-centric Zostel. The founders have considered the importance of safety and comfort while attempting to maintain the vibe joyful and cool. Zostel seeks to deliver great enjoyment to travelers rather than just a place to sleep.

    Startup Name Zostel Hospitality Pvt. Ltd
    Headquarter Zostel HQ, 4th Floor, The Circle Work, Huda City
    Centre, Gurgaon, India
    Operating Status Active
    IPO Status Private
    Sector Hostel, Tourism, Backpacker Tourism
    Founders Akhil Malik, Dharmveer Singh Chouhan, Paavan Nanda, Tarun Tiwari, Chetan Singh Chauhan, Siddharth Janghu, Abhishek Bhutra
    Founded 2013
    Total Funding $1 Million
    Last Funding Type Venture – Series Unknown
    Key People Dharamveer Singh Chouhan (Chief Executive Officer), Aviral Gupta (Chief Strategy Officer), Chetan Singh Chahuhan (Chief Operating Officer)
    Key Products Zostel Hostels, Zostel Homes, Zostel Escape, Trusted by Zostel
    Website zostel.com

    Zostel – Latest News

    08 March 2021

    Zostel, a hostel startup, alleges it has triumphed over OYO, however, the hospitality unicorn has denied such allegations, claiming that indeed Arbitration Tribunal has given Zostel no particular settlement in place of acquiring a stake in OYO.

    3 October 2020

    Zostel Hospitality Pvt. Ltd, which runs two franchises: Zo Rooms, an affordable hotel business, and Zostel, a travelers’ hostel network, has appealed to its clients to acquire INR 10 crore in fundraising at a pre-money worth of INR 75 crore. The startup has asked its clientele to become angel investors and contribute ranging from INR 5 lakh and INR 1 crore to the Zostel hostel brand.

    10 August 2020

    Zostel is investing heavily in local tourism, with plans to establish 500 more properties in the next two years. Zostel presently operates 60 hostels and guesthouses across the globe. The firm is soliciting funds from the market for Rs 10 crore.

    Zostel – History

    Whenever people from engineering and management backgrounds collaborate on any project, it leads to the greatest innovation of all time. Zostel, a hostel for backpackers was a huge success since most of us were waiting for this idea to be explored.

    We’ve all seen the film “Queen” and agree that something similar should happen in our country. So, for you adventurous vacationers, Zostel provides the same thrilling experience.

    On the occasion of Independence day 2013, Dharamveer Chauhan and his six buddies founded this exciting startup called “Zostel”. Their goal is to assist travelers to enjoy exploring Indian towns. It wasn’t just for backpackers, but also professionals and visitors. Seven pals came up with the idea of combining hostels and today’s Gen Z.

    Zostel created homes with facilities and afterward equipped them to offer an atmosphere they have never been a part of with a limited budget of Rs 50 lakhs, participating in several B-school contests, and generating revenue through bootstrapping. Jodhpur developed the 1st Zostel, accompanied by Jaipur.

    This company, which began with the hostel concept, is no longer limited to that notion but has evolved into a trailblazing travel solution company. It now operates in 37 cities across India and China, with over 200 hostels.

    Zostel – Mission and Vision

    The firm was established to encourage people to travel as a part of their lifestyle. They intend to contribute to the promotion of travel by building a reliable, enjoyable image and involving local people in the effort.

    They strive for a basic, adaptable hotel and hostel brand with a great understanding of visitors, the latest trends, and the required confidence, that has garnered them an unconventional status in the travel sector.

    With a simple approach, they hope to ensure that travelers simply pay for the features that they genuinely require and desire. They provide their clients with budget-friendly lodging in the heart of the city, with a strong emphasis on rates and comfort.

    Zostel Logo
    Zostel Logo

    “Live it Now”, as the tagline suggests, Zostel is for intrepid adventurers. Throughout your stay, you will meet people who have had interesting and intriguing travel experiences.

    During your trips, you seek peace. You get everything in one place, including well-furnished dorms, tasty foodstuffs, a private kitchen for cooking enthusiasts, game spaces, WIFI connectivity, and absolute coziness.

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    Zostel – Products

    Allow me to describe their products to you:

    Zostel Hostel

    Zostel Hostel is the company’s main product. It may be found in most tourist destinations. Initially, the majority of Zostel’s properties were owned by the company. Then it devised a franchising strategy.

    Zostel X

    It is a service that allows you to stay in a private home. Instead of being in the heart of the city, they are found on the outskirts. It is mostly suitable for groups of visitors or families. It is a privately owned property that is rented out.

    Zostel Escape

    It was created to provide guests with authentic local services. Only locals provide the services, allowing travelers to go beyond the typical tourist attractions.

    Zozo Bus: Zostel provides a Zozo bus service, which allows travelers to travel on a budget. It’s a 12- or 13-seater bus that brings you to pre-determined destinations.

    OTA (Trusted by Zostel): As a brand, Zostel has consistently provided excellent service to its visitors, making it a reliable location to stay. Inquiries are coming in from places where Zostel does not have a hostel. In situations like these, Zostel has partnerships with local hostels, allowing it to provide OTA services.

    Zo rooms: Zo Rooms is a Zostel subsidiary. Its like OYO, a hotel aggregator.

    Zostel – Business Model

    You may have heard about Zostel’s services, but its primary business model is franchise-based. Zostel came up with a unique project to assist and inspire imaginative minds who aspire to be entrepreneurs and escape from the chains of mundane existence.

    Zostel will guide you in the process of opening your own Zostel at a place of your preference through this project. The choice of location and the ideal property to operate is based on your skills, belief, and viability. Zostel will help you with the setup, branding, marketing, and operations aspects of your franchise.

    Based on the value of the building, the location, and your accord with the landlord, your Zostel franchise might cost roughly 30 lakh rupees. It will not be funded by Zostel but the periodic monetary incentive will be provided based on the performance of your Zostel compared to others.

    Traveling is a kind of relaxation for all of us. But the fear of staying in filthy rooms makes our trip a bit less fun. Considering that, Zostel wanted to change the way we Indians have traveled and it has made its goal to deliver the best services throughout our staycation. They’ve done so by forming a powerful network of backpackers and entrepreneurs capable of ushering in a change.

    In 2019, Zostel offered OTA, which allows them to earn a fee of 10% to 15% on each transaction. Both Zo rooms and Zostel work on a commission basis.

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    Zostel – Revenue Model

    Franchise Fees

    This is usually paid in one single payment after the franchise contract is signed. INR 2,00,000, including taxes, is charged by Zostel. Their commissions and monthly fees begin once the business is fully operational.

    Depending on the operational ranking, they charge a flexible fee of 18-24 percent of the lodging income. They also don’t charge fees on meal and refreshment revenues or any other supplementary income of the business.

    Royalty Fees

    In certain franchises, the franchisor offers a franchisee special power to sell the firm’s merchandise locally in exchange for royalties. These royalties are usually calculated annually or quarterly as a proportion of the franchisee’s gross sales revenue. This recurring fee allows Zostel to offset the expenses of continuous benefits offered to its franchisees while still generating a return from its operations.

    Site Assistance Fees

    Site assistance fees, also known as a set-up charges, are charged to the franchisee by the franchisor, Zostel, for assistance in locating and establishing a crucial site. They provide some support in venue selection and formation, but the franchisee is normally in charge of the ultimate choice, which is up to the permission of the parent firm. They opt to reimburse these expenses as part of the franchise fee.

    Ongoing Services

    Zostel offers assistance to its franchisees, such as staffing a service center for scheduling bookings and building and operating an app that can be utilized to improve efficiency at all franchisees. For them, it serves as a supplementary income source.

    Marketing

    To reach a wider audience and assist each franchisee in becoming more profitable, Zostel invests in domestic or foreign promotional activities. As a result, profitability is increased and more funds are allocated to royalties.

    Zostel – Challenges

    Controversial journey

    When Zostel introduced Zo Rooms, hotel aggregator company OYO rooms filed a lawsuit accusing Zostel of deception i.e. data theft. OYO took the case to court, which was soon resolved.

    Following that, OYO rooms were in talks to acquire Zo rooms. OYO spent a long period looking into the documents of Zo rooms for acquisition purposes but ultimately opted not to buy them.

    In return, Zo rooms filed a data theft lawsuit against OYO rooms, believing that OYO may utilize their information in the future. This acquisition battle went for 3 years and eventually, Zo rooms claimed victory over that.

    Vulnerable industry

    Zostel is entirely devoted to tourism. Micro and macro incidents have the greatest impact on the tourism business. Take, for example, the pandemic that wreaked havoc on the tourism economy. As a result, Zostel’s vulnerability will always be a challenge.

    The mentality of people

    Since Zostel provides cheap accommodation, people might think their services might be poor as well. The traditional concept of hostels being mostly for students hasn’t changed yet so it might take a while for people to get acquainted with this new idea.

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    Zostel – Funding

    Zostel received $1 million in funding in 2014. Recently, funds were raised on 25th July 2018 in a Venture series unknown round. Zostel’s recent investors are Orios Venture Partners and Presha Paragraph.

    Date Stage Amount Lead Investor
    May 13, 2014 Venture Round $1M Presha Pargash
    July 25, 2018 Venture Round Orios Venture Partners

    Zostel – What makes it unique?

    The services offered by Zostel are similar to those offered by hotels, yet the experience is unique. In hotels, you may not have the opportunity to interact with other visitors, but at Zostel, rooms are shared, so you may connect with your roomies and learn more about their adventure.

    The majority of Zostel’s are set up in natural settings. In this sort of environment, tourists feel more at ease and may openly converse.

    So, the ultimate goal is to connect more individuals and provide them a memorable experience while staying within their comfort bubble.

    Zostel – Competitors

    Traditional low-cost hotels have long been a threat to Zostel, but the number of local hostels and homestays is fast growing. In India, there are over ten hostel chains with a national presence, posing a direct threat to Zostel.

    The top 2 competitors of Zostel are:

    Backpacker Panda

    Backpacker Panda is a young, energetic firm with a vision of becoming a data-driven firm and revolutionizing the way Indians travel. The hostel brand has eight zones all over India, and its mantra of hygiene is often kept in mind.

    Roadhouse hostel

    Ambarish Raghuvanshi established it in November 2014. It operates in India from five different locations.

    Final thoughts

    In India, Zostel pioneered the backpacker hostel lifestyle. Zostel became a popular alternative for backpackers due to its unique strategy and high-quality services. Zostel’s services and experiences are unrivaled in their magnificent settings. As a result, they are a well-known hostel chain among travelers in India.

    FAQ

    What is the concept of Zostel?

    The concept of a Zostel is that its is a hostel for backpackers. In Zostel there are shared rooms a common dining room, and a variety of enjoyable activities.

    Who is the founder of Zostel?

    Akhil Malik, Dharmveer Singh Chouhan, Paavan Nanda, Tarun Tiwari, Chetan Singh Chauhan, Siddharth Janghu, Abhishek Bhutra are the founders of Zostel.

    Did Oyo acquire Zostel?

    No, Oyo was in talks to acquire Zostel but later opted not to acquire them.

  • Business Model of Treebo Hotels | How Does Treebo Hotels make money

    Treebo Hotels are well known for their tremendous facilities and services for its customers. With the advancing hotel budget network in India, Treebo Hotels are quite high on the list, closing a total of $34 million series in the C round.

    And it’s estimated that by 2021, Treebo Hotels will lay in more profit than ever. Treebo Hotels are backed by some very prominent investors SAIF Partners and Matrix India Partners.

    Treebo Hotels has experienced many ups and downs throughout the last four years which resulted in many lay-offs and fortunes plummet. Meanwhile, there was certain news in the market that Treebo Hotels are in acquisition deals with the Gurugram based Unicorn Oyo. That’s why Treebo Hotels spent around one year building a strong upholding strategy for the market that could bring the company back to its previous status and more.

    The strong deed that came out was reducing the cash burn and certain liabilities along with bold strategies for improving revenue sources. In this article, we have discussed the business model of Treebo Hotels, briefly. Let’s get started!

    About Treebo Hotels
    Where does Treebo Hotels operate?
    Key Services of Treebo Hotels
    Target Audience of Treebo Hotels
    Business Model of Treebo Hotels
    What’s Unique about the Business Model of Treebo Hotels?
    How does Treebo Hotels make money?
    FAQ

    About Treebo Hotels

    Treebo Hotels is a prominent digital hotel chain developed by IIT Roorkee graduates Sidharth Gupta, Rahul Chaudhary and Kadam Jeet Singh. Treebo Hotels aims for providing top-notch quality hospitality in a stated budget segment.

    The company focuses on the budget hotel sector by opting for a new well-organized hotel and taking that under the Franchise of Treebo Hotels. These become an official part of Treebo Hotel chains.

    The biggest competitors of Treebo Hotels are Oyo Rooms, ClearTrip, Fabhotels and MakeMyTrip.

    Treebo Hotels entirely manage all the aspects of hotels through advanced technology and look for the best revenue management and enhance the quality. With the growing hospitality industry in India, the customers get total facilities and can easily book any hotel under Treebo Hotels or Oyo with a minimum charge of Rs. 3,000 to Rs. 5,000. This offers the customers total hostel facilities without any interceptions.

    Where does Treebo Hotels operate?

    Treebo Hotels is a major part of India’s budget hotel chain that took over other hotels through Franchising.

    With the latest data of 2020, Treebo Hotels has established its chain of hotels in over 113 cities with around 600 hotels across India.

    Key Services of Treebo Hotels

    It often becomes very tough in finding the right suitable hotel with fresh toiletries, clean rooms and affordable basic breakfast service. A middle-class always suffers in finding this at a reasonable price. And that’s where Treebo Hotels comes in.

    Treebo Hotels provide great customer services and manage the basic requirements of the customers at their convenience. It provides exclusive hotel choices at very reasonable prices and with covering all aspects of the requirements.

    Target Audience of Treebo Hotels

    Treebo Hotels compete with the biggest hotel services of Oyo Room and FabHotels. Oyo is backed by SoftBank while FabHotels is backed by Goldman Sachs and these hotel services are extensively popular.

    On this note, Treebo Hotels in its mid-to-premium segment targets corporate customers and especially middle-class customers.

    Business Model of Treebo Hotels

    Treebo Hotels believes in branding rather than aggregating a marketplace. Their business model is franchise based. Treebo Hotels looks for the most suited hotel with good service and keeps up the standard of their brand. They communicate with the owners and offer great customer acquisition channels, branding, management software and many more.

    It charges around 40% of total revenue per cent from each hotel, which is quite high.

    Treebo Hotels works through the mid-segment hotel industry and for that, a strong complete business model which holds the operational capabilities has become quite a necessity.

    Treebo Hotels is looking for all aspects that can be covered in order to build a strong market upholding. And in the upcoming years, it is expected to grow more extensively.

    What’s Unique about the Business Model of Treebo Hotels?

    With most of the successful hotel services companies, look for a few hotels and sell them online. This makes them no different from MakeMyTrip or any other travelling company. However, Treebo Hotels offers the entire hotel services while covering all aspects of the requirements.

    Customers often get upset or angry with the poor services by many hotels. But, Treebo Hotels offers great customer service and experiences.

    Treebo Hotels is a Hotel Brand, not an aggregator and that’s why it is known to be the largest budget hotel chain across India. Treebo Hotels offers different locations in different cities at some very reasonable prices.

    Good hospitality is very necessary for greeting the customers. And India greetings are more important than anything. Treebo Hotels offers such hospitality in their hotels.

    How does Treebo Hotels make money?

    In the past few years, Treebo Hotels experienced some major losses up to Rs. 114. 94 crore. That’s why from next year, 2018, Treebo Hotels increased its cash burn by 80 per cent and doubled the revenue growth. Treebo Hotels is now focusing on the immense profit deals by 2021.

    Treebo Hotels operates the franchise model that’s why its major source of revenue is the hotels that come under the Treebo brand.

    In the last funding round of Treebo Hotels, it raised around $23 million which includes the $17 million series B.

    Treebo Hotels charges around the range of INR 1,000-3,000 per night with the best facilities of clean linen, free WiFi, bedding and other things. The annual revenue of Treebo Hotels as of 2019 is USD 11.7 million.

    Conclusion

    In the hyper-competitive market, Treebo Hotels are building their strong upholding. However, it experienced a major loss in past years but now, with advancing technology and services Treebo Hotels are stabilising their position.

    Developing a strong technical on-ground operation is very important in this sector to bring consistent experience for the customers. This is known as the capital intensive business which requires funding and great effort to establish. And Treebo Hotel is quite prominent among the members of India’s rising budget hotel networks. Stay tuned for more updates!

    FAQ

    Who is the founder of Treebo?

    Treebo Hotels is a budget hotel chain founded by Sidharth Gupta, Rahul Chaudhary, Kadam Jeet Jain in 2015.

    What is the revenue of Treebo Hotels?

    The estimated revenue of Treebo Hotels is $9.7 million as of 2020.

    When was Treebo founded?

    Treebo hotels was founded in 2015 by Sidharth Gupta, Rahul Chaudhary, Kadam Jeet Jain.

  • Why Restaurant bodies are seeking waiver – The Performance of Restaurant Industry from 2020 to 2021

    The major cities of India are under a lockdown with the Covid cases rising all over the country. The second wave of the virus was an unexpected hit towards the country causing a lot of casualties among the citizens and a lot of businesses going down. With regards to it, the National Restaurant Association of India has asked for a rental waiver. Let’s look at the further details and analyze the performance of the restaurant industry during the year 2020-2021.

    Announcement by NRAI
    The concerns raised by NRAI
    What is Revenue Sharing Model?
    Restaurant Business Post lockdown
    Performance of Restaurant Industry 2020 to 2021
    FAQ

    Announcement by NRAI

    On 19 May 2021, the National Restaurant Association of India (NRAI) has asked the owners of the malls to reduce or provide extra time for rentals during the lockdown phase in the country. They have also asked for a renegotiation on the commercial terms going forward as the malls are closed and this would further affect the restaurant and beverage, industry owners.

    The concerns raised by NRAI

    In a statement, the NRAI had conveyed that it had written to the mall to urgently solve the various commercial concerns that are faced by the restaurant and beverage industry owners. They have mentioned that in the letter the association has mentioned about two concerns which are waiver on rental charges and a revised model for revenue sharing.

    The association has communicated that the mandated lockdown has forced the owners to shut the shops and prevent the malls to allow the entry of guests and customers or even staff and suppliers. It mentioned that it is a typical situation and would require the rental charges or the common maintenance charges during the phase of lockdown to be waived off completely.

    It has communicated that the future agreements on rent have to be made keeping in mind the crisis that is faced due to Covid and the duration the business would take to reach normalcy. The shaping of the model of the post Covid era is expected to be based on a totally variable model.

    The association has communicated that the revenue sharing model would interlink the fortunes of the mall owner and the restaurant owners and they would reach a situation where both of them wouldn’t profiteer from each other but support one another.

    Statement by NRAI
    Statement by NRAI

    What is Revenue Sharing Model?

    The retailers and the restaurant owners are found to be in talks with the mall owners to waive off the rentals during the phase of lockdown and would want to renegotiate their terms to continue in the future through a revenue sharing model as the road ahead is uncertain.

    Restaurant owners are also trying to seek help from the government. The food and beverage industry employs around 7 million people and they fully depend on daily walk-ins which have caused a severe impact on the business due to the lockdown.

    The president of NRAI, Anurag Katriar conveyed that they would not be able to operate on old costs with less than half of older revenue. He added that therefore he feels that the revenue sharing model is a very fair model where even if we see an increase in the business volumes at the early stage the malls won’t lose out.

    Restaurant Business Post lockdown

    The business will recover post lockdown when the social distancing measures and the concerns of consumers about the crowded place would reduce. NRAI also communicated that they do not expect the business to increase as soon as the lockdown is lifted.

    They have conveyed that the business would just expect a volume of 30-40% of what they have been received the pre lockdown face and this would be possible by lowering the fixed costs of the restaurants.

    The industry body had mentioned in its letter that considering the proportion of fixed expenses in the F&B industry, the businesses are expected to face huge operating losses as the fixed expenses are really high and this would be controlled only if the major expenses such as the rent would be converted into a variable expense.

    Performance of Restaurant Industry 2020 to 2021

    The restaurant industry had a huge downfall at the beginning of 2020 as there was a nationwide lockdown and moreover, it was totally unexpected and a new concept faced by the businesses. The normal restaurants have tried to manage their operating costs due to the food delivery startups keeping the orders in demand.

    However, they also wouldn’t be able to increase their profit compared to the pre lockdown phase as walk in provide higher revenue for the restaurants. While comparing to the food and beverage industry in the malls they had faced huge losses as they were completely shut.

    As soon as the lockdown was raised and the restaurants and the public started moving around with fewer restrictions. The restaurants and the F&B industry in the malls had seen a revival in their businesses but soon the second wave had hit the country and the major cities of the country are undergoing a lockdown.

    FAQ

    Is restaurant business profitable in India?

    Restaurant business is a lucrative business which if planned properly the profit margins can be up to 40% per month.

    How many restaurants does India have?

    India has about 53,000 hotels and 70 lakh restaurants in organised category.

    What are five segments of the restaurant industry?

    There are five restaurant segments, Family dining full-service, Casual dining full-service, Fine dining full-service, Quick-service(fast foods), and Quick-casual.

    Conclusion

    The road ahead for the F&B industry is going to be hard as the country would take some time to reach normalcy. Since there is also a new epidemic in the country named Black Fungus the future has become so unpredictable. The NRAI has also taken into consideration to raise concerns towards the food aggregators and the individual landlords.

  • Teliportme – Simple and Powerful Platform to Create Virtual Tours for Every Budget

    Technology has dramatically changed the way real estate projects are marketed in the industry. Out of the various aspects of marketing, satisfaction is the priority for almost every organization. As for, customer engagement, virtual tours have proven to be a really effective tool for real estate companies.

    Gone are the days where people had to live in a hotel or a location to find out if it’s actually suitable. It is not easy or convenient for customers to visit every hotel before making a decision.

    The solution?

    Creating virtual tours for your business and customers so they can check out a location without actually visiting.

    The developers realized that 360- degree virtual tours are a good marketing strategy when added with eye-catching visuals and animations. All they need to do is to share these virtual tours over the internet and it can help strengthen their overall marketing strategy by conveying the message to the buyer.

    What is Teliportme?

    Teliportme is a virtual, cloud-based software with intuitive features. Its user-friendly design allows for a truly immersive virtual tour experience for users.

    It is ideal for real estate agents, hotels, businesses, travel agencies and restaurants. It has an unlimited free version that allows for 360 – degree camera functionality, unlimited embed functionality, and delivers your videos in 4k resolution.

    Create live or private virtual tours on Teliportme
    Create live or private virtual tours on Teliportme

    It is a premium virtual tour software because its comprehensive toolset is equipped with features for robust marketing and branding. Apart from creating virtual tours, it also features tools for live tours and private tours.

    You don’t need to have any advanced technical knowledge to create virtual tours. All you need is to simply capture and upload panoramic pictures and Teliportme will automatically set up everything.

    Free Cloud Storage Services to Store Data Online and Access Remotely
    Everyone who uses internet is aware of Cloud Storage and Computing today, andits benefits. It is nothing more than a cloud computing model that allows usersto store data over the internet, through a cloud service provider. Cloud storagehas drastically altered the traditional ’data storage on loca…
    StartupTalkyANSH MEHREY

    Teliportme – Features

    Teliportme lets you explore listings through images and panorama taken by users. It provides features like

    Custom brand

    Teliportme allows you to easily share or embed tours with your own logo in its editor.

    Custom hotspot icons

    You can add images, videos, audio and fully customize the look and feel of your tours. You can customize every aspect of your tour.

    Unmetered bandwidth and disk space

    Unlimited file sizes of your virtual tours without any cap on data transfer.

    Teliportme real estate virtual tours dashboard
    Teliportme real estate virtual tours dashboard

    Free training webinar

    The business upgrade lets you access 3 in-depth training webinars which will increase your ability to create stunning photos and virtual tours.

    Supports all 360 cameras

    Teliportme lets you use any 360-degree camera or DSLR to capture your images and upload them.

    Embed

    You can customize and embed virtual tours on any website as long as it is built on WordPress, Squarespace, or Wix.

    Treebo Hotels | Indian Company | Company Profile |
    Company Profile is an initiative by StartupTalky to publish verified informationon different startups and organizations. The content in this post has beenapproved by the organization it is based on. Indian hotel landscape was dominated by luxury five-star hotels for a very longtime. There was a …
    StartupTalkySarika Anand

    Share everywhere

    You can share your virtual tours with anyone using a public link including your social media channels with custom thumbnails.

    Virtual Reality Player

    Your customers will experience 360 – degree photos in virtual reality directly from their mobile devices.

    World-class support

    If you have any issues, the Teliportme team will address your queries within 24 hours. Support is provided through both email and phone.

    Teliportme – Pricing Plans

    Single – $79/ lifetime

    • 1 Brand account
    • 10 live virtual tours
    • 3 GB storage

    Double – $158/ lifetime

    • 10 Brand accounts
    • 20 live virtual tours
    • 6GB storage

    Multiple – $237/ lifetime

    • 25 brand accounts
    • 40 live tours
    • 9 GB storage

    Teliportme – FAQ’s

    What is a Virtual Tour?

    A virtual tour is a collection of 360 degree photos linked together with “hotspots”. These hotspots are used for navigation and allows a viewer t experience the space virtually. These tours can include branding, contact info, videos, URL links, location information, images etc.

    What are hotspots? How to add and edit them?

    A hotspot is an interactive element that you add to your virtual tours. It consist of an icon and an optional label which triggers a variety of actions, when clicked.

    What is Horizon Correction?

    Sometimes taking videos on a 360 camera can be difficult as the camera gyro stops giving you the right readings if the camera is tilted in anyway. Horizon correction removes any tilts and slants to create perfect panoramas that you can use for your tours.

    What is the difference between private, public and unlisted virtual tours?

    Public tours are visible to everyone. Private tours are only visible to the owners of the account when they are logged in, whereas unlisted tours are only visible when you have access to the link of panoramas or tours.

    Is Teliportme virtual tours MLS compliant?

    Yes- they are MLS compliant. After you create a tour and are ready to share, you will be given an option to choose the MLS link after which your virtual tour will become fully MLS compatible.

    Teliportme – Conclusion

    No matter how descriptive your listings are, you cannot expect your customers to make a decision without physically checking them out. However, physical inspections take time and effort, and you might lose out a few customers in the process.

    With Teliportme, you have complete control over your real estate projects as you offer your clients virtual tours that can be viewed on their own devices. Teliportme will set up everything up once you capture and upload your panoramic images.

    Since it offers unlimited embed, you can easily use YouTube videos and more, in just a click. Your clients can enjoy these tours as Teliportme easily integrates with Samsung Gear VR and Oculus Go.