Main Feature

Fortune smiles

Fortune Park Hotels, a venture of ITC-Welcomgroup, will expand to 26 hotels by the end of 2006, targeting the mid-level business and leisure segment. Neeti Mehra analyses the synergies involved in the success story.

Fortune favours the brave it is said. And no one has set a better example than Fortune Park Hotels Ltd, the wholly-owned subsidiary of ITC Ltd, that caters to the mid-market segment.

Speaking to Express Hospitality, Abinash Manghani, head sales and marketing, Fortune Park Hotels, says, "In the last decade, Fortune Park Hotels has grown substantially. Clearly, the customer has become more affluent and new destinations have emerged with the growth of the economy and industries. The customer has become more sophisticated and the product and service needs have changed accordingly."

Market matrix

Fortune Park believes in having the country's finest knowledge set for designing and commissioning of the hotels. Inputs during the project stage are guaranteed to save promoters substantial investments in the product while ensuring a contemporary and highly efficient hotel. Manghani explains, “Investment for a mid-sized hotel works out to approximately Rs 20-30 crore, excluding the land costs, whereas in the case of a five-star, this works out, in certain instances, to be three times this amount. In addition, mid-segment hotels also work out to be more profitable. Vast tracts of land are not required. Plus the grandeur of five-star properties such as long driveways and huge lobbies also add to the total costs, which is eliminated in this case. In the mid-market segment, the economics work out in favour of hotels." Regular energy audits are conducted to ensure that the energy costs are always in control. Advancements in technology and best practices in the industry are communicated to all hotels. Also, information on new products and systems is made available at periodic intervals.

Stand-alone vs chain hotels

Fortune Park Hotels combines synergies such as distribution network, central reservation systems, Pan-India sales and marketing infrastructure, support and a deeper knowledge pool to have an advantage over stand-alone hotels. Manghani stresses on the benefit of this. "This offers our hotel chain a unique advantage as it widens our spread. In addition, this leads to a saving in costs."

Fortune Park Hotels has a dedicated web-based Central Reservation System- FortuNet which provides easy-to-access instant reservation facility for all the Fortune hotels, and is linked to the hotels' website. This, coupled with the GDS provides timely and key information to potential customers on a global platform and gives it a comprehensive and all-encompassing market visibility. He believes pricing to be a key strategy in this segment. Elaborating on this, Manghani says, "Our key focus is to offer the customer a well priced quality product that offers value also. We sell primarily through our marketing offices across the country and focus on value propositions. We offer a 'Best Prices Guarantee' on the Net. This guarantee negates pre and post-purchase dissonance. We are aggressive in using alternate distribution channels such as the Net and telecon. This offer has built credibility for our chain."

It also maximises the group's resources to its advantage. The ITC-Welcomgroups hotel reservation network and the sales and marketing initiatives are used by Fortune Park, ensuring there is no duplication across channels. "We also use Welcomnet Welcomgroups Guest Contact Centre for all our customers," he says. WelcomNet is ITC Hotels Pan-India, mega hotel reservation network. ITC was the first hotel company in India to set up and operate this. Marketing initiatives include relationship marketing - the Executive Travel & Value Plan, WelcomAward, WelcomLink, to name a few, of the ITC-Welcomgroup are available to all Fortune Park Hotels.

Fortune's future

According to Manghani, they are currently focussing on the domestic market. By 2010, the group is targeting 50 hotels. "The Fortune Park Group is a brand and we ensure that high quality standards are maintained which will compete with the strong local competition in each destination." He concludes by saying, "In the entire market, our product is either the best in class or in location. For instance, in the city of Indore, we are best in terms of location, whereas in Delhi we have a very classy hotel." This market has recently exploded and demand is growing. Manghani says, "The ratio of international and domestic travellers differ from location to location. For instance, destinations such as Darjeeling, Ooty, Tirupati and Calicut are magnets for the domestic leisure traveller. Whereas the two key destinations of Jodhpur and Gurgaon, attract a greater number of foreign travellers, and our business mix is about 50:50 domestic and foreign."

Speaking on his expansion plans, he says, "Fortune Park Hotels has achieved a 30 to 40 per cent compound growth for the last five years in revenue terms. We operate about 1,500 rooms across the country in and our average ARR ranges between Rs 2,500 to Rs 3,000 and Rs 1,500 to Rs 5,500 depending on the location. I see tremendous growth in this segment primarily because it is largely under-serviced. Moderately priced quality accommodation in this country is not easily available. There will always be an active demand for the product."

Till Fortune favours its child, there will always be a star of this brand, dominating the horizon in the mid-market segment in India.