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During the last couple of years, the Indian hospitality sector was a rather unexciting playground. What prompted you to expand the Premier Inn brand in India?
If I stand back and think about Premier Inn in the weak economic backdrop, we have actually grown vary rapidly. We now have 640 hotels with more than 50,000 rooms across the UK and growing at 9 per cent per annum. We are adding one new hotel every 10 days in the UK. This has been possible because we have a very strong product.
Coming to India, the economy may not be very exiting for the short term, but we invest with a long-term vision. We are a company that was founded in 1742, and our business operation and expansion decisions are always taken based on long-term perspectives. The Premier Inn brand, which has been successful in the UK, will work great with Indian customers. We already have two hotels operational in India: Premier Inn New Delhi and Premier Inn Bangalore Whitefield. Three more are coming up soon and we can see that the product is already successful.
What are your expansion and investment plans in India?
At present we are operating two brands in India Costa Coffee and Premier Inn. We are looking to grow both the brands internationally. Costa already has 2,500 stores in 29 countries. We have 200 Costa stores in China and 100 Costa stores in India. Last year Costa Coffee grew by an impressive 25 per cent internationally. For Premier Inn, we have plans to expand in India, West Asia and Asia Pacific. So far we have invested in wholly-owned hotels in India with the aim of building the brand and showcasing the product. Apart from our existing properties in New Delhi and Bangalore, we are opening another hotel in Pune in the next six month, and breaking ground with one hotel each in Goa and Chennai.
Since it will take too long to develop the business if we go for the fully-owned property model, we are planning to adopt package-light model, wherein we will work with local partners but we will be the operator of the hotels. Land prices are also very high in most big cities of India. So, we think it is economically relevant and much quicker to work with local partners.
Where do you think India has a potential in leisure or business travel segment? How uniquely are you positioned to cater to this segment?
Our business is mostly around corporate travellers in India. Leisure is yet to develop. And I think it will develop soon as the country grows and the wealthy middle-class wishes to travel more. We have brought all our strength a strong international brand to our Premier Inn properties in India. So our products are very similar to what we have in the UK.
In the UK, more than 65 per cent of our revenue comes from corporate travellers, and it is the segment where we see opportunity in India as well.
You have set milestones for 2016: at least 65,000 Premier Inn rooms in the UK; 3,500 Costa stores worldwide and 3,000 Costa Express machines. Whats Indias share likely to be in this pie?
We are very ambitious in India. However, we havent set public goals because the business is now growing from a very small base. But we hope to sign five to eight new hotel agreements every year, which is a very rapid grow trajectory. And as we grow, we will consider more public milestones. We aim to invest $50 million per annum in the development of Premier Inn International, which includes India, West Asia and Asia Pacific.
Customer service plays a key role in customer satisfaction. For the Indian market, how uniquely are you going to operate or look at your customer service ?
We take customer service very seriously as its an integral part of our brand. At Whitbread, we keep the customer at the centre of all our decision making. We have several Standard Operating Procedures (SOPs) within our brand such as:
(a) Good night guarantee: If for some reason as a guest you do not have a good nights sleep we will return the money.
(b) Cancellation policy: The guests can cancel up to 1 pm on the day of arrival
(c) Zero check out time facility: payments can be made in advance at the time of arrival and the guests dont need to rush at the time of checking out.
Customers differ across geographies. Apart from bringing in international experiences, is Premier Inn planning to custom fit some of its products and services for Indian customers?
One of the main reasons why Whitbred has been successful is because it centres its whole business around the customer. We work very hard to engage all our employees to deliver the customer proposition. What we have done in India is not only bring all the strength of our products but also adjust them to local taste. We have adjusted our food and beverage category where it is partly international but mostly designed for the Indian consumer, small changes in room designs in accordance with the climate and more. The objective is to deliver a very high level of customer satisfaction.
And at the core of Premier Inn offering is the good nights sleep guarantee if a customer is not happy, he gets his money back. I believe that its a unique offering in India. To achieve this end, we have an Indian team who ran market research, spoke to designers and conducted detailed studies.
Will it work in India in the long run? How confident are you about this offering?
People once thought that it might not work in the UK. But we were always confident in our product. In the UK only a tiny percentage of people actually ask their money back about 0.2 per cent. In India, I am sure, it is going to be even less. The key point is, we deliver a great product at great value to our customers. We have confidence in our product and in our people. So we can guarantee.
How important do you think is customer experience for a brands survival?
Its essential to track guest satisfaction. We do so through a very exhaustive questionnaire, which maps the guests journey from the time of booking to checking out of the hotel.
The questionnaire gets mailed to every guest within 24 hours/5 days/10 days of their departure (if not answered). All the responses are collated on the website (managed by a 3rd party ORC in this case) and net recommend scores are measured. These scores are all tracked and form a part of our balance scorecard.
India has always been a country of tea-lovers. Now with international cafe chains looking to expand here, how optimistic are you about the Indian market?
There was a time in England when the English were known for drinking tea. And we now have 1,500 Costa Coffee shops in the UK. The Chinese are also famous for their teas. And we have now 200 Costa Coffee stores in China. Down to the south of India, in Bangalore, we see coffee is picking up. I think tea and coffee will co-exist in India and other international markets. We see that the English drink their tea and love Costa Coffee too.
How do you position your brand as opposed to a behemoth like Starbucks? What is your differentiator?
Costa Coffee has been quick to generate 25 per cent growth in revenue per annum. We have done this by simply offering a consistently great coffee experience. Our baristas are really important. When one walks into a Costa store, the baristas not just makes the coffee but also the customer connection they look at you, serve you, create and maintain the desired ambience of the store.
To us, a high customer experience includes a great coffee, served quickly, with a smile, in a warm hospitable environment. In the UK, we have as many stores as Starbucks. And we have done that by just focusing on customer experience. If you offer a great experience, customers come back again and they recommend their friends and family and you get more customers. Our brand has been built on consistent delivery of great customer experience, and thats our differentiator as well.
