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Hotels explore dual branding

News, 16 February 2016

NEW DELHI: Several hotel chains in India are exploring dual-branding, where two different hotel brands are available at the same property, in a move aimed at maximising the returns from increasingly expensive plots of land in urban markets.

"The concept helps to reduce risk by reaching out to a broad range of potential guests," explained Patu Keswani, chairman of Lemon Tree Hotels, which already owns two dual-branded properties in Delhi and Hyderabad and is set to open another in Gurgaon.

"Moreover, it helps in saving common costs like security, finance, administrative costs, human resources and brings in staff synergies," he told the Economic Times.

AccorHotels recently opened a dual-branded Pullman-Novotel property in Delhi's Aerocity and is planning another dual-branded property in Chennai. Jean-Michel Casse, SVP operations/India, concurred on the risk reduction strategy.

"Putting large inventory of the same category in one big land parcel is a big challenge," he said. "So, once you map the market and look at the potential customers and business feasibility, you need to split the risk in two different brands and different positioning."

The public faces of the hotel brands are quite different – separate entrances, front desks, and elevators – but other areas can be shared – including back-of-house operations and guest amenities such as pools and business meeting spaces.

The latter can be crucial to the success of such ventures, according to Abhijeet Umathe, associate director for hospitality and leisure at property consultancy Knight Frank India.

He reported that the dual branding concept worked well in those markets with a strong MICE (Meetings, Incentive, Conference, Exhibition) business.

He added that hoteliers were able to "keep attracting customers from different segments all the time, irrespective of the business environment".

While the economics appear sound, hoteliers will likely have to work hard to ensure the individual brands retain their distinctive appeals and that guests are not confused by this approach.

Data sourced from Economic Times; additional content by Warc staff