Travel And Tour World – Please elaborate on the business model which Treebo follows.
Punit Garg: We are a ‘digital hotel chain’ – a technology-enabled, asset light brand of budget hotels and work on a full inventory franchise model.
On partnering the hotel, we work closely and efficiently with these partners on operational aspects like SOPs, staff training, materials procurement, etc. consistently for the full property rather than engage in a divided manner with a few rooms. On the other hand, we take the full responsibility for generating sales for the property, thus creating a win-win situation. Treebo’s model is firmly based on forming deep partnerships with the owners and giving a consistent, high-quality experience to the guests. This also creates immense value for our partners who are usually long-time businessmen and not hoteliers.
Travel And Tour World – What problems have you faced as a start-up company in tourism business?
Punit Garg: In the last decade, the travel and tourism start-up ecosystem has undergone a significant transformation. We have also seen a tremendous shift in the consumer mindset and behaviour.
The new businesses disrupted the space by bringing in ease of discovering and booking. However, in the budget hotel space, the concern around the quality of guest experience was spotted but remained unsolved.
Unlike other existing players in the segment, we were not in the race to scale-up mindlessly and wanted to deliver exceptional guest experience and create value for our hotel partners. We had a different approach towards solving this problem and it came with its own challenges.
Firstly, we had to convince the key stakeholders at that time – hotel partners and investors- about why our distinctive business model would work. The partners were sceptical about working with us because of our business model that ensured long-term success and not short-term returns. The first few months in our journey were spent educating them about our business strategy which was far from what others were doing at that time.
Secondly, there were companies that had raised huge sums of money, and were burning cash to attract guests and hotel owners. Heavy discounting and a shortcut to scale through partial inventory made the other players a favourite among both the partners and the guests. Holding a deliberate, steady pace amidst the rat race in the initial days was really challenging.
Thirdly, communicating our value in the times of heavy discounting also took quite a lot of effort. Since the beginning, our primary focus was on building a fantastic value-for-money product that is independent of steep discounts. In the long run, the few customers that one acquires through discounting are not loyal to the brand in the absence of a clear service promise. They realised that excessive discounting in hospitality is a substitute for poor quality.
Travel And Tour World: What is the uniqueness of Treebo as compared to OYO or Make my Trip?
Punit Garg: The answer lies in the fact that we aren’t an aggregator but a hotel brand. We started Treebo Hotels with the mission of providing a budget-traveller the best value for money by building India’s first budget hotel brand.
Our full-inventory based franchise business model has transformed the segment through its effectiveness in solving the core quality problem and in terms of its unit economics. Our unique model enables us to address concerns of our hotel partners and customers, alike.
We take responsibility of the entire hotel, unlike online aggregators, and generate business for them through offline and online channels. Full ownership of the inventory also allows us to offer a consistent customer experience across all Treebo properties.
To deliver on our sharp focus on quality and guest delight, we heavily depend on technology interventions. Unlike online aggregators, we handpick our hotel partners carefully to ensure each one of them can deliver the desired Treebo standards, and to drive implementation and adoption of these standards, our on-ground Quality Managers visit our partner properties every single day to conduct quality audits, staff training, issue resolution, and guest interactions. These efforts help us emerge as not just the preferred brand of customers but also the thought leaders in the industry.
We see a lot of other players pivoting to our model, a move that we welcome wholeheartedly as it is indeed the right one to offer a good experience to the customers. Apart from the business model choice, it is the on-ground execution and the customer-service DNA that will separate the winners from the others in this space.
Travel And Tour World: Please comment on the strategy to compete in the market and how to structure and monitor the unorganized sector.
Punit Garg: We plan to continue to focus on offering high quality experience to our customers which has always been our primary objective.
Our endeavour is to expand to newer cities where there is a high demand from customers and a low supply of good quality budget hotels. The central and fundamental aim remains exceptional experience for our guests. Technology will become a fundamental driver and a competitive differentiator for us.
Travel And Tour World: Please talk about the initiatives you are planning for more customer satisfactory experiences and your vision that makes Treebo great.
Punit Garg: Treebo aims at building India’s most loved hotel brand that offers high-quality guest experience at value for money.
Our customer-centric approach reflects in all our initiatives, be it our brand promises or technology innovations. As a part of our core-offering, we have built in brand promises including Free Wi-Fi access, complimentary breakfast and clean and hygienic rooms that help us ensure standardized guest experience across our ~300 properties. These have today become the benchmark for delivering great guest experience at a budget hotel.
We continue to develop technology products and solutions at the consumer and back-end to enhance guest experience even before the check-in. Our consumer app, mobile website that was recognized at Google I/O for its high performance, Quality Management System are some of the examples.
We recently launched ‘InstaConnect’ — a technology feature that would allow guests to automatically connect to the hotels’ Wi-Fi network at over 50 Treebo properties. This feature helps us address one of the most common and yet unrecognized guest concern. We believe that such innovative features add to the guest delight and make us India’s top-rated hotel chain. We will soon launch Treebo Rewards, our membership program that will enable our frequent guests to make the most out of their stay with us.
Travel And Tour World: Please share your view about how to create the indulgent experience at a budget and economical value.
Punit Garg: One often thinks about budget hotels as a last option because of the shortcomings of services offered by the hotels in the price band between INR 1,000 – INR 3,000. In our view, paying 2000 bucks for a hotel room deserves more in return, with at least a basic quality guaranteed to all.
Most Treebo hotels are priced at an average of Rs 2,000 per room night. Even at such low price points, amenities such as clean, fresh linen, free wi-fi, complimentary breakfast, beverages, branded toiletries, TV with DTH or cable connection, air conditioning, among others are included in the room rate. Most importantly, all this is accompanied by prompt and courteous service by hotel staff, thereby offering the travellers a comfortable and dignified stay experience.
We believe that this band of hotels can leverage technology to deliver enhanced guest experience at scale. At Treebo, technology permeates every part of our business, whether it is customer facing activities, partner facing activities, or simply activities of our own internal teams.
If you truly have to build a brand on the back of solid customer-experience in the budget segment, such all-pervasive use of technology becomes a strategic priority, because without it it’s impossible to manage a large, fragmented, and unorganised network.