The client

A UK based asset management company investing in start-ups on behalf on Non Resident Indians.

What did Hotel Solutions Partnership achieve for the client?

The company maintained its momentum by utilising a consultant to bridge the gap left by the departing CEO. Robust, comprehensive and independent projections were put together speedily and the consultant participated in early discussions with financing houses before the assignment ended when the client’s funding dried up in the middle of the 2009 credit crunch and the project was mothballed.

Background

The founders had a vision to create a hotel brand that supports sustainable living without compromising on the standard of hospitality. The first hotel was under development in S.E India sized at about 90 rooms. It was intended that this hotel would be a prototype to fine-tune the brand and service icons of the new brand, as well as to validate the assumptions on the carbon footprint of the hotel operation. Thereafter the investors planned to build a hotel company represented by 100 branded hotels each of 100 rooms in a four year period leveraging a sister company’s investment in modular building technologies.

The vision was to construct and operate India’s first premium limited service and environmentally-driven hotel chain and use modular building technology to achieve a rapid rollout. The company had lost its Chief Executive Officer and retained Hotel Solutions for a period of time to provide consulting CEO and other services.

Consultants: Ian Graham

Project objective

The consulting assignment was intended to enable the company to continue to develop its strategic plans including the development of an initial and informal prospectus whilst also starting the search for and recruitment of, a replacement, and probably Indian based, CEO.

Project scope

Over a three month period, the project aimed to research and design elements of the strategy, to propose the initial and stabilised state business models (owned, leased, managed, franchise).

Methodology

Initially the consultant researched and designed certain elements of business strategy and from this developed a proposed brand positioning statement as well as outline technical standards for the brand. The consultant also researched and developed the issues that would enable the company to commit to and then deliver against a long term commitment to a nil or low carbon footprint. Further research was conducted on the key elements of the business model to include the employee journey, location criteria, organisational design and development process. The output from each of these areas of research and thinking then tested by BDRC using specially constructed focus groups.

The next piece of work was to develop original thinking in respect of the right mix of owned, ground lease, head lease, managed and franchise operations throughout the life of the company (start up, growth phase, maturity).

With these building blocks in place Hotel Solutions researched and authored a business plan for the proposed brand and business shaped as an initial and informal prospectus aimed at attracting the initial investors and identifying the initial sites. This was not to be a final version compliant with the requirements of listing agencies, but was a document plus appendices that synthesed the work done by the company and the consultant to date and put forward the economic argument for investment in, and lending to, the business. The plan included sensitivity analysis that allowed the reader to understand the interplay between key value drivers and IRR outcomes.