Vilas Pawar on transforming Hospitality with Vision, People and Technology

• When did you join Lemon Tree Hotel Group? How has the journey been so far?

I joined Lemon Tree Hotels in 2022 as CEO of franchise division as they wanted to expand via franchising. Later, I took over as CEO for managed business as well. It’s been a great experience. This is a very inclusive and a fast-paced organization, growing rapidly. So,it’s always buzzing and always full of action.

• What according to you are the two most important skills needed to be a successful Leader?

To be a successful leader, one needs to be open to learning. Times are changing, styles of management are changing. So,one needs to keep adapting. Also, one needs to be a people’s person and listen. Listen to your customers, both internal and external. Your employees are internal customers, so you have to listen to them and then cater to the needs of external customers as well.

• Post covid, the hotel industry has seen a tremendous upward swing. What’s the reason?

The economy is growing, there is stability in the government and there is belief in the system. Our impression on the world has improved, which has helped in foreign investments coming in. Hotel industry’s growth depends on how the economy is growing. So, the business is flourishing for now.

• What is the USP of Lemon Tree?

We are a true value for money company, all brands of our group included.

• Talking about India, in which all parts do you see the growth?

We’ve seen growth in equal proportion through the length and breadth of the country. We have seen growth in the North, the South, the mid and the West. East hasn’t grown as much as we would have liked it to, both from the hospitality industry perspective and Lemon Tree hotels’ perspective. Both North east and eastern part of the country have been slower than the rest of India.

• What is the most important element of franchising in hotel industry, given it means a long-term relationship in this industry?

To find the right partner to align with your business is of utmost importance in hotel franchising. The meeting of minds of the franchisor and the franchisee is of paramount importance. Also, expectations must be set correctly and realistically with the owner of the business.

• What are Lemon Tree’s expectations from its franchisees?

Maintain quality, brand standards and be customer oriented.

• Given the long-term relationship and high investment involved in the industry, how do you deal with franchisee defaults?

There’s a contract in place and if they default the contract, we have to go the legal route. If the franchisee defaults on the franchise fee, there is a window to mend the wrong. We give them some time as per the contract to make things right and honour their word. But if that doesn’t happen, we have to go the legal way.

• What’s the churn rate for Lemon Tree?

May be around 1%. Out of our portfolio of 112 operational hotels right now and 72 in the pipeline, I think we have exited only 1-2 hotels in the last 20 years. So, it is negligible.

• What are the main reasons for franchisor-franchisee relationship to end in the hotel industry?

From a franchisor’s perspective, if brand standards are not met or the franchise fee is not being paid on time, it can lead to termination of contracts. From a franchisee’s perspective,if the brand is not bringing him/ her enough business, the deal can go awry. That’s why it is very important that expectations of both franchisor and franchisee align.

• What are the three main factors that customers look for, while selecting a hotel?

Brand, location and value for money.

• How has franchising brought about a change in the business scenario?

Franchising has a long way to go in India. Still there aren’t enough third-party management contract companies that are managing hotels at a cost which is competitive to the management companies. Though it has brought about a positive change, it’s going in the right direction but still Franchising is in a very nascent stage as compared to Europe and USA. It will grow by leaps and bounds in the coming years.

• How do you ensure there is ongoing communication between the head office and its franchise partners?

Depends on the set up of the city, the number of hotels we have there. There are cluster managers, area managers etc, accordingly but the idea is to engage with the franchisee completely. Only then you can understand what their needs and expectations are and what support they need. They need to be aligned with the brand’s expectations as well. So it has to be a two way communication.

• How important a role does technology play in hotel management, especially in franchise management and administration?

Technology has made a huge impact and will continue doing so. Now there is management information system in place, which helps in how the hotel is run and how the business is operating. Even with AI coming in, I feel it will assist us in becoming more efficient, give us more information, more tools required to navigate our journey forward. So, I am looking at cooperation instead of competition from AI as hotel industry is all about human element at the end of the day.

• Any current trend that is going to change the dynamics of the hotel industry?

Technology will play major role, will bring about positive change and help us become more efficient. It will be a big tool/partner for us. Also, as an industry need to ensure that our employees are trained thoroughly and that we meet their expectations as well, they are our first customers, our internal customers. We need to listen to them as well. The internal and the external customers keep evolving and changing, and we need to change and grow with them.

• Your tip to first time hoteliers.

This is a capital-intensive business. So, if you want to enter this industry, you must have pockets deep enough to first make the right product (2 star, 3 star, 5 star etc) depending on the market needs and requirements and then have enough funds to sustain it for a few years before the profits actually start coming in.