Choice Hotels in India will transition from a direct franchise market to a master franchise model as part of a 15-year agreement with Suba Group of Hotels in India.
From July 1, Suba acquires exclusive master franchise rights to develop Choice Hotels’ Clarion, Quality and Comfort brands in India, and assumes responsibility for 58 Choice Hotels properties open and under development in India.
Choice Hotels Asia-Pacific CEO Trent Fraser told HM it’s important to have someone on the ground that can establish a cultural connection, pointing to other successful master franchise agreements established by Choice in other markets including China and Japan.
“For us, it’s about making sure we’ve got the right the right model, the right platform to move forward,” Fraser said.
“We felt partnering with a local group that already has established footprint of hotels, an established infrastructure, that would be a better way for us to grow and expand.
“We have a really good business established [in India], but to get us to the next level, we felt that we wanted to find someone locally to really move it forward.”
All franchised hotels will remain under brand within the Choice Hotels network, and will continue to benefit from the marketing, distribution, and franchisee performance services currently in place.
“Our dedicated team are excited by the opportunity to service and further develop these trusted and well-recognised brands as we look to aggressively expand within the region,” saidSuba Group of Hotels Managing Director, Mansur Mehta.
Suba has an almost 30-year history in India and has built a strong local offering in the midscale and upscale markets, making them an attractive master franchisee for these brands, Fraser explained.
“There’s a lot of good parallels there. They have an established, experienced team offering full suite of services to their ownership groups and their properties,” he said.
“The owner of the business has had a long and successful career, not only in hotels and hospitality but also in transport and cold storage. We really like the successful track record that he was able to share with us.”
Fraser likened India’s recovery from the pandemic to that of Australia’s, saying it’s midscale and upper-midscale segments are recovering at a similar pace. Most of the opportunities for Choice and Suba in that market will be coming from conversions.
“We’ve got a couple of new build properties coming up in the near future, but the majority of our short-term growth will be the conversion opportunity,” Fraser told HM.
“We think there’s a lot of unbranded properties in India that could really do with the services that ourselves and Suba will be bringing to the table. That’s what we’re looking forward to the next three to five years or so.”
Choice Hotels continues to grow throughout the Asia Pacific region, with five agreements signed so far this year.
“We’ve always had a strong and successful track record of organic growth,” Fraser said.
“We are expecting a stronger second half of the year as markets recover. Owners have become a bit more interested and curious about branding and partnering, as they can see the recovery well underway.”
While the New Zealand market is slower to recover – about six months behind recover curves – Fraser said Choice is seeing some “really positive signs”.
He is confident in overall business recovery, and expects continued growth from here.
“May and June have been standout months for us where we are back to 2019 levels of business for the majority of our hotels. That’s really exciting to see that consistency month on month,” Fraser said.
“It’s certainly a domestic-led recovery story [in Australia], that’s for sure. I think in the future, we’ll have some [more] Australians travelling abroad, and as we come out of our winter – Northern Hemisphere summer – I think we’ll see a lot more international visitation coming in to balance that out. We’re optimistic about a really strong second half of the year.”