News Update - Oakwood opens first luxury serviced residence apartment in India
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Reprinted from EXPRESS HOTELIER & CATERER INDIA (EH&C), October 25, 2004
'First Oakwood Will Open In Hyderabad In 2006'
Robert Philips, director of sales and marketing, Oakwood Asia Pacific, in an exclusive to Ashish K Tiwari, speaks about the company's venture into the Indian market...
EH&C: Oakwood has finalised its plans to enter the Indian hospitality market. What motivated the move?
ROBERT PHILIPS: Oakwood is a global hospitality organisation, with an international clientele of business and leisure travellers. Our customers, which include many multinational corporations, have asked us to be in India to provide accommodation for their travellers. India's growing economy has certainly increased business travel to the country. We have also had thousands of guests from India staying at our Oakwood properties in locations such as Silicon Valley, California and Bangkok. These guests too ask us why we don't bring the brand to India. Another major reason for us to venture to India is that Indian real estate developers have seen how profitable serviced apartments can be in cities such as Singapore, London and Tokyo. They have contacted us to manage their developments. Oakwood's management team has several individuals with extensive experience in India and we are well positioned to enter the market. This team includes our managing director P G Mathew; vice-president, development and technical services Paul Prescott and director of technical services Percy Muncherji.
EH&C: I understand that Oakwood properties are being planned in Pune, Mumbai, Bangalore and Hyderabad. Please elucidate the reasons for targeting these destinations. Are you also looking at other cities?
PHILIPS: Bangalore, Mumbai and Hyderabad are prime markets for business travel. Pune is emerging as a technology and manufacturing centre. We are also working in New Delhi and Chennai, and reviewing opportunities in other cities as well. Our experience informs us that there is demand for serviced apartments in both primary and secondary markets.
EH&C: Will the Oakwood serviced apartments in India follow a set pattern in terms of number of rooms and other facilities?
PHILIPS: The individual apartments will offer spacious floor plans with elegant design. They will be well decorated with superb furniture. Each apartment will have broadband connectivity and a home entertainment system. The properties will also have a suite of facilities. Each will have a restaurant, health club, gymnasium, swimming pool, business centre and Resident's Lounge. Some will have additional facilities such as on-site grocery store and children's playground.
EH&C: By when and where do you intend to launch the first Oakwood serviced apartments in India?
PHILIPS: We will open initially in Hyderabad in early 2006 and the other properties will follow soon thereafter.
EH&C: Could you elucidate on the brand positioning and target market/clientele for Oakwood serviced apartments?
PHILIPS: We have three brands in Asia, all of which are exclusively for serviced apartments. The Oakwood Premier luxury brand - known for 'A Culture of Quality' - targets senior business executives, expatriates and the upper income local market. These are exquisite properties in prime locations, with luxurious facilities and decor and a complete suite of amenities. The Oakwood Residence brand provides relaxed luxury, ideal for business travelers but also for families. The Oakwood Apartments brand provides comfort and style at a value price.
EH&C: What would be the pricing, marketing and promotion strategy? Are you also looking at setting up an office here to handle India operations?
PHILIPS: Pricing will be comparable to leading hotels. We will provide discounts for extended stays. Oakwood will have management, sales and customer service offices at the properties. Promotion will be extensive as we introduce our brands in India.
EH&C: Could you also elaborate on the business model?
PHILIPS: The Oakwood business model is based on management of serviced apartments since the 1960s. It is quite a different concept from a hotel. Our sales come from different channels; the average guest stay is longer; their service needs are different; our training techniques are specialised; and our staffing levels and operating costs are different. Oakwood has proprietary systems and operating techniques that lower costs and risks. In virtually every market we do business, Oakwood leads the serviced apartment market in gross operating profit.
EH&C: What are your views on the serviced apartment market segment in India? What is the market size like and how much of it are you targeting?
PHILIPS: The size is quite limited at present, because the concept has only been offered in a few buildings. We believe Indian cities can be comparable to other major markets around the world. Major cities such as Los Angeles, Singapore and Bangkok support 3,000-5,000 serviced flats. Secondary cities support several hundred apartments. Oakwood will target the clientele in India seeking four-star and five-star calibre accommodations. This will be both international visitors as well as domestic travellers.
EH&C: How does Oakwood plan to deal with competition in this segment from the Indian and international serviced apartment operators?
PHILIPS: In every market, there is strong competition and we expect that in India too. At the end of the day, we believe customers are attracted to the Oakwood brands and the quality and service they represent.