Interview with Aditya Sanghvi, CEO and Co - Founder of Hotelogix.

The setting and all is okay with you, right? I am like everything is at home in my bed.

It's like a nice wall at the back.

It's absolutely okay. Yeah, you I was in your mind Searching for LS Searching for truth I couldn't let you go Without a request or even a task.

Thank you for being on the next season of the Askavi Arya show where we interview hospitality professionals like yourself from all over the world with two major purposes. One is to inspire other budding hoteliers and hospitality professionals to come into this ecosystem well informed. And B is to inspire and educate people from our fraternity to know what's happening and how they can remain relevant in 20, 19, 20 and beyond. So you know, so in the spirit of, you know, how this show starts, I'd like to ask you. So you know, you and I have known each other since tech and digital came into the whole era and we've been sort of dabbling into things since then. And there was a time when people didn't understand what you and I were doing. We've been taking our sales bags and going for conferences all over the world. And now it's now digital marketing and technology for hotels has become mainstream now finally we've reached the current johar stage of Hindi movies. These are pre made three great things. Digital or tech, flooring, marble, hotel operations. Now it's become mainstream. Everybody wants to talk to you, so tell me. And you know, you also become like a, you know, somebody like one of the most trusted companies in the at least in this part of the world. And you know, people know that this product. But I remember going back to those days when you told me many five, six, seven years back when you told me that we are the only cloud pms and people were like cloud PMS from those days to migrate. How many thousand hotels have you migrated to that new mindset?

So see you know, all in all taking into account people who do our trials on our sites so that they get educated on, you know, what this whole technology is like, acquiring customers and stuff like that. So let's say you know, in total today we have around 2,000 odd hotels that are live with us. And outside of that every month There are almost 400 hoteliers who try out our system on our side. They come small, these are small independent hotels who this technology is all about, right? So they do that and they, you know, get educated, some few get convinced and stuff like that. No, you are right. You know Abhijit, this industry has changed very drastically actually in the last three to Four years we've been, we got, we were pretty much early right into this space. 2008 is when hotelogics got incorporated. And at that time when we said cloud pms, no one would understand as such. Not that we were the first ones, but you know, in this part of the world, you are one of the first ones. So the industry has drastically changed in the last three to four years and people have got really educated on what is digitization, what, what you know, the market is getting organized, you know, and part of the market getting organized is that a lot of small independent hotels, they come into the fold of some multiple property groups and digitization mean a lot of money is going into, a lot of investments are going into the market to get into online travel, online reputation. And you've been, you must have seen, you know, how reputation has grown over the last couple of years. You know, if someone tried to talk or talk this, you will have a discussion with this with a hotelier. Just three years back, I'm talking about in India, you know, that we should look at reputation. They would say, you know, these guys are talking again, they've come out with some marketing gig.

Right?

Right. There was no touch of reality that they would find. But now you just talk to any hotelier, he's so well aware, know may not be doing everything correctly, but he's at least aware of the problem or, you know, that the ecosystem matters to him.

So tell me from an entrepreneurial perspective, I'll come to hotel and marketing hoteliers later. Entrepreneurs perspective. For entrepreneurs who be watching this show, what is your advice? Because sometimes you, you don't know when you're in the market. Sometimes you're ahead, sometimes you're in time. So if you've taken 10 years to build it as a solid brand of 2000 hotels. So what is your one or two pieces of advice to entrepreneurs who are setting up SaaS products and coming into the Indian ecosystem? What are the two things? One is obviously resilience and guts and gumption and all of that. But what are the two business pieces of advice that you would give to somebody who's trying to set up a SaaS company like yours in any field.

So number one, I think you should trust the value that you're trying to provide. I think at the end of the day, the most important entity when you do the business is the customer. Right? And if you so believe that there is value that you have to provide in to this customer, number one, and second, that the problem is large enough that it can become a Business, not a lifestyle living for you. So if that is the firm belief, then I think, you know, you should try and be in the game as much as you can. I know it is very hard if the markets are not responding. So it is very hard to still be in the game, motivate your team. Financial issues are there and stuff like that, right? But somehow if you have that belief, it always, you know, it has a ripple effect. It has. It has snowballing effect, right? It is into your team and to your other believers around, and then the time comes and then you can push it hard right, at that point in time. So I think, number one is that the core value proposition, if you have your grips on it, right, then I think that then there is business to be done. There is. It makes sense to chase that particular. And, you know, people should not get sentimentally attached to things. If you so get to know. No, I was looking at it. Yes, there was value, but this. This problem is not at scale. You know, might as well take a. Take a, you know, decision at that point in time. Either pivot or go the other way. Right? So I don't think people should have this fear of failure or there is any. They should feel shameful about it or whatever. So now I think, you know, the environment is very well suited for entrepreneurship. People actually think, you know, that failing is also a success because. Yeah, so. So, yeah, I mean, those are my very basic, you know, there can be multiple fundamentals, people can teach them. Right. But this is the basic of entrepreneurship. Right, Lovely.

I love that. So now tell us, you know, now we're now coming back to more hospitality and hoteliers and GMs and all of that. So what is that? You know, Hotel Logix is obviously, it's a product that has come of age, you've refined it, you continue to refine it, and I know how much you love it. You know, it's you, it's the product. It's you. You are the product. You know, when that happens, when you and your. When there's a. When there is no line between, you know, the entrepreneur and his product, that's when, you know, people start, you know, sort of engaging or loving the product because they see the passion behind the people. We love Richard Branson because we love Virgin Ethnic because of Richard Branson. You know, so. So when few entrepreneurs are able to align their names to their brands. So tell me when it comes to that. Now Hotel Logix is working with 2,000 hotels, and Indian hotels are coming, you know, coming. Coming into the Foray. So what is your one message in terms of digitization? You know, tell us one thing that you feel is happening. This is your message to all the general managers or decision makers who are adopting digital. What is that one thing that you're worried about that this is still not happening. And what is that one thing that you're optimistic about that this is happening.

Okay, so let me first, you know, take a step back. You said a few things about me and hotelogics. So I think, you know, there is a Rahul Ravid, my team, right. Who is the unsung hero.

Okay.

And that is Prabhash. That's my.

I remember him. I know him very well.

So see basically the whole product and the whole solution and the problem was conceived by him. And he has beautifully brought it out in the market. Right. Looking at the way he has solved the issue, you know, it. My passion actually grew and you know, and I started to get so attached to it and so my, I started to believe in it so much that you know, it almost feels like, you know, Hotelogics is me and I am Hotelogic. But I think Prabhash is the creator of this genesis of him. So I would not want to take that credit away.

Of course, of course. That makes sense. Yeah.

Now and I was always very, very passionate about trying to build products that had global, that had an ability to solve global issues. And that is what I see in Hotelogics. Right. And that, that keeps me going. You know, Hotelogix is today in 100 plus countries where hotels use it for their operations. Right. So I think, you know, I should say, you know, job well done from the ability of exposing the brand and getting its acceptance, answering your questions objectively. So what I see as I said that there is a lot of investment that is in this part of the world, that is South Asia, Southeast Asia, Middle East, Africa, this part of the world. Right. To digitize it and to organize it. And so when you are, when you are, when you are in and when we were. When a particular traditional group is now trying to say so what's happening? You know, there is so much of investment that has gone into Oyo tribos of the world. You have Zen rooms, you have red doors in Singapore based companies. There's fab hotels in India. So what have they done? They have and make my trip and stuff like that. Spent a bunch of money trying to educate people that there is something called as brand. In the mid segment. Right? Mid to small segment. There is something called as brand. And you can have brand level expectations. So you have brand expectations that the brand promises that the brand gives. And you can have your guest expectations, service level expectations that you have and the brand should provide that. This is what is called, I think which is a very expensive education. All this money has gone into educating the consumer that this is what it is. And now what the traditional groups have realized is that these new brands have come into the picture in couple of years time. They have accumulated hundreds and thousands of hotels under their flag. And here we are sitting for the last 20 years with 20, 25 hotels under our brand. What are we doing? There is an asset light model that can be used, right. And then expand rapidly. And they say on top of that we understand hospitality much better than these guys. That's what their belief is. So all these traditional groups, hotels, they are basically expanding very, very rapidly. And in this expansion, so all these groups, they were already using some of the other on prem technology. They were not digitized, but they're still using technology, right? As such. So these guys are now looking at okay, how do we expand? And that's where they are basically now finding that, you know, the logics or cloud based PMS are the answer only to expand rapidly. They can't be going that the on prem way to do it. Number one, number two is, you know, with so much of money that has been spent on online, you know, I think online is growing at almost 20% growth in this part of the world. Online bookings, the rate at which it is growing is almost 20% year on year, right? So it is growing very, very rapidly. So, so they have realized that, that people are actually looking at online reviews. They are looking at, you know, the bulk of the business is coming from online and they need to solve that problem somehow. That's what they know, right? So, so they are adopting technology. They are coming to us. They are. Every group is talking to us today. But the issue in their mind is still that whatever they have invested 10 years back, they still think that it is going to go waste. They don't look at every day. They are not taking a decision, a forward looking decision, right? They're actually losing money on the table and they're letting the competition become better than them, Number one, right. Number two, it is yet to be digested in this part of the world that even a television in the room, you change every four or five years. Technology changes, right? But the base technology that is going, that runs their hotels, they are unable to digest that it needs to change. A radical change, right? So Few hotels, they, few, few of them, they get it. They bite the bullet. They go to the next level. Right. Few of them, they look at them and they stand on the fence. So for me, what I say is that if your whole world is changing around you and you're sitting and running your business as if you cannot hear what digital world wants to say and you still want to use that kind of a technology, then you are actually doing disservice to yourself and to your guest.

Right.

Very valid point.

Totally agreed.

I think the Internet, he's had an experience. Yeah. So your guest is basically talking about you online. There is, there are reputation management tools that can help you, you know, aggregate that data, consolidate the data and tell you very clinically what is it that they are saying about your fnb, what is it they're saying about your front front office, what is it that they're saying about your housekeeping and stuff like that. You need it is a golden opportunity for you to listen to it and respond to it. Number one. Right. In the earlier days and would is perfect. Right. But now your guests are talking about you and it is in your interest that you have a look at it and respond to it. I am sure no business in its real sense means not to give service in the best possible way but is human service and stuff like that. So my message to them is care for your guests, care for your own business and then take the decision holistically. Looking at five years ahead, what is it going to fan out, don't have baggage. What's happened in the past? Understood. The industry rapidly changing.

Tell me Aditya. No, that's a very great point and I'm sure a lot of people will appreciate for a lot of people this will this your last statement is going to help them validate or revalidate the thoughts that have been going on in their minds. Now this leads me to my next question. You know there are a lot of young hoteliers which are getting into the ecosystem. People are rising from front office and getting into revenue management and then becoming digital marketing people. You know, 10 years back I used to tell people that every hotel will have a digital marketing person. And they were like that's never going to happen. And now you see how people are employing people. So things are changing to that effect. Now a lot of people are getting in from front office into revenue and digital portals. A lot of people are getting in from GM level and saying I want to understand digital. So there are, there are, you know, and people are still trying to understand what works what doesn't work? And the hotels are in a very privileged position. Every client is in a very privileged position, especially the branded hotels. They can call every vendor and for a good presentation, after 30 presentations from 30 of the top software companies in the world, they become digital marketing experts on their own, right? And they can do a pitch, they can do a presentation. So it's good because it's for them their knowledge and awareness of what's happening in the market. But you know, that's one way I also, I always tell people, you want to learn Digital Marketing, call 10 people to give you a pitch and by the end of the 10th pitch you will become somewhat of a marketer. You'll understand what's happening. But what is your advice of being, you know, every day you meet hoteliers, every day you talk to and make give solutions to 2000 hotels. What is your advice to the new and budding hoteliers or people who are wanting to get into hotel revenue, hotel digital and all of that? What kind of mindset should they have going forward? So if they want to succeed, the.

Number one mindset of, you know, roi, right? The ROI based mindset is very, very important. I was just, without taking name, I was just talking to a very, very dear friend of mine, right? And saying, no, you know what Aditi, I have no sir, I tell you, right?

So because I had the luxury and.

The privilege, you know, to question them things, you know, that they, it would directly force them to think, you know, and I have no fear of either losing the deal or whatever. So I am not talking to them as a, as a vendor but as a friend or as a thought, you know, expert in the industry. Sure.

Thought leader for sure.

Yeah. So, so basically I said, you know what I said whatever you've quoted, you know, for your technology, it. So it was a hotel, traditional hotel group which is now wanting to open, you know, these budget hotel brands, right. And want to take up some buildings that are there over supplies there in India and stuff like that and brand apartments and start using them as apart hotels and stuff like that. You know what I want to do, I want to make sure that there is a minimum of human, you know, resource requirement over there. There is a lot of automation. I want to solve a very, very specific use case and hence the kind of investment that I want to do over there is very, very low. Right? So I said that, you know what, so whatever you quoted, I need at least a 50% discount in that. I said, see when you are trying to automate things, that means you're trying to shift your budgets to automation. Automation would directly translate into technology. Right. Number one, number two is that if you are not looking at at least 2% of your revenue going towards technology, I don't think that you are looking at your business in the most appropriate way. Right. And if that is the case, whatever, whatever experiment you are doing right now, you are doing it with the wrong cost levels over there. Second is today when you employ a sales guy, he says I need you know, 30k as my salary and I'll give you, let's say you know, five lakh rupees of sales every month. And then there comes a sales guy who says I need 50,000 rupees of salary, but I will give you 15 lakh rupees as sales every month. You are meant to employ the 50,000 rupee guy because that you are able to understand and conceive. But same thing, you are not looking at the, from digital world and from technology. You are not placing the technology in the same category as such. It can also grow revenue for me and stuff like that. So if you do not have the mindset of ROI driven mindset, you can never take forward looking decisions. Right. So that is.

Yeah, yeah, that's, that's, that makes a lot of sense. You know, I'm just, maybe I'm going to read redo my sales pitch after this talk with you. A lot of hotel owners, general managers, decision makers have this one question and I'm sure that they have this question with you. As with you being a technology player. I'm already working with a company now to switch technologies means that my staff will have to learn and unlearn.

Sure.

How do you address those kind of challenges?

Well, it is very important that you go to the top guys and say, and make them first believe that this change is going to make your business better. Right, right. Once that, so that is your first battle to fight. Once you are able to achieve that. Right now it has to be top down. It has to be then mandated from top down that this thing needs to happen. Because I am a businessman, I was earning $1 million and now this is, if I don't do this, number one, I am going to lose my winning position. Number two, with this adoption probably I can make one and a half million dollars. Right. And if once that sense is there. Right. Then getting down to the other stakeholders within the hotel organization is simpler. If, if I go to a particular CEO and you know, and he says, you know, I will call everyone in the room and everyone has to make that decision. I tell him that this decision will never. Because it is a business decision. But if you are, if your housekeeping manager is going to be an integral part of it. I am not trying to undermine any housekeeping manager. But his goals are different. His goals are very different. The GM's goals are very different. The revenue managers goals are very different. The IT managers goals are very different. If their frontline goals are very different and you're trying to make a decision which has a very, very different. A business goal which everyone is not always aligned to. Right. A lot of people are aligned to only operational goals. So, so then you know, this decision will never get made. So that is my pitch to them that you know, I, my approach is to go top down, make them understand that this is going to help your business. And if that does not happen, I, more often than not, I know that this deal is not going to happen over here, number one. Number two is that I try to understand that what is their aspiration in terms of their expansion of their business. And if, and most of them right now are looking at 2x the expansion every, almost every year. So you'll be, you'll be surprised to see how hotel groups over here are, you know, looking at expansion. So, so I, I asked them that how do you plan to expand? You know, what is the way that you're going to expand? How are you going to get centralized control? Sure. If you do that. So if you are not able to control centrally and you expand rapidly, you are going to create so much of, to every. Right. So, so I think these are the two, three ways in which I am able to address and we can't, you know, get past everyone. So there are people who still get left behind and stuff like that. So yeah, so yeah, it's, it is generally top down perfect.

So I think we've come to the end of our 30 minutes. This we asked for you.

I'd like to quickly recap.

You told us about how important it is for an entrepreneur to keep resilient and keep working and there will be a wave that will take you to the next level. You spoke about how the mindset needs to shift, you know, on ROI and you know that's going to help you decide. The other thing which I, which I like what you said was that you know, at least 2% of your budget should go into technology. If you're, you know, especially if you're a growing company. You, you also said that the decision has to be taken from a business come operational angle, not only from operations and therefore it should end. Even if there is a challenge of learning and relearning and unlearning. Everything has to come from the top down. If the management has got a buy in into technology of the future then it will trickle down to hotels. But I think this was very useful. We're keeping it bite size, we're keeping it half an hour. Because every time that we upload a video which is more than 40, 45 minutes, people save it and they never view it completely. So we thought in 2019 the new version we do is between 25 to 30 minutes. So there are more and more people who consume the entire content. So thanks Aditya for bringing this. It's been absolutely valuable. I'm going to show it to my team as well. Maybe they will also understand how it is working in a similar ecosystem and working tech and business environment and all of that. Good learning for me too. Thanks very much.

Thanks. Thanks Abhijit. And thanks for having me over the show. It's been always a privilege interacting with.

You and we have to catch up and party in Bombay like we did last time.

Absolutely.

Okay, take care. See you. Thank you very much for taking time out today.