Building A Hospitality Business From Scratch

Building A Hospitality Business From Scratch

Gopalkishna Kulkarni Featured in   Healthcare & Pharma

The former founder-promoter & currently board member of Perfint Healthcare, Gopalkrishna Kulkarni, has identified a niche in the mid-budget hospitality segment by founding Stay Simple Resorts. Banking on the growth in income of target customers and improved transportation infrastructure, he aims to bring in 120 resorts across 100 destinations on to the platform by 2019.

Gopalkishna Kulkarni, Founder, Stay Simple Resorts

If you look at the leisure hospitality landscape in India today, on one hand there are premium brands such as Taj Hotels and Park Hyatt, which lease and operate an upscale chain of resorts for the higher income groups, and on the other, there are budget hotels under brands such as Oyo Rooms which offer affordable stays even in holiday destinations. But, what about the middle ground? The space where even mid-budget travellers can experience quality, holistic hospitality services? That’s where Stay Simple Resorts comes into place. As the name goes, the brand has under its umbrella, an affordable chain of leisure accommodation for the traveller who explores places on a shoestring budget. “If you look at the statistics, the number of mid-budget travellers has been growing 30 per cent year-on-year since 2012. We see a strong opportunity here,” says its founder, Gopalkrishna Kulkarni.

A former founder-director and board member at Perfint Healthcare, Kulkarni has signed on board a total of 16 resorts with 520 rooms across Karnataka, Tamil Nadu, Kerala, Goa, Rajasthan and Uttarakhand, since founding. With every partnership, Stay Simple Resorts enters into a long-term lease agreement with the owner, wherein the owner is given a fixed monthly income, and the revenues from resort occupancies are put back into the business. “Typically, in every resort we partner with, our initial investments include upgrading the kitchen, the overall look and feel of the resort and rooms, training the staff and branding,” shares Kulkarni. Once the guidelines are met, the resort is branded under the Stay Simple Resorts umbrella.

In December 2015, the company raised Rs. 5 crore from the family office of Sudhir and Shalini Sethi (of IDG Ventures) and Praveen Someshwar, the Asia-Pacific sales head for Pepsico. The first interactions between Kulkarni and IDG’s Sethi happened during their stint at Perfint, where IDG was one of the investors. “Typically, in an angel environment, the investor first strikes a chord with the promoter, followed by long discussions on the business model before deciding to invest,” notes Kulkarni. The funds from the current round are being channelized towards expansions. As Kulkarni indicates, the company has signed eight additional resorts in the last couple of months and expects to close this financial year with a lineup of 20 resorts.

The Three Phases

When Stay Simple Resorts was founded in 2008, the initial business model was built around purchasing land and constructing its own resort. This was when Kulkarni setup a property in Sakleshpur and Hassan in Karnataka. “Soon, we realised that buying land transforms it from hospitality to a real estate model. Hence, we adopted the leasing route,” he recalls. In this phase, the company formed an asset-light model wherein it entered into long-term lease agreements with mid-budget resorts, thus achieving faster growth than the previous model. “Today, the two resorts we purchased and built earlier still remain under the Stay Simple Resorts brand name,” he adds.

Phase three, as Kulkarni recalls, was officially launching the Stay Simple brand, and focussing on providing ancillary experiences for the customer. One of the key learnings we had from the earlier two phases was that it is not enough to provide a holiday stay. The experiences around it are equally important,” says he. This phase saw the introduction of restaurants and other services such as taxi facilities, fun activities and more.


“We select resorts which meet our criteria and our investment is limited to upgrading the kitchen, the look and feel of the room (linen, landscaping, painting and more), branding, and training the staff.”


Putting the Word Out

Since the company still operates on a shoestring budget, it relies heavily on word-of-mouth and direct selling to travel agents and tour operators. Some of its strategies include promotions and leveraging customer reviews on TripAdvisor, offering incentives to customers every time they refer a friend to experience the brand, a yearly mail to existing customers about the recent expansions and advancements made by the company and more. “Having said that, no doubt, investing more into digital marketing will help but maybe in future,” admits Kulkarni.

Going forward, Kulkarni is confident that in three years, he can build Stay Simple Resorts into a national brand with an assortment of 120 resorts across 100 destinations. He aims to grow the company into a visible hospitality brand in the leisure, mid budget segment. “With the growth in income, and improved transport infrastructure, we see a huge increase in the number of people taking vacations. This could only mean a greater opportunity to grow for businesses like ours,” he voices, on a parting note.


Snapshot

Stay Simple Resorts

Founder: Gopalkrishna Kulkarni

Year: 2008

Concept: Leases and operates mid-budget resorts under the Stay Simple Resorts brand name

Investors: Sudhir and Shalini Sethi (family office) and Praveen Someshwar, the Asia-Pac sales head for Pepsico.

Expansions: Currently has on board 16 resorts with 520 rooms across Karnataka, Tamil Nadu, Kerala, Goa, Rajasthan and Uttarakhand.

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