Shashi Group Shares Advice for First-Time Franchisees

Shashi Group’s technology-savvy founders, Dipesh Gupta and Manish Gupta, recognized early on the significant hotel supply-and-demand gap in Silicon Valley, says Narayanan Karu, vice president of finance and asset management. Top Fortune 500 technology companies, including Apple, Google, Facebook, and LinkedIn, have experienced substantial growth over the past seven to 10 years. Scarcity of land and restrictive, long, and uncertain entitlement processes in Silicon Valley cities such as Cupertino, Sunnyvale, Mountain View, and Palo Alto create barriers to new supply for hotel developments.

Shashi Group secured its first entitlements in 2009 to build a state-of-the-art hotel in Cupertino within walking distance to Apple’s headquarters, Karu says. Once entitled, it began exploring branding options. “We had very high interest from all major flags,” Karu says. “We chose Starwood as our partner because the overall offering from the franchise tops our ‘best fit’ criteria. Starwood’s SPG reward program is one of the most popular among Silicon Valley travelers. Moreover, Aloft is the perfect brand fit for providing a premier guest experience in the heart of Silicon Valley.”

What has been most rewarding about working with the Starwood brand? Starwood’s ability to make timely and swift decisions is one of the most rewarding experiences. The management at all levels in Starwood was willing to work with us to package the solution that best fit our project as long as it still delivered the best guest experience.

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What are your future plans in the hotel industry? Shashi Group is selectively growing with long-term strategies. Our near-term growth will come from Silicon Valley’s technology hot spots like Cupertino, Mountain View, Palo Alto, Sunnyvale, Fremont, and San Jose. Considering the cyclical nature of the hospitality industry, we also have plans to extend our growth around major corporate hubs in the United States. We will be very selective in identifying the locations for our future projects and will focus on sites that can bring in corporate travelers from leading technology companies, world-class universities, and other supporting service sector organizations.

What advice do you have for someone looking to get into the industry? Increasing globalization and the need for a cultural blend have created enormous growth opportunity in the hospitality industry. And yet, my advice is to treat each project like an independent start-up venture. Macro factors are important at the time of selecting a project, and detailed analysis has to be done at a micro level to understand the local market, comp set data, financing structure, and level of scope in bringing value addition compared to the current performance level. After a careful selection, for a continuous operational success of the project, a partnership with a highly competent and trustworthy management company has to be established. This relationship will provide a good platform for the development company to focus on its core competencies in project selection and deal structuring.

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