Fab hotel is a chain of hotels founded by Adarsh Manpuria and Vaibhav Aggarwal in 2014. They have over 400 locations spread across 40 cities in India. They operate on a 100% exclusive franchise model with a contract for long term. These hotels generally have three-star ratings and their position is strategically placed either near a railway station or airport or any business hub.
Recently, Fabhotels has announced to add 1000 more hotels under their franchise and venture into 15 more cities. By the end of 2019, they will be adding cities like Ludhiana, Kanpur, Allahabad, Ajmer, Raipur, Jamshedpur and more such places to their list of hotels. They believe that customers have shown faith in their business model and there are customers who keep coming back for the same brand. Under this faith, the chain of hotels will be expanding their wings including more than 15 new cities in their brand.
As stated by the company spokesperson, there is high demand from different hotels to align themselves with this brand and reinstate their values in the hospitality world. The company also stated that they have raised over USD 25 million and a big chunk of that money will be spent towards expansion only. Another important aspect is investing towards technology development and training the staff properly with the maximum focus on quality control. This is because having well-trained staff is a necessity to satisfy the customers. Hotels with poor quality service are badly rated on the internet and hence do not attract good business.
The main objective of any hotel is to put forward the need of the client and ensure one hundred per cent client satisfaction. In this rat race of hospitality industry, complying with this standard is mandatory. Any hotel which does not comply will surely lose out on customers. Fab hotel is a globally known brand and hence more and more hotels are looking forward to identifying themselves with this brand.
They work on a light asset model, gaining partnerships from small hotels under a franchise model to provide standardized services. Existing partner Accel Partners, also participated in the round to raise money. In July 2016, the start-up managed to pool in $8 million from Accel Partners, RB Investments and Mohandas Pai’s Aarin Capital and Qualcomm Ventures. “The focus in past 12 months has been on investing in technology. In the next 12 months, we want to triple our technology team and double the number of rooms from the 5,000 that we have today,” said Vaibhav Aggarwal, co-founder and chief executive officer, FabHotels.
FabHotels was founded in 2014 by Aggarwal and Adarsh Manpuria. The former partner had previously worked for coupon website Groupon and helped set up online furniture retailer FabFurnish for German Internet giant Rocket Internet. Manpuria was also previously at Rocket Internet as a venture development associate.
According to Aggarwal, the business has seen robust operating metrics so far. “Our occupancy is 85% plus an average daily rate (ADR) is Rs2,000-plus, which is the highest within this segment,” he said.
FabHotels is following Chinese examples like Home Inn and China Lodging, which have built billion-dollar budget hotel chains. However, it is not the only tech-focused start-up in the field.