Redefining Rented & Travel Accommodation Trade: Chototel

Redefining Rented & Travel Accommodation Trade: Chototel

The travel segment in India is exponentially becoming lucrative and having full of innovative potential. In our quest of recognizing and highlighting innovative startups, we came across Chototel. A UK based startup which started its business activity from India. In an exclusive chat with SMEStreet, Rhea Silva founder and managing director of Chototel shared her business plan, strategy and also highlighted the main opportunities for her part of business. Rhea is an entrepreneur, with social enterprise being the object of her goals. Her background managing her family business has given her exposure to real estate, hotels and capital markets.

Please unleash some details regarding Chototel and also share how did this business idea was originated?

Chototel was conceived out of a need to provide good quality, dignified housing solutions in a market that fails to cater to those at the bottom of the pyramid. Soaring rentals and housing prices are fuelling housing poverty resulting in vacant residential projects and a greater number

of people living in substandard housing. There is clearly a mismatch in the supply and demand of housing, particularly with regard to the demands of the urban poor. There is a gap in the market that, if filled successfully, has the potential for phenomenal impact.

Chototel, formed from the words “chotu” (meaning small) and hotel, is rolling out an exciting project building ‘super-budget hotels’, where tariffs start from US$2/day with uninterrupted utilities, clean water and social infrastructure such as crèches, community kitchens and open, green spaces.

Since the company is based out of UK, what made you to consider India for your pilot project? How you zeroed in on a place like Mumbai-Goa Highway for the same?

You cannot defy demographics! In a country like India which has over 1.2 billion people living in it, and a substantial amount of population live in substandard housing. A rapid market solution is critically needed.

Our pilot project is located in an industrial hub and located on the Mumbai-Goa highway. Within a 15km radius of the hotel, multinational companies like Posco, Jindal, Reliance Petro, Welspun Steel, Bhushan Steel, Nitcotiles ,Pidilite,  Maharashtra Seamless are creating a large number of jobs and that number is only increasing.

Furthermore, the hotel’s 50-meter proximity to the national Mumbai -Goa highway, will attract a range of guests and travelers seeking accommodation, in addition to other amenities such as food and beverages.

Chototel is targeting both budget travelers as well as people who are looking for rental accommodation.  How feasible is catering to two different segments of customers whose demands are different?

We want to find a way to offer the service at 10-20% of people’s average income. All our guests will be subject to standard civic and behavioral rules & code of conduct.We cannot discriminate between the type of guests staying with us and the hotel will be open to all guests subject to the availability of rooms.

How similar and different is Chototel in terms of its service design to a budget or Economy hotel?  What a customer can expect from a Chototel?

Chototel uses technology to manage and run the hotel efficiently. At 2$ a night are guests have access to uninterrupted water, electricity and gas. The hotel has social infrastructure like playgrounds, walking track, crèche, community kitchen. It is also contiguous to a school and hospital. The rooms have generous lighting and ventilation, have colored television and are wifi enabled. Our value proposition lies our price. We have not seen a similar offering to customers!

What are your expansion plans for India and also please share your go to market strategy?

Our strategy is to choose locations in areas where there is very high density of people or areas where we see a potential for exponential growth.

Additionally the hotels will be located on transport corridors where residents do not have to travel more than 1 km more to find transport. India is an emerging market where there are a huge number of jobs being created and the disposable income to people is increasing.

Our second project is targeted near Pune, one of India’s fastest growing industrial corridors, predicted to create additional jobs over the next decade.

As Chototel grows, we will aim to have a presence in the World’s most populous cities, where people struggle to find affordable accommodation. Our hotels are going to be in growth centres and in locations which are on their path to become high density urban clusters in a time frame of 10-15 years.