Chototel, a London-based start-up, uses innovative technologies to build, operate and manage in a way that helps keeping costs low and efficiencies high. Using ground-breaking technology across construction, management and operations, Chototel seeks to be a catalyst to eradicating housing poverty and homelessness. Rhea Silva, Founder & MD, Chototel is a third-generation social entrepreneur with experience in building and managing affordable housing and hotels. She believes and is committed to making India the cornerstone of our market entry strategy
Team Estrade: Give us an understanding of your company’s journey since its inception?
Rhea Silva: Chototel was founded in London, in January 2016.I have been involved with affordable housing and hospitality sectors in the past. Our vision was to build a service offering that was based on the cost efficiencies of affordable housing and the service efficiencies of budget hotels. Chototel then decided that its first pilot should be based in India, because, Demographics never lie!!! India is a country with over 1.2 billion population of which 40 million live in substandard housing. A rapid market solution is critically needed.
“India is a country with over 1.2 billion population of which 40 million live in substandard housing”
Team Estrade: Tell us about the brand “Chototel”? Where did the idea come from?
Rhea Silva: Chototel, the brand formed from the Japanese words “chotu” (meaning little) and hotel. There is an opportunity falling into the niche between budget hotels and rental housing which is unaddressed. The real scale exists in countries such as India, Nigeria and China where rapid urbanization is causing young working people to move towards cities where opportunity exists for them. Not all of them can afford to buy a house and renting comes with hassles like deposits, committed tenures etc. A solution like Chototel therefore makes sense.
Team Estrade: In terms of the market position where do you stand, e.g. are you a GINGER, Keys, Mango Hotels? Kindly elaborate.
Rhea Silva: The budget sector is priced more as a function of its investment cost, which basically means , the hotels are built in subprime area so the real estate costs are low and the specifications are much lower than the luxury category therefore they can offer lower tariffs , in most cases such hotels are priced between USD 30 to 50 per day.
In our case the efficiencies are being developed by technology across many levels , we use technology to build quickly and inexpensively , that keeps the working capital cycles short; we have a product that needs little or no maintenance, technology is used to manage billing and basically operate the hotel as a near to, unmanned operation.
If you had to position the product, its two levels below ginger, and one level below an OYO.
“Our hotels are going to be in growth centers and in locations which are on their path to become high density urban clusters in a time frame of 10-15 years”
Team Estrade: How did you short list the location of your first property?
Rhea Silva: There were two reasons for choosing Nagothane near Mumbai as our first site, firstly the site is situated on the new Mumbai-Goa Expressway. That automatically attracts tourist traffic and augments the food and beverage income. Also the Roha industrial belt has over 50,000 informal workers, who are the prime target for clean and affordable, temporary accommodation. 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 centers and in locations which are on their path to become high density urban clusters in a time frame of 10-15 years. In India our target initially is to build around, Mumbai, Ankleshwar, Bangalore, Hyderabad and Pune. These locations have an optimum blend of IT industries, manufacturing and retail.
Team Estrade: Challenges you are facing today and constraints in Hotel Industry and how do you plan to mitigate them?
Rhea Silva: We face the typical challenges that all hotel companies face, starting with land acquisition, permits, and contractors. In most markets that are prime to us in terms of the demand, these issues are common, so I guess we have to develop the resilience to overcome them. In all markets the management is local and that aids us in understanding the peculiarities of the market, which basically are cultural issues.
Chototel: Creating world’s first super-budget hotels