Hotel consultancy: HVS India shuts operations; senior management start new venture Hotelivate

A major shakeup is taking place in the hospitality consulting space. HVS India, which was a joint venture between HVS global and hospitality industry veteran Manav Thadani, has shut down operations. The largest consultancy with about 60 per cent market share in the hospitality consulting space closed down after the senior management of HVS India and 42 employees started their own venture Hotelivate.
 
The idea behind breaking out, according to Achin Khanna, the former managing director of HVS India and now the managing partner (strategic advisory) at Hotelivate, is to expand the service offerings, enter retail and restaurant segments and move beyond the Indian subcontinent. "At HVS, we were working with every hotel brand in the country. With Hotelivate, 100 per cent of the existing HVS India clients are moving with us. We have spoken to every client over the past six months to confirm if they are okay with it," says Khanna.
 
In an email response, Stephen Rushmore Jr, president and CEO says that he is committed to India for the long-term and will personally oversee the transition along with Dubai-based regional president, Hala Matar Choufany and Singapore-based managing director, Hok Yean Chee. "I am planning to announce a new leader for India shortly. It is presumptive to assume they (existing India clients) are all moving with the old management. Many clients prefer to work with a global brand," says Rushmore Jr.
 
HVS India has estimated revenues of USD 3 million annually, and Hotelivate plans to do twice as much business in the next one year on its own. In India, the other big consultancies in the segment include Horwath HTL, JLL, Cushman and Wakefield, Knight Frank, Dun and Bradstreet and EY.
 
"HVS offers just five services globally. Bigger consulting groups do all kinds of work. There are 20 things that a hotel owner or operator wants. We could not offer many services at HVS India that our clients wanted," says Khanna.
 
Hotelivate is offering eight services now, including conferences, asset management, executive search, feasibility studies, operator searches, valuation, and transactions.  While HVS India was doing business in India, Pakistan, Bangladesh, Nepal, Bhutan and Sri Lanka, Hotelivate plans to tap demand in matured markets such as Bangkok and Singapore besides operating out of Delhi and Mumbai. "We have already found talent in these locations, and registering the entities," says Khanna.
 
Industry experts believe that it will take some time for Hotelivate to establish its credibility. "When a big foreign investor wants to invest in India, they prefer going to the Big Four for due diligence and other things. In the same analogy, a global hospitality investor would prefer hiring a global name like HVS," says founder of a mid-size homegrown hotel chain.
 
It may be noted that SAMHI, a private equity-controlled hospitality firm and one of the largest in the country, was also co-founded by Thadani, Rushmore Jr. and Ashish Jakhanwala in 2010. But according to Thadani, Rushmore Jr is no longer associated with SAMHI.
 
Khanna says that India is a small fry for HVS globally. Currently, India represents around 3 per cent to the HVS's global revenues. HVS operates out of over 40 offices globally. "If HVS has to come back to India, they will have to look for a new joint venture partner who would probably have to put in a couple of million dollars on the table, find an office space, hire a team, and create brand name from the scratch," says Khanna. HVS India was in existence for the past 20 years with Thadani as the majority owner, and minority stake was owned by Rushmore Jr.