Interview: Chototel - The Peoples’ hotel

Chototel has embarked on a mission to supply 1% of the world’s demand for affordable housing by 2025. Moreover, the hotel group has plans to build five million super-budget hotel rooms in the next decade.

Originating in India, and conceived out of the need to provide better quality housing solutions in a global market that fails to cater to those at the bottom of the pyramid, Chototel is spearheading a movement to supply budget-friendly accommodation with uninterrupted utilities, clean water and social infrastructure, while delivering market returns.

"I don’t think Chototel is targeting or addressing the housing crisis in a way that no one has attempted previously – there has been social housing before and there have been low-budget hotels too, but our concept of bringing these two models together is new," Silva begins.

"No one has looked at the issue in this way before. We are positioned between these two models – providing a life of dignity to people, in a joyous and welcoming way, instead of a derogatory way. Furthermore, people are invited to stay with us as long or little as they like: one week, one month or one year".

Formed from the words "chotu" – meaning small in both Hindi and Japanese – and "hotel," Chototel aims to deliver its own style of clean, safe and affordable accommodation to the UAE in the coming years.

"We choose our locations where there is a high growth in the manufacturing, information technology or industrial sectors. These are locations where jobs are being created, where there is greater potential for growth and most importantly where the cost of land and buildings are appreciating. So we think the UAE has a lot of potential in terms of these key criteria."

Silva explains that where the UAE-based property is concerned, the exact location is anticipated to be finalised by the beginning of 2017, after which it will take approximately six months to complete the development and construction phase. "We use a steel frame construction method, this is no longer an uncommon method of construction, in fact it’s being used all over the world."

Silva adds: "The difference is that in most countries around the world, people are paid by the hour for the time worked, so a lot of people are not incentivised to complete the project promptly. At Chototel we pay our employees as per each completed hotel project, so they are motivated to complete the current job and get on with the next one much faster."

Chototel now has tenders in China that can import the whole building to the UAE, completely fabricated: "It just works like nut and bolt construction – it’s like Ikeas, but in steel. We just have to erect the building in its final location. Other than the hotel’s foundations, it’s completely dry, with no wet construction and no bricks, it is all made using steel and dry technology".

When it comes to developing in the UAE, Silva anticipates a broad spectrum of source markets, but she acknowledges that in areas where there are large numbers of jobs being created and in-transit corridors, Chototel will be most attractive. Construction workers and labours are to be targeted in the initial project, until the company has capital to locate additional properties centrally in the cities.

"I think our target market will be people who actually work in the industry and manufacturing sector – those without access to quality accommodation. Because we are offering accommodation from $2 (AED7) per night that can be shared for up to four people the actual cost can be as low as 50 cents (AED2) per person." She adds: "We want to target those without access to accommodation, electricity and gas; those at the lower end of the pyramid."

On the topic of revenues, Silva speaks passionately about the use of innovative technologies to build, operate and manage in a way that keeps costs low and efficiencies high. "There are two income streams for the hotel: one from daily rent for the rooms, the other is from guests paying as per utility use." She adds: "We implemented tiny bots in different areas of the room, so we have a bot at water meters and gas meters measuring the amount of resources being used in real time. These pieces of technology then send this information to the guest’s smartphone, so they can monitor exactly how much is being consumed and how much it is costing. They then pay as per their individual usage."

Chototel is bringing affordable housing to India with its super-budget hotel model. Rooms start at $2 a day and provide affordable accommodation to those priced out of urban centers.