Mumbai-based Cabana Hotel Management plans to build or convert hotels in India into Best Western Premier hotels. The flag offers at least 27 additional services and amenities than those provided by the average Best Western hotel. Photo courtesy of Cabana Hotel Management

MUMBAI, India – Early last summer, American hotel giant Best Western International Inc. named upstart Indian hotel company Cabana Hotel Management Pvt. Ltd. its master franchisee for the subcontinent. The decision left many hotel-industry insiders there and abroad scratching their heads: Best Western, with more than 4,200 independently owned and operated hotels bearing its logo internationally, is by far the world’s largest hotel chain. Yet it picked a tiny company with no properties of its own to oversee its expansion in India, where demand for hotel rooms is strong but supply is nil. Why?

It all comes down to experience, according to Prabhu Goel, Cabana Hotels co-founder and co-chairman. “One of our founders is Bhupendra Patel, who has a very good history with Best Western and has been very successful in the hotel business in the United States,” Goel said. “He owns eight Best Westerns and 13 other properties in California, has been with Best Western since 1982 and serves on the company’s board of directors. [Bhupendra’s] history with Best Western and his experience in the hotel industry were significant factors in their awarding Cabana Hotels the franchise for India.”

As Best Western’s master franchisee for India, Cabana Hotels also serves as the chain’s representative to the South Asian nation. The Mumbai-based company is responsible for deciding which hotel properties are worthy of carrying the Best Western flag in India, provides hotel-management services and is currently developing an advanced hotel-management institute in the eastern Indian city of Bhubaneshwar.

Cabana Hotels expects to invest more than $1.2 billion in the decade-long program, which calls for the addition of at least 100 Best Western hotels and more than 10,000 rooms to India’s burgeoning hotel market. To accomplish this, Cabana Hotels plans to build new hotels or convert existing properties to three-star or higher levels in first-tier markets such as Mumbai, Delhi, Bangalore and Hyderabad; and in fast-growing, smaller cities like Bhubaneshwar, Ooty, Rameshwaram, Kanyakumari and Jaisalmer.

Patel, Goel and a third partner, Sushant Patnaik, established Cabana Hotels in mid-2007 in Mumbai; collectively, the trio has more than 30 years of hospitality, entrepreneurial and global management experience. Goel is a private-venture investor who serves on the boards of directors for several public and private companies in the United States and India, while Patnaik is a successful entrepreneur with holdings in both nations. Cabana Hotels is led by chief executive officer Anil Wad, who brings more than 25 years of hospitality-management experience to the company.

Cabana Hotel’s co-founder Prabhu Goel.

“India’s booming economy and growing travel market make the country an excellent strategic fit as Best Western furthers its global reach,” David Kong, Best Western president and chief executive officer, said in a statement. “With more than 30 years of hospitality and management experience in North America and India, Cabana Hotels is a respected and proven leader within the industry, and a well-suited partner. [Bhupendra] Patel owns and operates eight Best Western-branded properties in California, bringing a thorough knowledge and understanding of the brand to our development efforts.”

As Best Western’s India expansion falls in line with the chain’s overall growth strategy of building higher-caliber hotels in new markets, Cabana is building a large number of new properties and converting more existing ones to receive the Best Western Premier designation. Introduced in August 2003, Best Western Premier hotels offer at least 27 additional services and amenities than those provided by the average Best Western hotel, including porter and bell service, turndown, laundry and dry cleaning service, bar and lounge or in-room mini bar.

Only select hotels are considered for the designation, which targets well-heeled business travelers and international visitors. Currently, Best Western has more than 80 Premier hotels in Europe and Asia.

“What’s interesting about Best Western is that Indians who have traveled to Europe think it is a four-star brand, yet Americans think of Best Western as a three-star brand,” Goel said. “But if you look at Best Western’s success in Asia, it has been phenomenal – the company is thought of as a luxury-hotel chain. That’s what we aim to do in India with the Best Western brand.”

Best Western began in the years following World War II. At the time, most hotels were either large urban properties, or smaller family owned roadside hotels. In California, a network of independent hotel operators began making referrals of each other to travelers. This small and informal network eventually grew into the modern Best Western hotel chain founded by M.K. Guertin in 1946.

Unlike other chains, which are often a mix of company-owned and franchised units, each Best Western hotel is an independently owned and operated franchise.

The Phoenix-based company does not offer franchises in the traditional sense, where both franchisee and franchisor are for-profit ventures; rather, Best Western is a nonprofit membership association, with each franchisee acting and voting as a member of the association.

The company charges a rate that is based on an initial cost plus a fee for each additional room. Best Western also publishes a list of standards that each hotel needs to maintain. Instead of long-term contracts, each hotel renews its membership on a yearly basis - and the renewal rate is well over 90 percent.

The hotels are allowed to keep their independent identity. Even though they must use Best Western signage and identify themselves as a Best Western hotel, the hotels are allowed the option of using their own independent name as part of their identity. The properties can either be traditional roadside motels, motor inns, or full-service hotels. There are also many smaller "mini-chains" that are owned by the same management within Best Western; a good example of this are the Best Western Midway Hotels found in the Midwestern United States.

“Best Western’s global footprint and worldwide reservations system make it a strong partner for international hotel developers,” Goel said. “Cabana will leverage this strength to become the leading provider of high-quality hotel accommodations in India, with a focus of achieving excellence and building relationships with existing and potential clients.”