A Look Into Knight Frank’s Foray Into The Hospitality Business

There’s a good reason why a company like Knight Frank would get into the hospitality sector — the industry needs them. Specifically, Knight Frank has made an entry into the facilities management and asset services (called “FM” and “AS”.)

Knight Frank Hospitality Business

A common challenge that economies in their mid- to late adolescence face is a lopsided growth spike in a sector. The latter part of the last two decades in India has seen a spike in the number of hotels and therefore, the general F&B sector.

As demand for hotels grew in mass, hotels needed to become affordable and also, numerous. The consequent order of things is typical of the supply-side vs demand-side free-for-all; rapid investment for creating capacity growth, but as a result, more competition and therefore, lower yields (lower ARR or Average Room Rates in this case.)

The overarching problem is one of resources. With a 2x or greater growth that happens suddenly one morning, the industry obviously would need trained personnel and easy-to-get infrastructure. 

And if the problem of finding enough resources for the hospitality industry was not already a challenge, large companies find the need to install hospitality-like facilities for their staff, i.e., a structured facilities management model to an otherwise unstructured market with its idiosyncratic needs. Read, people to take care of things.

Given the time it would take for the ecosystem to generate “trained” people, the only answer would be to automate and to outsource some operational and even, management areas.

Ergo, Knight Frank’s crusade to calm these choppy waters.

At its heart, Knight Frank LLP is a real estate agency, residential and commercial property consultancy founded in London by John Knight, Howard Frank and William Rutley in 1896. Knight Frank together with its New York-based affiliate Newmark Knight Frank is one of the world’s largest global property consultancies.Its global network comprising 500 offices in 60 territories and more than 19,000 employees handles in excess of US$817 billion worth of commercial, agricultural and residential real estate annually. (Wikipedia)

Over the last 125 years, Knight Frank has evolved from a business conducting transactions, valuations and surveys to becoming a principal real estate consultancy service across geographies.

Knight Frank India was established in 1995 and is considered to be a major player in office, industrial, warehousing, capital markets, advisory, facilities management and residential services, with a large portfolio under management. According to Knight Frank India, they are “focused on being responsive to client requirements, looking to match tailored solutions to every client”. Their foray into facilities management in the hospitality sector is a recent move.

Knight Frank’s vessel is piloted by two professionals, Sathish Rajendren, COO for Facilities & Asset Management Services, supported by Vinod Valson, VP Hospitality.

Knight Frank Hospitality Business
Sathish Rajendren

Sathish Rajendren, despite his relative youth, is a name that has earned much suffix — FRICS, MCR, DMS, MBA, CFM. With over 18 years of experience in Facilities, Property & Asset Management and Corporate Real Estate, Sathish Rajendren is  the Co-Chairperson at CoreNet Global India & is a part of the CoreNet global board. (CoreNet is an American non-profit association comprising 11,000 members strategic leaders for real estate assets of large corporations from across 50 countries.) Rajendren has an interesting educational background that included theology at one point, but we digress.

Rajendren seemed tuned in to the market. “One of the greatest mistakes that hotels make is compromising on routine inspections of their facilities. Even a minor equipment failure or property damage can have a negative impact on the brand,”  he said.

Knight Frank Hospitality Business
Vinod Valson

Valson is a hotelier with enviable experience. He would know what hotels need. Valson joined Knight Frank India in February 2018 after spending over three decades that includes major brands such as the Taj Group of Hotels and WelcomGroup. His expertise translates into making Knight Frank’s service line for hospitality more structured and efficient, and provide its clients with a holistic customer experience, not just a transactional one.

Valson explained the critical nature of ops. “India’s facilities management for hospitality is an unstructured market, yet the pricing is extremely competitive because of the immense potential for growth that this business offers. Knight Frank is a major player not just as a corporate entity, but also as one that provides subject matter expertise to hotels on innovation, long-term and short-term cost management, and other tailored benefits.” 

“Any hospitality brand requires a top-notch maintenance team that can provide the best service to its customers. In this day and age of social media, one small mistake can be quite damaging. The facilities management team in hotels needs to be ahead of the game at all times,” Valson told Explocity. 

“Even five years ago, we lived in simpler times,” Rajendren explained. He said that today, most medium and large-sized hotels are focused on automation from integrating artificial intelligence to manage resources, to apps with easy interfaces for customers to communicate with the hotel, the demand for real-time data collection and optimum use of data insights to ramp up facility services are growing at a pace much faster than budgets.

“Bringing in that perfect admixture of technology and scalability, along with cost savings and cash flow management, has been an interesting challenge for the hospitality facilities consultancy industry,” he said, “and then there is a growing demand for low carbon footprint and adoption of green technologies which has become a silent mandate from nearly all clients, which again needs to be factored into our services.” 

So how has this influenced the evolution of the facilities management services? 

Rajendren spoke about the importance of people. “The ‘person connect’ is very important in our industry. Facilities management today is the second largest corporate spend after human resources.” 

To this end, Rajendren built a strong team that vibes with him. Similar to Knight Frank’s best practice of creating a home away from home experience in its hospitality management projects, Rajendren focused on developing a strong team of committed staff who would go above and beyond their call of duty to deliver to their best potential. “Mentoring plays a key role in my leadership style. Just as much as I vouch for the advice from my mentor, I also have a clear-cut mentorship program outlined for my team. All our mentees are coached on personal, financial, education, health and professional fronts,” he said, adding that each team member is shown a clear growth curve and is guided towards achieving it, but with the right work-life balance.

“A great leader is one who has the right strategy in mind and has a succession plan. We all need to grow. Only when I grow will people under me also succeed. And this comes with people connect.” 

Rajendren rocks a commitment-based approach, “Today, I find people leaving the basics behind in an effort to do something complicated, which lands them in trouble. My success is based on going back to the basics. Focus on emotions, make people feel comfortable – be it a client or a team member – and ensure you have a transparent relationship.”

Valson said this sentiment defines Knight Frank’s approach. He said, “When you focus on emotions and make people feel comfortable at work, they begin to feel responsible. When team members are empowered and made accountable, high quality work is a natural output.”

In the last three years, the Knight Frank facilities management team has grown from about 20 professionals to about 100.

“In the last three years, our Facilities & Asset Management service portfolio in India has grown from a mere 30 million sq. feet to 245 million sq. feet with over 850 professionals,” Rajendren told Explocity.

“It is this culture of transparency and commitment infused within the organisation that has helped Knight Frank maintain its best practice of providing benchmarked standards of service to our clients,” Valson said.

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