BUDGET HOTELS: LAUNCH OF INDIONE

HOSPITALITY INDUSTRY
It is one of the fastest growing industry in the world as well as in India. With the advancement of the budget hotels its pace is accelerated. According to World Travel and Tourism Council India has the potential of becoming the number one tourist destination with the demand growing at 10.1%/ annum.

HOSPITALITY INDUSTRY
The World Travel Organisation predicts that India will receive 25 million tourist by 2015. India currently has over 200,000 hotel rooms and is still facing a shortfall of over 100,000 rooms(source-FHRAI). India will be adding 114,000 hotel rooms over the next five years and investment of INR 40, 463.10 crore (source-HVS). Application of aggressive strategies through its campaign Incredible India to promote tourism.

The Current Scenario

Existing hotel rooms in India:- 202,963(sourceFHRAI) Revenue of the Indian hotel industry FY 200910: US $ 137.36 million (INR 47,889.03 crore) 30% of the revenue i.e. US $ 41.2 million (INR 14, 366.7 crore) went back into the market in FY 2008 09 as operating expenses.

COMPANY PROFILE
The Indian Hotels Company (IHCL) and its subsidies are collectively known as Taj Hotels Resorts and Palaces. It is one of Asias finest and largest group of hotels. Incorporated by the founder of Tata group Jamsedji Tata.

COMPANY PROFILE
Taj Hotels Resorts and Palaces comprises 93 hotels in 53 locations. It includes 25 Ginger hotels across India and 16 international hotels. IHCL operates in the luxury, upper upscale and value segment of the market. IHCLs head office is in Mumbai, India.

BUDGET HOTELS :
It is Indias first of its kind chain of Smart Basics hotels. It is a innovative concept which redefines the way the business travel is done in India. It is a GenNext category of hotels in India. It signify simplicity, convenience, informality, style, warmth, modernity and affordability. The concept was developed in association with Dr. C.K. Prahalad.

BUDGET HOTELS :
It was first launched in Bangalore and was called IndiOne, a brand name given by Chlorophyll (communication consultancy). Chlorophyll also designed the signage, curtains, furnishing and the website. It was also provided with the job of direct marketing activities of the brand.

INITIAL PROBLEMS
The venture was not under the Brand name of Taj. After stripping features in the services and cutting cost, they cannot go below Rs. 2500. It was not a competitive price for the Budget Segment.

STRATEGIC MOVE
They took the assistance of Dr. Prahalad. He suggested the bottom up approach to arrive at a price and the service offering. They surveyed managers, salespersons and business travellers of mid-sized companies. This gave them a fair idea of price range i.e. Rs. 1000/room.

STRATEGIC MOVE
Each hotel was built in the area of 1 acre with 100 rooms. They budget of each hotel was marked at Rs. 100 millions which means Rs. 1 million/ room. This was comparatively far lower than the investment of Rs. 5 millions 15 millions / room in developing five star hotels.

STRATEGIC MOVE
Size of the room was kept small- around 180 sq. ft. as compared to 250- 400 sq. ft. of premium segment hotel. The company cut down room service and applied the concept of Help Yourself. This concept helped in operating the hotel with 25 people as compared to 250 people in premium category hotel.

PRICING
Single Room Charges- Rs. Double Room Charges- Rs. 950. The customers were entitled to a discount of Rs. 50 if booking is made through internet. This practice helped to cut their marketing costs which contributes to 10% -15 % of room costs.

SPECIAL OFFERS
Early Booking Offer:- SAVE NOW Book Early and Pay Less. Last Minutes Rates:- Sensational last minutes rates in their top destinations. Day Use Rates:- Introducing special day use rates for travelers to freshen up or relax before heading to work. Coolest Offer Packages:- Visit most popular destination starting at just Rs. 2799/- onwards.

FACILITIES
Gingers facilities and services are intelligently designed for customers comfort and convenience. It provides: meeting room, conference room, restaurant and WiFi and net zone self checking safe zone CCD, water dispenser 20 inch flat-TV in each room with satellite channel Mini fridge 24 hr hot /cold water

BOOKING SYSTEM
It provides a toll- free number-1860-266-3333 to book over phone. Payment Options:American Express Card. Master Card / Debit Card. Visa credit/ Debit Card. Net Banking. Facility of group booking is also available.

CORPORATE ADVANTAGES
Optimizes costs:- Enjoy special customized rates. Enjoy exciting facilities. Convenience and peace of mind:- suitable location, rooms are hygienic, peaceful & comfortable. Consistency:- Uniform standard in services. Hassle free resevations. Transparency in booking process National Contract.

GLOBAL TRENDS
Enjoy unmatched blend of comfort and economy & convenience in India. According to global study, international travelers are increasingly concerned about their safety while choosing hotels, so Ginger ensures stringent checks. The Ease of the internet for booking solutions and customer can also get SMS and e-mail updates of every transaction.

STRATEGIES ADOPTED BY GINGER HOTELS

Meeting room for Corporate Banquet halls Gymnasium facilities with Certified Trainers Hotels in Malls PPP models-Yatri Niwas

HEALTH TOURISM & HOTEL IN MALLS

Indias gaining popularity in Health tourism
Disparity cost in healthcare services. Yoga, meditation, ayurveda etc

Hotel in Malls for seasoned business travellers or tourists

Tristar Hotels Private Limited, first in Delhi

SUCCESS FACTOR FOR BUDGET HOTELS

Site & location
Positioning Financial flexibility Brand equity

EXISTING PLAYERS
ITC Fortune Hotels- strong presence in
Ahmedabad, Chennai, Darjeeling, Indore,Jodhpur, Jamshedpur

Courtyard - Mariott International

commissioned hotels in Goa, Chennai, Pune, Hyderabad

Lemon Tree Hotels- Delhi based Company

presence in cities like Goa, Gurgaon, Ahmedabad, Aurangabad, Indore, Chennai

Formula 1-joint venture between France hospitality giant Accor and

Emaar MGF

UPCOMING PLAYERS
Keys -backed by NewYork based Berggruen Holdings. Premier Inn-UKs largest hotel chain Hilton Garden Inn- a joint venture launched by DLF and
Hilton Hotels

Indian Railways, in the public sector, has announced its plans

to set up 100 budget hotels all over country on railway land

CHALLANGES
Poor domestic tourism infrastructure Highly prone to socio-economic & political conditions Tourism on the verge of ecological imbalance Indias growing economy and new entrants

PORTERS FIVE FORCES

COMPETITORS

Existing players Unorganized hotel sector

NEW ENTRANTS SUBSTITUTES Mid- Size hotels

India's growing economy thereby attracting new competitors 100% FDI permissible Low investment

BARGAINING POWER OF BUYER

Higher in metro cities due to increasing room supply.

BARGAINIG POWER OF SUPPLIERS Limited due to higher competition (metros)

ANALYSIS OF GINGER HOTEL, BHUBANESWAR

Implementation of all Smart Basics concept Coffee Caf day Presence of Swosti Premium, May Fair, Hilton No proper advertisement & promotion

Our strategies
Target to middle class foreign tourists Corporate tie-ups Loyalty cards Referral system Travel agents Hop-on-Hop-off