Indian Tourism Industry-Overview

domestic tourist
visits(2010)
1.Andhra
Pradesh(155.7mn)
2.Uttar Pradesh (144.75
mn)
3.Tamil Nadu(111.64 mn)
4.Maharashtra (48.46
mn)
5.Karnataka (38.20 mn)

foreign tourist
Visits(2010)
1.Maharashtra (5.08 mn)
2. Tamil Nadu (2.80 mn)
3.Delhi (1.89 mn)
4.Uttar Pradesh (1.67 mn)
5.Rajasthan (1.28 mn)

Source: Ministry of Tourism, India

Indian Tourism Industry

The travel and tourism market in

India reached US$ 91.7 billion in
2009, growing at a compounded
annual
growth rate (CAGR) of 16.4% over
the past five years
The market is expected to touch
approximately US$ 266.1 billion by
2019 on back of continued
economic growth and India
attractiveness in the global context

Source: Ministry of Tourism, India

India is an inflexion point in the

Hotel Industry, with buoyant
demand, increasing
occupancies and increasing
pipeline of quality supply
With supportive government
initiatives to optimize land
costs, the sector will see even
greater momentum of
investments.

Sector Highlights
Continued domestic economic growth and investments in
infrastructure i.e airports(world class in New Delhi, Mumbai,
Bangalore, Hyderabad and many more following), roads, rail and
air
connectivity has enhanced demand for organised hospitality and
hotel rooms
The current count of hotel rooms is 130,000, and the country is
expected to require an additional 50,000 rooms(~USD 6-7 bn) over
the next two to three years, according to World Travel and Tourism
Committee (WTCC) estimates
In recent times, the product mix is shifting as the country has
witnessed huge growth in budget, midmarket hotels, premium
hotels in larger cities and alternate forms all of which are
increasingly
targeted by organised hotel chains

Opportunities
The Ministry of Tourism estimates a shortage of 0.15 million hotel
rooms, with two-thirds in the budget category

Shortage of
hotel rooms

Potential of
Business
Travel

Investment in
smaller cities

Global hotel chains including Hilton, Accor, Marriott International,

Berggruen Hotels, Cabana Hotels, Premier Travel Inn (PTI), Inter
Continental Hotels and Hampshire have all announced major
investment plans for the country

The share of convention or meetings tourism is miniscule in India in

comparison to international standards, which accounts for over
20.0% of all international arrivals

Smaller destinations including Udaipur, Thiruvananthapuram,

Bhubaneswar, Pune, Kochi and Chandigarh have shown
potential for growth due to growing business and leisure travel
Hospitality chains are expected to increase their presence in
smaller towns

Opportunities

Hospitality chains are diversifying towards new product

segments,
including budget hotels and serviced apartments

Diversification

Medical
tourism and
other niche
segments
Acquisitions,
strategic
alliances and
partnerships

Indian Hotels has already launched budget hotels in India,

while
Accor has announced plans to introduce its budget hotel
brand,
Formule 1, in the country
India is emerging as a preferred destination for medical
treatment, with medical tourism expected to grow at 29.0% to
reach US$ 2.4 billion by 2012
eco-tourism, wildlife tourism and adventure tourism are
gaining popularity
International hospitality chains are expected to acquire local
players to increase their presence in the country
Domestic and international players are expected to form
strategic alliances and partnerships with regional players to
expand in the country, reduce risk and optimize resources

Threats

Threats

Indian Tourism Industry

Clientele: Budget hotels

Foreign Tourists/
Leisure FIT; 7.7 Airline Crew; 1.1
Others; 27.9
Business Traveller-Domestic; 36.4
Business Traveller-Foreign; 9.4
Domestic Tourists/
Leisure FIT; 17.5
Source: TFCI,
IBEF

About Ginger
Ginger

Hotels is a budget segment Hotel of the

prestigious Tata Group

Established

under Indian Hotels Corporation limited,

Ginger hotels introduced the concept of budget
segment hotels in the Indian tourism sector for the
first time

Located

primarily near IT parks, manufacturing hubs

and religious locations catering to business travelers
and Free Individual travelers (FITs)

Ginger

India

Hotels has a presence of 24 locations across

Presence in India

Room Snapshot@ Ginger

Smart Basics
Simplicity &
Convenienc
e

Modernity &
warmth

Affordability

Booking
channels

Product
Design

Transparen
t Pricing

Payment
Gateways

Service
Philosophy

Special
offers

Smart Basics

Smart Basics

Current Situation
Increasing disposable income and an ever increasing
middle class demands affordable pricing yet
luxurious necessities
People are willing to let go of luxulike Swimming
Pool, Jacuzzi, spas and lounges
But want necessities like air conditioners, ambient
rooms, excellent food, Internet connectivity and a
location which is not exotic but yet convenient.
Credit card spending has not increased, but there is
an increased usage of debit and ATM cards, Net
banking and cash Cards for payments.
People demand improved service in terms of
booking, stay and staff interaction.
Value for money concept has set in.

Objectives of growth
Current

focus for the company is 70% corporate and 30%

FIT
Scope of growth would focus on an increased FIT and
lesser corporate to widen domestic reach in an economy
with increased disposable income
Initial strategy faltered on creating the right Brand Image
in the consumer mind. New strategy has to aim at tapping
alternate market segments: newer segments of travelers
and an improved marketing strategy to create the right
Brand Image in the consumer mind
Objective is to achieve increased market share in a
completely new market where there are very few
competitors
Ginger Hotels has a first mover advantage and should try
to leverage on the same

Competitors- Budget Hotels

Hotel Group

Tata - IHL

Sarovar

Lemon
Tree

Hotel Chain

Ginger

Hometel

Red Fox

Fortune Hotels

1000-6000
(varying acc.
to
locations
Gurgaon is
Rs.10000)

ITC

Rate/ Single
room

999

2000-4000

800-3,000, at
20
per cent of
whatever is
the
five-star
pricing
in that market

Year of Launch

2004

2006

2008

1995

Approx. No of
rooms/ hotel

100

100

150

var

Approx. cost of
construction

12 crores

15-20 crore

50 crore

var

Competitors- Budget Hotels

Hotel Chain

Location

Future
Locations

Ginger

Hometel

Bangalore,
Bhubaneswar,
Durgapur,
Haridwar,
Mysore, Pune
and
Thiruvananth
apuram

Bangalore

Pondicherry,
Nashik,
Varanasi,
Agartala,
Baroda,
Panaji and
Tirupur

Gurgaon,
Hyderabad
,
Jaipur,
Mumbai,
Pune and
Baddi.

Red Fox

Fortune
Hotels

Hyderabad,
Jaipur,
Mumbai

Chennai,
Gurgaon,
Indore,
Ahm'bad,
Trivandrum,
Jamshedpur,
Vapi,
Calicut,
Vijayawada,
Ludhiana

33 cities

Kolkata,
Cochin,
Lavasa (near
Pune), Siguri,
Mumbai,
Chennai,
Bangalore

Competitors Major Budget Hotels

100 economy hotels being planned in next 3-5

years
- Indian Hotels, Accor (Ibis), Marriott International
(Courtyard) , Hilton, InterContinental Hotels
(Holiday Inn Express), Starwood Hotels, Shangri-La

Indian Railways wants to develop a chain of budget

hotels
- Public Private Partnership

Red Fox properties in Pune , Jaipur atop shopping

malls

SWOT Ginger
Weakness

Strengths

Mother Brand name well

established
First Mover Advantage: Largest
Locations than any existing player
Excellent quality rooms at
affordable rates
Low employee-to-room ratio

Brand Image not well understood

Location not attractive to FIT
Insufficient advertising spend and
promotions

Opportunity

India preferred destination for travel

Higher disposable income and
changing Indian demographics
Scope for tie-up with government
agencies
Development of Tier2 and Tier3
cities as manufacturing, IT hubs

Threats

Inflation pushing up land and

employee cost
Increased Competition from
Domestic and International
players

Problems

Since so many offers are available, people

perceive Ginger to be a cheap hotel

Ginger still thought of as a self service hotel

which is untrue

Locations a put-off for Individual travelers

since all locations not closer from railway
station, airport or bus stands

It is still perceived as a business professionals

hotel only

Solutions

Ginger-STP
Segment

Lifestyle
Behavior
Age
Group
Income Level
in Lakhs p.a.

Price
Conscious

15-25

Quality
Conscious

25-35

<5

Image
Conscious

35-45

5-10

Brand
Conscious

>45

>10

We intend to position Ginger hotels as Affordable Luxury for

all

Nos.
needed
Tie-up
with Low Cost
Airlines
Professionals generally prefer
low cost airlines like GoAir,
Indigo, Spicejet, etc.
Tie-up with some of these
airlines and bundle the whole
package
Airlines would be offering 2
packages, one is just the ticket,
and the other would be the
ticket + ginger bundle
Win-Win for all the three parties
Advertisements in in-flight
magazines

Advertising with
Indian Railways
Local

Trains

Hoardings at major local and outstation stations

Print ads on the train

Advertise on Indian Rail and IRCTC website

4.5 Million Monthly Users collectively
Most professionals book tickets online
Also integrated travel plans including tickets
and stay at Ginger

Tying up with travel agents

Tie-up with travel

agents
Provide them with
higher margins
Ensure they do bookings
for Ginger Hotels

 Online

promotion on
various social sites and
other popular hits
Tie-ups

with online
travel agencies in order
to display ads as other
prominent hotels do

Discounts

on bookings made through

credit/debit cards

Banks

could periodically send alerts

regarding any schemes offered by the
hotel

Food and culture festivals

PROPOSED STRATEGY
To promote hotels, culture and food festivals can be
organised
State specific food, dance and handicraft festivals can be
organised
Festivals like Diwali and Christmas can also be celebrated
in the hotels through events and gatherings
This will encourage leisure travellers to stay at Ginger
hotels

Differentiation of rooms
EXISTING STRATEGY
The rooms are of same types
No differentiation
Most rooms are simplistic un-cluttered business class rooms
Not appealing to the recreational traveler

PROPOSED STRATEGY
Three types of rooms
Standard business class rooms: with work area(70)
Colorful and spacious rooms for the leisure traveler (20)
Special rooms-with bunk beds for kids, rooms for the
family of 4(10)

Pricing Strategy
Current pricing

Till

2009 Ginger had

uniform and nominal
pricing pan-India
Since then there
rooms have been
priced based on
their presence in a
tier I/II city.

Proposed
Pricing

Based

on the new
rooms the pricing
should be done ,
keeping in view
the location of the
hotel.

Existing Pricing

Increasing the levels of service

INSIGHT
People in India feel the need to be pampered when they
travel as guests
They liked to be served by and respected by the staff
EXISTING STRATEGY
Serve yourself
Smart basics
PROPOSED STRATEGY
Minimum staff should be kept for laundry, tour planning
reception
Also room service should be refined as lots of complains
have been seen on hotel review websites

Taking over existing 1/2 Star

hotels

As observed the only Ginger hotel having full

occupancy 365 days a year is the Delhi hotel which
is an IRCTC hotel near the Delhi Station
Proposed Strategy

Redevelop/takeover 1 or 2 star hotel near the Station at tourist or

pilgrimage centers- Give them the Ginger brand
Propose a revenue sharing model with owners(70-30 break up)
In some locations leasing floors above popular malls can also be
thought of(this reduces the Hotels burden for food-it can be
sufficed by the malls-leading to savings )

Convert business travelers to leisure

travelers
Current Accounts:
Ginger Accounts

Platinum
(>1200 room
nights)

Gold (300-1200
room nights)

National Priority
(100-300 room
nights)

Local Priority
(business at
single location)

Tata Account
(other Tata
companies)

Proposed Strategy
A frequent Business traveler can be given special discounts and
spot offers to encourage his/her visiting the hotel as a leisure
traveler
A special loyalty card can be started which can have a points
system which counts your business stays and you can redeem
them with extensive discounts for family visits

New Segments
Tie-up with Wedding Portals

Tie up with wedding portals such as BharatMatrimony.com,

shaadi.com and other regional wedding portals.
Idea is to tap the lower middle income group segment that
cannot afford a luxurious hotel, but would want basic hygiene
and refreshing rooms.
Have a special honeymoon suite in each of the hotel rooms,
which is currently unavailable, to tap into this segment.

New Segments
Tie-up with colleges and schools

: This segment has high potential

If rates can be lowered to suit colleges and schools which
have annual picnics during the monsoons which is a slack
season anyways for tourism, then it could lead to great
increase in the top line and bottom line.

Branding options at Ginger

hotels

Hotel Space

Sampling/Educating

Website/mailers

Invoices

Brand Connect: Network with us and get connected to your

customers
Through such branding an income can be maintained throughout
the
year and drop in income during slack periods can be avoided

Branding at hotel spaces

Options :-

Benefits :-

Tent Cards

More time spent with

Brochures/Leaflets

the creative

Floor Graphics

Captive Audience

Standees

Uninterrupted

Kiosks

communication

Product Placement

Customer in relaxed

Product Distribution

frame of mind

Your creative ideas

High engagement

Mailers/Website
Options :-

Benefits :-

Through Mailers

More than 5000

-2 lakh
registered
customer base
-Discounts/offers
Website
- branding
options
- Promotions and
discounts

visits/day
Focused and filtered
Target Group

Cost Effective
Transactions based
website