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(source- FHRAI)• Revenue of the Indian hotel industry FY 2009- 10: 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 Asia’s 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.• IHCL’s head office is in Mumbai, India.
BUDGET HOTELS :• It is India’s 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• Ginger’s 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 HOTELSMeeting room for CorporateBanquet hallsGymnasium facilities with Certified TrainersHotels in MallsPPP models-Yatri Niwas
HEALTH TOURISM & “HOTEL IN MALLS”• India’s 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-UK’s 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• India’s growing economy and new entrants
PORTER’S FIVE FORCES COMPETITORS • Existing players • Unorganized hotel sectorNEW ENTRANTS SUBSTITUTES• Indias growing economy thereby • Mid- Size hotels attracting new competitors• 100% FDI permissible• Low investment BARGAINING POWER BARGAINIG POWER OF OF BUYER SUPPLIERS • Higher in metro cities Limited due to higher due to increasing room competition (metros) supply.
ANALYSIS OF GINGER HOTEL, BHUBANESWAR• Implementation of all “Smart Basics” concept• Coffee Café 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