The document discusses the budget hotel industry in India. It outlines how budget hotels are one of the fastest growing segments in the hospitality industry. It then provides details on IndiOne Hospitality, the first budget hotel chain in India, launched by Taj Hotels. IndiOne faced initial problems achieving a competitive price point but adopted a bottom-up approach recommended by Dr. CK Prahalad to better understand customer needs and arrive at a Rs. 1000/room price. The chain was rebranded as Ginger Hotels and utilizes strategies like low room rates, optional facilities, and online booking to appeal to cost-conscious customers. It also discusses the opportunities and challenges faced by the growing budget hotel industry in India.

1. BUDGET HOTELS: LAUNCH
OF INDIONE

2. 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.

3. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

11. 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.

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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

18. 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.

19. 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.

20. 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.

21. STRATEGIES ADOPTED BY GINGER HOTELS
Meeting room for Corporate
Banquet halls
Gymnasium facilities with Certified Trainers
Hotels in Malls
PPP models-Yatri Niwas

22. 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

23. SUCCESS FACTOR FOR BUDGET HOTELS
• Site & location
• Positioning
• Financial flexibility
• Brand equity

24. 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

25. 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

26. 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

27. PORTER’S FIVE FORCES
COMPETITORS
• Existing players
• Unorganized hotel sector
NEW ENTRANTS SUBSTITUTES
• India's 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.

28. 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

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