Can you remember a time before the no-frills aviation boom? The low-cost carriers gave wings to the common man, but he was grounded when it came to finding decent accommodation to suit his pocket.
As Patu Keswani, owner of the Lemon Tree chain, puts it, “So far Indian travellers were denied choice, we only had upscale properties or seedy two-star and lower holes-inthe-wall and guesthouses.” So if you were planning a three-day holiday, staying at a five-star hotel would dent your pocket by around Rs 30,000 (excluding taxes), at a conservative estimate. But at a budget hotel, expect a bill of no more than Rs 4,500.
If you are already wrinkling your nose at the word “budget”, which in India has long been synonymous with tacky, you have another think coming. We are talking about “luxury budget” hotels, a new breed of hotel chains that aim to lure customers with a heady cocktail of value for money and design, at a price point higher than that of onestar hotels but below that of their full-service three- or four-star counterparts.
Says Prabhat Pani, CEO, Roots Corporation, a holding company for Ginger Hotels, one of the fastest-growing examples of the new hotels, “We cater to the traveller who pays for what he really wants, but will not confuse expensive with better.” This cheap-but-chic revolution is beginning to change the face of the domestic hotel industry. Think bedand-breakfast priced rooms with flat screen TVs, think neat accommodation with luxury bedding and free Wi-Fi located bang at the city hub.
Indeed, from big banner luxury brands like the Taj group to midrange hoteliers like the Sarovar group to international heavyweights like the Ramada group, everybody is focusing on redefining budget hotels. Because the demand supply gap for budget rooms in the country is currently over 50,000.
Take the case of the Ginger Hotels, for instance. For under Rs 1,500 you get a choice of single, twin-bedded or queen-sized air-conditioned, Wi-Fi enabled rooms provided with electronic locks, a work area, an LCD TV, minifridge, tea- and coffee-maker, STDenabled telephone, 24-hour hot and cold water and toiletries. In addition, all Ginger properties offer a restaurant, meeting room, gymnasium and a cyber cafe. No, there are no hidden costs to watch out for. The same story is repeated across the country among competitors, be it Radha Hometel, Smart Inn or Clarks Inn.
In fact, foreseeing the demand for such kind of mid-range accommodation, Keswani is in the process of launching a second brand of hotels called Red Fox that will cater to people who think Lemon Tree, an upscale chain that is cheaper than four-star hotels, is out of their budget. Currently limited to 14 rooms at Lemon Tree, Pune, he is looking to expand to 400 rooms in Jaipur, Hyderabad and Delhi by next year. He’s not building castles in the air. Most of the newerbudget hotels in operation are already posting 80% occupancy, irrespective of the season.
And the number of takers is swelling daily, prompted by word of mouth and ads. Little wonder then that all the players have ambitious plans centred on important business hubs and leisure and pilgrimage destinations, which is where the maximum footfalls are.WHAT YOU GET | WHAT YOU DON’T |
| A smaller room offering all the basic essentials, from a flat-screen TV to a spacious desk | A luxurious bathtub that would eat up space is replaced by a regular shower area |
| A fixed menu restaurant, possibly even an option to order in from nearby restaurants | Multiple dining options or a separate lounge bar; no lavish banquet halls either |
| A meeting room equipped with all that businessmen would need | A 200-seater conference hall and a swimming pool |
| A self check-in kiosk to ease up traffic at the front desk | Round-the-clock room service, valet parking |
Over 10 Hometels are expected in the next two years, with the Hyderabad and Mumbai properties opening within this year, while Clarks Inn is actively pursuing tieups in Pune, Delhi, Ooty and Chandigarh among other destinations. Ginger Hotels, already well established in nine centres, will be opening up 15 new hotels by 2008, notably in Vadodara, Delhi, Ludhiana, Goa and Pondicherry.
They face stiff competition from global giants in the budget space such as Ramada and easyHotel.
Talking about their India plans, David Kuperberg, vice-president, development and strategy for the Wyndham Hotel Group International, the mother brand for Ramada Hotels, says, “Apart from 10 fourstar Ramada hotels, totalling at least 1,000 rooms, in the next three to four years, we have the three-star Days Inn brand primarily targeting the business traveller with 70-100-room budget hotels and a chain of tidy roadside motels which provides “a significant opportunity for capturing India’s growing roadways business and leisure travellers”.
Also angling for a share of this highway travel pie is Kamat Hotel Group’s Kamfotels—around 50 small hotels are planned in the next few years. Interestingly, several Super 8 Motels across the world allow pets to stay in the rooms. Should the Indian motels also follow suit, it will be a welcome first step in introducing pet-friendly hotels.
Explains Kuperberg, “With India’s significant population being under 26 years, there is a need for modern hotels that deliver modern facilities at friendly prices. Streamlining amenities and design schemes can create a clean, consistent product that maximises profitability.”
So how do these hotels manage to deliver value for less? Each of these “intelligently-basic” hotels have done away with services that make life pleasant but are not essential for a comfortable stay. You could call it trading across rather than trading down. You won’t find hothouse flowers and bottles of champagne greeting you at check-in.
Round the clock room service will be non-existent and there may be no swimming pool. In lieu of luxury, these hotels promise to cover everything that you can’t do without, whether you are on a business trip or a leisure one, unless the hotel is your holiday destination.
At Smart Inn, self-service is the key. Customers can check-in using the touch screen kiosks located outside the hotel. Once the payment formalities are completed, the machine issues a smart card for the customer with the details of his or her stay in the hotel. The same card also acts as the key to the guest’s room. Another novel idea is having a restaurant that serves a fixed menu at fixed timings, like Ginger does.
If you prefer something different, there is the unique Dial-a-Meal service— just order from a selection of menus from local restaurants and collect the food at the Give ‘n’ Take counter. For those who suffer hunger pangs at unearthly hours, there is a snacks and drinks dispenser in the lobby.
But the single biggest strategy deployed is reducing the room size. Almost all the new budget hotel rooms are about 200-220 sq ft, while a typical upper-end hotel has rooms above 280 sq ft, but less space does not mean cramped surrounding. Says Ajay Bakaya, executive director of Sarovar Hotels and Resorts that have launched the Hometel concept, “The key to delivering value for money is to reduce or eliminate hotel public areas. This also ensures that electricity bills are lower. We’re building rooms at lower costs and designing them in a manner that keeps operating costs low.”
Then there are a thousand small things that together bring costs down considerably, like having sliding doors that do away with doormen, like blinds in place of curtains, so no need for laundering, like showers in place of a bathtub, big windows replacing a balcony, baggage trolleys to help you move your luggage, as against a traditional bell hop service…the list goes on. So there won’t be a fortune cookie on the bed tea tray but in the larger scheme of things would you really mind its absence?
The icing on the cake? If you have to check into a budget hotel, India is probably the best place to do so. Because, while globally the nofrills hotels maintain an employee per room (EPR) ratio of 0.5, in India it’s as high as 1.5. This means that you still stand to be pampered— think housekeeping staff that will still faithfully do up your room twice a day and laundry that is delivered back to you within half a day or even room service for a part of the day.
But the going has not been easy for these early birds—the first mover advantage has come with its share of thorns. “The high cost of land and raw materials and the lengthy and complicated approval process are the two main stumbling blocks,” claims Keswani, adding, “These add to the costs of building a hotel which in turn drives up the price of the rooms.”
But savvy hoteliers are circumventing such hurdles by deploying innovative strategies. Says Pani, “We are planning some unique ideas like the “mall format”, which involves converting the top floors of shopping malls into a hotel. This is an attempt to counter the escalation in real estate costs, while providing customers with multiple food and entertainment options close at hand.”
Is the no-frills revolution in the hotel industry going to match the success of the low-cost carriers? It should because for the Great Indian Middle Class these hotels complete the missing piece in the quest for value-for-money travel.
Home away from home
An off-shoot of the “luxury budget” trend is the growing popularity of homestays, particularly among leisure travellers. Across the country, enterprising owners of heritage homes are opening their doors to tourists, thus serving a dual purpose: it’s a good revenue stream and it plugs the absence of quality budget accommodation in tourist destinations. Barwara Kothi is just one example.
Says Deepali Singh, the owner of the century-old colonial mansion in Jaipur, “The ace up our sleeves is that we offer all the comforts of a home away from home—personalised attention. You can opt to stay at a fancier hotel but there you won’t get warmth, just service.” There is a growing tribe of Indians who will do anything to avoid fawning staff at a see-and-be-seen address.
What they are looking for is flexibility and unique experience, which is why spending a week milking a cow or lazing on a charpoy is now ranks higher on the coolness metre than yet another shopping trip to Mumbai. Taking the lead in this niche market is Haryana. The state has identified over 13 farmhouses where visitors can catch a glimpse of both rural India and local culture at dirt-cheap prices—overnight packages range from Rs 2,000 to Rs 2,500, all inclusive.
For more information visit www.ashextourism.com. The biggest advantage of a homestay is that it can be as close or cut-off from city hubs as you want them to be. Sure, some of the best-known homestays are located far from the maddening crowds, but there are equally decent options located bang in the city too.
Sensing the immense potential of this niche segment, the defence ministry launched a Veterans Homestay project in Kerala last year, where interested retired personnel have opened their homes to tourists. In the bargain, clean and safe bed-andbreakfast options are now available in God’s Own Country, a state that otherwise mainly boasted of hotels.
