Staying on track

With its Rs 20,000 crore public-private initiative that will offer three-star lodging at affordable rates across the country, the Indian Railways is set to revive its sagging image. For proof, check out the newly renovated Ginger Yatri Niwas in Delhi.

Sushmita Choudhury | Print Edition: September 18, 2008

Hot deals
Interesting packages to look out for

Park Plaza
Cost: Rs 5,999 for two
Contact: 011-26383851

The five-star business boutique hotel, located in the heart of the city, is offering a two-night package till end-September.The offer includes daily buffet breakfast and all taxes. An extra child can be accommodated in the same room for an additional Rs 650, while an adult will cost Rs 1,300, including breakfast.

Grand Hometel
Cost: Rs 5,000 per night
Contact: 022-28797979

Located at Malad, the hotel has opened recently and is offering discounted rates till 30 September.This is the first “branded budget” hotel in the city catering to business travellers and a USP is its proximity to the airport.The introductory offer for a single room is Rs 4,000 a night.

For all those who have marvelled at the connectivity of the Indian Railways but cringed at the crass lodging facilities provided by it, here’s some good news. In a radical move to upgrade its sagging image, the Railways has undertaken a Rs 20,000 crore public-private initiative to renovate its four existing Rail Yatri Niwases and construct new budget hotels. In the first phase it plans 100 hotels in five years. So even as you travel across the vast expanse of the country, you can look forward to three-star accommodation at extremely affordable rates. The best bit? These hotels will be located in the vicinity of the railway stations as the government has decided to make good use of the 40,000 hectares of vacant land it owns around the stations.

The Delhi-based Ginger Yatri Niwas is the first in the long line of projects taken up by the Indian Railway Catering & Tourism Corporation (IRCTC) in a publicprivate partnership with Roots Corporation, a subsidiary of the Taj Group of Hotels. The freshly painted beige-and-red building has been renovated at a cost of Rs 10.5 crore. In nine months, the dilapidated Rail Yatri Niwas has undergone a Cinderalla-like transformation and now offers services like a gym, cyber cafe, round-the-clock pharmacy, travel desk and a 24x7 multicuisine restaurant, where you can have a meal for as little as Rs 100. Then there are room facilities like a flat-screen TV, mini-fridge, Wi-Fi connectivity, phone with STD facility and an attached bath. All this for a measly Rs 999 per room. Compare this with the basic amenities— an AC room with a TV—you got for Rs 850 earlier.

Up next for renovation is the Howrah Yatri Niwas. The Meghalaya Hotel Group has won the contract and is ready to set the ball rolling as soon as it receives a no-objection certificate from the Railways. Says P.C. Rao, general manager, Meghalaya Hotel: “The revamped hotel will be ready within six months of our receiving the NOC.” It plans to offer most of the facilities being provided at Ginger and the room rates will be under Rs 1,000 a night.

So how do the private players expect to make a profit or simply break even with such high investments but low room rates? For one, the IRCTC has not imposed a price ceiling on the private players. So even though a fraction of the rooms will have to be priced significantly lower as per the deal, the losses incurred from these rooms will be offset by the earnings from the remaining rooms, which are expected to be priced in the range of Rs 4,000 a night.

And no, they are not worried about the lack of takers for the more expensive rooms because more and more business travellers are taking to the railways in the face of escalating air travel costs. This segment would give anything to find comfortable, yet affordable, accommodation in the heart of the city. For instance, a twonight stay in a double room at Ginger would cost Rs 2,398, including taxes. Compare this with the Rs 4,000 (plus taxes) that you’d pay at the Tourist Deluxe, a hotel boasting similar facilities and farther away from the railway station.

As far as the Railways is concerned, it is confident the project will be a money-spinner. The Rail budget 2008-9 envisages that Rs 4,000 crore will be raised by commercially using the surplus railway land. Besides, Ginger alone will shell out about Rs 8 crore to IRCTC over its lease period of 15 years. “In the first year, IRCTC will receive Rs 32 lakh, Rs 34 lakh in the second year and so on,” said K.C. Jena, chairman, Indian Railways.

The private players too are not in the game for charity. Says Ramneet Trehan, head of business development, Zoom Developers, which has won most of the bids so far: “Railway land is mostly prime property and we get access to this land at no extra cost. We only have to bear the building and operating costs.” Zoom Developers will be building hotels in 19 locations, including Guwahati, Chennai, Mangalore and Bhubaneswar and are expected to be operational by 2010.

Adds Prabhu Goel, co-chairman, Signet Hotels: “The IRCTC hotels give us an opportunity to build hotels at sites that will be prime properties in the future.” The Signet Hotels, which is yet to decide the pricing strategy, has won three bids—Kanyakumari, Rameshwaram, Ooty—all of which will be ready by 2011 and operated under the Best Western brand. So far, 28 contracts have been awarded to private developers on a build, operate and transfer basis, and the IRCTC has similar plans for 72 more sites in the next five years.

The one thing that all the hotels in this project will have in common is their focus on intelligently designed facilities that cut operating costs without inconveniencing guests. Claims Prabhat Pani, CEO, Roots Corporation: “Our strategies help dispense with unnecessary manpower and costs for the hotel.” As soon as you enter Ginger, you see what he means—baggage trolleys help you move your luggage, making bell boys redundant and an electronic check-in kiosk helps reduce the burden at the reception. All these cost benefits are passed on to the customer via lower room tariffs. The new hotels promise to redefine hospitality—while giving the Railways a good name.

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