|By P.R. Sanjai, Mint, New
DelhiMcClatchy-Tribune Regional News
Oct. 22, 2012--MUMBAI -- Tata Group-controlled Roots Corp. Ltd on Monday opened its first Ginger branded hotel in Mumbai and plans to add as many as 80 such hotels in India by 2016.
The Mumbai property has 116 rooms and will charge Rs.4,999 per room per night for a single person and Rs.5,499 per room per night for double occupancy.
"Considering the cost of real estate and three star hotel services, Ginger is 20-25% cheaper compared to its peer group," said Prabhat Pani, chief executive officer of Roots Corp. "We will be having more hotels in the western or central suburbs in Mumbai city in the future."
The company, which started making profits in the last fiscal, plans to add 70-80 hotels in three-four years, Pani said, without disclosing details. The Mumbai property is the company's 26th hotel.
"This type of a hotel requires high and steady occupancy rate. Therefore, we will be setting up a hotel in a place which is not affected by seasonality. We will not mind setting up hotels in Shirdi or Tirupati (both popular pilgrimage centres), where occupancy and steady volumes are assured,'' Pani said.
Mumbai has about 18,500 hotel rooms, with the organized segment of the industry accounting for 76% of the total inventory, according to a September report by real estate consulting firm Cushman and Wakefield.
The city recorded a 6% decline in hotel occupancy in the first half of 2012 with an average occupancy rate of 61% because of the addition of hotel rooms in the beginning of the year. The average room rate, however, has remained stable.
"The last quarter of the year is the most productive quarter for Mumbai and recovers for the relatively slower months during Q2 and Q3 (the second and third quarters). Also, the city is expected to witness a pipeline of 10,200 keys in the organized segment in the next four-five years and, thus, the pipeline indicates an equilibrium that will be achieved with hotels operating across all categories in the various micro markets," said Akshay Kulkarni, regional director (hospitality, south and southeast Asia), Cushman and Wakefield.
Roots Corp. is a unit of Indian Hotels Co. Ltd. Launched in June 2004, Ginger entered the hotel industry with the aim of offering rooms with basic services at economical prices. But, over time, Ginger has added a few frills such as coffee shops, meeting rooms and even self check-in kiosks at some properties.
Ginger Hotels still maintains a Rs.999 per room per night tag at some of its properties, though elsewhere the rates have increased because of rising real estate costs and inflation, Pani said. "If we want to maintain low rates, we would not be able to enter big markets like Mumbai and NCR (National Capital Region),'' he said.
The concept was developed in association with renowned corporate strategy thinker C.K. Prahalad, and the hotels were designed and developed by Indian Hotels.
The first such hotel was launched in Bangalore and was called IndiOne. It was later rebranded Ginger Hotels.
(c)2012 the Mint (New Delhi)
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