The Hindu Business Line : Roots Corpn scales up Ginger hotel chain

Chennai, Dec. 10 Roots Corporation Ltd, a wholly owned subsidiary of The Indian Hotels Company, owner of the Taj brand, is well on track to expand its ‘smart basics’ hotel chain, Ginger, from the present 10 properties to 15 by March next. And will add a few more during the next calendar year.

Talking to Business Line after launching the chain’s tenth property in Puducherry last weekend , Mr Prabhat Pani, Chief Executive Officer & Director, Roots Corporation, said any chain has to have at least 60 to 70 properties to be a prominent player in the market.

The hotel brand Ginger provides “all basic facilities and services in a smart way at a value pricing”. The new concept was developed by the Tatas in association with renowned corporate strategy thinker C.K. Prahalad. The group launched its first hotel in Bangalore in 2004. “As this is the first of its kind category, we had to study the market response. Hence it took us almost two years to launch our second hotel in Haridwar in March 2006,” Mr Pani said, adding, “But, it took us only 20 months after that to add another eight properties.”

Ginger hotels are officially three-star hotels. Though the interior design and the pricing strategy remain the same in all its properties to date, Mr Pani adds “as we are still evolving, every time we launch a new hotel, we keep adding or removing some facilities based on our customer feedback”. Ginger spends Rs 12 to 14 lakh per room (excluding land value), against the industry norm of Rs 20 – 25 lakh per room. For example, Ginger has consciously avoided swimming pools in its facilities, as it was found out that only a few use the pool during their stay. “Then why should we increase the overheads and pass it on to the customer? We also avoided bars as they will call for additional overheads by way of extra security and other infrastructure.” However, Ginger is planning to install vending machines that would dispense canned wine and beer.

Early this year, Ginger hotels tied up with Café Coffee Day to open its outlets on the hotel premises and offer its guests a different eating option. Currently, Café Coffee Day outlets are present in six Ginger hotels. In the Puducherry hotel, “We have roped in The Harbour Market by film star Mohanlal’s Taste Buds Restaurant Pvt Ltd, for its multi-cuisine restaurant with sea-food as its speciality, to beat the monotony of the hotel menu,” said Mr Pani. It has also brought in Landmark bookstore into its premises at this property.

The brand’s next five hotels are to come up in Goa, Vadodara, Ludhiana, Pantnagar and Delhi. The buildings are in various stages of completion and will be launched before the end of this fiscal. It will also commence work on hotels in Tirupur, Guwahati, Jamshedpur, Mangalore, Paradip and Ahmedabad. “We are also on the look-out for properties in Coimbatore, Kochi, Belgaum, Hubli and Tirupati,” he said.

According to Mr Pani, the locations are identified after detailed studies across various parameters such as market potential and peak periods. The company is also open to joint development of properties. “As long as we are able to serve our brand promise, we are open to the idea,” he said.

The hotel in Ludhiana is coming up in the fourth and fifth levels of a mall. In Delhi, the company bought the Railways’ Yatri Niwas through a bidding process.

“The arrangement is to pay Railways a fixed fee, in addition to which a percentage of revenue,” he added.

Is Chennai not in the radar of Ginger? “Of course, Chennai is very much in our radar. We are looking at Sriperumbudur, OMR, Ambattur and a few other places,” Mr Pani was quick to respond.

According to him, by the end of March, the company would have invested around Rs 220 crore which includes debt and equity, “and we may spend another Rs 80 crore on developing properties committed during the year.”