Budget chain Ginger Hotels, part of the Tata Group, is making several changes internally to evolve itself into fashionable brand.

Ginger is also changing the room configuration in its hotel chain and is tying up with family-run hotels for taking over their management. “We are working on a new age Ginger 2.2 version that will give it a contemporary look making it an aspirational brand,” P.K. Mohankumar, Managing Director and CEO of Roots Corporation, which runs the Ginger Hotel chain, told Business Line .

More single rooms

Henceforth, Ginger will have more single rooms as most of its customers are business travellers. But it will continue to hold on to the tariffs though there will be several upgradation in terms of higher hi-fi bandwidth and more services to its customers. “The 2.2 version is fully based on from our learning curve, customer feedback and incorporating some of the best practices across the world,” Mohankumar said.

The company expects to invest Rs 150-200 crore during the year as capex for expansion as well as upgradation of its hotel chain. Tata Capital, which has a stake in the company, will fund most of its expansion activities. Ginger has 28 hotels as of now and plans to ramp up the number to 50 by 2015. This will be done through a combination of new launches as well as taking over family-run hotels through either a management contracts, lease arrangement or through equity participation.

Mohankumar said one of the strategies for expansion would be to take over the management of family-run hotels.

“We realised that there were several family-run hotels which have not been unable to do good business either because the current generation has interests elsewhere or do not have the capital or the expertise to take on competition,” said Mohankumar, who earlier worked with other Tata Group’s hospitality ventures. He said his company is already in talks with several such hotel groups in this regard.

Greenfield projects

He also pointed out that setting up greenfield projects are expensive and time consuming and hence one of the ways to increase the number of hotels to 50 would be to take over the management of family-run hotels. These hotels could be operated through a management contract and the company was even open to pick up equity in these hotels up to about 30 per cent.

Ginger has a market share of 60 per cent in the branded segment in its category of hotels and its average room rent is at about Rs 1,700 and for metro-located hotels, it is about Rs 2,000 with about 80 per cent occupancy.

Roots Corporation will look at taking Ginger public once it crosses 100 hotels and may even set up hotels abroad “as it has the potential to become an international brand.” But, as of now, the focus is on expanding the domestic operations.

>giriprakash.k@thehindu.co.in

Published on September 28, 2013