Accor India’s budget brand Formule 1 is betting big on demand from domestic corporate and leisure tourists to drive its expansion. The company expects to have 10 operational hotels by the end of next year.

Currently, the hotel chain has four operational hotels in Greater Noida, Bangalore Whitefield, Ahmedabad and Pune-Hinjewadi. 

Philip Logan, Vice-President, Formule 1, Accor India, said, “We are targeting young travellers aged 23-33. Our hotels feature flat screen TVs, high-speed wi-fi and modern sound-proof room. We outsource the food and beverage and have smaller public spaces, but we offer safety and security standards that are as good as an upscale hotel. The consumer pays for what they use.”

The company has 19 committed deals for expansion of Formule 1 hotels in India. Of this, it is building 15 hotels in collaboration with hotel investment and development company, SAMHI.

Last year, the company divested 60 per cent stake in the 15 wholly-owned hotels to the firm. In addition, it is striking management contracts with other developers. It recently struck a deal with a developer in Lucknow.

“The hotels on an average will have 100-120 keys, which can go up to about 200 rooms,” said Logan.

Contracts

Business travel is largely serviced through annual contracts between corporate and hotel chains. “We do not contract. But as more and more companies are rationalising their travel costs and the corporate traveller is looking for uniform service standards across locations, Formule 1 is well-poised to service the corporate traveller,” said Logan.

He also believes that a chunk of corporate travellers are living in company- run service apartments and guest houses due to lack of affordable and quality hotel rooms in the country. The company is banking on this demand.

It is also looking to build hotels near hospitals to tap into the demand of families tending to the sick and looking at affordable accommodation. Logan said there was also a huge potential to offer rooms to school kids who travel for championships and educational trips.

In the future, as more and more leisure tourists drive down due to better highways and infrastructure, budget hotels such as Formule 1 will fit their bill, believes Logan.

“We believe a large chunk of our occupancies will come in from domestic travellers rather than international ones,” he added.  

The hotel brand recently tied up with loyalty programme, Payback, which it believes will give it immediate access to 20-30 million Indians.

Asked about growing competition in the budget hotel segment, Logan said while there was competition in micro markets, there was no single strong nationwide player in this segment yet.

Talking about the current hotel scenario, he said despite over-supply and subdued sentiment, demand for hotel rooms had grown. He believes that the hotel industry will see an uptick by 2015-16.

meenakshi.v@thehindu.co.in

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