The Tata group’s no-frills hotel brand is putting its best foot forward.
By the month-end, Ginger will open its 21st property at Wakad in Pune. This comes three months after the Tata group-owned low-cost hotel chain opened its 20th property in the steel city of Jamshedpur.
The target: nine more hotels by the end of next year, which means the no-frills Ginger has set up an average five hotels a year since its inception in 2004.
That’s not a great speed, but Prabhat Pani, Roots Corporation CEO, is going all out to shift gear. Ginger is run by Roots, a subsidiary of Indian Hotels, which also owns the Taj Group.
Pani is now looking beyond the traditional build, own and operate format and is in talks with land owners, property developers, mall owners and real estate companies to spread his hotel chain far and wide.
“The last few months have been the most challenging from a real estate point of view. We realised that there is no point in sticking to the original model of buying land and then building a hotel if we have to expand fast. Flexibility is the key,” says Pani.
Ginger is now going in for either leasing of land, or space in a large building. It is also pursuing the franchisee model based on revenue sharing. All this means costs go down substantially. The company currently has only one managed property in Durg but now wants to have more such contracts moving forward.
Ginger has also tweaked its earlier tariff strategy. The single rooms now cost Rs 1,000-1,500 instead of the earlier uniform tariff of Rs 999 – whether you are in Delhi or Bhubaneswar.
The other new innovations include introduction of smart rates – if you book early, you pay less than the standard rates; and rooms with a theme-- treat yourself to original works of art by guest artists at no extra cost.
Scaling up its presence across the country is just one part of Ginger’s growth strategy. The hotel chain has set up a small team of managers who would look after the requirements of prized customers — either frequent guests or high profile executives. The company has so far built detailed dossier on 500 such clients.
This is effective as 60 per cent of Ginger's clients belong to the corporate sector. And 40 per cent of them are repeat customers, who visit Ginger twice in three months.
“Our account managers constantly stay in touch with our regular customers informing them about the latest changes we have made or the opening of a new property or the offers currently run at some of our hotels.”, Pani said.
The percentage of repeat leisure travellers is also high at 40 per cent, Pani says.
Besides, Ginger is now looking to strengthen its online presence by revamping its website to make it more informative, providing extensive data while being interactive. This is one of the mediums where the company is making investments to gain an upper hand in the budget hotel segment.
“We are investing, we are going to specialists who understand the role of the internet in travel business. We will very soon have a newer version of the online booking format. This would make the packages more powerful and attractive. We will also carry tickers which will carry the best rate available within the city. With the number of hotels going up, the service will come in handy,” Pani says.
The new medium, which will be launched shortly, will provide live rates of all Ginger properties across the country with best available packages along with the entire details of the cost structure and facilities provided. It will also give comparable rates of other hotels in the vicinity of a Ginger property.
Pani says the recent efforts have worked, with the average room occupancy around 65-70 per cent across its 20 properties. That greatly helps in generating money and achieving the break even point faster than earlier”, Pani says.
While other hotel companies such as while Red Fox and Lemon Tree are busy projecting themselves as a class above the purely budget brand, Ginger has decided to stick to its original business model — ‘smart business hotels' without frills and fuss, yet offering most of the amenities on offer at higher grade hotels, the idea of which came during a meeting with management guru C K Prahalad.
To make sure that the concept makes business sense too, Ginger decided the following: in regular business hotels, the room to manpower ratio is 1:3, but for Ginger, it was decided to restrict it to 1:0.36. This was made possible through outsourcing of management facilities, food and beverages and the reception facilities.
Pani says Ginger doesn’t want fancy restaurants, swimming pools and other such luxuries as customers don’t need them in a no-frills hotel.
