Ginger Hotels will continue expansion with 15-20 properties each year in key cities: Nikhil Sharma, COO

A breed of travelers who demand more options at very competitive pricing will continue to drive the mid-segment, says Nikhil Sharma. As the govt. moves towards implementing some of its key programs, it will aid to increased travel and, consequent, tourism, he adds. An excerpt of the interview on company’s growth, larger trends in the mid-segment space and more:

Nikhil Sharma

1. Tell us a little about Ginger Hotels and its positioning? How is the business coming up in the mid-segment? How has been the average occupancy rate, off late?

Ginger Hotels is value-for-money hotel chain in the economy segment and a forerunner in this space. Over past few years we have noticed a sharp rise in the economy hotel / mid-market segments. Mid-market segments have emerged as the most preferred investment categories in India. Since it started 13 years back, Ginger has built a portfolio of 34 hotels through Greenfield developments, management contracts and leases. Going forward, the brand will grow asset-light with a focus on leisure destinations as well as existing metro markets. Our facilities are meticulously designed as per customers’ comfort and convenience. We aim to deliver consistently, quality services to the customers and manage customer expectations. According to a report by a hotel consultancy firm, HVS, mid-market and budget hotels together form around 65% of the proposed branded hotel rooms between 2014-15 and 2019-20. At the group level, we have witnessed occupancy levels over 75% for the last year. Average rates in leisure locations have seen an upswing of 20 % with increased awareness in this segment. In Business locations, we have seen similar growth in metros and 15% growth in Tier I and Tier II cities – where we are present.        

2. In terms of pure revenue generation, which of your properties lead your market foray?

Our hotels in Mumbai, Delhi, Chennai, Bengaluru, Ahmedabad, Surat, Vadodara, Noida, Bhubaneswar, Trivandrum, Indore, Mangalore, Mysore, Goa, Pondicherry and Pune, along with our hotels in pilgrim locations like Katra and Tirupati, have also witnessed encouraging momentum from travellers.

3. What are some key trends in the mid-segment business travel space? How do you see them evolving in the coming months?

The mid-segment business travel space has observed a transition in last few years. Business travellers look at ease of stay with ‘no-frills’, however, they want state-of-the-art technology at their disposal to work while staying in a hotel. We have seen that the mid-segment travelers are frequently turning their business trips into ‘leisure’ vacations—extending work trips to unwind with family or friends, better yet, just explore the location. Consumer awareness and demand has led hotels to provide services that are personalized and gives the consumer more options for less money. Travel will increase amongst all demographics, however, ‘money-conscious’ travelling will remain a big part of this burgeoning travel industry. Also, India has seen a phenomenal increase in internal tourism, as the Gen-X travellers set in the current trends in the country. If seen in hindsight, this is an effect of growing mid-segments in hospitality industry.

4. Do you think that government initiatives like ‘Make in India’ and ‘Digital India’ have started showing some impact on the ground – vis-à-vis corporate travel?

 Govt. Initiatives have certainly increased focus on manufacturing and services sectors by these programmes. Ginger Hotels being present in key locations across the country with right mix of this portfolio, believe that in the coming days there will be more activity from policy to implementation towards achieving these goals and thus, aid in increasing demand. In the case of SMART CITIES projects, there was similar travel flow witnessed, though confined to a very small number of locations in the current stage.        

5. Are you planning on expansion? How many properties are you operating currently? What makes you choose a particular city for your hotel?

Yes, Ginger hotels will be aggressively expanding besides Green Field and brown field,  we are re-badging hotels, our success in multiple locations gives us the confidence to incorporate this into our existing framework. In terms of spread, we would be looking at being present in key gateway cities to the new age India on business and leisure front. We are currently operating 36 properties and 20 properties under construction at various stages. We are looking at adding 15 to 20 properties every year. Being a data driven company, we have a heat map of 70 cities where we intend to expand in the next few years.

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