Foreign hotel chains tweak economy models to meet local demand

With the domestic tourist numbers burgeoning, foreign hotel chains, eyeing a share of this pie are introducing their budget brands and expanding in the no-frill segment. India witnessed about 851 domestic travel visits in 2011.

According to hospitality consultancy HVS India, more than 50 per cent of the proposed supply of hotel rooms for next five years is for the budget or mid market hotels.

“India has been associated with the development of luxury and upscale hotels.  But now this segment accounts for only 43.7 per cent of the total proposed supply across the country, giving way to increased development in the mid market and budget space,” according to the HVS Trend and Opportunities Report 2012.

There are about 54,000 hotel rooms to be developed over the next five years, which means that more than 27,000 rooms will be coming up in the budget segment.

For long hotel chains like the InterContinental Hotel Group, Marriott and Accor have had only their premium luxury brands in India. But now they are launching their economy hotels, albeit with some tweaks to meet demands of the domestic travelers.

So there are restaurants, room service and a higher number of employees per room as compared to the budget hotels in developed markets of the United States and the United Kingdom. 

Global brands like Premier Inn, Holiday Inn Express and Formule 1 will be competing with homegrown budget hotel brands like Ginger, Taj Hotels economy hotel chain, and Red Fox, Lemon Tree Hotels’ budget brand, that too are busy sketching their expansion plans with special focus on budget hotels in the country.