Swaraj Baggonkar Moneycontrol News
More than a decade after starting operations, the loss-making budget brand Ginger Hotels is set for a makeover in what seems like a desperate attempt by the Taj Hotel group to turnaround its subsidiary.
Indian Hotels Company (IHCL), the second biggest hotel company in the country and which runs the Taj chain of luxury hotels, will reposition Ginger as a mid-scale brand with never seen before facilities.
In an interview to Tata Review, an in-house magazine, Puneet Chhatwal, MD and CEO, IHCL said, “We want to reposition Ginger in the mid-scale segment, with or without food and beverages, and have within each a small meeting venue, a banquet hall and one restaurant that is done up tastefully.”
Ginger currently has 42 operational properties across the country with more than 3,700 rooms. Of this, 33 are owned by Roots Corporation, a subsidiary of IHCL, and the rest are managed properties.
Targeted at the budget business traveller the hotel chain missed expansion targets, deferred listing plans and has come under pressure from new generation, web-based hotel aggregators.
The changeover to mid-scale segment will be pivotal to Ginger given that it had developed an image of a low-cost brand starting with room rates of Rs 999 before moving onto the current range of Rs 2,500-3,000. Entering the mid-scale category will push rates further north to a minimum Rs 5,000.
But entering the mid-scale category won’t be easy for Ginger, given the large number of already well-established rival brands in this segment. Novotel, Fairfield by Marriott, Radisson Blu, Premier Inn, Ibis and Days Inn are some of the brands in the mid-scale segment.
Ginger managed to survive the hotel company's twin restructuring process that saw the axing of Vivanta by Taj and Gateway brands from the Taj portfolio and subsequent rebranding of all properties as Taj. Vivanta, however, was brought back under the second restructuring exercise.
A new scheme Last fiscal, Roots Corporation saw its loss balloon to Rs 19.06 crore, an increase of five times compared to 2016-17 figure of Rs 3.76 crore, as per data shared by IHCL. Roots Corporation had to mortgage some of its properties to secure bank loans to run operations.
But the new management at IHCL believes that despite heightened competition there is space for Ginger to grow given the makeover of all the properties under its fold. As a result, Ginger will bear new scheme of colours, banquet hall facilities, meeting rooms and perhaps a full service restaurant.
“Customers don’t care what the room size is in the value segment, and they don’t want to pay for a banquet hall if they are not using it. However, a key expectation is a seamless broadband experience and we are working towards providing that in all Ginger hotels. We need to make Ginger a bit more fun by playing with colours, style of furniture, lighting, and by offering WiFi connectivity,” added Chhatwal.
With the entry of new players in the budget hotel segment Ginger was finding it difficult to attract consumers. More than new 30 companies, all in the hotel aggregation space, entered the segment to challenge Ginger.
Aggregators such as Oyo Rooms, Fab Hotels, Treebo Hotels, Airbnb and several others entered the space with many properties charging less than Rs 1,200 per room per night. Oyo Rooms even started setting up properties under the brand Townhouse charging consumer on par with Ginger rooms.
Ginger will have a significant presence in the IHCL brandscape. It will address your company’s drive to be present in the fastest growing segment. The brand will take on a fresh avatar to address the needs and aspirations of the new and younger customer segments, a statement from IHCL said.
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