Ginger hotels redefined India’s hospitality industry with its unique price-and-value proposition. Launched in Bangalore in 2006, as indiOne (the name was changed to Ginger in 2007), the 'Smart Basics™' concept offered fundamental comforts at affordable prices.
With 15 hotels already operational and six more in the pipeline, Ginger is growing at a frenetic pace. How do you plan to sustain this rate of growth?
Secondly, Ginger has the first-mover advantage. Given that real estate costs have shown significant increase in the last few years (despite a recent slowdown), the entry barriers for a new player are not insignificant. There is a competitive need for Ginger hotels to grow at an even faster pace, so as to convert the market potential into significant business. Apart from greenfield projects, we are also looking at manifold options such as partnerships with developers and re-developments of existing properties and management contracts, for a faster roll-out. We plan to have 19 hotels by the end of this fiscal year and add about 10 more in the next year.
What were the challenges in commissioning so many projects in such a short period of time?
We have managed this by keeping the growth model flexible. In the initial phase we bought or leased land to build greenfield hotels. Now we are doing things differently – from building a hotel on top of a shopping mall (where lease costs are relatively low) in Ludhiana to redeveloping an existing property like the Rail Yatri Niwas, next to the New Delhi Railway station.
Another challenge has been to attract and retain talent, in the midst of pressure from competing industries, by becoming the preferred employer of choice.
Ginger’s chief differentiator is the concept of Smart Basics™. With many new budget hotel chains entering the market, will it continue to yield results?
I would say that the critical success factor for the Ginger team has been to keep an open mind-set, while constantly seeking innovative solutions to meet the challenges. We sold the concept through innovative marketing methods and backed it with innovative ideas such as partnering Café Coffee Day to bring in 24-hour coffee outlets. I feel that our efforts at institutionalising innovation will help us evolve with the changing customer expectations.
With our continuing expansion across India, corporate customers are seeing greater value in Ginger hotels. So we are also positioning ourselves as a superior alternative to guest houses and serviced apartments. We are confident that as we extend our presence across the country, we will continue to get positive response from both leisure and business travellers.
Has customer feedback lead to any change in your concept or strategy?
The concept has so far been very well received by travellers in India. Nearly 90 per cent of our customers say they will continue to stay at Ginger hotels and recommend it to their colleagues and friends.
Recognising that the customer is constantly evolving in terms of their expectations of an economy hotel, the approach has been to connect with the customer continuously. This has resulted in adding features like a book shop in all new properties and a 40-60 seater conference room in select locations.
What is the strategy behind the choice of city and location?
Many of our hotels (such as Bhubaneswar and Nashik) are based in locations which support both business and leisure travellers. While we have been doing reasonably well in most of the markets we operate in, our best performing locations in occupancy terms are Pune, Bhubaneswar, New Delhi, Bangalore, Nashik and Vadodara. Pantnagar, a relatively newer property is also doing well.
Your marketing seems to be localised and low profile. Tell us more about your marketing plans.
Direct marketing and search engine optimisation help in getting more than a third of our non-corporate customers to book rooms directly on-line. This is supplemented with the business we are able to garner in partnership with web-based travel portals.
How are the partnerships with Café Coffee Day and Home Inn working out? Are more such partnerships in the offing?
Our tie-up with Landmark bookstore provides guests another opportunity to explore a fresh experience. The hotel has also tied up in Goa and Pondicherry with The Harbor Market by Mohanlal’s Taste Buds Restaurant, known for its multi-cuisine restaurant specialising in coastal flavours. A similar tie-up is in place with Sayaji in Vadodara.
We have a marketing alliance with Home Inn – we endorse their offering in China as our partners and provide the link to their website from our website.
We are open to any new partnerships that add value to the customer as part of the Ginger offering.
What are the synergies with Indian Hotels?
Is Roots Corporation likely to launch another brand? Or set up hotels outside India?
By the same logic, when the time is right, we will examine the opportunity of expanding internationally.
Where do you see Roots Corporation in the next few years?
The vision for the future is complete with Ginger being one of the top Indian brands, and the organisation being a top employer of choice. Ginger hotels, like any other Tata enterprise, would continue to be driven by respect for people and nature, and would like to epitomise environment-friendliness and social responsibility in all aspects of business.