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Indian Tourism Industry-Overview
domestic tourist
visits(2010)
1.AndhraPradesh(155.7mn)2.Uttar Pradesh (144.75
mn)3.Tamil Nadu(111.64 mn)4.Maharashtra (48.46 mn)5.Karnataka (38.20 mn)
foreign tourist Visits(2010)
1.Maharashtra (5.08 mn)2. Tamil Nadu (2.80 mn)3.Delhi (1.89 mn)4.Uttar Pradesh (1.67 mn)5.Rajasthan (1.28 mn)
Source: Ministry of Tourism, India
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Indian Tourism Industry
Source: Ministry of Tourism, India
The travel and tourism market inIndia reached US$ 91.7 billion in 2009,growing at a compounded annualgrowth rate (CAGR) of 16.4% overthe past five years
The market is expected to touchapproximately US$ 266.1 billion by2019 on back of continuedeconomic growth and Indiaattractiveness in the global context
India is an inflexion point in theHotel Industry, with buoyantdemand, increasingoccupancies and increasing
pipeline of quality supply
With supportive governmentinitiatives to optimize land costs,the sector will see even greatermomentum of investments.
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Sector Highlights
Continued domestic economic growth and investments ininfrastructure i.e airports(world class in New Delhi, Mumbai,Bangalore, Hyderabad and many more following), roads, rail and airconnectivity has enhanced demand for organised hospitality andhotel rooms
The current count of hotel rooms is 130,000, and the country isexpected to require an additional 50,000 rooms(~USD 6-7 bn) overthe next two to three years, according to World Travel and TourismCommittee (WTCC) estimates
In recent times, the product mix is shifting as the country haswitnessed huge growth in budget, midmarket hotels, premium hotelsin larger cities and alternate forms all of which are increasinglytargeted by organised hotel chains
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Opportunities
Shortage ofhotel rooms
Potential ofBusiness Travel
The Ministry of Tourism estimates a shortage of 0.15 million hotelrooms, with two-thirds in the budget category
Global hotel chains including Hilton, Accor, Marriott International,Berggruen Hotels, Cabana Hotels, Premier Travel Inn (PTI), InterContinental Hotels and Hampshire have all announced majorinvestment plans for the country
The share of convention or meetings tourism is miniscule in India incomparison to international standards, which accounts for over20.0% of all international arrivals
Investment insmaller cities
Smaller destinations including Udaipur, Thiruvananthapuram,Bhubaneswar, Pune, Kochi and Chandigarh have shown potentialfor growth due to growing business and leisure travel
Hospitality chains are expected to increase their presence insmaller towns
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Opportunities
Diversification
Medicaltourism andother nichesegments
Hospitality chains are diversifying towards new product segments,including budget hotels and serviced apartments
Indian Hotels has already launched budget hotels in India, whileAccor has announced plans to introduce its budget hotel brand,Formule 1, in the country
India is emerging as a preferred destination for medicaltreatment, with medical tourism expected to grow at 29.0% toreach US$ 2.4 bill ion by 2012 eco-tourism, wildlife tourism and adventure tourism are gainingpopularity
Acquisitions,strategic
alliances andpartnerships
International hospitality chains are expected to acquire localplayers to increase their presence in the country
Domestic and international players are expected to formstrategic alliances and partnerships with regional players toexpand in the country, reduce risk and optimize resources
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Threats
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Threats
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Indian Tourism Industry
ForeignTourists/
Leisure FIT,7.7
Airline Crew,1.1
BusinessTraveller-
Domestic, 36.4
DomesticTourists/
Leisure FIT,17.5
BusinessTraveller-
Foreign, 9.4
Others, 27.9
}Clientele: Budget hotels
Source: TFCI,
IBEF
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About Ginger
} Ginger Hotels is a budget segment Hotel of theprestigious Tata Group
} Established under Indian Hotels Corporation
limited, Ginger hotels introduced the concept ofbudget segment hotels in the Indian tourism sectorfor the first time
} Located primarily near IT parks, manufacturinghubs and religious locations catering to business
travelers and Free Individual travelers (FITs)
} Ginger Hotels has a presence of 24 locationsacross India
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Presence in India
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Room Snapshot@ Ginger
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Smart Basics
Simplicity &Convenience
Bookingchannels
PaymentGateways
Modernity &warmth
ProductDesign
ServicePhilosophy
Affordability
TransparentPricing
Specialoffers
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Smart Basics
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Smart Basics
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Current Situation
} Increasing disposable income and an everincreasing middle class demands affordablepricing yet luxurious necessities
} People are willing to let go of luxulike Swimming
Pool, Jacuzzi, spas and lounges} But want necessities like air conditioners, ambient
rooms, excellent food, Internet connectivity and alocation which is not exotic but yet convenient.
} Credit card spending has not increased, but thereis an increased usage of debit and ATM cards, Netbanking and cash Cards for payments.
} People demand improved service in terms ofbooking, stay and staff interaction.
} Value for money concept has set in.
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Objectives of growth
} Current focus for the company is 70% corporate and 30%FIT
} Scope of growth would focus on an increased FIT andlesser corporate to widen domestic reach in an economywith increased disposable income
} Initial strategy faltered on creating the right Brand Imagein the consumer mind. New strategy has to aim at tappingalternate market segments: newer segments of travelersand an improved marketing strategy to create the rightBrand Image in the consumer mind
}
Objective is to achieve increased market share in acompletely new market where there are very fewcompetitors
} Ginger Hotels has a first mover advantage and should tryto leverage on the same
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Competitors- Budget Hotels
Hotel Group Tata - IHL Sarovar LemonTree ITC
Hotel Chain Ginger Hometel Red Fox Fortune Hotels
Rate/ Singleroom 999 2000-4000
800-3,000, at 20
per cent ofwhatever is thefive-star pricingin that market
1000-6000(varying acc.
tolocations Gurgaon isRs.10000)
Year of Launch 2004 2006 2008 1995
Approx. No ofrooms/ hotel 100 100 150 var
Approx. cost ofconstruction 12 crores 15-20 crore 50 crore var
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Competitors- Budget Hotels
Hotel Chain Ginger Hometel Red FoxFortune
Hotels
Location
Bangalore,Bhubaneswar,Durgapur,Haridwar,Mysore, PuneandThiruvanantha
puram Bangalore
Hyderabad,Jaipur,
Mumbai
Chennai,Gurgaon,Indore,Ahm'bad,Trivandrum,Jamshedpur,Vapi,Calicut,Vijayawada,Ludhiana
FutureLocations
Pondicherry,Nashik,
Varanasi,Agartala,
Baroda,Panaji andTirupur
Gurgaon,Hyderaba
d,Jaipur,Mumbai,Pune andBaddi. 33 cities
Kolkata,Cochin,
Lavasa (nearPune), Siguri,Mumbai,Chennai,Bangalore
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100 economy hotels being planned in next 3-5 years
- Indian Hotels, Accor (Ibis), Marriott International(Courtyard) , Hilton, InterContinental Hotels (HolidayInn Express), Starwood Hotels, Shangri-La
Indian Railways wants to develop a chain of budgethotels
- Public Private Partnership
Red Fox properties in Pune , Jaipur atop shoppingmalls
Competitors Major Budget
Hotels
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SWOT Ginger
Strengths Weakness
Opportunity Threats
Mother Brand name well
established
First Mover Advantage: Largest
Locations than any existing player
Excellent quality rooms at
affordable rates
Low employee-to-room ratio
Brand Image not well understood
Location not attractive to FIT
Insufficient advertising spend and
promotions
India preferred destination for travel
Higher disposable income andchanging Indian demographics
Scope for tie-up with government
agencies
Development of Tier2 and Tier3
cities as manufacturing, IT hubs
Inflation pushing up land and
employee cost
Increased Competition from
Domestic and International
players
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Problems
} Since so many offers are available, peopleperceive Ginger to be a cheap hotel
}Ginger still thought of as a self service hotel
which is untrue
} Locations a put-off for Individual travelers
since all locations not closer from railway
station, airport or bus stands
} It is still perceived as a business professionalshotel only
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Solutions
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Ginger-STP
Segment
PriceConscious
QualityConscious
ImageConscious
15-25 25-35
10
35-45 >45
BrandConscious
LifestyleBehavior
AgeGroup
Income Levelin Lakhs p.a.
We intend to position Ginger hotels as Affordable Luxury for all
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Tie-up with Low Cost Airlines} Professionals generally prefer
low cost airlines like GoAir,Indigo, Spicejet, etc.
} Tie-up with some of theseairlines and bundle the wholepackage
} Airlines would be offering 2packages, one is just theticket, and the other would bethe ticket + ginger bundle
} Win-Win for all the three parties} Advertisements in in-flight
magazines
Nos. needed
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Advertising withIndian Railways
} Local Trains} Hoardings at major local and outstation stations
} Print ads on the train
} Advertise on Indian Rail and IRCTC website
}4.5 Million Monthly Users collectively}Most professionals book tickets online
}Also integrated travel plans including tickets
and stay at Ginger
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Tying up with travel agents
Tie-up with travel
agents Provide them with
higher margins
Ensure they do bookings
for Ginger Hotels
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Online promotion onvarious social sites andother popular hits
Tie-ups with online
travel agencies in orderto display ads as otherprominent hotels do
Discounts on bookingsmade throughcredit/debit cards
Banks could periodicallysend alerts regarding anyschemes offered by thehotel
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Food and culture festivalsPROPOSED STRATEGY
To promote hotels, culture and food festivals can beorganised
State specific food, dance and handicraft festivals can beorganised
Festivals like Diwali and Christmas can also be celebrated inthe hotels through events and gatherings
This will encourage leisure travellers to stay at Ginger hotels
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Differentiation of roomsEXISTING STRATEGY
The rooms are of same typesNo differentiationMost rooms are simplistic un-cluttered business class roomsNot appealing to the recreational traveler
PROPOSED STRATEGY
Three types of roomsStandard business class rooms: with work area(70)Colorful and spacious rooms for the leisure traveler (20)Special rooms-with bunk beds for kids, rooms for the familyof 4(10)
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Pricing Strategy
Current pricing
} Till 2009 Ginger haduniform and nominalpricing pan-India
} Since then thererooms have been
priced based ontheir presence in atier I/II city.
Proposed Pricing
} Based on the newrooms the pricingshould be done ,keeping in view the
location of thehotel.
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Existing Pricing
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Increasing the levels of service
EXISTING STRATEGY
INSIGHT
People in India feel the need to be pampered when theytravel as guestsThey liked to be served by and respected by the staff
Serve yourselfSmart basics
PROPOSED STRATEGY
Minimum staff should be kept for laundry, tour planningreception Also room service should be refined as lots of complains havebeen seen on hotel review websites
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Taking over existing 1/2 Star hotels
}As observed the only Ginger hotel having fulloccupancy 365 days a year is the Delhi hotelwhich is an IRCTC hotel near the Delhi Station
Proposed Strategy
Redevelop/takeover 1 or 2 star hotel near the Station at tourist orpilgrimage centers- Give them the Ginger brand
Propose a revenue sharing model with owners(70-30 break up)
In some locations leasing floors above popular malls can also bethought of(this reduces the Hotels burden for food-it can be sufficedby the malls-leading to savings )
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Convert business travelers to leisure travelers
Proposed Strategy
A frequent Business traveler can be given special discounts and spotoffers to encourage his/her visiting the hotel as a leisure traveler
A special loyalty card can be started which can have a points systemwhich counts your business stays and you can redeem them withextensive discounts for family visits
Ginger Accounts
Platinum (>1200room nights)
Gold (300-1200room nights)
National Priority(100-300 room
nights)
Local Priority(business at
single location)
Tata Account(other Tatacompanies)
Current Accounts:
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New Segments
Tie-up with Wedding Portals
Tie up with wedding portals such as BharatMatrimony.com,shaadi.com and other regional wedding portals.
Idea is to tap the lower middle income group segment thatcannot afford a luxurious hotel, but would want basic hygieneand refreshing rooms.
Have a special honeymoon suite in each of the hotel rooms,which is currently unavailable, to tap into this segment.
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New Segments
Tie-up with colleges and schools
: This segment has high potential
If rates can be lowered to suit colleges and schools whichhave annual picnics during the monsoons which is a slackseason anyways for tourism, then it could lead to great increasein the top line and bottom line.
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InvoicesSampling/Educating
Website/mailersHotel Space
Branding options at Ginger hotels
Brand Connect: Network with us and get connected to yourcustomers
Through such branding an income can be maintained throughout theyear and drop in income during slack periods can be avoided
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Options :-
Tent Cards
Brochures/Leaflets
Floor GraphicsStandees
Kiosks
Product Placement
Product Distribution
Your creative ideas
Benefits :-
More time spent with
the creative
Captive AudienceUninterrupted
communication
Customer in relaxed
frame of mind
High engagement
Branding at hotel spaces
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Options :-
Through Mailers
-2 lakh registered
customer base-Discounts/offers
Website
- branding options
- Promotions and
discounts
Benefits :-
More than 5000
visits/day
Focused and filteredTarget Group
Cost Effective
Transactions based
website
Mailers/Website