Branded Budget’ hotels jostle for space

In lieu of the flourishing hospitality industry, global giants are pushing the concept of branded ‘Economy or Budget’ hotels — for e.g., ‘Fortune’ (ITC Group) and ‘Oberoi Trident (Hilton). The brand extension strategy is aimed at achieving topline growth even as the luxury brands within the fold drive the bottomline.

For the hotel industry, the growth in demand ranges from 10 to 12 per cent year-on-year (in terms of occupancy) even as the domestic travel sector posts extensive growth — domestic travel by air itself has grown by 27 per cent in the last year buoyed by a number of low cost-no frills airlines. Sheila Nair, COO, Roots Corporation Ltd., a wholly owned subsidiary of Indian Hotels Co. Ltd. (including the Taj Group of resorts), says, “Consistent growth in tertiary and secondary town markets has spurred the need for branded budget hotels. In fact, the development of ‘A’ category railway stations across India indicates the need to address discerning domestic travellers. In India, Budget hotels conjure up pathetic imagery and our research showed a huge potential for branded accommodation in the economy segment.”

Pointing out to the global trend of the mid priced economy segment witnessing the highest growth, Uttam Dave, President & CEO, Interglobe Hotels Ltd., avers, “Due to the demographic changes, an increasing proportion of younger working Indian professionals are embarking on business and pleasure trips. So, the demand for quality offerings at economy prices has grown exponentially. In fact, the demand has seen double digit growth.”

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