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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

ginger hotels1

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