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Indian Hotels revamps Ginger brand, eyes profitability by FY19-end

IHCL plans to double the number of Ginger hotels to over 100 properties as part of a strategy to achieve scale and improve margins in the next four years

Monday, December 10, 2018, 11:00 Hrs  [IST]
HBI Staff | Mumbai

Tata-group owned Indian Hotels Co. Ltd (IHCL) is revamping its budget hotel brand Ginger and is looking to sell some of its assets to make it profitable by the end of the current financial year, top company executives said.
Formed in 2004 under Roots Corp. Ltd, a subsidiary of IHCL, Ginger hotels made losses in the last three financial years. In 2017-18, it posted losses of INR 19.07 crore.
IHCL, which also runs Taj luxury hotel chain, plans to double the number of Ginger hotels to over 100 properties as part of a strategy to achieve scale and improve margins in the next four years, Puneet Chhatwal, managing director and chief executive, IHCL, said in an interview.
Ginger’s rebranding exercise comes at a time when it is faced with tough competition from other economy brands such as Oyo, Lemon Tree Hotels Ltd, Keys Hotels and Ibis, which are aggressively expanding their operations.
“We are completely relooking at repositioning the brand (Ginger) itself. From being seen on the pyramid of being value-driven, we are transforming it to one more aspirational and provide an experience that speaks to our target audience of millennials,” said Deepika Rao, who was appointed as the managing director and CEO of Ginger Hotels.
As part of the revamp, most of Ginger’s existing 45 properties will undergo a complete makeover, besides introducing a new logo and a website. There will also be additional features and services, especially targeting young travellers.
“The product has got stuck at a certain perceptions in the customers’ mind. Therefore, there is only a certain price point he is willing to pay,” Rao said. Post-rebranding, room rates at Ginger hotels will rise by 30-50% to INR 3,500-5,000 depending on the specific market, she added.
IHCL plans to complete renovations of 30 hotels in the next two years, starting from its two most profitable properties at Panjim and Bengaluru. The company is likely to spend INR 240 crore on renovation, with each room costing INR 8-9 lakh. The first refreshed Ginger hotel at Panjim will open today.
“This year we will make a profit at a minimum break-even. We are also selling four Ginger hotels this financial year though we have already identified to sell a total of six,” Chhatwal said.
After taking over as IHCL boss last year, Chhatwal said the company has decided to go back to its earlier multi-brand strategy instead of clubbing all premium brands under the Taj brand. To achieve scale and better profit margins, the company plans to focus on ramping up its mid- and economy-budget hotels.
“One of the objectives when I started is to clean our brand scape. We had put Taj everywhere....Then we said where and how can we get scale. We can sign 10 Ginger in a year but it is very difficult to sign ten Taj.. so the scale can mainly come from other brands namely Vivanta and Ginger,” he said.
(Source : Livemint)

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