Today, Indian guests enjoy comfortable stay, together with timely services from trained staff even in budget hotels .jpg) After traveling several distraught miles, Indian hospitality and tourism industry is experiencing a boom phase in recent times on the back of burgeoning Indian middle class, increasing foreign tourists (primarily driven by robust growth in IT and outsourcing sectors), growing economy, improving civil aviation and government campaigns promoting ‘Incredible India’. As the country is emerging as a major global destination, occupancy levels have shot up substantially, leading to a huge demand for quality budget hotels.
Concept evolution
In India, the concept of budget hotels has undergone a sea change over the past few years. Earlier budget hotels were often synonymous with sub-standard or poorly maintained hotels showcasing features such as noisy room air-conditioners (ACs), shabby toilets, smelly carpets and untrained staff.
Today, Indian guests enjoy comfortable stay, together with limited yet efficient services from trained staff even in a budget hotel. At present, the basic room amenities available in such hotels include effective ACs, clean and hygienic fresh linen, television with cable connection, intercom telephone, tea-coffee maker, hot and cold running water and refrigerator.
Undoubtedly the quality of rooms and services has enhanced considerably, alongside room rates have also elevated, raising the question of unaffordability.
Key bottlenecks
Since the term ‘budget hotels’ refer to reasonably-priced lodges or inns, the rising price quotient is a concern not only for guests but also for promoters. Here I must add that location plays a pivotal role in determining the rates for a hotel.
Most budget hotels overseas come up in suburbs due to cheap land cost. Besides, well-developed road network smoothens driving down to the city centre. Consequently, these help the promoter to earn good return on investments and offer guests with maximum choice at affordable range.
Unfortunately in India, poor road network and sub-standard local transportation within the city compel promoters to select expensive plots close to the city centre, eventually escalating the project cost. Complicated laws, together with ‘much’ delay in approval processes make matter worse for developers.
Limit facilities
For budget hotels, where a guest wants to restrict his expenditures up to Rs 3,500 per room (the rate however may vary with change in location), a developer needs to be extra cautious about every facility he provides to minimise built-up area that has direct impact on total cost. Better limit the facilities only to those that are used by a majority of guests. This should be followed stringently to keep the room rates affordable, satisfy customers and simultaneously record a reasonable profit margin.
These days hotels normally offer various state-of-the-art facilities such as health club, business centre, spas etc, which are left unused by majority of guests but significantly add to the cost. Therefore, services have to be limited to those only that majority of guests use as back of the house area requirement needs to be drastically reduced to make the project viable.
Limited services help reduce the built-up area, which in turn lowers the project cost. Moreover, it also helps in reduction of staff to room ratio and close monitoring of payroll costs is critical for efficient functioning of a budget hotel.
Improve food services
Often some of the new entrants into the budget market have tried to cut down food services, while incorporating others. A big blunder indeed. We have to remember that quality, hot food attracts most Indians. Therefore, a buffet restaurant may be the best option to satisfy customers as take aways are still not very common in India.
Today, meeting rooms are in high demand worldwide. Having couple of meeting rooms also seem to be a lucrative option as it helps in filling up the hotel during lean periods.
The success mantra of a budget hotel developer, seek out ways to offer guests basic comforts, enrich value for money and make their trip pleasurable.
Anil Madhok, managing director of Sarovar Hotels & Resorts, a reputed hotel chain in India
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