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Hotel Business Review
According to Malkani, “Budget hotels are hotels which have agreed to scale down certain non-essential services to reduce cost.” “There are two key factors which have contributed to star hotels in India entering the budget segment. One is the impressive demand for budget hotels in tier I, II and III cities of the country and the second is their low operational cost,” concurred Rajib Das – Operations Manager, The Fern Residency, Pune. “Budget hotels are one of the fastest growing segments in the Indian hospitality industry, and one can hope to see it growing further due to increase in demand,” opined Das. “Budget hotels are essentially a no-frills stay experience and are for those who expect clean linens, comfortable beds and hygienic washrooms as most basic facilities from hotels. Other than this, budget hotels may extend services such as wake up calls, laundry, wi-fi, toiletries which are a default in many star hotels. Star hotels are fancy and are more inclined to meet the taste of those who may want a regal stay experience,” averred Malkani. “Good hotel facilities such as comfortable rooms with ACs, a multicuisine restaurant, room service, wi-fi, etc. are offered at these budget hotels. Other additional facilities required are made available on demand at additional costs,” explained Das. “These hotels offer basic amenities like bed and breakfast, wi-fi and clean rooms with hot/cold running water, and also an information desk,” proffered Sunil Bhatia, Director, Sales & Marketing at The Mirador Hotel Mumbai. “Budget hotels in India attract students, individual business travellers, and also mid category corporates who
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May-June ’16
Bharat Malkani
do have a slab wise requirement to put up their employees. Airlines also opt for budget hotels for their internal and guest requirements,” averred Bhatia. No wonder budget hotels in India are upbeat about their increasing demand. “Budget hotels are popular in the domestic market and slowly catching pace among inbound traffic too,” affirmed Das. As per industry estimates, the inventory in the budget hotel space in the country is expected to grow further with both new and existing players expected to bring up to 10,000 new rooms online this year. “There is ample scope for this segment to grow in India. We already have hundreds of budget hotels outside railway stations and interstate bus terminals. They are also there in central business districts, beaches, places of pilgrimage, etc. They just need to concentrate on quality and pricing and they are likely to do well,” affirmed Bhatia. “Budget hotels are more popular with domestic travellers in India. With
international tourists, most of the numbers account under MICE tourism and as a trend we have seen that these travellers opt for star rated hotels. Of course, exception being those foreign tourists who come to India for the ‘roads less travelled’ experience,” pointed out Malkani. However, that does not mean that budget hotels are not popular with the inbound tourists in India. There is little doubt that budget hotels in India are finding a ready market among both domestic and inbound tourists, who are seeking economical but comfortable accommodation during their travels. However, according to Google survey, leisure destinations will be the next growth driver for branded budget hotel category as today out of the top 50 domestic destinations searched, only 30 percent of destinations represent leisure travel.
Feedback to Improve Performance Though budget hotels seem to have a promising market in the Indian hospitality industry, to take their business to the next level, the budget hotel brands need to implement stringent quality standards and focus on the guest experience on a more personalised basis. Some of the hotel guests feel that one notable advantage, besides the price factor, of the budget hotels in India is the personalised services offered in these hotels. As these hotels often contain less rooms compared to the luxury hotels, the guests here are also comparatively less in numbers, which in turn, facilitates the owners to attend each of their guests separately and personally. With greater personalisation of services, an ordinary budget hotel can graduate to a boutique budget hotel. One of the ways the service standards can be enhanced is through continual feedback from guests. “Taking feedback from guests is a healthy practice that helps the hotel to improvise on the areas that needs improvement. We, at Hotel Transit, too follow this practice and invite guests to give their honest feedback and point out if there is indeed some shortfall or unintended negligence by us,” asserted Malkani. Das concedes that there are some shortcomings in the budget hotels in India. “These are mainly due to the limited service offered by budget hotels. To solve these shortcomings, we take our guest