NEW DELHI, Feb 21 – Tune Hotel Group has earmarked nothing less than 100 hotels in India, with the first to open its doors in Ahmedabad, Gujarat, come April 2013, says its Chief Executive Officer, Mark Lankester. Gujarat’s vibrant economy is among the key factors in the budget hotel chain’s decision to start its ventures in India from the state which is located in the Northwest, he said.
“We have a full strategy for the whole of Gujarat. Normally we go into the big locations such as Delhi but we went with Gujarat first as when we looked at the history it is the best performing economy in the whole of India,” he said. Hence, it is important for Tune Hotel to make its presence there first, he told Bernama in an exclusive interview. Apart from the economy, which saw an average annual growth rate of 10.4 per cent over the last five years, there is also a huge non-resident Indian traffic to Gujarat.
“If you look at one state that has more citizens leaving aboard, it is Gujarat. There are about one million Gujaratis in the United Kingdom and another million in the United States. They are all over the world, which is a huge market to be tapped into.
“So, within Gujarat itself there is a strategy for five to six hotels ideally over the next three years,” he said, adding that the first 100-room hotel would open this April in Motera, Ahmedabad.
It would be followed by a 120-room hotel in Bhiwadi, Haryana, by end-2013 and a 200-room hotel near the New Delhi Railway Station early 2014. Besides Delhi, Mumbai, Calcutta, Bangalore, Hyderabad and Chennai are the other major capitals that Tune Hotel would stamp its presence.
Others in the pipeline are in Neemrana and Jaipur in Rajasthan, Chandigard, Punjab and Bhavnagar, Gujarat. The average room rate would be between Rs2,000 (RM114) and Rs2,500 (RM142). Unlike other hoteliers, Tune Hotel, he said was very much keen in the Tier 2 and Tier 3 cities.
“As a value hotel brand, often we go into a Tier 3 city. We could be the best thing that happened for that town and could almost be the best hotel there.
“I think for India, if you are going to have significant coverage you really need to be where the industrial areas are coming up, new commercial centres as well as places where the new capital regions are developing,” said Mark. There is not enough supply of hotel rooms in India, “so, within India 100 hotels is easily achievable when you look at the demand and supply situation,”
he said when asked on the company’s expansion plans in India. He disclosed that some of the value hotel chains in China have between 3,000 and 4,000 hotels. Asked on the business model for India, he said, it would be a mix of acquisition and/or joint venture with developers or pure management agreement.
“India is such a big country, therefore, you got to be flexible. If you go in with very hard and fuss rules and say this is the only way we will operate, than, I think that will be a mistake for us,” he said. Elaborating further, he said in India, domestic demand for hotel rooms were phenomenal, “and we love to go into countries where the domestic economy and the ability for domestic demand is always there whether it is business or leisure.”
There is different spin for India when it comes to demand, he said, pointing out to the “big fat Indian weddings” as a huge potential market for hoteliers.
“Weddings takes a big part in demand for hotels in India. So, we are very much interested to ensure that we take part in the wedding process. If you’re part of a family wedding, you want to house all of them in a single hotel,” he said.
Generally, the budget hotels in India have less than 100 rooms per hotel, but Tune Hotel would have between 100 and 200 rooms, which would make it easier for the hotel chain to capture this market, he said.
“It is important for people to understand that we provide good value and customer service. We got to be competitive,” he said, adding that Tune Hotel has been working on India for the past 42 months. The country with a population of 1.2 billion people offers immense opportunities and could potentially emerge as one of Tune Hotel’s biggest market, said Mark.