SectorWatch

Now No-Frills Hotels In The Offing

With most travel related aspects going for the new revolution of low frills, even hotels have joined the bandwagon. S Nithya Kamakshi tries to delve into this relatively new concept

No frills airlines, no frills cruise, and now no frills hotel. In keeping with the "no frills" philosophy, frills are again being ditched in favour of value for money. With consumers caring less about certain status symbols, the low cost revolution is here to stay, yet so is the need for aesthetic pleasure and experience. The reason a trend like no frill hotel is important to all B2C sectors has to do with its power to change consumer expectations. Frugal consumers will like the chic experience at virtually no extra costs, dumping no-chic low cost offerings.

In India, giant Tata Group has launched indiOne, a chain of no frills hotels with well designed, air-conditioned rooms with refrigerator and flat screen TVs, going for the rate of budget class hotels. The first indiOne hotel with 101 rooms was launched in Whitefield, Bangalore. The Tata Group plans to open about 12-14 such hotels (roughly 1,500 rooms) within the next 10 months, and 150 hotels within the next five years, before taking the concept overseas.

"India's middle class faces a problem that's as typical as it is common while travelling: finding hotel accommodation that's safe, clean, comfortable and, most importantly, affordable. More often than not, they have to compromise on one parameter or the other. This is set to change in the coming years following the launch of no frills hotels for the benefit of such people" says a travel agent from Chennai. Targeted at budget travellers and tourists, no-frills hotels offers an innovative hospitality model where the emphasis is on delivering quality hotel rooms at low cost.

"A budget hotel, ideally speaking, is a three-star or a four-star hotel with cheaper costs. But it will incorporate all the features and facilities required by a business traveller. As any traveller, I will need cleanliness, hygiene, good quick service, telecommunication such as Internet and telephones. I would also look for good and quality food. If you remove the top end items like high value marble, wood in all the rooms and provide smaller rooms, it will cut down the costs drastically, "says Patu Keswani, managing director, Lemon Tree Hotel.

Sheila Nair, the chief operating officer of Roots, terms the indiOne prototype a reclassification of what constitutes fundamental comforts. "We called it 'smart basics' because we have changed the definition of what 'basic' in a hotel connotes," she says. "We have reconfigured a new set of basics in India and value innovation was foremost on our list." With the goodies it has on offer, indiOne is hardly a no-frills hotel in terms of facilities, but this is no five-star extravaganza. Just 25 people run the 101-room Bangalore property. There is no room service, no porters, and guests have to carry their laundry to the counter. The hotel has 72 single rooms, 20 double rooms (with separate beds for those who travel together) and eight larger-sized rooms. Additionally, there is a special room for the disabled.

"Being a budget hotel, it is perceived that we are targeting people looking for cheap rates, but that is not the case at all. We are aiming at customers who seek a certain unique set of features, among them cleanliness and hygiene, safety and security. We have already had traders, entrepreneurs and chief executive officers as our clients" says Nair.

Sarovar Hotels has also made inroads with their Hometel, a no-frills hotel that holds a huge potential in the upcoming tourism boom. Says Anil Madhok, Managing Director, Sarovar Hotels, "Hometel is a new concept which is rapidly spreading across the country.

It is not just known for its low cost but for its superior hospitality service, quality accommodation, hygiene, security and facilities that are on par to the four and five-star category hotels. The brand aims to provide the business traveller with basic quality, good facilities at affordable prices."

India is certainly the fastest growing travel market. Establishment of nation-wide internationally branded economy hotel network will fill a major void in the Indian hospitality sector. At present, the budget hotels are targeting the group, which is at the lower end of the deluxe hotels and at the upper end of the guesthouses. "An organisation has different departments. Not all the staff members are designated to senior-level positions. The staffs at lower-management-level are the people that generally prefer these hotels. But still the higher officials prefer to go to the five star hotels," says Sunil Verma, managing director, Hotel Royal Castel.

The no-frills low budget hotels also comes with a cost. Expenses are kept to a minimum with just one person manning reception 24 hours a day, and there are no services, food, entertainment or public areas. Similar to airlines, room bookings are all done on the Internet. Those people who book early get the best prices for rooms. "Hotels must have cheapest branded group and the cheapest room, where you can actually have some confidence about what you are getting. Most often people will go for consistency," says a frequent business traveller. These hotels promise all of the amenities, facilities and levels of comfort you would expect from a five-star hotel and at the same time maintain the meticulous standards required by the travel and tour operators worldwide.

Similarly, leading Indian and international hotel chains like Marriott, Hilton, Accor and Inter Continental are also establishing budget brands across the country. With a view to streamlining the scheme to provide subsidy to the budget hotels, the Ministry of Tourism, Government of India has introduced a scheme "incentive to accommodation infrastructure". Under this scheme, the capital subsidy is granted to newly approved hotel project in 1-star to 3-star and Heritage Basic categories in the country except the four metropolitan cities - Delhi, Mumbai, Kolkata and Chennai.

No frills hotels cater to corporate executives, traders and self-employed professionals, tourists, pilgrims and leisure travellers who are looking for a clean, secure, convenient hotel, without having to pay premium prices.