Mid-market hotels seen driving growth

NEW DELHI: With the hospitality industry seeing sluggish demand due to the economic slowdown, players say mid-market branded hotels will be the biggest growth driver for them. Growth of this segment will be helped by the growing number of corporate travellers, patrons of five-star hotels, shifting to these hotels as part of cost-cutting measures.

A mid-market branded hotel is a term used to describe three-and four-star hotels that are positioned between five-star and entry-level budget hotels.

���Even as the slowdown has hit construction of all hotel segments, we believe our mid-price upscale brand Fortune will grow relatively faster than other brands in the group,��� said ITC Fortune Hotels CEO Suresh Kumar. The company plans to open five new Fortune hotels this year.

For Indian Hotels, owners of Taj Hotels & Resorts, its four-star hotel brand Gateway is the fastest-growing among its portfolio, with 31 hotels up and running within nine months of its launch. ���We have 12 Gateway properties in various stages of construction,��� said Indian Hotels sales and marketing senior V-P Ajoy Misra.

Hotel consultants believe mid-market properties not only require lower investment in construction, but also help hotel companies expand to new cities and markets faster. ���Mid-market hotel brands can be easily taken to tier-I and II cities, unlike luxury hotels. Moreover, in tough times like these, mid-segment hotels can be flexible with pricing and still make profits,��� said HVS India executive director Siddharth Thaker.

International hotel brands such as French hotel company Accor and Global Hyatt Corporation are also building their India expansion strategy on a similar plank. ���In the next two years, we will see large chunk of inventory coming in from mid-market hotels, as they are a much safer option for investments at the times of slowdown. Our brand Hyatt Place will add room inventory faster than the company���s other brands,��� said Hyatt India senior vice-president Ratnesh Verma. Similarly for Accor Hotels, its mid-market brand Ibis would be key to establishing its presence in India.