Tourists prefer grey hotels as compare to branded

NEW DELHI: VoIP taverns, cannabis caverns, ethno-fusion chic, China shop freak. Shaken? Well, that’s how Pahar Ganj, the dilapidated 1,500-plus hotel nest in central Delhi looks like at first glance. Tell-tale signs of dossing it out abound: garish banners shout ‘Talk Global, Pay Local’, tobacconists stock the most exotic Virginias, ‘joint’ ventures are commonplace and each hotel houses 20 rooms on an average.

Passerby Hila Izhaki from a village near Tel Aviv is unfazed. “I’m paying Rs 600 for a room here, which would otherwise have cost me ten times more. Besides, I’m just back from Almora where I was shelling out only Rs 100 a day for a very decent pad.” SundayET checks in with how decent is decent.

Izhaki is not alone. She joins the ranks of nearly 1.3-million backpackers who make up around 30% of the 4.4-million tourists to India (Of the 4.4 million foreign arrivals in 2006, 32.1% arrived in Delhi, 25% in Mumbai, 10% in Chennai and 2.95% in Kolkata.) And that’s a growing tribe ready to rough it out even at the by-lanes of mercy.

From Dharamsala to Delhi and Mumbai to Murmagao, more and more foreigners are pigeon-holing in on ‘rest’ rooms that never make it to the ‘Leading Hotels’ list. Here, brands refuse to make the cut but the word ‘grey’ seems to blend in perfectly with Izhaki’s grey top and the kitschy lining of curios flanking the sidewalk.

Evidence of grey clouds over India’s hospitality market loom large and severely eat into the branded hotel segment. “In the last three years, average room rentals (ARRs) have skied 280%. Guests are shifting from branded hotels to the unbranded ones as they can’t afford these properties anymore,” says Siddharth Thaker, associate director of hotel consultancy, HVS International.

That calls for a rise of weird nomenclature in the hospitality space — Hotel Cheap in Pahar Ganj, Hotel Chu Manchu in Dharamsala and St Xavier’s Lodge at Goa. In short, the unbranded hotel mart runs parallel to the organised sector. The unorganised segment has around 1,80,000 hotel rooms, 60% more than branded hotels. Besides, the ratio of grey to branded hotels gets starker as one moves from metros to smaller towns.

There’s also the hugely price-sensitive, perhaps conscious-of-the-rising-rupee, foreigner who keep away from brands. “Almost 30% of the foreign arrivals are price-conscious backpackers who opt for accommodation in the unorganised market. Unlike European countries, India doesn’t have $10 a night youth hostels,” says Deep Kalra, CEO, Makemytrip.

Right under the steeples of Hotel Cheap, bean-counting tour operators, such as Cosy Travels and Zing-Zing Tours wheel a deal. Fly-by-night operators regularly facilitate the travel requirements of these foreigners in transit. “The grey market of tour operators is double the size of the organized segment,” says Kalra. There are 3,000 IATA (International Air Transport Association)-registered tour operators in the country.

In its own way, ministry of tourism has tried to crack the whip too. It launched the much-touted ‘Bed and Breakfast’ (B&B) scheme last year to bring these unapproved ‘rest’ rooms under the organized rainbow.

“There are many such unorganised hotels in Coorg and Goa,” says Nandita Da Kunha, manager with KPMG. Anyhow, the government’s B&B policy has come unstuck. “There is no incentive for the unorganised hotel players to get themselves registered or come under the classification of the ministry of tourism,” says CV Prasad, president of Travel Agents’ Association of India.

Bowing to the acute supply crunch, small guesthouses (three-to-five rooms) are becoming a norm of sorts across Delhi, Bangalore and Pune. There are around 10,000-12,000 such rooms across the country. Banana lassis and long-distance calls to Tel Aviv at Rs 4 for 3 minutes alone can’t justify the shortfall. Hospitality needs to hop along to a place that does not acknowledge its last three alphabets. It’s now or never.