OREANDA-NEWS. There is a huge potential in the branded budget hotel segment.

Roots Corporation, a wholly-owned subsidiary of Indian Hotels Company that operates Ginger Hotels, is eyeing up to 60 per cent market share of the country's branded budget hotel segment in the next four years.

“There is a huge potential in the branded budget hotel segment. Currently, there are about 7,000-8,000 rooms in this category, of which we have 20-30 per cent share. We are aiming for 50-60 per cent of this segment by FY'17,” Roots Managing Director and CEO P K Mohankumar said.

With growing branding of properties, the company is focusing on international designs and architects to make Ginger hotels stylish and increase their appeal among new-age executives, who are its target customers, he said.

The company has a three-stage strategy in place, Mohankumar said.

“We are mapping strategic locations and first our focus is metros as they provide high occupancy level. To be sustainable in the long-term, one needs to maintain 70-80 per cent occupancy level. We are mostly looking at operational business or family-run properties for our expansion.”

The company, he said, will next look at expanding in the tier I cities, state capitals and major railway junctions that see more of high-end travellers. “In stage three, we will look at tier II or emerging cities.”

Roots is also open to mergers and acquisitions of local domestic chains, he said, adding the company is planning an additional 40 hotels by FY'17, taking the total to 65-70.

Roots is opening its 30th property in Jaipur next week.

“We own 12 properties and the rest are either management contract or on long-term lease. Going ahead, we will prefer to continue to be asset light with management contract and long-term lease,” Mohankumar added.

“The budget hotel segment is recession-proof with low-risk factor. The demand for this segment will always remain positive as the new-age travellers prefer branded products. It is recession-proof and the risk factor in India in this segment is very low,” he said.

The company will focus on enhancing brand visibility to attract investors and expand customer base, he added.