Operations Strategy for Ginger Hotels

Gist of the topic-

A Ginger hotel offers all the facilities that a normal hotel would offer. Ginger adopted following strategies for its expansion and growth

* Fixed Price Model- Extremely attractive tariffs. Tariffs are same for every place throughout the year.

* No-frills model offers all the necessary comforts -- posturepedic mattresses that support the back, good quality linen, an LCD TV offering channels from Tata Sky, a tea / coffee maker, a mini fridge, an attached bathroom with 24-hour hot water, free wi-fi connectivity -- but dispenses with elements like the traditional services of doorman and valet, multiple restaurants and swimming pool. Even the room service is limited, allowing guests to order only a select range of snacks.

* Places- Ginger is targeting either smaller business centres like Tirupur or Durgapur or tourist destinations that attract visitors round the year. That is also why it has a property at Nashik, Maharashtra -- given its proximity to popular pilgrimage Shirdi -- but not Manali, which is deserted in the winter.

Personal View-

Pricing-

* Pricing strategy of Ginger would attract a particular segment of market which buys solely on the basis of low cost (Which have price as a USP).

* Since it is a fixed price model and tariffs cannot be increased even if there is a sudden surge in demand, occupancies need to be high throughout the year

* No frills model- Smart basics package focusing on hospitality elements needed by a traveler, with no unnecessary frills like traditional services of doorman and valet, multiple restaurants and swimming pool, keeping tariffs extremely attractive. This makes it a budget hotel, not a luxury hotel

* Research firm KPMG estimates the demand-supply mismatch to be far more acute in the budget segment than in the luxury segment. Just about 40,000 rooms are available currently in the economy and budget categories; compare that with the 430 million domestic tourists that criss-crossed the country in 2006.