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Big market for budget hotels in small towns and cities: Experts

Delhi,Business/Economy, Sun, 25 Mar 2012 IANS

New Delhi, March 25 (IANS) Growth of hospitality sector in the country's tier 2 and tier 3 cities is set to become the next big trend, but the market is difficult and flexibility is the key to survival, according to experts.


Speaking at a session at Hi-Aim 2012, a two-day industrial conference held in capital, Pushpendra Bansal, promoter, Lords Inn hotels claimed that even though some of his hotels were in "tier 4 and tier 5 towns", there was a big market for budget hotels.


"The secret of success in this market is flexibility and consumer-friendliness," Bansal said.


"Currently, we own 7 properties, lease three of them and manage eight more properties under the Lords banner. We hope to cross 20 properties by the time this year end and so far, we have been able to break-even within 18 months," he added, claiming the next big success stories will come out of smaller cities.


Geeta Khurana agreed that the market was certainly there but it came with its own set of difficulties.


"One of the biggest issues that many companies in this area face, is retaining the trained manpower. In Fortune, we have a process of constantly upgrading our employees instead of keeping them fixed," she claimed.


Khurana has been associated with Ahmedabad's Fortune Landmark hotel for more than a decade.


Country Inns & Suites, Country Development and Management Service(CDMS) vice president, Sanjeev Pahwa claimed that since Country Inn was an international brand, employee-retention was higher.


"The people who join us, often stick longer since they view us as an international brand and want to be with us," Pahwa claimed.


"The bigger challenge is to exceed the customer's expectations in budget hotels. It goes a long way in ensuring the customer loyalty," he said.


"When expats come to India and book in our budget hotels, they expect a semi-serviced hotel, but they find a fully-serviced property and are astonished. That keeps them coming back," he added.


Budget hotelier Vijay Singh claimed that one of the secrets of success in the budget hotel scene was a strong marketing network.


"With Aveda, our strong sales and marketing team along with a focus on our core clients, the corporates has helped us succeed."


Confident about his approach, Singh guarantees returns to the owners of the properties that he uses for his Aveda hotels.


"In a tier 2 town, a hotel charging Rs.3-5 thousand as room rent means luxury. And with corporates, this means a luxurious stay for their employees without shelling out huge amounts on luxury hotels. This also gives an edge to us in smaller cities," claimed Singh.


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