The first 400-room hotel in the country in the mid-scale category will come up in the city to provide quality accommodation at affordable prices. The Indian Hotels Company Ltd (IHCL), which runs the Taj group of hotels, will build a large Ginger hotel to monetise a land asset lying idle for decades. The land in Vile Parle is valued at ₹125 crore.
Puneet Chhatwal, MD and CEO of IHCL, in an interview, said, “Our board has cleared the proposal for construction of the flagship Ginger Hotel in Mumbai [near the domestic airport] and complete construction in 27 months after receiving final clearance.” The company has received no objection certificate for the project from authorities. Mr. Chhatwal said the plan is to have one Ginger hotel in every district headquarters, all pilgrim centres and tourist destinations in the country.
IHCL has opted for an asset light model, which means the hotel will be sold to an institutional investor, but operated and managed by IHCL’s 100% subsidiary, Roots Corporation Ltd through a lease agreement.
Mr. Chhatwal said IHCL may invest money initially to start construction of the hotel, but it will be sold during or after its built. Tata Capital may be roped in to invest in construction before the institutional investor acquires the property.
The front side of the hotel will be four times bigger than the nearby Ibis hotel. A Taj flight kitchen used to operate from the land measuring 1.75 acres. To build one room would require an investment of ₹35 lakh and at that rate the total cost of construction would be about ₹140 crore.
IHCL sees a great potential in mid-scale hotels because around 400 million Indians who cannot afford luxury hotels will start travelling and would require a hotel room. This segment is fast growing in China, which has over 10,000 such hotels. Ginger, which has 45 hotels across the country, is looking to add 15 more soon. Agreements for six new Ginger hotels have been inked this year.
“The number will go up to 10 by the year-end,” said Deepika Rao, MD and CEO, Roots Corporation Ltd., which owns the Ginger brand. She said the company plans to have 100 Ginger hotels in the next 30 months. “We are working towards the growth plan of Ginger for the next two to three decades.”
