Why Investing in a Ginger Hotel Franchise is a Smart Move in India
Written By: Juhi Sharma
As of 2023, 35 - 40% of hotels in India operate under franchise, and one such hotel with great success and goodwill is Ginger Hotel Franchise, with 85 hotels across the country the hotel chain was made to cater to the growing demand for budget-friendly, mid-scale accommodation. But why is investing in Ginger a smart move? Let’s discuss why you should Invest in a Ginger Hotel franchise.
India's Hotel Franchise Industry - What's Boosting The Ginger Hotel Franchise Opportunity
When local merchants from New York opened the first hotel back in the 18th Century, or when Ellsworth Milon or Cesar Ritz started to build on it, introducing more affordable hotels for middle-class and business travelers and established elite hotels providing more luxury to the upper-class, did they imagine that this concept would grow into an industry that is expected to cross USD 1 trillion by 2026 globally?
That the market has an expected growth of 5 - 6 % CAGR? With more than 1,87,000 hotels globally, they can accommodate 18+ million people. Will they give birth to an industry that will have the capacity to employ millions of people? They probably dreamed big about introducing hotels, to do something evolutionary, but did they think a concept started in the USA would grow the fastest in India?
With an INR 1.3 trillion market and a 10 - 12% CAGR, India has the fastest-growing hotel industry. The concept of hotels gave birth to hotel chains and this model of hotel chains gave birth to hotel franchising, and the segment alone sits high at a market value of INR 400 billion in 2023 with a CAGR of 15 - 18%.
Benefits of Ginger Hotel Franchise:
- Ginger Hotel Franchise is a part of Indian Hotels Company Limited (IHCL) a sub-brand of Tata Group which is not just one of the biggest groups in the world but also one of the most trusted and respected conglomerates. This association with Tata brings credibility, trust, and recognition to the franchise giving them a boost of advantage over the competition.
- Tata’s experience with hospitality with brands like Taj Hotels gives them an upper hand and ensures operational excellence, robust marketing, and strong brand positioning, all of which are beneficial for the franchisee.
- There has been a growing demand for budget hotels as it is the fastest-growing segment in India’s hospitality market. With an increasing middle-class population, domestic travel is at an all-time rise, giving rise to the demand for more affordable and safe accommodation options.
How The Hotel Franchise Industry Works?
The target of the hotel franchise is to provide modern, functional, and affordable stays to people traveling for business and leisure, making it well-positioned in the market.
The franchise works on an asset-light model, which means the company tries to minimize its ownership of physical assets and instead partners with an external or third-party resource to operate, helping it focus on operations and core competencies, reducing capital expenditure, and allowing faster expansion.
There is a greater profit and cost-effective operations probability because of the operational efficiencies and other economic scale benefits provided by the Indian Hotels Company Limited network.
Whats unique about Ginger Hotel Franchise?
Ginger Hotel franchise has established itself as a prominent brand in the mid-market segment, hence its recognized presence helps attract customers more easily, reducing marketing burden.
Being a well-recognized chain the franchise has many corporate contracts, loyalty programs, and partnerships with travel agents and online booking platforms. As a franchise you benefit from the extensive support system provided by the Indian Hotels Company Limited,
These benefits include:
- The Ginger Hotel franchise largely leverages the Indian Hotels Company Limited network for marketing, digital promotions, and sales. This means that all the franchises will have a proper toolkit to run their Hotel franchise with the best material developed by a professional team of marketing and digital genius.
- The Indian Hotels Company Limited group Maintains a high level of standards and to continue that, it provides all its franchises with proper operational training, customer service guidance, and staff development insurance services across all its locations.
- Along with that, the franchisees get access to a much-advanced booking system, revenue management platform, and customer relationship management (CRM) tools that are developed by experienced and talented IT of the company improving operation efficiency and service.
Keeping the concept of why the Ginger Hotel franchise chain was born, the hotel caters to both business travelers who are seeking convenient locations near business districts or transport hubs and leisure travelers who are looking for affordable accommodation options around tourist spots.
India’s Flourishing Market For Top Hotel Business Opportunities
The TATA Group is known for being a genius when it comes to strategy planning they have done the same when it comes to planning the location of the properties of its Ginger Hotel franchise keeping in mind the rapid urbanization and increase in tourism the brand offers properties in cities and major tourist destination ensuring a steady flow of guest all year round.
Ginger franchises are not just affordable for their customers but also flexible for the franchisees that want to invest in the brand whether you want to build a new hotel or convert your existing hotel into a ginger branch.
The brand provides scalable solutions that align with your investment and can fit your budget without compromising on the market needs.
- This franchise is an excellent choice for those who want to start smaller and expand over time as their brand grows especially in a tier-2 or tier-3 city where demand for budget accommodation is on the rise.
- Government programs that promote tourism and hospitality like “Incredible India” and “Dekho Apna Desh” combined with improved infrastructure like airports, roads, bus stations, and train stations have also increased domestic travel.
- The government focuses on promoting schemes like “Swadesh Darshan” and the “National Mission On Pilgrimage Rejuvenation” that promote tourism in religious and cultural circuits. Therefore, these have also largely been a benefit for budget hotel chains like Ginger therefore, positioning to cater to a budget-conscious domestic audience.
- While being a pocket-friendly brand Ginger Hotel franchise is also focusing on sustainability initiatives that align with the world's need for eco-friendly accommodation options.
- The brand focuses on minimizing its carbon footprint, promotes sustainable practices to its customers, and also appeals to environmentally conscious travelers to use its services as a way of supporting the mission.
To Conclude,
With innovative technology like contact list check-ins, mobile bookings, and smart features, Ginger caters to and attracts tech-savvy travelers portraying itself as a forward-looking brand.
Ginger Hotel typically enjoys an occupancy rate of between 60% and 70% which helps ensure consistent revenue generation and that is possible because of its mid-scale and budget-friendly hotel services.
With lower operation costs and standardized services, Ginger offers attractive profit margins for the franchisees.Ginger is known for believing in cultural diversity, providing an inclusive culture and experience for all its guests.
The Indian Hotels Company Limited franchise is an affordable hotel franchise in India. Being a part of one of the top hotel brands in India is not just a smart, safe, and credible investment.
The Ginger franchise is not just a loved and trusted brand it is also an award winning chain of franchise, with multiple Outlook Traveler’s “Best Budget Hotel” and Lonely Planet’s “Best Value Hotel” awards, Ginger has received recognition from the elite’s of the hospitality industry for years now.
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FAQs
- How much does a Ginger Hotel Franchise Cost?
The investment capital for a Ginger Hotel Franchise varies based on location, size, and the type of property. The investment amount can range approximately anywhere between INR 1 Crore to INR 5 Crore. This cost includes the franchise fee, initial operation cost, and set-up fee.
- What is the process of applying for a Ginger Hotel Franchise?
If you want to apply for a ginger franchise follow the below given steps:
- After the form on the website that you fill, attend an initial meeting where there is provision of all the necessary details.
- You will have to submit all the necessary documents thereafter, for Ginger’s team’s evaluation.
- Upon approval, you will be provided with an agreement, you can discuss the details and conditions with your team of attorneys.
- Sign the contract and begin with the set-up process.
- Is Ginger Hotel profitable?
Investing in Ginger is a profitable business investment, you are not just signing up to a handsome profit but also to be a part of an eco-friendly, tech-advanced and diverse hotel chain. The brand offers quite attractive profit margins ranging between 10 - 20%, with gross margins around 25%. Most companies see a break even for their investments in 4 to 6 years.
Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog.
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