The Indian Hotels’ plan to offer hotel rooms for less than Rs 950-a-night across the country, is expected to trigger a price war among hotel companies. ‘‘Nowhere in the world any hotel company is offering a hotel room with our kind of facilities at less than $25 a night. This move will certainly bring pricing pressure across the industry,’’ says Prakash Shukla, Senior Vice-President of Roots Corporation, a subsidiary of Indian Hotels Ltd, operators of Taj Group of hotels belonging to the Tata Group. 

The hospitality industry is witnessing a mini-boom of sorts with an average 70 per cent occupancy rates in the first quarter of the current fiscal. With budget hotels from the Taj stables now opening its doors for business, the average room rates will dip from the peak $400-a-night even in the five-star hotels, say analysts. Indian Hotels want to cash in on the boom now triggered by the rising aspirations of domestic travellers and corporate executives who seek low cost rooms. It’s competitors, however, think that the Tatas are late. ‘‘We were the first to start budget hotels with our Fortune range of hotels which offers competitive pricing,’’ says Richa Sharma, spokesperson of ITC Hotels. 

Fortune is operating hotels in Ahmedabad, Thiruvananthapuram, Calicut, Darjeeling, Jamshedpur, Vapi, Hyderabad, Indore, Ootacamund, Madurai, Jodhpur, Tirupati and Port Blair. ‘‘The idea behind the ‘Smart Basics’ hotel, branded ‘IndiOne’ is to provide extremely comfortable, clean and safe stay at an affordable cost across Indian cities,’’ adds Raymond N. Bickson, Managing Director of Indian Hotels Company. The idea of IndiOne came from noted management guru, Dr C.K. Prahlad and the Tatas worked on the concept for the last two years to launch first IndiOne hotel in Bangalore last week. 

In the next five years the group will boast of 150 IndiOne hotels across the country and the properties — each costing about Rs 10 crore. ‘‘In the last few years the dynamics of the entire hospitality industry has changed and category like budget hotels has emerged as a compelling business opportunity. We think significant demand exists in the metros, secondary and tertiary cities across the country," Bickson added. "This new category augurs well for the consumer, empowering them with unique and reliable choice," says Dr Prahlad.