Taj group to roll out 10 more indiOne hotels
Business Standard — March 9, 2005

Following the success of its first budget hotel, indiOne, in Bangalore, the Taj Group of hotels is setting up 10 hotels across key destinations in the country. The ‘smart basics hotels’, as the company has named this venture, is operated under Roots Corporation, a wholly owned subsidiary of Indian Hotels Company (IHCL), which also owns the Taj Group. The new properties, covering seven states will come up in 2005-06. The investment for setting up a hotel is around Rs 10 crore, Raymond Bickson, managing director of IHCL said,

“After the success of our venture in Bangalore, we are now rolling out 10 hotels in the first phase across the country.” Launched in June last year, indiOne Bangalore has achieved an average occupancy of over 85 per cent. According to Ajoy Mishra, vice-president of marketing, Taj group, “The returns on smart basics hotels are quite attractive considering that operating and capital costs are quite low.”

The revenue mix for the Taj group could see a shift with budget hotels expected to contribute significantly in the long term. Currently, the luxury division accounts for the largest pie to the group’s turnover. IndiOne will be coming up at Pune, Nasik, Mysore, Hardwar, Panaji, Bhubhaneshwar, Varanasi, Trivandrum, Jamshedpur and Durgapur with 100 rooms in two years. The second phase would consist of 200 room hotels. The unique proposition of the upoming hotels is that all of them will be identical in terms of structure, design and interiors.

The Taj group, which has been following an asset light strategy, will also adopt a similar business model for its indiOne budget hotels. As per the strategy, it will only manage the property, while investment in terms of land and constructing the hotel will be done by a third party. However, the 100-room property in Bangalore was entirely funded by the group. “We will drive this business through a mix of our investment and through management contracts,” said a Taj group executive.