Tata's Gateway Hotels eyes non-metro cities

Hospitality major wants to have the first-mover advantage

Gateway Hotels, the Tata Group's upmarket full-service hospitality chain, is to move into India's non-metropolitan cities faster.

Managed by Indian Hotels Company Ltd (IHCL), it has around 15 properties under construction and four or five would come up in 2014-15 at Raipur, Corbett Park, Gondia and Pune.

On Wednesday, the hotel made its foray here, with a 197-rom property, its 24th in the country.

“The metro market  is crowded and we are already there. The question is can we reach these (tier-II/III) segments before the others do. We need to be having the first-mover advantage,” said Prabhat S Verma, chief operating officer at Gateway.

The Tata Group has different hotel brands, catering to different  segments. While the Taj is a luxury brand, Vivanta is an upscale one. Ginger is the offering in the budget hotel segment, with no frills.

The Kolkata property is said to have cost Rs 150 crore. It was built by Jalan Intercontinental Hotels. Gateway is managing the property.     

According to the senior management, the hotels will continue to focus on an asset-light model. Deepa Misra Harris, senior vice-president (sales and marketing) at IHCL said, “If a brand has to grow, it has to be asset-light.”

“A majority of our new properties would be managed by us,” said Verma.   

Gateway had an annual turnover of around Rs 350 crore in 2012-13 and Verma said it was confident of Rs 410 crore this year.

The average occupancy at star hotels has come down to around 57 per cent. Verma said, “It cannot get worse than this, so my mantra is it can only go up now.”