Tata's Gateway plans 3 launches in Sept

The move from Tata comes at a time when several industries are expecting a revival in the economy

Gateway Hotels, the Tata Group’s upmarket chain, has planned three new property launches in September-October, a busy time for the hospitality sector in India.

The three formal openings are in Pune, Gurgaon (near Damdama) and Raipur. According to Tata Gateway's chief operating officer, Pravat S Verma, the majority verdict in favour of the Narendra Modi-led Bharatiya Janata Party would have a positive effect on the sector in the months ahead. “At this moment, sentiment is overriding. It's a slow process and given that the past couple of years have been harsh, things could only improve from the present situation,” he said.

A 160-key Pune property would see its formal launch, as will a 112-key one at Raipur and an 80-key property at Gurgaon.

This move comes at a time when several sectors expect a revival in the economy. The hospitality segment has been in a bad phase for two years, with occupancy in many major hotels dropping to 50 per cent. As a result, like many of its competitors, Tata Gateway has been focusing on an asset-light model. A recently opened Kolkata property is being managed by them, though it was developed by Jalan International Continental Hotels for about Rs 150 crore.

Tata Gateway says many of its new properties under construction are in non-metropolitan cities, as the metros have become a crowded market. A first-mover advantage in a non-metro city is an incentive.

Tata Group has different hotel brands, catering to diverse segments. The Taj is a luxury brand, Vivanta an upscale one and Ginger is the offering in the budget hotel segment, with no frills. Gateway had an annual turnover of around Rs 350 crore in 2012-13 and expects to earn Rs 410 crore for 2013-14.

A senior official from a foreign hospitality major said the impact of the new government would be more visible in the second half of the year but average room rates were are likely to stay flat, as occupancies have been hit. “Raising rates just when there are positive signs might not be a good move,” the person said.