Gateway banks on staying awake

Taj Group's brand focuses on flexibility and cities with young traveller traffic

As one steps into the latest Gateway Hotel, of Taj Hotels Resorts and Palaces, along Chennai's IT corridor, one cannot miss the touch of youthfulness in its opulent interiors. The Gateway Hotel IT Expressway Chennai will be the first to be launched in one of the four Indian metros since the brand's launch in 2008.

So far Gateway hotels have been a mix of new and old, converted properties. The new Chennai hotel tries to mix the brand's mainstays of flexibility, fitness, speed and food. So, Prabhat S Verma, chief operating officer - Gateway Hotels says, "We do not close the gym at 10 in the night. It's open round-the-clock. Our coffee shop will serve you meals at any time. If you want to have a meal at six in the morning or at mid-night, yes, you can. It's all by design." The food too is supposed to incorporate antioxidant- and fibre-rich ingredients.

Such flexibility with a focus on fitness and food is how the brand plans to engage its target audience, that it terms as 'new-age nomads'. Patrons who travel a lot on work, work long hours, don't grab meals at regular hours but are health-conscious, have a global outlook and are fairly successful at a young age populate this segment.

Gateway is the Taj group's answer to brands such as Courtyard by Marriott (by Marriott Hotels), Four Point Sheraton and Aloft (promoted by Starwood Hotels) and Novotel (Accor). These mid-market hotel brands with tariffs from Rs 6,000 are out to plug the supply mismatch that experts say plagues the Indian hospitality sector - there not being enough hotels for the domestic population.

India Hotels Company Managing Director Raymond Bickson had envisaged the Taj group's brand architecture to meet the need for different brands in different strata in the industry. He had said in an earlier interview that because new brands were coming in to try and eat away at the group's market share, brand architecture was necessary, leading to the creation of both Gateway in mid-scale and Vivanta by Taj in upscale categories. Ginger in budget and Taj in luxury were already in place.

The group eschewed referring to the Taj brand when naming Gateway to lend it its own distinct identity. By not making it a brand endorsed by Taj, Gateway was meant to appeal to a more youthful audience, in contrast to those of the luxury and heritage brands that the group ran.

"This really helped the company sustain its leadership position in India and also capture shares across different audience segments," explains Deepa Misra Harris, senior vice president, sales and marketing, Indian Hotels Company.

It would also work the other way round, prevent the group from alienating the luxury-seekers at the Taj with its association with a mid-scale brand, no matter how upmarket.

Gateway hotels can be built with a cost of Rs 50-55 lakh per room, as against the Rs 90 lakh-1 crore for building a room in Vivanta and Rs 1.5-2 crore a room for the Taj. Analysts say the positioning ensures low costs and calls for a a larger footprint in smaller cities.

Even though technically not a metro, but with all the trappings of one, Bangalore has returned results for the brand according to market experts. Kolkata will be another large city for the brand next.

Verma says the focus will "definitely" be tier II and III cities, along with pilgrimage stops such as Benaras, that are finding favour as heritage sights among the youth, and IT corridors such as those in Chennai (Sripermbudur), Kolkata (Eastern Metropolitan Bypass) and Pune (Hinjanwadi).

However, Gateway is moving on from restoring older properties to running newly-built ones. Says Harris, "Twenty-two of the existing properties are legacy hotels that were converted to Gateway Hotels and going forward all the launches will be new properties."

Managed properties will dominate the brand as Verma insists on an asset-light model. Managed-hotel joint venture partners had faced rough winds in 2007-09 delaying some of the brand's hotel launches.

The brand has 24 hotels with an inventory of over 2,200 rooms. Verma says Gateway clocked 8-10 per cent growth across its hotels, earning a revenue of Rs 350 crore. Taking its total count to 32 hotels in the next 18 months and more than 40 in three years will be properties in Tiruchy, Shimla, Hyderabad, Pune, Faridabad, Corbett, Chandigarh and Pune. Even though overseas expansion is off the charts, it has a property in Colombo, Sri Lanka.