Tatas launch no-frills hotel in Bangalore

Ratan N Tata

First, it was the aviation sector that launched the "no-frills" concept. Now, it's the turn of the Indian Hotels Company Ltd (IHCL), a division of the Tata Group, to usher in the same concept, albeit in the hospitality sector.

Chairman of the Tata Group, Ratan N Tata, inaugurated the first indiOne hotel at Whitefield in Bangalore today.

indiOne will offer its rooms at a price of about $20 per day and has been developed in association with renowned corporate thinker CK Prahalad. The project has taken a little over two years.

Roots Corporation, the wholly-owned subsidiary of IHCL, will operate indiOne.

indiOne's Bangalore property has 101 rooms and the Tata Group plans to open about 12-14 such hotels, or about 1,500 rooms, within the next 12 months. Each hotel will be built at an approximate cost of Rs 10 crore.

The group plans to open about 150 hotels within the next five years before the concept goes overseas.

In India, it will enter many secondary and tertiary cities, as well as places like train stations, pilgrimages, and hill-stations, among others. Key overseas locations include emerging markets like China, the Gulf and Africa.

Speaking to reporters on the sidelines of the inauguration, Tata said that competitors might come up with a similar product.

"I think what will probably happen is that there will be more hotels like this in the future. We will have to keep coming up with new products and innovations to stay ahead. We do not prefer to come under the budget segment. We really need to find products and services for the people of India. We tend to reach out only to the affluent. We have to reach out to the broader segment of the population."

When asked if the Tata Group will be open to acquiring executive hotels of this nature, he said, "It is too early to tell. We will look at each one on its own merit. In the first instance, we are going to make this model applicable to India."

Earlier, Raymond Bickson, managing director of IHCL, said that partnerships would also play a key role in the growth of the indiOne chain.

"We will control investments and operational costs. We are bringing a new dimension to the price-performance equation in the hospitality sector."

Bickson explained the need for such a hotel by citing the example of Manhattan. "The organised sector in the Indian hospitality industry has about 85,000 rooms, as against 125,000 rooms in Manhattan alone. We are filling up this gap with indiOne."

In his presentation to the media, CK Prahalad said that indiOne will re-define hospitality by coming out with new rules for the sector.

"It is neither a budget hotel, nor a value for money concept. The Tata Group is pioneering this new model, and will follow next practices instead of best practices. Traditionally, hotels place a lot of emphasis on public space, instead of private space. We have reversed the trend here. This represents an important innovation from India in a traditional industry."

The Tata Group is open to go for the franchisee model for its indiOne chain of hotels. In order to set proper standards, it will initially look at owning or even partly-owning its properties.