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Amrit Dhillon

Travellers now have a choice: marbled luxury, backpacker's flea pit or smart basics

Not long ago, tourists in India  followed the strict but simple rules of the prince and the pauper   in choosing either a glittering five-star hotel, or a shabby bed-and-breakfast in a scruffy part of town.

Those  caught in between, wanting  only a clean, well-lighted place,  discovered to their frustration that the country's hotel industry  completely ignored them.

'Either you go to a government-run guesthouse reeking of urine with bed bugs sucking your blood or you end up in a luxury hotel packed with marble and chandeliers and just pray that it's off-season and you might be given a discount,' said  Anshu Seth,  a marketing executive with a New Delhi-based Japanese multinational.

In a dramatic shift,  this gaping gap in the market is being plugged, and India will soon have two famous  chains offering budget hotels all over the country.

The Taj group of hotels has been celebrating the success of IndiOne, its first budget hotel in Bangalore.

Launched  in June last year, it boasts occupancy rates  above 85 per cent. The rooms are functional and  reasonably priced at 900 rupees ($161) for a single room.

Encouraged by its success, the Taj  plans to add 10 more such hotels with an investment of about US$20 million in total.

Conscious of the power of branding,  the Taj prefers not to call  IndiOne  'budget' hotels; instead, it wants them to be known as 'smart basics hotels''.

The need for such hotels is acute.

With a fast-growing economy, Indian cities are growing, Indians are travelling more than ever before, and more foreigners are coming, too.

Foreign tourists  topped the three-million mark for the first time last year, a rise of 24 per cent over the previous year. The figure is embarrassingly paltry compared with the 50 million tourists that China gets every year, but it is still considered an achievement in government circles.

According to the World Travel and Tourism Council, the number of tourists visiting India will expand by 8.8 per cent between  next year and 2015 - the third fastest in the world.

The government hopes that 'Incredible India' - a slick promotional campaign aimed at luring foreigners - will help the country become an appealing destination. But will there be room at the inn?

'The biggest bottleneck being faced by tour operators is lack of hotel accommodation,' said Subhash Goyal, president of the government-run Indian Association of Tour Operators.

Even domestic tourism is on a roll, but middle-class Indian families cannot afford five-star rates.

'I had a [visiting] British journalist complaining about the exorbitant rate a five-star hotel charged him in Delhi, so you can imagine how unthinkable it is for an ordinary Indian family,' said Anisa Kapoor, a housewife who dreads it when her family is planning a holiday and the children ask  where they are going to stay.

The Taj chain decided that after operating in the luxury sector for the past 100 years, it had to expand, preferably into another niche.

'There was a whole sector of secondary and tertiary markets where we did not have a presence,' said Sheila Nair, chief operating officer of IndiOne.

'So we thought of how we could utilise this market opportunity, meet the need, further segment the market and get into the next race.'

The IndiOne concept seems to work.

The emphasis is on cleanliness, hygiene, safety and security. All the hotels will be identical in structure, design and interiors. Business customers are likely to be traders, entrepreneurs, middle level managers and sales executives, although the staff at the Bangalore IndiOne were gratified one day when a Mercedes-driving guest came to stay.

Experts estimate that India needs at least 100,000 more rooms by 2010 to sustain the tourism upsurge seen last year.

Helping meet this need is Accor, the European hotel chain which has formed a joint venture with InterGlobe Enterprises of India to develop 20 Ibis  economy hotels over the next 10 years across India, at a cost of US$170 million.

The first two hotels will be in India's software capital, Bangalore, and in a township just outside Delhi called Gurgaon. The others will be in Pune, Jaipur, Chennai, Mumbai and other  urban centres.

Accor, which owns more than 650 hotels in 36 countries, is confident that the time has come for its  economy hotels in India.

'This is the right time for us. We can look forward to giving the Indian middle-class a quality experience at the best value for money,' Accor Asia-Pacific managing director Michael Issenberg said recently. Choice Hotels India, a franchisee of Choice Hotels International, already manages 35 properties in the country under the Quality and Comfort Inn brands.

It is  planning to expand aggressively by launching three new  brands - Clarion Hotels, Sleep Inn and Comfort Suites - at a total cost of US$70 million over the next five years.

The rise in business and leisure travellers  has led Saudi Prince Alwaleed bin Talal, the world's fifth-richest man, to invest in hotel properties in India.

Even the normally lethargic Indian government is waking up to the need for affordable hotels.

'Owing to the high cost of land, building a budget hotel becomes an expensive proposition and the return on investment is quite low,' said G Shankar Dhar, joint director general in the Ministry of Tourism.

'So we are planning to make land available on long leases and at subsidised rates to  investors.'

This is all very well. But India also has to get its act together on  cleanliness and courtesy.

A recent survey of Malaysian tourists  found that they went home unhappy: they were shocked at the stinking, sewage-clogged water in the Yamuna River near the Taj Mahal, at being hounded by beggars and fleeced by  taxi drivers.

Tourism Minister Renouka Choudhury said the government was aware of these problems.

'They're not going to be solved overnight. We're modernising our airports, cleaning up monuments and even training Delhi taxi drivers to be more courteous towards tourists. As a society, we need to learn better civic behaviour - but it will take time,' he said.



Budget hotels in India get a makeover