According to a report in The Business Standard, international and domestic mid-scale hotels are charting strategies for expansion, buoyed by sustained momentum in the Indian travel and tourism sectors, with an expanding middle class and rising discretionary incomes. The likes of Indian Hotels Company’s (IHCL’s) Ginger brand, Hilton’s Hampton brand, and Treebo with its new mid-scale chain of Medallio, are rapidly adding supply to the segment to obtain a bigger share of the pie, which is expanding on account of young, new travellers emerging in the country. Treebo Hospitality Ventures, the parent company of budget-friendly brand Treebo, has recently ventured into the promising mid-scale segment with Medallio, with room rates starting at Rs 5,000 a night. “While we hope to have 2-3 per cent of the economy market in the coming decade, with the country’s economic pyramid shifting upward and people looking to avail better services, we are now beginning to play in the mid-scale category, with 500-700 hotels planned in the coming years,” said Sidharth Gupta, co-founder and chief executive officer (CEO), at Treebo Hospitality Ventures. Sparse competition in the segment gives room for aggressive expansion, according to the company, which is expanding from two Medallio offerings, one each in Udaipur, Rajasthan and Gangtok, Sikkim to other Tier-II and Tier-III cities like Odisha’s Puri and West Bengal’s Siliguri. Meanwhile, IHCL — the parent company of the Taj group of hotels — has identified its mid-scale brand Ginger as a growth driver.
In the quarter ended December 2024, Ginger’s consolidated revenue grew 43 per cent year-on-year to Rs157 crore, while expanding the earnings before interest, taxes, depreciation and amortisation margin by 200 basis points to 45 per cent. The brand continues to witness repeat business, with almost 40 per cent of the enterprise level revenue of Ginger is loyalty led. IHCL has now identified Ginger as the second most important brand in its portfolio, after its mainstay Taj. With tax breaks for middle income groups taking effect from April, travel is expected to get a larger share of people’s wallets in the future. This comes at a time when a tourism boom after Covid led to a demand-supply gap with not enough keys or rooms for the rising number of travellers. “The (mid-scale) segment, which accounts for 38-40 per cent of India’s total hotel inventory, holds immense potential. Over the past decade, this segment has witnessed steady expansion, driven by increasing demand for leisure and business travellers across urban and emerging markets,” said Mandeep S Lamba, president and CEO (South Asia) at hospitality consultancy HVS Anarock. Branded mid-scale hotel supply in India has clocked a compound annual growth rate of nearly 9 per cent up from around 9,000 rooms in 2000-01 to nearly 65,000 rooms in 2023-24, according to data from the consultancy.
