India’s biggest hotel chain operator, ITC, has extended the concept further to create multiple sub-brands. Example: Fortune Park, its brand which caters to the mid-market to upscale segment of customers.
Though all the sub-brands are bunched together under the Fortune Park brand, they are distinct from each other serving guests having different affordability levels. ITC already had four sub-brands — Fortune Select, Fortune Park, Fortune Inn and Fortune Resort. A fifth was added to that list recently, with the conversion of the WelcomeHotel Sheraton Chola in Chennai, ITC’s first hotel property, to a new sub-brand called, My Fortune.
Impressed by the yearly average occupancy of around 60 per cent, ITC is now looking to expand in the Tier II and III cities for future expansion. It is in fact planning to open a Fortune hotel every 180 kms in several cities across India.
My Fortune also marks another key shift in the hotel chain’s strategy. So far, all Fortune Park properties were set up on management contracts as the company opted for an asset-light business model. But the Sheraton Chola property is owned by the company and ITC plans to set up another My Fortune property in Bangalore on land owned by the company. ITC, however, says it has not yet defined the route for the brand – whether owned or managed – and will take a call based on location.
Presently Fortune has 40 operating hotels while another four hotels are slated to be commissioned during this year. Another 23 properties are currently under various stages of development. The company plans to have 67 properties with aggregate room inventory of over 5,000, spread across 50 cities under the Fortune brand.
“The chain has extensive expansion plans and we are looking at being a 90 hotels-strong chain by 2015. Introduction of new sub-brands is a part of the overall growth strategy,” says Suresh Kumar, Chief Executive Officer, Fortune Park Hotels, a full-owned subsidiary of ITC.
In addition to Fortune, ITC has the ITC Hotel - Luxury collection at the premium end, Welcome Hotel and Sheraton at the mid-scale segment and the Welcome Heritage, a collection heritage hotels including palaces and forts.
Kumar says the mid-market to upscale segment hotels are emerging as the biggest growth drivers in the industry that has traditionally been occupied by the 5 star and 5 star plus/luxury hotels. The Fortune brand operates across a wide spectrum of brand extensions, thereby creating specialised products designed to suit the specific needs of various segments, he adds. Essentially, Fortune hotels are as good as the five star properties but are much smaller in size than a typical 400-500 room luxury hotel as per a report in Business Standard by Swaraj Baggonkar
The Fortune Select is the upscale hotel brand located at business locations in metros and mini metros. Fortune Park is a mid-scale business hotel, while Fortune Inn remains a full service business hotel with 30-50 rooms. Fortune Resort is a mid-market and upscale brand located at popular holiday and leisure destinations like Mussoorie, Port Blair and Ooty.
ITC says through Fortune, it is targeting the upper middle class population comprising both business and leisure travellers. Business travel, however, accounts for a majority of its revenue, though resorts do have a mix. The company believes the revenue per available room night (revpar), specially in the mid-market to upscale segment, would continue to grow at a healthy pace in the coming period.
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