Luxury hotels focus on mid-market brands 

More than 60% of the hotels that are coming up are in the mid-market category involve less capital expenditure and quicker profits

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With luxury and upscale hotels finding it difficult to make money, top global chains like the Marriott, Hilton, InterContinental, Starwood and Accor are betting big on midmarket brands as they aggressively expand in newer markets. More than 60% of the hotels that are coming up are in the mid-market category involve less capital expenditure and quicker profits says an ET report. 

"This strategy is right as midmarket is where the business volumes lie from both business and leisure travellers," says Rami Kaushal, senior executive director, CBRE Consulting. According to Kaushal, the cost to build a midmarket hotel is 60% less than that to build a luxury property. 

While a luxury hotel costs at least Rs 1 crore per room, a mid-market brand can be constructed for around Rs 30-35 lakh per room. Also, a mid-market property can be built in 2-3 years, while it takes more than four years to build a luxury hotel. 

Global hotel chain Hilton Worldwide recognised its growth potential in the mid-market segment and created prototypes of its midscale brands — Hilton Garden Inn and Hampton by Hilton — specific to the Indian market. "Clearly, midmarket is important for us as the nature of the segment makes it viable across not only top cities but also secondary cities as well," says Rajesh Punjabi, vice president, development — India at Hilton Worldwide. It has recently signed the management contracts of two new Hilton Garden Inn brand hotels in Jaipur and Lucknow. 

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