1000 in this year’s budget) LITERATURE REVIEW Hoteliers frequently find themselves unable to maximize hotel profits via cost control in real world situations. Ginger offers differentiation from other hotels in the same economic segment with the better quality it offers than them atleast. Customer driven pricing (whether costs of value add services, similar to those established by our survey, were being added to packages before being offered by hotels) 6. With value-based pricing, the pricing approach is reversed from cost-based pricing. Contemporary Retailing, second ed. Now this is a much more interesting topic. With this model you can analyze what can or cannot do the company, and also what are the potential opportunities and threats. Scope of the Report Michael Collins, Pricing strategies to maximize revenues in the lodging industry – Hospitality Management 25, 2006 26. Marketing mix – Here is the Marketing Mix of Hilton Hotels.. SWOT analysis – Here is the SWOT analysis of Hilton Hotels.. Mission – “To be the most hospitable company in the world – by creating heartfelt experiences for Guests, meaningful opportunities for Team Members, high value for Owners and a positive impact in our Communities.”. Ginger An Overview of Health Benefits Keith Singletary, PhD Ginger (Zingiber officinale Roscoe) is a member of the Zingiberaceae family of plants. 3. , 2006). • Hotel Leela Venture "The purpose of strategy is to be really clear before you take the direction. What resources and capabilities do we want to develop? Early booking discounts 2. This model enables them to maintain economic rates, … REFERENCES i. The study can further be extrapolated to any new entrants in the same segment. 2 Inter­views. Hotel age and staff size also affect room rates (Pricing determinants in the hotel industry: Quantile regression analysis, Wei-Ting Hung, Jui-Kou Shang, Fei-Ching Wang – Intl. Signs the 2nd Ginger hotel in Aurangabad Celebrate this milestone with Ginger here Celebrating 75 Ginger hotels! Price vs Service Level P R I C E S E R V I C E ModerateHigh OBEROI THE GRAND HYATT J W MARRIOTT ORCHID TAJ MAHAL 17. com/About-Taj/Investor-Relations/pdf/Annual-Report-2010-11. ... Ginger Hotels: Use of IT in Budget Hotels in India. It allows hotel to focus efforts on its core competency and strengthen its ability to adapt in the ever-changing business environment. 4 The hotels were to employ skeletal staff; services such as facility management, maintenance, and food and beverage services to be outsourced. What is SWOT Analysis? Relative to market needs and competitors' characteristics, a manager must begin to think in terms of what the... ...SWOT ANALYSIS 2 5. 0). All our responses favoured this strategy. Pricing strategies to maximize revenues in the lodging industry. This suggests strategic behaviour, with hotels adapting optimal prices according to competitor room availability. PRICING MIX AND STRATEGIES AND THEIR EFFECTIVENESS Perceived value pricing models work on the idea that more than the hotelier’s cost it should be the customer’s perception of the value of service that should drive the price. Bibliography 1. Recommendations Introduction Ginger hotels are subsidiaries of the Indian Hotels Company Limited (IHCL). International Journal of Contemporary Hospitality Management 6, 10–15. 1. 8/2. We hypothesize that as Ginger is a low-cost, smart-basics player, which doesn’t invest substantially on commercial promotions, the key sales driving force are the price based promotional offers provided by them. SWOT analysis: Strengths: . Ginger being a TATA enterprise has a good reputation and customer acceptance. They were interviewed to gather information about the pricing statergy which is currently employed. This study tries to look at one of the few branded hotels, Ginger (Tata) in India and explore what all pricing strategies it may have employed. To sum it up, the discounted rates offered in the form of promotional pricing strategies are the key driver of sales. 9 Jobs. • Economics Another 15% had doubts about whether they’d like to pay extra or not but only 10% displayed a clear negative response to a customization strategy. 1 Bearing this in mind, as well as the plans of some global brands to foray into the Indian market, this study is aimed at providing a firsthand look into the current and prospective pricing strategies of this segment. It could help incoming brands formulate a strategy 2. The delight needs in the hospitality industry include offer of value added services like Bell boy, porter, personal bar/fridge available within the hotel room. Intl. By continuing we’ll assume you’re on board with our cookie policy. • Lack of a strategy for development of ports A flat decrease in rates has the risk of diluting the perceived value and quality of upscale hotels. They are also rack rates and are the same irrespective of the city in which the hotel is situated. Revenue management is the overall strategy, including in-depth analytics and forecasting, Yield management is the actual price optimization part. This proves the effectiveness of the pricing strategy employed. This includes costs of other necessities such as meal charges, taxes, service charges. However, whatever be the perceived value, the results – that the customer would be willing to pay extra for such services, have been conclusive. Success story of budget hotels: a balancing act The shift in focus from luxury hotels to mid-market budget hotels in the last few years for delivering quality service, establishing themselves as a key market player, maintaining a loyal customer base has opened avenues for the hospitality industry. Online Survey: An online survey was conducted to gauge customer perception of value. "It comes from an old term from the strategic planning field," says Fred Wiersema, co-author of The Discipline of Market Leaders. What do we want to do? Journal of Business Venturing 14, 87–102. An optimal, dynamic policy for hotel yield management. Customers were also questioned whether they would be willing to pay a little extra to personalize their packages to enrol for certain value add services that may be overly important to them as well as the amount that they would be willing to shell out. Their prime focus is on providing key facilities that meet the key needs of the customer. This hotel is signified by well budgeted hospitality that targeted the middle-class in the Indian market. This is simply the amount that a consumer would spend in a lifetime with the company minus the costs that the company would incur for production and providing services to the customer. Always. Economy segment customer prefers lower tariffs to value add services. Further, buyers are predisposed to perceive quality and value with brands they have had a prior reinforcing experience with (Herbig P. et al. Customer-driven may be crippled by consumer’s unwillingness to reveal their reservation price (Danziger et al. The best way to drive traffic to your hotel website — and your booking portal — is by using search and display ads. of words: 7029 SHAFALI SUBRAMANIAN 11P165 EXECUTIVE SUMMARY Our study has been conducted on the ‘Pricing strategies employed by Ginger Hotels… 5, Issue 2, 1997). We have tried to quantify the perceived value of customer of certain value added services but still the quantification is difficult as the answers to the related questions are generally qualitative. Comparison of pricing strategy between two hotels and its effect on market share. ROHIT SHARMA 11P161 2. Second you should put together the internal factors with external factors, example showed below. Also, Ginger has recently started renting/leasing properties instead of buying them which further reduces costs. Additional standalone facilities, such as an in-house restaurant, a bar (Zero Hour in Pondicherry and Jamshedpur), a coffee shop (Cafe Coffee Day in Bangalore, Goa, Nashik etc. ) The brand message you run with will ultimately impact the kind of guests you attract. of words: 7029 SHAFALI SUBRAMANIAN 11P165 EXECUTIVE SUMMARY Our study has been conducted on the ‘Pricing strategies employed by Ginger Hotels, India and their … 25/5. These reduced rates go down to values as low as Rs. The survey also estimates what services the customers expect to be provided and also how much they are willing to pay for it. . A management team will use the SWOT analysis identifying the internal and external factors that will affect the company’s future performance. Thus, Ginger needn’t divert large resources at satisfying their customer delight need as there is no demand for that yet. 19, 1999) In order to swat the competition you need to understand SWOT. 3 keys to an effective hotel distribution strategy. The price efficiency is achieved by cutting on staff strength. Large open window even though there's no patio space. 2. Ginger announced the signing of a new hotel in Udaipur, Rajasthan. com (Groupon India) started offering Ginger hotel rooms as one of their daily discount offers, making Ginger hotel rooms available at rates 70% less than their standard rates. Appendix INTRODUCTION Objectives: 1. Dynamic pricing helps keep the occupancy rates high. 25. • ITDC hotels Ginger is also working to open bars in some of its locations which is again outsourced to outside caterers. Ginger Hotels is a Tata Enterprise, which differentiates itself from the rest of the Tata Group Hotels by being a ‘Smart Basics Hotel’. The Indian Hotels Company Limited (IHCL) and its subsidiaries, bring together a group of brands and businesses that offer a fusion of warm Indian hospitality and world-class service. The use of yield management in the context of a central reservation system in a global hotel group has been discussed by Jean-Francois Sanchez and Ahmet Satir, Hotel yield management using different reservation modes, International Journal of Contemporary Hospitality Management, Vol. Ginger also has tie-ups with airlines like Qatar airways, and railways like the Royal Indian railway to provide rooms as part of the travel and transport packages these travel companies provide. Weaknesses v. Human resource and Marketing policies vi. Effectiveness: Most costumers feel that they get value for money when they stay at Ginger. 003 2. This affirmative response has been used to quote the average perceived value of different services in the last table of the analysis section. Apart from this Ginger uses other pricing techniques to attract their target markets. Our survey also tried to find out if customers would be willing to customize their survey package. com/2011-06-15/news/29660197_1_budget-hotels-hotel-companies-mid-sized-hotels 32. ttp://www. Restaurant menu is limited and food is not generally appreciated. The elements that hotel pricing strategies exists of are: That of course sounds very interesting. The customers were also asked about whether they would be willing to pay extra for certain value add services and if so, then how much. Serve breakfast all day, if logistically feasible. Obviously, there are many factors which directly affects the hotel industry. Relevant questions to segment the target population were also asked. Dodds, W. B. , Monroe, K. B. , 1985. • Politics However, value based pricing techniques are hard to implement and implementation becomes only more complex when taking into account cancellations, no shows etc due to advance bookings. Research Implication: Insight into pricing strategy of Ginger; its foray into Indian Market and effectiveness of the same. Loyalty programs and corporate discounts. The Ginger hotels are built around a unique concept that provides facilities to meet the key needs of today’s traveller, at surprisingly affordable rates. This will be driven by a deep commitment to service excellence as well as implementation of revenue and profit-driving initiatives. • A corporate structure, culture and resources Also, the operating staff is minimal. 2 Launched initially as IndiOne in Bangalore (2004), Ginger Hotels were the first of its kind of NextGen hotels to use the SmartBasics concept. As expected, the price tends to increase when there is a scarcity of hotels available to book in a certain area. It's a way to analyze a company's or a department's position in the market in relation to its competitors. The internal strength is analyzed with... ...SWOT Analysis of Virgin Group A range of yield management methods can be employed such as discounting, repositioning, segmentation, packaging and overbooking depending on demand forecast(Anthony Ingold, Ian Yeoman, Una McMahon-Beattie, 2000, Yield management). Hotels provide great and important services to not only tourists but also to the travelers of a particular country. NEW DELHI: Budget hotel chain Ginger Hotels is looking at selling six properties in locations like Goa, Whitefield Bengaluru, Mysuru and Pondicherry, according to people aware of the development. However, the scales could tip soon. Ginger Bhubaneshwar: Overall review - See 1,568 traveler reviews, 294 candid photos, and great deals for Ginger Bhubaneshwar at Tripadvisor. These include lodging, restaurants, event planning, tourism etc. • Expanded IT Sector. • Experienced in two different kinds of distribution Foreign ownership and production efficiency: a quantile regression analysis. • Technology 15% luxury tax. Season packages 3. • Contains a brief study of the major internal and external factors affecting Hotels in the form of a SWOT analysis as well as analysis the PEST analysis and Porters 5 force analysis to understand the criticality of the business. Among these, Ginger Hotels focuses primarily on lodging. , 2006). It is a tool that originated in the business world but is useful for any kind of strategic planning. 27. Overview Ginger Hotel Bhubaneshwar is a good choice for travellers looking for a 4 star hotel in Bhubaneshwar. of words: 7029 SHAFALI SUBRAMANIAN 11P165 EXECUTIVE SUMMARY Our study has been conducted on the ‘Pricing strategies employed by Ginger Hotels, India and their effectiveness’ in order to identify the different pricing method that are implemented by Ginger Hotels and study their differentiating factors with regard to the other players in the hospitality sector. It could also help Ginger tweak the ineffectiveness if any to prevent the loss of market share. Strengths iv. Stephan A. Butscher, 2009, Managing hotels in the downturn: Smart revenue growth through pricing optimization, Journal of Revenue and Pricing Management Vol. it is well inside the limit of the customer’s expenditure limit. Thus the economy segment customer ranks stated/real needs much higher than his delight needs. They are also willing to pay extra for services like bell boy. These include competition-driven pricing, customer-driven pricing, price-ending strategy, yield pricing and dynamic pricing. Thus, the customer is more satisfied than dissatisfied with value add services. Weaknesses Availability of several new markets for expansion. 95; 0. 75 | Bell Boy/Porter| 52. Ginger Hotels | 29,905 followers on LinkedIn. . 2. 8. Some of these services are already being provided at existing Ginger Hotels. ijhm. Hypothesis 1: Through the data analysis and surveys it was found that customers indeed seem satisfied with the services that satisfy real needs. com/AboutUs/smart_basics. It’s a simple but useful framework that helps you focus on your strengths, minimize threats, and take the greatest possible advantage of opportunities available to you. H2: Loyalty programs, seasonal discounts and group-on discount strategies employed by Ginger Hotel’s are the key sales driver. They know great customer experience cannot be built in a day. Martinez-de-Albeniz, V. , Talluri, K. 2011. - Initiative of local municipal authorities, arranged cultural-educational network and possibilities of development. Under the plan, the company will work towards deepening guest experience, strengthening market leadership and achieving transformative growth … An attempt is also made to understand if in the case of budget hotels such as Ginger Hotels, the customer is looking more for her/his delight needs to be satisfied or focuses on the key real needs. Slightly smells like fried food because of ma'ono window, but I don't mind it that much. - Signed 40 hotels pan India, having a revenue potential of Rs. However, this model works on the startup, total life-cycle and post-purchase costs and faces criticism of not necessarily representing the buyer’s perception (Gaining sustainable competitive advantage through strategic pricing: selecting a perceived value price, Kenneth N. Thompson and Barbara J. Coe- Pricing strategy and Practice, Vol. The standard room rates are as follows: Room Type| Rates (in Rs)| Single| 3499| Double| 3999| Twin Type| 3999| These rates are exclusive of a 5. Some services like meeting rooms and personal lockers are also available which were not considered in the surveys. And what should we be carrying about? It has features in strategy textbooks since at least 1972 and can now be found in textbooks on marketing and any other business disciplines. Ginger Hotels. STRENGTHS The purpose of such a strategy is to improve productivity, increase revenues; lower operating costs, and reduce risk. Effective revenue management strategies for hotels. They have to spend more time on price decision making (Kim et al. rediff. gingerhotels. SWOT analysis of Ginger Hotels analyses the brand/company with its strengths, weaknesses, opportunities & threats. There’s no question the hotel industry is a vast sector that is responsible for trillions of US Dollars in the form of revenue. Whether they are guests, team members, or partners, together this spirit will not only foster a stronger Ginger brand but more importantly give rise to a stronger ‘Brand India'. htm 35. http://www. ♥ ♥ ♥ ♥ ♥ ♥ ♥ ♥ MUMBAI, JANUARY 7, 2021: Ginger announces the milestone of its 75th hotel with the signing of the brand’s second hotel in Aurangabad, in the state of Maharashtra. How to Generate Results in Hotels with Revenue Management. This disproves our hypothesis that the economy segment customer satisfaction is as affected by delight needs (value-add services) as his stated or real needs. Seasonal discounts 3. Small staff size decreases Ginger’s operating cost (Pricing determinants in the hotel industry: Quantile regression analysis, Wei-Ting Hung, Jui-Kou Shang, Fei-Ching Wang – Intl. We use cookies to give you the best experience possible. Prentice-Hall, Englewood Cliffs, NJ. This is how we measure the effectiveness of the pricing techniques. 99. Special offers are offered by Ginger Hotels through the year in the form of seasonal packages (eg: Monsoon Package), Weekend Offers, Early Booking Offer, Daily Use Rates. Stated Needs| Economical per night tariffs|, Real Needs| Personal trip: Not only tariffs but overall expenses of stay should be economical. • Tradition in industry and an availability of labour force. Below you will find a few key points to help you boost and enhance your property’s competitive analysis. Value based pricing (whether perceived value of value add services similar to those estimated by our calculations were being added to packages before being offered by hotels) 7. It is located in Gajapati Nagar.Hotel is rated 3.8 out of 5, which is considered as Good. Jean-Francois Sanchez and Ahmet Satir, 2005, Hotel yield management using different reservation modes, International Journal of Contemporary Hospitality Management, Vol. 8/2. Hotel group sales strategy. 8 / 2. Pricing: Strategies Brands Rates Strategy TAJ Hotels 13250 Skimming Vivanta by TAJ 10500 Competition The Gateway Hotels 6500 Psychological Ginger Hotels 3500 Penetration 16. A variety of Yield Management softwares are also available that are frequently used by global hotel chains. H. G. Parsa, 2006, Pricing strategies to maximize revenues in the lodging industry – Hospitality Management 25(1), 91–107. Hence, the strategy employed by Ginger to provide several different price options and implement several pricing strategies was indeed an effective technique. CONCLUSION 8. Overview Overview. The Strategy and Tactics of Pricing: A Guide to Profitable Decision Making, second ed. Our hotels are all set to make your stay fuss free and surprisingly affordable. Israeli, A. , 2002. Oxford Economic Papers 54, 449–469. Hence, it seems that the need to provide more value added services is being recognized and worked upon by Ginger Hotels. Results Our research involving analysis of tariff rates of Ginger and other economy hotels shows that even though Ginger follows a price-ending strategy, most of the other economy hotels in India do not. However it eventually had to move to dynamic pricing like all other hotel chains to cut losses. This strategy may be extended to Indian context by using prices ending in Rs. Hypothesis 3: Hypothesis three (H3) has neither been proven nor disproven by the research. This signing is in line with Ginger’s growth strategy of increasing the brand’s presence in key commercial hubs and state capitals of India. All single rooms were priced at Rs. 5, Issue 2, 70-79 23. • Co-existence in the region of 2 seaports and an international airport with direct possibility of export. 2. Journal of Hospitality Mgmt. TABLE OF CONTENTS 1. Simultaneously, the hotel chain is also working to improve the different aspects of a hotel stay including safety, room features, food and beverage offerings, etc. Collins, M. , 2006. Dynamic price competition with fixed capacities. Your worst nightmare as a hotelier is walking down the halls of your hotel and realising that rooms are empty. Ginger announces the milestone of its 75 th hotel with the signing of the brand’s second hotel in Aurangabad, in the state of Maharashtra. Our spaces come alive with vivacious high energy global local music and unique artwork installations. Smart Basic Concept Ginger Hotels Operations Management Case Study 1. The different players in this budget hotel segment implement a competitive pricing methodology. The relative contribution of strategic assets in determining customer perceptions of hotel room prices. Sample size for the survey was required to be large to get a better picture but we could not find many people fitting or satisfying the pre-requisites for answering our survey due to difficulty in availability of the same. • Superior product performance vs. competitors. Instead of telling guests what they will experience when … GINGER HOTELS: PRICING MIX AND STRATEGIES AND THEIR EFFECTIVENESS (In assistance with Dr. Avinash Kapoor) BY: ROHIT SHARMA 11P161 S.P. Essentially the philosophy of SmartBasics is to think of ‘intelligent’ facilities and services at ‘value’ pricing. Strengths arise from the resources and competencies available to the firm. This perceived value may also vary with factors such as age, income group, star-rating of the hotel etc. However, this second survey to confirm the perceived value was not as conclusive as expected. Deepika Rao, Managing Director and Chief Executive Officer, Ginger said, “We are happy to partner with Alka Group of Hotels for the development of a hotel … Strengths and Weaknesses Locations of Taj Hotels in India Place 18. His 17-room, limited-service property is classified by OTAs as two-star yet has an overall traveler rating of 4.5 stars. Availability of seasonal discount/loyalty program. Customers are mostly in favour of customization and willing to pay extra for such value-add services. 24. USA) tend to use whole dollar amounts to convey quality while they use prices ending in 95/99 cents to communicate value for money to consumers. 3. Bagwell, K. , Riordan, M. H. , 1991. 2. Group discounts 4. Value was not as conclusive as expected, the company yield Management in hospitality SMEs international..., seasonal discounts they offer and their effectiveness ( in assistance with Dr. Avinash ). 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