Accor’s Formule 1 to take on Tata’s Ginger

Accor, the French hospitality major, is set to give fierce competition to Tata group’s budget hotel chain Ginger with the India debut of its Formule 1 hotels at Greater Noida next month.

The Asia Pacific’s largest international hotel operator plans to open 10 more Formule 1 hotels, its first low-cost offering in India, by 2013-end.

Philip Logan, vice-president, Formule 1 Hotels, India, said, “It will be the first true international budget hotel brand in the country filling the void for standardised comfort at a competitive price of around Rs2,000 per person.”

Accor said it would also unveil the concept of standard rooms with a single price for up to three people, though it did not share details as to how this pricing mechanism would work.

Michael Issenberg, chairman and chief operating officer, Accor Asia Pacific, in an earlier interaction with DNA Money, had said, “The Formule 1 hotels are positioned at the economy segment carrying the sub-`2,000 price tag for a night’s stay. These hotels will largely compete with brands like Ginger and offer limited services. The food and beverage facility in these hotels will be outsourced to third-party firms.”

Industry experts said Accor’s pricing strategy would be a game-changer in the budget segment.

“The Rs2,000 tag for Formule 1 guestrooms is quite aggressive. It would be interesting to see how Ginger counters it, as when it (Ginger) was launched as Indione back in 2003-4 it had promised a pricing of under `1,000. However, its rates increased to over Rs2,500 over the years across most locations,” said a senior official of a leading hospitality consulting firm.

Details about the cost per key (one guestroom) for a Formule 1 hotel were kept under wraps as well. But industry experts said that cost of a Formule 1 guestroom would be around Rs20 lakh, excluding land costs. The cost per key at Ginger was pegged at Rs15 lakh, including land costs.

All the Formule 1 hotels in the pipeline (12 hotels by 2015) would be owned and managed by Accor.

Florian Kohli, general manager, Formule 1, Greater Noida, said the 114 rooms at the hotel are stylish, more restful, with soft colours, rounded edges and soothing lighting, as well as extra storage space.

“The soundproof rooms come with TV, free wireless internet, quality bedding and individually controlled air-conditioning,” said Kohli.