Mumbai on a budget

Hotel accommodation in Mumbai may soon be more conducive to your wallet, courtesy the arrival of branded budget hotels in the city. While Sarovar Hotels & Resorts (SHR) will soon open the doors of its Hometel brand in the city’s Malad suburb, Lemon Tree Hotels’ unit in Andheri East will be ready by 2011.

Given Mumbai’s realty prices, how do these hotels plan to hold their price line below Rs 10,000 per room per night? “Simply by eliminating large public spaces and chopping off the bells and whistles, I can sell my rooms at a tariff of Rs 5,500-6,000,” says Ajay K. Bakaya, ED, SHR. The staff per room ratio is a measly 0.75 for his 100-room property, and the average room cost is Rs 18 lakh.

Lemon Tree Hotels, on the other hand, is maximising its built-up space to earn more returns— offering 300 sq. ft rooms for Rs 6,000-7,000, banking on volumes to achieve breakeven.

Can this model be replicated in other metros, say Delhi? Says Bakaya: “The Delhi Master Plan specifies sites for building hotels, whereas in Mumbai you can build a hotel in any commercial area. This increases land costs and makes it difficult for anyone to think of a budget hotel.”

—Tejeesh N.S. Behl