The UK-based InterContinental Hotels, a global hospitality group, plans to set up budget hotels in the country under its economy brand, Holiday Inn Express, in a couple of years.

The hotels are likely to be set up in metros and secondary cities. Budget hotels are essentially bed-and-breakfast hotels with an average room rate (ARR) of Rs 1000-1,500.

Michael G Herrmann, director of operations, south-west Asia, said, “We would, however, be entering the budget segment in a gradual way as our prime focus is going to expand our portfolio of premium and executive brands such as the InterContinental, Crowne Plaza and Holiday Inn.”

InterContinental operates more than 1,500 Holiday Inn Express hotels around the world, of which about 1,250 are in the US. India, with its growing number of domestic tourists, is attracting number of hotel groups into the budget segment.

Last year, Indian Hotels Company launched its indiOne brand and European hotel chain Accor came with its Ibis range of budget hotels in the country.

The domestic tourist traffic, which was 40 crore in 2005, is growing at 15 per cent. Additionally, 40 lakh foreign tourists tour the country every year.

Middle-class travellers have often complained of lack of good quality budget hotels across secondary cities such as Agra and Jaipur.

“Lack of good budget hotels are forcing some people to stay in five star hotels,” said a frequently travelling corporate official. Shortage of rooms in a city such as Bangalore has propelled the ARRs to as high as Rs 16,000 during peak season (October-December).

It is estimated that about 200-250 branded budget hotels are likely to come up in the country over the next five years.

InterContinental Group currently operates 15 hotels in India including six InterContinental hotels (two each in Delhi and Mumbai and one each in Goa and Srinagar), two Crowne Plaza Hotels and the remaining Holiday Inns.

( www.business-standard.com)