Hotels in malls – hospitality industry new marketing strategy


Hotels, apparently, are driving to malls in groups. A new location cum marketing strategy is getting evolved. The primary catalyst is the fact that developers have garnered most prime properties in metros and are building malls to fuel India’s retail ambitions. Which is why, hotel companies are moving into malls and occupying the top floors.

It is getting difficult to avail the desired land in most cities. Moreover, developers do not like to sell land. They prefer joint ventures or long-term leases. Hence, hotel managements are looking at setting up their hotels within the malls said a CEO of a reputed Hotels group.

On the face of it, leasing out space in malls to hotels seems like the beginning of a symbiotic relationship between the developer and hotel companies. Developers on the one hand are actively pursuing business models that minimize the risk involved with any project. Therefore, it has become a trend to create projects that include properties having elements of a residential complex, commercial and retail properties and hospitality options. While residential projects take time to sell, they earn constant revenues by leasing out retail and commercial properties.

An instance of mix-use development is Runwal Group’s project at Ghatkopar. The project, spread over 20-acres will have 500 apartment units, commercial spaces and a largish mall. A Runwal Group Director said that they are developing a one million sq ft mall and have ear marked 100,000 sq ft for a hotel within the mall. They have already received four queries and in negotiation with a few.

On the other hand, it is believed that moving in a mall boosts business for hotels. This is because, malls tend to attract a lot of visitors and more the people that come in, the better chances a hotel has for business. Also, the hotel companies get a ready made infrastructure. A hotel typically looks out for 100 rooms in this kind of projects and it amounts to around one lakh sq ft. Budget hotels and service apartments are the two most common segments in hotels that the hotel companies are negotiating.

While it benefits both the business, a mix-use project needs to be handled well. Such projects require the smallest details to be worked out well at the initial stage itself. Details like sharing of facilities (air conditioning and electrical equipments) and also the profile of retail brands in the mall should complement the hotel’s brand said a top level personality in the hospitality industry.

In cities like Mumbai that is constrained for space, the model would be the lower floors occupied by retail companies while the top floors by hotels. While in non-metros the hotel could be adjacent to the mall. Interestingly, The Taj group of Hotels is exploring this concept for its budget hotel chain “Ginger�.

The innovative idea solves the space constraints in cities like Mumbai and creating a win-win situation for land developers, Mall owners and Hoteliers. With the mall boom in Mumbai and other major cities in India one can always look for a hotel or associate with a hotel wherever there is a Mall in the very near future.