The Indian Hotels Co Ltd expects to tap a new segment of budget travellers with its lineup of hotels close to railway stations, as rising middle-class incomes encourage more domestic travel.
Indian Hotels, which runs the luxury chain of Taj hotels and resorts and budget chain Ginger, had won a 15-year lease for the first of Indian Railways' low-priced guest houses given over to a private company.
The centrally located Ginger Rail Yatri Niwas (travellers' guest house), which was taken over by Indian Hotels in January 2007, has been renovated at a cost of 105m rupees ($2.4m), Ginger Hotels said in a statement.
The 109 rooms are priced at 999 rupees each, it said.
Ginger will bid for other Rail Yatri Niwas properties in the rest of the country, a spokeswoman said.
Indian Hotels is investing a further 1bn rupees in six new Ginger Hotels for the fiscal year to March 2009, she said.
An estimated shortfall of 150,000 rooms in India has bumped up room rates, that often rival or surpass those in Hong Kong and Tokyo.
Reporting by Rina Chandran, Reuters.
