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CHAPTER-1INTRODUCTION
1.1
History&Evolution
Thehotelindustrythatexiststodaycanbetracedbackto3000B.C.wheretheearliestinnswerehomeswithroomsprovidedfortravelers.Conditionsimprovedin1700sEnglandwhentherenaissancesparkedthedesiretotravel.TheUnitedStatessawitshotelindustrycreatedacenturylater.Bythistimetheyhadrevolutionizedmanyfirstsintheindustryincludingprivateroomswithlocksanddoors,freesoap,atrainedstaff,andapitcherofwaterineachroom.Indoorplumbingandthecreationofthelobbyfollowedshortlythereafter.Thebusinessofprovidingstrangerswithhospitablemeanshascomealongway.Whatoncewasaservicetofellowmanisnowthefoundationnumerouseconomiesthroughouttheworld.Themoderneraofthehotelindustrysawitsbeginningsin1794NewYorkwherethefirsteverhotelwasbuilt.Profitpotentialwasrecognizedwiththeinceptionoftheindustrialrevolution.Stockcompaniesinvestedinhotelsseekingprofitfrompropertyvalueappreciationandroomoccupancyrevenue.Surroundingcommunitieswerepromisedincreaseinsalesbymeansofhighervolumeofpeoplepassingthrough.,theindustrycreatesamultitudeofopportunitiesthatnowsaturatetheindustryintheformofspin-offsofthesetopfourhotelcompaniescreatingthemostcommonchainsweknowoftoday.Historyhasproventhatthesuccessofthisindustryhaslargelytodowithtwofactors,locationandinnovativei
ntegration,thecombinationofthesetwohascreatedamarginbetweenthelargerchainsandthosewhooperateonasmallerscale.Soapandlocksondoorsweretheinnovationfortheirday.Strategicplacementandproductdifferentiationonceagainguidethesuccessofthisindustry.ThewordhotelisderivedfromtheFrenchhtel(comingfrom
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htemeaninghost),whichreferredtoaFrenchversionofatownhouseoranyotherbuildingseeingfrequentvisitors,ratherthanaplaceofferingaccommodation.Ahotelisanestablishmentthatprovidespaidlodgingonashort-termbasis.Theprovisionofbasicaccommodation,intimespast,consistingonlyofaroomwithabed,acupboard,asmalltableandawashstandhaslargelybeenreplacedbyroomswithmodernfacilities,includingen-suitebathroomsandairconditioningorclimatecontrol.Additionalcommonfeaturesfoundinhotelroomsareatelephone,analarmclock,atelevision,andInternetconnectivity;snackfoodsanddrinksmaybesuppliedinamini-bar,andfacilitiesformakinghotdrinks.Largerhotelsmayprovideanumberofadditionalguestfacilitiessuchasarestaurant,aswimmingpoolorchildcare,andhaveconferenceandsocialfunctionservices.Somehotelsoffermealsaspartofaroomandboardarrangement.HotelIndustryinIndiahaswitnessedtremendousboominrecentyears.HotelIndustryisinextricablylinkedtothetourismindustryandtheGrowthintheIndiantourismindustryhasfuelledthegrowthofIndianHotelindustry.ThethrivingeconomyandincreasedbusinessOpportunitiesinIndiahaveactedasaboonforIndianhotelindustry.TheArrivaloflowcostairlinesandtheassociatedpricewarshavegivendomestictouristsahostofoptions.The'IncredibleIndia'destinationcampaignandtherecentlylaunched'AtithiDevoBhavah'(ADB)campaignhavealsohelpedinthegrowthofdomesticandinternationaltourismandconsequentlythehotelindustry.Accordingtoareport,HotelIndustryinIndiacurrentlyhassupplyof110,000roomsandthereisashortageof150,000roomsfuellinghotelroomratesacrossIndia.Accordingtoestimatesdemandisgoingtoexceedsupplybyatleast100%overthenext2years.ThefuturescenarioofIndianhotelindustry
looksextremelyrosy.Itisexpectedthatthebudgetandmid-markethotelsegmentwillwitnesshugegrowthandexpansionwhiletheluxurysegmentwillcontinuetoperformextremelywelloverthenextfewyears.
1.2ListofplayersintheindustryTajGroupInterContinentalLeMeridienGroupofHotelsOberoiGroupofHotelsTheParkGroupofHotelsWelcomeHeritageGroupofHotelsITCWelcomegroupofHotels1.3Categorizationofplayersintheindustry
BasedonlocationCitycenter:Generallylocatedintheheartofcitywithinashortdistancefrombusinesscenter,shoppingarcade.Ratesarenormallyhighduetotheirlocationadvantages.Theyhavehightrafficonweekdaysandtheoccupancyisgenerallyhigh.Motels:Theyarelocatedprimarilyonhighways,theyprov
idelodgingtohighwaytravelersandalsoprovideampleparkingspace.Thelengthofstayisusuallyovernight.Suburbanhotels:Theyarelocatedinsuburbanareas,itgenerallyhavehightraffic
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onweekend.Itisidealforbudgettravelers.Inthistypeofhotelratesaremoderatelylow.Airporthotels:Thesehotelsaresetupnearbytheairport.Theyhavetransitguestwhostayoverbetweenflights.
Resorthotels:Theyarealsotermedashealthresortorbeachhillresortandsodependingontheirpositionandlocation.Theycaterapersonwhowantstorelax,enjoythemselvesathillstation.Mostresortworktofullcapacityduringpeakseason.Salesandrevenuefluctuatefromseasontoseason.Floatinghotels:Asnameimpliesthesehotelsareestablishedonluxurylinersorship.Itislocatedonriver,seaorbiglakes.Incruiseships,roomsaregenerallysmallandallfurnitureisfixeddown.Ithaslongstayguest.Boatels:Ahouseboathotelsisreferredasboatels.TheshikarasofKashmirandkettuvallamofkeralaarehouseboatsinIndiawhichoffersluxuriousaccommodationtotravelers.Rotels:Thesenovelvariantsarehotelonwheel.Ourveryown"palaceonwheels"and"DeccanOdessey"aretrainsprovidingaluxurioushotelatmosphere.Theirinteriorisdonelikehotelroom.Theyarenormallyusedbysmallgroupoftravelers.BasedonSizeofPropertyThemainyardstickforthecategorizationofhotelisbysizethenumberofroomsavailableinthehotel.Smallhotel:hotelwith100roomsandlessmaybetermedassmallhotels.Mediumsizedhotel:hotelwhichhas100-300roomsisknownasmediumsizedhotel.Largehotels:hotelwhichhavemorethan300roomsaretermedaslargehotels.Megahotels:arethosehotelswithmorethan1000rooms.Chainhotels:thesearethegroupsthathavehotelsinmuchnumberoflocationsinIndiaandinternationalvenues.BasedontheLevelofServiceHotelsmaybeclassifiedintoeconomy,andluxuryhotelsonthebasisofth
elevelofservicetheyoffer.Economy/Budgethotels:Thesehotelsmeetthebasicneedoftheguestbyprovidingcomfortableandcleanroomforacomfortablestay.Midmarkethotels:Itissuitehotelthatofferssmalllivingroomwithappropriatefurnitureandsmallbedroomwithkingsizedbed.
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Luxuryhotels:Theseofferworldclassserviceprovidingrestaurantandlounges,conciergeservice,meetingrooms,dinningfacilities.Bathlinenisprovidedtotheguestandisreplacedaccordingly.Theseguestroomscontainsfurnishing,artworketc.primemarketforthesehotelsarecelebrities,businessexecutivesandhighrankingpoliticalfigures.Example:HyattRegency,NewDelhiBasedontheLengthofStayHotelcanbeclassifiedintotransient,residentialandsemiresidentialhotelsdependingonthestayofaguest.TransientHotel:Thesearethehotelwheregueststaysforadayorevenless,theyareusuallyfivestarhotels.Theoccupancyrateisusuallyveryhigh.Thesehotelsaresituatednearairport.Residentialhotels:Thesearethehotelwhereguestcanstayforaminimumperiodofonemonthanduptoayear.Therentcanbepaidonmonthlyorquarterlybasis.Theyprovidesittingroom,bedroomandkitchenette.Semiresidentialhotels:Thesehotelsincorporatefeaturesofbothtransientandresidentialhotel.BasedonThemeDependingonthemehotelmaybeclassifiedintoHeritagehotels,Ecotels,BoutiquehotelsandSpas.Heritagehotel:Inthishotelaguestisgraciouslywelcomed,offeredroomthathavetheirownhistory,servetraditionalcuisineandareentertainedbyfolkartist.Thesehotelsputtheirbesteffortstogivetheglimpseoftheirregion.Example:JaiMahalpalaceinJaipur.Ecotels:theseareenvironmentfriendlyhotelsthesehoteluseecofriendlyitemsintheroom.Example:OrchidMumbaiisAsiafirstandmostpopularfivestarEcotels.Boutiquehotels:Thishotelprovidesexceptionalaccommodation,furnitureinathemedandstylishmannerandcaterstocorporatetravelers.Example:InIndiatheparkBangaloreisaboutiquehotel.Spas:isaresortwhichprovidetherapeuticbathandmassagealongwithotherfeaturesofluxuryhotelsinIndiaAnanda
spainHimalayaarethemostpopularSpa.
BasedonTargetMarketCommercialhotel:Theyaresituatedintheheartofthecityinbusycommercialareassoastogetgoodandhighbusiness.Theycatermostlybusinessmen.
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Conventionhotels:Thesehotelshavelargeconventioncomplexandcatertopeopleattendingaconvention,conferenceResorthotels:Theseleisurehotelsaremainlyforvacationerswhowanttorelaxandenjoywiththeirfamily.Theoccupancyvariesasperseason.Theatmosphereismorerelaxed.Thesearespreadoutinvastareassomanyresortshavesolarpoweredcartsforthetransportofguest.Suitehotels:Thesehotelofferroomsthatmayincludecompactkitchenette.Theycatertopeoplewhoarerelocatingactaslikelawyers,executiveswhoareawayfromhomeforalongbusinessstay.Casinohotels:Hotelwithpredominantlygamblingfacilitiescomesunderthiscategory,theyhaveguestroomandfoodandoperationtoo.Thesehotelstendtocaterleisureandvacationtravelers.Gamblingactivitiesatsomecasinohotelsoperate24hoursadayand365days.
1.4BriefprofileofplayersintheIndustryBestHotelChainsOfIndiaMentionedbelowarethesignificanthotelchainsofIndia,TajGroupofhotelsinIndia:ThemostpopularnamethatisalmostsynonymoustohospitalityinIndiaisthatoftheTajGroup.Offeringthebesthotelsacrossvariousgenreslikebusinesshotels,heritageresorts,luxuryhotelsandevensearesorts,theTajGroupisdefinitelythebestinthefield.TheOberoiGroupofHotelsinIndia:OneofthemostprominentnamesamongthehotelchainsofIndiaistheOberoiGroup.ItalsoownsseveralpropertiesinexoticplaceslikeAustraliaandMauritius.WithitsworldclassfacilitiesandefficientstafftomanageandplaytheperfectIndianhosts,theOberoihotelsisnodoubtagreatfeatheronthegrandcapoftourisminIndia.LeMeridienGroupofHotels:TheLeMeridienGroupofHotelshasplayedaninstrumentalroleinplayingtheperfecthosttothemillionsoftouri
stsandguestscominghere.ItisaluxurybrandofgreatfameandreflectstheinherentLeMeridientouchofeleganceandclassthroughallitspropertiesinIndia.ItisnowonderoneoftheexclusivehotelchainsofIndia.BestWesternGroup:Aworldfamousnamewhenitcomestohospitalityandservice,theBestWesternGroupownsseveralpropertiesacrossIndia.Eachofthehotelshasbeenequippedwithnumerousfeaturestoenableacozycomfortablestaytotheguest.
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CHAPTER-2PRODUCTLINESANDCONSUMERBEHAVIOUR
2.1ProductsRooms:TheroomsinhotelsarebasedontheCategoryofthehotel.Thefacilitiesintheroomsarebasedonthetypeofhotelandpriceoftheroomsarebasedonthetypeandfacilitiesprovidedintheroom.ConferenceRooms:Theconferenceroomsareprovidedbyhotelsforthemeetingsandotherrequirementsaspertherequestbythecustomers.Thepricedependsonthefacilities,spaceandtimeutilized.Banquets&Halls:Banquethallsareprovidedbyhotelsforpartiesandfunctions.Thesehallsprovideextrarevenueforthehotels.Restaurants&Bar:Alongwiththeroomshotelsproviderestaurantsandbarswhicharechargedseparately.Thisaddsrevenueaswellasafacilityforthecustomerswhoarestayinginhotels.Recreationfacility
2.2ProductDescriptionThereareseveraltypesofroomsprovidedbythehotelsbasedontheircategory.FewtypesofroomsareexplainedbelowSTANDARD:Thiscategoryusuallymeansthemostbasicroomtypeofferedbythehotel.Ithasbasic,standardamenitiesandfurnishings.Standardroomsinhotelswithhighercategoriesoftenhavenovieworhaveapoorviewoverthedumpsterorparkinglot.MODERATE:Usuallyaslightbitbetterthanstandard,butstillnotdeluxe.Itmay
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refertotheroomviewaswellasthesizeandtypeoffurnishingsoffered.SUPERIOR:Thiscategoryisalwayssubjecttointerpretation.It'ssupposedtomeansuperiortoastandardroominbothsizeandfurnishings,butitoftenreferstojusttheview.SomehotelshaveonlySuperiorrooms;thecategoriesthenaredefinedbytheviewandlocationoftheroom.DELUXE:TheseroomsaresupposedtobeDeluxeineveryway:View,location,furnishingsandsize.JUNIORSUITE:A"junior"suiteistypicallyalargerroomwithaseparateseatingarea.Sometimesit'sgotasmalldividerbetweenthepartoftheroomthatthebedisinandtheseatingarea,butitisnottwoseparaterooms.SUITE:ASuiteisusuallytwoormoreroomsclearlydefined;abedroomandalivingorsittingroom,withadoorthatclosesbetweenthem.Manyhotelsusetheword"suite"todefineanyroomwithasofainitsobesuretocheckthoroughlyifwhatyoureallywantarethetwoormoreseparaterooms.STUDIO:ThisisusuallyconfiguredlikeaJuniorSuite,buthastheaddedadvantageofa"kitchenette,"orcookingfacilities2.3ComplimentaryProductsSwimmingpool,,FitnessCentreMeetingRooms,BusinessCentreComplimentaryHighSpeedInternet,FreeLocalCallsSuperstarHotContinentalBreakfast,ComplimentarymorningnewspaperGuestLaundry,DryCleaningCoffee/teaMaker,Minifridge,MicrowaveComplimentaryValetParkingWakeUpServiceBikerentalatthereceptiondeskFitnesscentreTeniscourtBeautyparlourLucie:liftingcure,regenerationcure,manicure,pedicureHairdresserPrivatecarparkonthehotelpremisesTravelagentAirportpickupanddropGuidefacilitiesBanquithallsMeetingroomsSwimmingpools
2.4
SubstitutesFriendsorrelativehouses,Youthhostels,PayingguestsDormitories
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ResortsMotelsLoungesinairports,railwaystations,busshelters.PrivateguesthousesandR&Bguesthouses
CHAPTER-3GROWTHOFTHEINDUSTRY
3.1RateofGrowthAccordingtoareport,HotelIndustryinIndiacurrentlyhassupplyof10,000roomsandthereisashortageof150,000roomsfuellinghotelroomratesacrossIndia.Accordingtoestimatesdemandisgoingtoexceedsupplybyatleast100%overthenext2years.Five-starhotelsinmetrocitiesallotsameroom,morethanonceadaytodifferentguests,receivingalmost24-hourratesfrombothguestsagainst6-8hoursusage.Withdemand-supplydisparity,hotelratesinIndiaarelikelytoriseby25%annuallyandoccupancyby80%,overthenexttwoyears.ThiswillaffectthecompetitivenessofIndiaasacost-effectivetouristdestination.Toovercome,thisshortageIndianhotelindustryisaddingabout60,000qualityrooms,currentlyindifferentstagesofplanninganddevelopment,whichshouldbereadyby2012.HotelIndustryinIndiaisalsosettogetafillipwithDelhihosting2010CommonwealthGames.ThefuturescenarioofIndianhotelindustrylooksextremelyrosy.Itisexpectedthatthebudgetandmid-markethotelsegmentwillwitnesshugegrowthandexpansionwhiletheluxurysegmentwillcontinuetoperformextremelywelloverthenextfewyears.ThehotelindustryinIndiaisgoingthroughaninterestingphase.Oneofthemajorreasonsfortheincreaseindemandforhotelroomsinthecountryistheboomint
heoveralleconomyandhighgrowthinsectorslikeinformationtechnology,telecom,retailandrealestate.Risingstockmarketandnewbusinessopportunitiesarealso
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attractinghordesofforeigninvestorsandinternationalcorporatetravelerstolookforbusinessopportunitiesinthecountry.Thearrivaloflowcostairlinesandtheassociatedpricewarshavegivendomestictouristsahostofoptions.TheopeningupoftheaviationindustryinIndiahasledthewayforexcitingopportunitiesforthehotelindustryasitreliesonairlinestotransport80%ofinternationalarrivals.Moreover,thegovernment'sdecisiontosubstantiallyupgrade28regionalairportsinsmallertownsandprivatizationandexpansionofDelhiandMumbaiairportwillimprovethebusinessprospectsofhotelindustryinIndia.SubstantialinvestmentintourisminfrastructureisessentialforIndianhotelindustrytoachieveitspotential.TheupgradingofnationalhighwayconnectingvariouspartsofIndiahasopenednewavenuesforthedevelopmentofbudgethotelshere.TheGovernmentofIndia'sIncredibleIndiadestinationcampaignandtheAtithiDevoBhavahcampaignhavealsohelpedthegrowthofdomesticandinternationaltourismandconsequentlythehotelindustry.Inordertoincreasethestockofhotelrooms,theFederationofHotelandRestaurantAssociationsofIndiasuggestedtothegovernmentthatthefloorarearationoftheexistinghotelsshouldbeincreased.Thiswasacoupleofyearsbeforeandwillhelpcreateadditionalroomsintheexistingpropertiesandeasetheburdenofshortageofhotelroomsinthecountry.Theproposalisyettobeimplemented.
3.2PatternofGrowth(Seasonal&cyclic)Patternofgrowthinhotelindustryisbothseasonalandcyclicalashotelindustryisinterrelatedandbasedonthetourismindustry.Astheindustryisrelatedandrunonthedemandbasedonthelocationinsomeregionslikehistoricalplacesandbusinesscenters(ex:Delhi,
Hyderabad,Tirupathi,etc)thedemandforthehotelsarecyclicalandforfewplacesthedemandisseasonal.Seasonaldemandisdependontheclimateandlocation(ex:beachesinIndiaaremostlyvisitedinsummerbecauseofclimateandvacations)
3.3GrowthDeterminantsLocationLocationisacriticalconsiderationbecauseifaffectshotelsabilitytodrawcustomers.Itisimportantthathotellocationbevisible,accessible,convenientandattractivetomarket.Surroundinglandusesareimportantforalltypesoflodgingoperations.Aestheticsofthearea,noise,safetyandotherfactorsshouldbeconsidered.CommercialLocationsBylocationalongmajorhighwaysorinbusinessorindustrialdistricts,hotelsandmotelsbenefitfromhighvisibilityandproximitytogeneratorsofroomnightdemand.Localcolleges,hospitals,attractions,servicesandentertainmentareexample
sofroomnightdemandgenerators.ResortLocations
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Hotelsandmotelsinresortareasgeneratemostoftheirbusinessformleisuretravelerswhoseethelodgingfacilityandsurroundsareaastheirdestination.Accessandvisibility,whileimportant,aresecondarytothequalityofthefacility,services,amenities,andnearbyattractions.LocalMarketAreaAlodgingfacilitymustbelocatedinamarketareathatattractsovernightvisitors.BusinessClimateHotelsandmotelsthatprimarilyservebusinesstravelersusuallyrelyonthestrengthofthelocalbusinesscommunity.TourismActivityHotelsandmotelsinresortareastypicallyrelyonlocalattractionstobringincustomers.Attractionscanincludebothnaturalandmanmadeplacesofinterest.
BusinessTravelers:Businesstravelersrepresentalargeportionoflodgingdemandinmanymarketareas.Theyincludepeopletravelingonbusinessrepresentingcommercial,industrialandgovernmentalorganizations.PeakbusinessdemandisusuallyexperiencedMondaythroughThursdaynights.LeisureTravelers:Leisuretravelersmayvisitanareaforavacation,toattendsportingorsocialevents,toshop,ortovisitfriendsandrelatives.Theymightbestayingoversimplybecausetheyaretravelingtootherdestinations.Leisuretravelersmaybeindividuals,couples,families,orsmallgroups.Travelersvisitinghospitalsanduniversitiesaretypicallyincludedinthismarketsegment.Leisureroomdemandisoftenseasonal.Inlarger,moreurbanmarketareas,leisureroomdemandmaybelimitedtoweekends,summermonthsandholidayperiods.OtherTravelers:Variouslodgingcustomerscannotbeclassifiedunderthecategoriesofbusiness,leisure,orgroup.Thesetravelersmayincludeconstructionworkers,truckers,utilitycrewsandothers.
CHAPTER-4
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TECHNOLOGYOFPRODUCTIONANDDISTRIBUTION
4.1CoststructureSOURCEOFFINANCEThesourceoffinanceavailabletoahoteldevelopmentissimilartothoseavailabletorealestatedevelopersofotherskindofproject.ThefollowingareusualmethodofrisingfinanceforthehotelIndustries:1.Sharecapital2.Preferencesharecapital3.Equitysharecapital4.Borrowedcapital5.Debenture6.Mortgage7.Loanfromcommercialbank8.Loanfromfinancialinstitution9.Tradedebt-creditguaranteedbysupplier10.Intercompanyloans11.Provisionfortaxation12.Publicfixeddeposit13.IPOFUNDALLOCATIONFORTHEPROJECTHotelindustriesdisplaysaninvestmentcharacteristicwithDistinguishesitforotherindustries.Theindustrycanbeclassifiedasoneamongthosewhicharehighlycapitalintensive.MostoftheHotelrepresentedbyland,building,furniturefurnishingandEquipment.Astudyofthebalancesheetoftheleadinghotelcompaniesshowsthatbulkcapitalis90%.
Ahotelprojectrequiresmoneyunderthefollowingheads:1.Costoflandandbuilding2.Costofcivilworks3.Costofelectricsinstallationandfixtures4.Costofsanitaryworkandfixtures5.Costoffurniturefixtureandfitting6.Costofcarpet7.Costofprovidingfacilitieslikeair-conditioning,boilers,watertreatmentplant,filtrationplant,waterpump,drainagesystem.8.Costofprovidingswimmingpool,landscaping,landdevelopment,
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9.10.11.12.
Shoppingarcade.Costofkitchenware.CostofmanpowerMislliniouscost
Thehotelindustryenjoystheeconomiesofscalebasedontheoccupancyrate.Whentheoccupancyrateishighthehotelsenjoytheeconomiesoflaborandfixedcostisdistributedoverlargenumberofroomseffectingintheincreaseoftherevenueandthevariousothercostslikemaintenancewillremainsamewhatevertheoccupancy,iftheoccupancyishightheexpensesaredistributedoccupiedroomsresultingintheincreaseofrevenue.Otherthanthesavingsincostmanyhotelscharge24hoursrentonroomsusedfornighthalts(i.e.isfor8to10hours)thusenjoyingthechancetorentsameroomtoothercustomersfor24hours.
4.2EconomiesofScale
4.3EconomiesofScopeOpportunitiesfortheIndianhotelsectorcontinuetobeinthebudgetandmid-marketsegment.Anticipationforhugegrowthandexpansion,inthenextyearortwo.Theluxurysegmentissettoperformextremelywelloverthenextfewyearsuntilthesupply-demandgapisbridged.Newopportunitieslieintheextendedstaysegment,whichmanypotentialdevelopersarecurrentlyshyingawayfrom..Agra,whilehavingseenhighestimprovement,hasstillalongwaytogo(citywideoccupancy47%).TherealsosomeunfinishedhotelprojectsinAgra,whichwillcontinuetoputpressureonthecity'sperformance.AsregardsJaipur,therecentannouncementbyamajorITcompanytosetupabaseoutsid
eJaipur,aswellasthestategovernment'sinitiativetopromoteIT-relatedactivityinthecity,meansthatJaipurcanlookforwardtosomeadditionalroomnightdemandfromthebusinesssegment.ThesedevelopmentsintheleisuresegmentincludingthestrongperformanceinGoaleadstobelievethattheleisuresegmentisclearlybenefitingfromtheincreaseinforeigntouristarrivalsandgrowthindomestictravel.Hotelsinmetrocities,withanaveragerateofRs2,600-3,000,andhotelsinnon-metrocities,withanaveragerateofRs1,800-2,400,arelikelytoexperiencerapidgrowthindemandinthenextyearortwo.Citiestowatchoutfor,intermsofdevelopmentopportunity,arePune,Goa,andcertainpocketsinmajorcitieslikeDelhi(west)andMumbai(milllands).
4.4LabourDepartmentofHotelsthatareavailableforguest24X7:HotelIndustryKitchen/FoodProduction:Kitchen&foodproductionisadepartmentofhotel
thatresponsibleforfood.EvenhotelshavingCoffeeShopprovides24
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hourservicestotheguest.HotelIndustryEngineering:-Ifanyproblemscomeinroom,bulbfuse,A/Cnotworking,thenneedtocontactHotelEngineers,theyarealsoavailable24hours.HotelIndustryFrontdesk:-Frontdeskis1stimpressiononguest,ifguestlikethissectionthenonlyhewillgoforotheroptionlikerestaurant,laundry,etc.Frontdeskconsistsofyoungandenergeticstaffwhoisalways(24x7)betheretohelpguest,theyarealsoresponsibleforBusinessCentre,InternetAccess.FrontofficedeskresponsibleformakingC-FormforForeignerClients,providingsafetylockerstotheguest.TakingReservationbyTelephone,E-Mails,andFaxfromtheguest.AlsoprovidingguestMoneyExchangeServices.HotelIndustryHousekeeping:-Housekeepingareavailable24X7forguest,makingtheirbedroom,bathroom,etc.ProvidingguestLaundryservicesalsododaytodayroomcleaningforguests.HotelIndustryFood&BeverageService:-Theyincludeprovidingguesttheserviceswhetherinrooms,RestaurantsorBanquets,orinConferencerooms.
HotelIndustryTravelDesk:-Theyareresponsibleforarrangingdaytodaytravelsfortheguest.Theyalsodotheticketconfirmationwork,andalsoprovidestheinformationforsightseeingtotheguests.Gym/HealthClub/Sports:-MediumandlargehotelsareprovidingGyms,SwimmingPool,HealthClub,BeautyParlor,Saloon,gameslikeBilliards,Pool,etcfacilitiestotheirguests.MostoftheHotelsareprovidingthesefacilitiescomplimentarywiththerooms.Parking/Shops:-FewStarhotelsprovidingbigparkingspace,shopsintherestaurantitselffortheguestconveyance,sothattheycangetthethingsinhotelitself.
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CHAPTER-5MARKETING
5.1
HotelsinIndiaarebroadlyclassifiedinto7categories(fivestardeluxe,five-star,fourstar,threestar,twostar,andone-starandheritagehotels)bytheMinistryofTourism,GovernmentofIndia,basedonthegeneralfeaturesandfacilitiesoffered.Theratingsarereviewedeveryfiveyears.AsofDecember2005(latestavailablefigure)therearefollowingnumberandcategoryofhotels.StarCategoryNo.ofHotelsNo.ofRooms5-starDeluxe82187645-star92113324-star13294013-star704310392-star587190311-star212695Heritage832216Tobe505127Total1934103973Source:MinistryofTourism,GovernmentofIndiaThetableexcludeshotelsintheunorganizedsectorthathaveasignificantpresenceacrossthecountryandcaterprimarilytoeconomytourists.PremiumandLuxurySegmentthissegmentcomprisesthehigh-end5-stardeluxeand5-starhotels,whichmainlycatertothebusinessandupmarketforeignleisuretravelersandofferahighqualityandrangeofservices.Thesegmentaccountedfor29percentofthetotalhotelroomsinthecountryinDecember2005.
MarketSgmentation
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Mid-MarketSegmentThissegmentcomprises3and4starhotels,whichcatertotheaverageforeignanddomesticleisuretravelers.Thissegmentalsocaterstothemiddlelevelbusinesstravelerssinceitoffersmostoftheessentialservicesofluxuryhotelswithoutthehighcostssincethetaxcomponentofthissegmentislowercomparedwiththepremiumsegment.BudgetSegmentThesecomprise1and2starhotelsreferredtoasBudgetHotels'.Thesecategoriesdonotofferasmanyfacilitiesastheothersegmentsbutprovideinexpensiveaccommodationtothehighlyprice-conscioussegmentofthedomesticandforeignleisuretravelers.HeritageHotelsInthepastfourdecades,certainarchitecturallydistinctivepropertiessuchaspalacesandForts,builtpriorto1950,havebeenconvertedintohotels.TheMinistryofTourismhasclassifiedthesehotelsasheritagehotels.OthersAtanypointintime,applicationsforclassificationareusuallypendingwiththeMinistryofTourismbecauseofwhichsuchpropertiesremainunclassified.Thenumberofhotelroomspendingclassificationhasdeclinedfromhistorical15-20percentto5percentofthetotalroomsavailableintherecentpast.
5.2MarketStrategiesBrandingDuringthe1980s,thehotelindustrysawanexplosionofnewbrands,,Marketsegmentationhasservedasoneofthemostpowerfuldriversinthecreationofmoreandmorebrandedproductsatrendthatbecameapopularmarketingconceptinthe198Osandremainssotoday.Seenasavehicleforgrowthbyanumberofhotelcompaniesthattappedavirtuallylimitlesssupplyofcapitalinthoseyears.Largehotelchainsassumedthattheycouldcreatenewmarketsbyestablishingnicheproductsinavarietyofsegments.Withthebenefitofhindsight,however,somehotelchainsthatstartedoutinamid-market
segmenthavetriedtomoveup-marketbycreatingnewbrandconceptstodoso.Ashotelcompaniesfine-tunetheiridentities,repositiontheirproductsandpromotegrowththroughaggressivefranchisingprograms.TechnologyInthehospitalityindustry,asinallarenasofcommerce,technologyrepresentsoneofthestrongestforcesforchange,whilehavinghadasignificantimpactonbrandmarketing.HotelreservationsystemshavebeenshiftingfromvoicetoelectronicGlobalDistributionSystemsandarenowonthevergeofconsumeraccessviatheInternet.Theincreasingroleplayedbythe
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Internetshouldslowlyaffectbookingpatternsinthefutureasinexpensiveconsumeraccesstohotelproductbecomesavailable.This,ofcourse,haspotentialimplicationsforthebenefitsassociatedwiththebrandingofhospitalityproducts..
5.3MarketpracticesPRICINGSTRATEGIESOneofthesinglegreatestchallengesfacingindependenthotelstodayispricing.Pricingtheinventoryeffectivelycanleadtoprofitabilityandhelpslaythefoundationforlongtermsuccess.But,pricingtheinventoryineffectivelycanleadtodisaster.Duringthelastdecade;twosimultaneousfactorsimpactedthemarketplaceandcustomerbuyingpractices:(1)thedramaticdropindemand(2)andthewidespreaduseoftheInternetforbookingrooms.Capitalizingonthissituation,thirdpartyInternetcompaniesseizedtheopportunitytogrowtheirbusinesses.Hotelswereeagertoworkwiththem,andcustomerswereeagertousethemasconfidenceandsecurityinbuyinggoodsandserviceson-lineincreased.RackRates:Withoutanyaffiliationstowarrantdiscounts,theRackRatedcustomerpaidthepublishedrate,whichwasthehighestrate.ConsortiaRates:ThiswasthesamecustomerwhobookedthroughatravelagentusingtheGDSandreceiveda5%-10%discountoffRackRates.CorporateRates:Havingmetthehotel'squalifyingcriteria,suchasvolume,businesseswereguaranteeddiscountedrates.GroupRates:Withablockofrooms,ratesvariedbasedontimeofyearandthenatureofthegroup.WeekendRates:Individualleisuretravelers,usuallywithinadrivedistancetothehotel.Promotionalrates:Theserateswereoriginallyusedsparinglyandusedasameanstostimulatebusinessbyusingdiscountedratestoanyone,regardlessofaffiliation.
CHAPTER-6INNOVATION
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ServiceInnovation
Hotelindustryiscontinuouslyusingtheconceptoftechnologytodevelopitsimageandoccupancyratio.Thoughthehotelindustryisaserviceindustryitiscontinuouslyinnovatingthewaytheservicesareprovided.Manyhotelshaveacategoryofroomswhicharedifferentinthespaceandfacilitieseachonehavingtheirownspecialtiesandrangeofprice.Hoteliersarenowrunningtheirbusinessaccordingtothetasteandpreferencesofthecustomerscontinuousfeedbackfromthecustomersarehelpingthemanagementtoinnovateintheservicesprovidedbythe.Fewhotelsareprovidinganservicesintheiruniquewaytogetintomoonlight.Offeringspecialservicesrespectingthecustomer'straditionsandcustomsandprovidingtheserviceintheirwayisnewinnovationtoattractthecustomers.TechnologicalInnovationTheadventoftheInternethasopenedupmanyavenuesforthehotelindustry,mostimportantlytheabilitytobookclients.Mostifnotallofthehotelchainsoffersomesortofonlinereservationenablingthehotelmanagementandstafftofocustheireffortsinavarietyofdifferentplaces.Itisreportedthat25percentofallreservationsaremadeonlinemakingitakeytoolinroomoccupancyfulfillment.Inadditiontoroombooking,mosthotelchainstodayutilizetheInternetbyofferingonlinedealsandmajoradvertisingcampaigns.ElectronicadvertisementaccompaniedwiththeabilitytomakereservationsonlinehasmadetheInternettremendouslyvaluable.Adaptingtoecommercetransitionssuchastheimplementationmulti-purposecomputersoftwarearenecessarytocatertotheclienteleofthenextgeneration.Ahigherunderstandingofmarketneedswillensurealargerportionofit.Informationprocessingm
anagementisanotherkeyelementthathascontributedtohotelindustrysuccess.Understandingandactingontheneedsofclientelewillluretravelersawayfromcompetitors.Again,mostifnotallhotelchainstodayareutilizingsomesortofcustomerpatterntracking.Completeclientpleasureisdependentuponwhatyoucanofferdifferentlyfromtheotherguy.Thecolorofthesheets,thepositionofanicemachine,thesoftnessoftoiletpaper;targetingtheverycoreneedsofclientelemeanstheywillreturntowhattheyarecomfortablewith.
CHAPTER-7STRATEGIESANDCOMPETITIONINTHEINDUSTRY
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7.1InternalRivalryThedegreesofinternalrivalryconsistofcompetitorsinthehotelindustrythatdifferentiatestheirstrengths,cost,productoffering,andpositioningwithintheindustry.Inthehotelindustrythereisalotofcompetitionthattakesplacebetweendifferentproviders.Eachcompanyfindstheirstrengthsanddoeseverythingintheirpowertobeacknowledgedbythecustomer.Oncetheyuncoverhowtheycanservetheirconsumersbetterthanleadingcompetitorstheypositionthemselvesintheindustrythatbetterservestheconsumers.7.2SWOTAnalysisSTRENGTHSAverywidevarietyofhotelsispresentinthecountry.ThereareinternationalplayersinthemarketsuchasTajandOberoi&InternationalChainsAmanpowercostintheIndianhotelindustryisoneofthelowestintheworld.IndiaoffersareadymadetouristdestinationwiththeresourcesNaturalandculturaldiversityDemand-supplygapGovernmentsupportWEAKNESSESThecostoflandinIndiaishighat50%oftotalprojectcostasagainst15%abroad.ThehotelindustryinIndiaisheavilystaffed.Hightaxstructureintheindustrymakestheindustryworseoffthanit'sinternational.Only97,000hotelroomsareavailableinIndiatoday.OnlylimitedvalueaddedservicesSlowimplementationOPPORTUNITIESDemandbetweenthenationalandtheinboundtouristscanbeeasilymanagedduetodifferenceintheperiodofholidays.Inthelong-termthehotelindustryinIndiahaslatentpotentialforgrowth.Uniqueexperienceinheritagehotels.Risingincome.THREATSGuesthousesreplacethehotels.PoliticalturbulenceintheareareducestouristtrafficandthusthebusinessofthehotelsChangingtrendsinthewestdemandsimilarchangesinIndiaTheeconomicconditionsofacountryhaveadirectimpactontheearningsinhotelindustry.Lackoftrainingmanpowerinthehotelindustry.Fluctuationsininternational
touristarrivals.
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Increasingcompetition
7.3
PortersFiveForcesModel
BARGAININGPOWEROfSUPPLIERSTheterm'suppliers'comprisesallsourcesforinputsthatareneededinordertoprovidegoodsorservices.Thehighclasshotelsareoperatingbyfewhotelchainslike-TAJ,EIH,ITC&THELEELAPALACEsotheyhaveacontrolovertheindustry.Therearenosubstitutesforspasandfivestarhotels.Thehotelscustomersarefragmented,sotheyhavetoreducetheirbargainingpowertoattractthecustomers.TheTaj,ITC&Oberoiarehavingvariousratesandtariffs.Becausetheyarehavingtheirownbrandimage.ThehotelchainsareoperatingdifferentserviceslikeSpas,Boatels,Resorts,CityCenters,HeritageHOTELS,etc.BARGAININGPOWEROFCUSTOMERSSimilarly,thebargainingpowerofcustomersdetermineshowmuchcustomerscanimposepressureonmarginsandvolumes.Thehotelindustryisoneofthemostinvestedinitsfixedassets.Sotheyaretryingtorecovertheiramountquickly.Thesuppliersareprovidingbetterinformationaboutthemtoattractthecustomers'.Herethebuyersarehighlyinformed.Ifthehotelpricechangesaremoderate,theCustomershavelowmarginsandareprice-sensitive.Someunseasonedtimingsthehotelsareofferingdiscountsandincentivestoreducethebargainingpowerofbuyers.THREATOFNEWENTRANTS
Thecompetitioninanindustrywillbethehigher;theeasieritisforothercompaniestoenterthisindustry.Insuchasituation,newentrantscouldchangemajordeterminantsofthemarketenvironment(e.g.marketshares,prices,customerloyalty)atanytime.Thereisalwaysalatentpressureforreactionandadjustmentforexistingplayersinthisindustry.TheforeignhotelchainsaretiedupwithIndianhotelstoreducetheinitialcostandusingthelatter'sbrandname.BrandloyaltyofcustomerslikeTAJ,ITC,andLEELAPALACEaffectsthenewentrants.AccesstorawmaterialsandDistributionchannelsarecontrolledbyExistingplayerslikeTAJ,ITC,andLEELAPALACE.ThecostoflandinIndiaishighat50%oftotalprojectcostasagainst15%abroad.ThisactsasamajordeterrenttotheIndianhotelindustry.InIndiatheexpendituretax,luxurytaxandsalestaxinflatethehotelbillbyover30%.EffectivetaxintheSouthEastAsiancountriesworksoutto
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only4-5%.
THREATOFSUBSTITUTESAthreatfromsubstitutesexistsiftherearealternativeproductswithlowerpricesofbetterperformanceparametersforthesamepurpose.Theycouldpotentiallyattractasignificantproportionofmarketvolumeandhencereducethepotentialsalesvolumeforexistingplayers.Thiscategoryalsorelatestocomplementaryproducts.Brandloyaltyofcustomers(TAJ,ITC,LEELAPALACE,etc,)isdominatingthesubstitutes.Thehotelrelationshipwithcustomerandcostsalsothereasonstoswitchingtosubstitutes.Thepricevariationofsameclasshotelservicesfromvariousbrandsisoneofthereasonstochooseasubstitute.Thepresentdemandandsupplyofhotelroomsisoneofthereasonstochooseasubstitute.Morefixedcostandswitchingcostsaffectsthebusiness.COMPETATIVEPOWEROFRIVALRYPLAYERSThisforcedescribestheintensityofcompetitionbetweenexistingplayers(companies)inanindustry.Highcompetitivepressureresultsinpressureonprices,margins,andhence,onprofitabilityforeverysinglecompanyintheindustry.Thetopcompetitorsinhotelindustryarehavingthesameserviceslikefivestar,spas,boatelsandmotels,heritagehotelsandpalaces.Thehealthycompetitionamongtheallplayersishelpingtoincreasetheindustrygrowth.Intenseinmetrocities,slowlypickingupinsecondarycities
CHAPTER-8BUSINESSENVIRONMENT
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PESTALModelPoliticalfactorsRulesandlawsareapartofcitizenseverydaylife.Wehavetoabidebycertainrulesandregulationsinordertoremaininsociety.Thisgoesforcorporationsaswell.Allcorporationshavetofacesomesortofrulesandregulations.Althougheachcorporationhastofacerulesandregulations,eachindustryfacesdifferentrulesandregulations.Ofcourse,itwouldonlymakesensetobelievethatallregulationsarenegativeforcorporationsbecauseittakesawayfromthebottomline.However,therecanbepositiveaffectsoftheregulations.Forexample,arulinginfavorofanti-trustlawswilltakeawayfromthemonopolisticcompany,butatthesametime,thebarriersofentrywillbecomeeasyleavingopportunityforothercompaniestoincreasetheirbottomline.Ananalysisofthehotelindustryhasrevealedthatthereareenvironmental,labor,andfood&safetyregulationsaswellasregulationsformerging,whichmustbelookedatbeforeenteringintotheindustry.Environmentisoneaspectthegovernmentwillalwayshavetheireyeon,andtheywillintroducelawsthatwillprotecttheenvironment.Suchlawswillneedtobelookedatasaplayerinthehotelindustry.Hotelsarecouldbeliableforcleanupofcontaminationandothercorrectiveactionundervariouslaws,ordinancesandregulationsrelatingtoenvironmentalmatters.Suchlawsreferringtokeepingtheenvironmentingoodshapecanbequitecostlytohotelsintheindustry.InEurope,NorthAmerica,AustraliaandNewZealand,suchprosecutionscannowresultinheavyfinancialpenalties,considerableclean-upcostsorinworstinstances,jailsentencesAnotherpoliticalfactorthatcanimposeaconcernforamemberinthehotelindustryisthelawsregardinglabor.Forinstance,therearelawsthatgovernminimumwage.Althoughthismightnotseemtobeaconcern,butanytimeyouarefo
rcedtopayawagenotinplans,whicharetakingawaybottomline.Anotherlawthatcanbequitecostlyistreatmentofemployees.Forexample,therearelawsthatpreventdiscrimination,andsexualharassment.Ifahotelcompanyviolatestheselaws,itcanleadtoseverelawsuits,andatthesametimethehotelwillbeslicingtheirrevenues.Thelaborlawsareprettystraitforward,butmustbeobeyedinordertokeepongoingprofits.SocialCulturalFactorsSocialculturalfactorsareabigissuetolookintoforhotelindustrybecauseitdealswithalotofconsumerswhohavedifferentdemographic,ethnic,culturalbackgrounds.Bysatisfyingeachconsumersorgeneralizingthewaytohospitalize,hotelindustrycanhavechancetoexpandmore.TechnologicalfactorsInorderforahoteltopreventobsolescenceandremaintechnologicallyadvanced,thehotelmustbeuptodatewithallthelatesttechnologicalchangesthataretakingplacethatmighthaveanimpactontheindustry.Asitmovesthroughthetwenty-firstcentu
ry,itisevident,thatthereisastrongfocusontechnology.Today,theInternetisincreasinglybeingused.ConsumersareshoppingontheInternet,frommusictotravelandanythingonecanthinkof.Forthehotelindustry,theyneedtotakethisintoconsideration.Thereasonisthatifhotelsdon'thaveawelldevelopedwebsite,theywillpossiblyloosepotentialconsumers.Notonlydotheyneedtoalternatetheirdistributionchannelsofinformation,theyalsoneedtoadvertiseaggressivelyontheInternet.Discussinginfurther
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detailofwhatthecomputerhasbroughtisusingitfororganizingthehoteloperation.Thedayofhavingeverythingonpaperisobsolete.So,inorderforahoteltohaveacompetitiveadvantage,theyneedtohaveaveryhightechinformationsystem.Whilethecomputerischangingthewayhotelsintheindustrycanofferinformationtotheirpotentialconsumersandthewayahotelorganizestheiroperations,materialssuppliedtothehotelarestartingtobecomeobsolete.Forexample,inmosthotels,youwillstillfindstereos,VCRs,andregulartelevisions.However,thingshavechangedinthewaypeopleaccessmusic,movies,andofcourseT.V.Today'ssociety,individualshavemovedawayfromthosebigboxesandadoptedtheuseofdigitaltechnology.So,forahoteltopreventobsolescencethemustchangefromthesuppliersthataresupplyingthemwithstereos,VCRs,andregularTVsandlookforsuppliersthatwillofferthemipods,DVDs,anddigitalHDTVforroomuse.Movinginthisdirectionwillmakethehotelmuchmoreattractive,thustherevenueswillincrease.Thefinaltechnologicalfactorthatneedstobelookedatistherisingcostsofenergy.Theseareuncontrollablecosts,thustheonlythingthatcanbedonetolimittheimpactoftheseincreasingcostsisforhotelstomanagetheuseofenergyefficiently.Astrategyofhowtomanageitwouldbeonething;however,ahotelmustalsolookatthealternativesofenergythatarecomingintotheworld.Forexample,withhigh-energycostssomebusinessesarethinkinginnovation.SolarCitieswillbethesuccessesofthe21stcentury.EcologicalfactorsEnvironmentissomethingweashumanbeingscomeincontactwitheveryday.Theconditionoftheenvironmentwilloftenguidedecisions.Forinstance,ifitisreallysmoggyoutside,thechancesofgoingforahikeortoanamusementparkareverysmall.So,itwouldonlymakese
nseasamemberofanindustrythatislookingtoincreasethedemandofconsumerstofullyunderstandwhatenvironmentalfactorsfortheirindustrymightimposeanimpactonthecustomer'sdecision.Forexample,duringhurricaneseason,thecustomerdecisiontostayinahotelontheeastcoastisnotaslikelyasitwasbeforethesenaturaldisasters.Globalwarmingisanotherecologicalfactorcallsforconcern.Theozoneisslowlybeingexhaustedbyhumanactionswhileleavingtheearthdegreeswarmer.Theuncertainclimatecanhaveadirectimpactonhotelsthatareinareasofskiresorts.However,eventhoughthisisadefiniteconcern,itshouldbeaconcernforlongtermplanningthetimeframeforsucheffectsismorelikelytohappeninthefuture.Awaythatcouldallowthisnottobeanimpactforotherhotelsistobuildastrongimageintheconsumersmind.Suchimagewouldcomefrombeingecoefficientbyimprovingresourcestopreventpollution.
CHAPTER-9CRITICALSUCCESSFACTORS
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9.1FactorsinfluencingSuccessintheIndustryDemandDrivers.ThehotelandrestaurantindustryofIndiawasRs.658.89billionduring2007-08.Travel&TourismIndustryofIndiawasvaluedatUS$35.73billionin2007,contributing3.56%toIndia'sGDP.ThenumberofforeigntouristsarrivingtoIndiareached5.08millioncomparedwith4.45millionintheyear2006,showinggrowthof14.16%.India'sshareininternationaltouristarrivalsatgloballevelgraduallyimprovedfrom0.46%in2004to0.49%in2005andfurtherto0.52%in2006and0.56%in2007.ThenumberofdomestictouristsinIndiawas526.57millioncomparedwith461.76millionin2006,showinggrowthof14.03%.Thereare1,437hotelsapprovedandclassifiedbytheMinistryofTourism,GovernmentofIndia,withatotalcapacityof84,327hotelroomsasonDecember31,2007.Indianhotelindustryiscurrentlyaddingabout60,000qualityrooms,whichareexpectedtobereadyby2012.
InternationalTouristTrafficTheforeigntouristarrivalsinIndiaincreasedatCAGRof5.5percentfrom2.29Millionin1996to3.92millionin2005.Significantly,thebulkofinternationalarrivalsintoIndia,bothin2004and2005,havebeenbusinesstravelers.Mainreasonforthisincreasehasbeenfollowingfundamentalfactors:India'sstrongGDPgrowth.Openingofsectorsoftheeconomytoprivatesector/foreigninvestment.Strengtheningoftieswiththedevelopedworld.
Also,introductionoflowcostairlinesalsocontributedtothedemand.Theincreaseininternationalflights,seatcapacityandfrequencyintothecountryandthedecisiontoallowprivateairlineslikeJet
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AirwaysandAirSaharatoflyoverseashashadapositiveimpactontouristandbusinessarrivalsintoIndia,bywayofprovidingadditionalseatsto:Keydestinations.DevelopmentofinfrastructurebytheGovernmentIndia'semergenceasanoutsourcinghub.SuccessofIncredibleIndiacampaignandothertourismpromotionmeasures.India'sgrowingrecognitionasanexcitingplacetovisit(TheReadersTravelAwards2006',conductedbyCondNastTravelershasrecentlyplacedIndiaatnumberfouramongtheworld'smust-seecountries,upfromnumberninein2003)hashelpedboostitsimageasaleisuredestination.9.2IdentifyingCriticalSuccessFactors(CSF)FortheIndustryThemarketforthehotelindustrycanbedividedintothefollowingkeyconsumersegmentsbasedonpurposeofvisit:TheBusinessTravelerTheBusinessTravelerisabusinessmanoracorporateexecutivetravelingforbusinesspurposes.Thissegmentincludescorporate,bothdomesticandforeign,whoopenofficesinthehotelpremisesduringstart-ups,corporateexecutiveswhomakeextendedstayeitherforlongdurationprojectsorwhilewaitingforpermanentaccommodation(primarilyexpatriates)andconventionarrivals.Whiletheseniorexecutivesusuallystayin5starhotels,themiddlelevelexecutives,whoaremuchlargerinnumber,stayinthebudgethotels.Thissegmentoffersbetterrealizations,astheydemandrelativelysmallerdiscountsonroomrents(about10percent-15percent),usemoreoffacilitiessuchasPCs,faxmulti-media,conferencehalls.Also,theFood&Beverage(F&B)revenuesarebetterastheyusuallyeatinthehotelitselfduetotheirbusyschedules.TheLeisureTravelerTheLeisureTravelercouldeitherbeaforeigneroradomestictravelerwhosePrimarypurposeofvisitisholidayorsiteseeing.Amongnon-businessforeigntouriststheprimarymotivationforvisitingIndiaislargelyculturalattraction
followedbyconferencesandconventions,touristattractionslikebeaches,wildlife,hillresortsetc.Usually,leisuretravelersarepartofapackagerunbyatouroperator.Themarginsofferedbyleisuretravelerstendtobelowerbecauseoftworeasons.Firstly,theyseekhigherdiscountsandalsoprovidelessF&Brevenuesastheyusuallyeatout.ThebusinessofferedbythissegmentishighlyseasonalandtendstopeakintheSeptembertoMarchperiod.AirlineCabinCrewAirlineCabinCrewformsanotherimportantsegmentbecauseoftherepetitiveandguaranteednatureofthebusinessthattheyprovide.Usually,theseareapartofanannualcontractwhereby,inreturnforafixedrate,acertainnumberofroomsareprovidedondemandforcabincrews.Withdiscountratesintherangeof40percentand50percent,thisrepresentsalowyieldsegmentforhotelsingeneral.PremiumandLuxurySegmentThissegmentcomprisesthehigh-end5-stardeluxeand5-starhotels,whichmainlycatertothebusinessandupmarketforeign
leisuretravelersandofferahighqualityandrangeofservices.Thesegmentaccountedfor29percentofthetotalhotelroomsinthecountryinDecember2005.
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CONCLUSION:
ThehotelindustryinIndiahavingatremendousopportunityinthefuturebecauseofincreasingtrendsinthetourismindustryandgovernmentpromotingtheIncredibleIndiacampaignandothertourismpromotionmeasures.ThehotelindustryinIndiaismixofmanybrandinternationallyestablishedhotelshavingthescopetoattractsharesinthebrandhotelswhichwillhelptoexpandtheindustryandtheinnovationsintheindustryishelpingthehotelstoretainthecustomerswiththem.Thoughtheindustryishavingopportunitiesinfutureitissufferingwiththecostoflandwhichiscosting50%ofthetotalcostandthetaxesaremaindrawbacksfortheindustry.Industryisopeninggatesfortheforeigninvestmentwhichisagoodsignfortheindustryandindustryisworkingtowardthefulfillmentofthedemandandsupplygap.
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