Hotel Feasibility Study

CHAPTER -1INTRODUCTIONTOURISM

“Tourism” is the totality of the relationship and phenomenon arising from traveland stay strangers the stay does not imply the establishment of a residence and connectedwith remunerated activity.IMPORTANCE OF TOURISMIn creating better appreciation of other people’s ways of the life and institution, tourismmay create goodwill for a country. Each year many tourist travel to participate inparticular events ranging from congress to corona tings; their visits also affordopportunities to improve co-operation as well as project the correct image of a country tothe out side world.Politics, society, education, and culture thus often provide motivations for tourist to travelaway from home, they influence tourism and tourism in turn has an influence on them.These factors also help explain participation in tourism generally as we have seen. Anevaluation of the significance of tourism may be extending to such aspects as organizedsport and religion.The main economic significance of tourism-that money earned in places of normalresidence is spent in places visited-is common to all tourism, whether domestic or

2international. Each year vast sums are transferred from the economy from whom it isearned, to economies in receiving areas where they provide a source of income, a meansof livelihood, and amenities for the resident population.The outstanding economic effect of tourism lies in the purchasing to spend at a muchbigger rate than when they are at home. The flow of money generated by touristexpenditure finds its way into the overall economy of the tourist destination, as themoney is turned over and re-spent. But international tourist expenditure introduces anadditional aspect of economic significance, as countries, which have separate politicaland economic entities, have to balance their transactions with the rest of the world.International tourism, therefore, enters into the balance of payments accounts of individual countries and ease of major significance in international trade. For countries,which generate tourist traffic, it represents an import, in much the same way, as theimport of merchandise. Globally tourism countries are a major item in world trade, whichhas shown a much faster rate of growth in recent years than trade in goods.Tourism is evaluated mainly in terms of its economic significance, but reference is madealso to its role as source of other, less quantifiable, benefits and to

some of the problemswhich tourism presents to individual destinations.When traveling away from home, tourists come in contact with places they visit and withtheir inhabitance, and so social exchanges take place. Their presence and their socialbackground affects the social structure and mode of life at the destination. Tourists are in

3turn affected by the experiences and often carry back home with them new habits andnew outlook on life.Tourism has an educational significance. In the wider sense it has the altogetherbeneficial effect which contact between people of different races and nationalities canbring about. In a narrow sense much tourist activity takes the form of study trips andattendance at courses and conferences with specified educational aims in view.Tourism is often accompanied by cultural exchange and by cultural enrichment of thosewho travel as well as those at the receiving end. The cultural factors that may attracttourists to a particular destination are architecture, historical monuments and birthplacesof famous people. These are some of the places most visited by the tourists. Festivals andexhibition rely heavily to visitor traffic as their audience.Tourism can be classified into:a.Tourists visit places forrecreational purposes. Such tourists spots are usuallyhill stations, beaches etc, such tourists like to get away from the daily grind of lifeand freshen themselves.b.CULTURAL TOURISM:Such type of tourist satisfies the cultural curiosity of the tourist. Such tourist spotsinclude ancient monuments, places of historical and religious importance etc

c.ADVENTURE/SPORTS: This type of tourism is very particular with the youth. This type provides peopleto have adventure like diving, skiing, rafting etc.d.HEALTHSuch type of tourism takes people to places of recovery like places with curativepossibilities. E.g.: Hill-Stations, hot springs, spas etc.

e. CONVENTION/EDUCATIONAL:Tourism such as these are meant for organizing conventions for political, culturalor academic reasons.Tourism can also be classified on basis of region:Domestic: Domestic tourism is for tourists belonging to their own country and do not requireany papers or documentation for travel.International: Such type of tourism refers top traveling to other countries other than their ownand with different political and economic systems. This requires documents such as visa,passports, etc , to cross the borders.

MODERN TRENDS IN TOURISMSpread over a land mass of 324 million sq.kms with a population of aroundmillion, with at the rote of about 13 million every year, with 14 major and 20 notlanguages and 845 dialects, each state habits, religious customs and festivals. For a foregone visitors to indo, it some how gets on his blood. Love it or not. Onecan never ignore India. One visit to India can never satisfy the thirst of screening visitorand when back in his/her place , desire to get back there.India is luxurious country. Some places are featureless as some spectacular, thefood can be terrible as it is magnificent and the country defies imagination and cold logic.There is diversity and get unity.This is India of the Indus valley civilization; there is also Bharat, the land of Emperor Bharatha.It mixture of natural beautiful and diversity of culture attracts a lot of tourism.India is a country where tourists can enjoy the adventure of Himalayas and the beauty of the sea. They can explore the desert and jungle of Assam. Behind this terrific beauty,India has a never-ending culture, religion, temples, church and mosques. Tourism in Indiais presently the 3rdlargest after gum and jewellery and ready-made garments.The fettle of India tourism is not very attractive when compared to the worldscenario. The annual foreign tourist arrival in India is 2 million where as the foreign

exchange earnings touched Rs. 70 billion. Most of the India tourism thrives on domestictourism. Each year, 100 million domestic tourist criss-cross the borders of

the states.The government of India had put forward some strategy on order to improve thissector. Now the Indian tourism exchange industry has become the 11thlargest foreignexchange earner of the world and during 1997-1998 the estimation made on the earningsof foreign exchange was Rs. 11032/- Crore. Tourism budget has been increased from 100Crore to 160 Crore recently and the government has also helped in their organization of visit India year 1999-2000 which boost up the industry.The government, in collaboration with Rajasthan tourism had put forward thePalace of Wheels. It is a luxury train with 14 deluxe saloons.The train covers 8 destinations in 7 days. In February 1995, the Gujarath tourismlaunched a similar train called Royal Orient which is centrally air-conditioned.Tourism industry in India shows a positive trend for the future and with thedevelopments as well as those, which will occur in future, will without any doubt shootup the industry

CHAPTER -2PROJECT DESIGNAIM:To reveal the market feasibility and financial viability of the proposed hotelOBJECTIVES:Some of the main objectives of the study of the project are:

• To determine the marketing feasibility & Financial Viability of a proposed hotelin TRIVANDRUM

• To estimate the cost of project.

• To estimate the total expected revenue from the various departments of theproposed hotel.

• To calculate the profitability ratios and pay back loan period of the proposedhotel.

• Determine the profitability analysis.

• To find the break-even point and expected return on investment

METHODOLOGY:The information for this project has been collected through the followingprocedures:Primary Data:Some of the primary data, which are collected for the study of this project, werecollected from government officials of respected departments. The data, which wascollected during the survey through investigation woith hospitality officials.Secondary Data:Various data were used from journals, books and various supplementary copies of news and other magazines and from the Internet has helped us in gathering information.LIMITATIONS:

• Calculation made in the project is based on assumption, approximation and subject tochange.

• Getting exact financial figures was not possible.

CHAPTER -3INFORMATION ABOUT THE PLACEKERALA Slender green sliver of land clinging to the south western flank of the Indianpeninsula, Kerala is one of the southern states of the Republic of India.Though it's roots date back to the early years of the Christian era, the modernstate of Kerala was created in 1956, when all the states of India were reorganized on alinguistic basis. History was created in 1957, when Kerala became the first state in theworld to have democratically elected a Marxist government to power. Things havechanged, but politics still continues to dominate conversation, particularly in thenumerous wayside tea stalls, where the brew is as strong as the ideology.The state has been in the forefront, in terms of education and health services. Ithas the highest rate of literacy, lowest rate of infant mortality and the leading female tomale ratio, in the country.GEOGRAPHYKerala is made up of fourteen districts. Each of them have a distinct

character.Thiruvananthapuram (also known as Trivandrum) is the capital of Kerala, famous for

10it's Kovalam beach (rated one of the top ten beaches of the world). Geography isdestiny in Kerala with the monsoon winds bringing the gift of life annually. It'smonsoons are likened to a battalion of wild elephants.HISTORY OF KERALAThe history of Kerala belonging to the early Christian era is not much known except thatthe dynasty called the cheats were the predominant rulers here. But from 6thcenturyonwards the picture gains clarity, revealing the fact that then the land was ruled bydynasty known as the Perumals. The last of the line, Cheraman – perumal abdicatedkingship and divided the land between his chieftains.The state of Kerala was formed long after Indian independence, in 1856, Travancore ,Kochi , Malabar , were united to form the present state of Kerala. Thus the wholeMalayalam speaking population was brought within a single physical boundary.LAND AND PEOPLEA total number of 45 rivers make Kerala a fertile piece of land flowering down from theghats to the west. Kerala is also a paradise of backwaters. The numerous backwaters,canals and ocean inlets play an important role in economic field of the state. Beside themajor rivers are Bharathapuzha, Parma and Periyar. Many of the rivers are harassed forpower generation and irrigation.Kerala’s contribution towards the national total of fishproduction amounts to 35%. The kerala coast is renowned for prawns , sharks andsardines

CLIMATE Being situated very close to the sea, Kochi has a moderate climate. Heavyshowers are experienced during the months June, July and August due to the South-WestMonsoon. The North-East Monsoon brings light rainfall during the months September,October, November and December. December to February is pretty cool. The annualrainfall is about 310 cm . In summer the temperature rises to a maximum of 35 ºC whilein winter it is around 25 ºC LITERATURE

Malayalam , the prime language of Kerala is treasures have of literature. With anenvious level of literacy in India (100%) urban area of Kerala have an intellectualbackground. Large groups of the population possess the capacity to evaluate arts andliterature with an aesthetic and objective outlook. Needless to say that there areorganizations and forums to encourage and appraise artistic creation in the fields of literature, art and cinema.FESTIVALS AND FOLK ARTS

‘Onam’, the national festival of Kerala is now observed as a part of the tourist week celebrations. All the district capitals and other tourist spots are decorated and providedwith entertainment. Onam is a harvest festival celebrated in chingam the first month of

12Malayalam era (august/september). An interesting pageant of this festivity is the snakeboat race held at Alappuzha , Kochi , Kumarakam , Aranmula , Chambakulam etc. Otherpopular festivals are Vishu , Ramzan and Christmas. Besides, there are numerouscelebrations of local importance along the length and breadth of Kerala. Kathakali is adance drama in which the actors do not speak but express themselves through mudras (gestures ) accompanied by padams ( recitals ) in the background.Kalarippayattu is an ancient martial art of Kerala. It is a sophisticated way of usingweapons like sword, dagger , stick , spear and shield. Training in kalarippayattu isimparted at CVN Kalari, east fort, Thiruvananthapuram and many other centers.FOOD AND DRINKSKerala has a variety of delicious food specialties. Rice is the staple food. It isaccompanied with varies curries , curd , pappad , pickles and other side dishes. The non-vegetarian dishes are made of mutton , beef and chicken. Fish is also a favorite dish. Adessert called payasam usually follows the main course of food. Payasam is a preparationof rice or vermicelli with milk, sugar and spices. The popular thirst aids are buttermilk and bottled soda drinks. However, tender coconut water is the best bet for a refreshingand nourishing

COMMERCEAgriculture contributes most to the state's income in the primary sector. Kerala'smajor sources of exports are agro-based and traditional like coir and cashew as well asmarine products and manpower. In spices, pepper is the single most important product,with Kerala being the largest producer and exporter of black

pepper. Cardamom andginger are also exported.Kerala at a glance Area 38,863 Sq.KmCorporations 3Districts 14Municipalities 54Taluks 63Rivers 44Panchayats 991Highest Mountain Anamudi (2652.3 Meters)

TRIVANDRUMTrivandrum is the capital of the Indian state of Kerala and the headquarters of theThiruvananthapuram District. It is located on the west coast of India near the extremesouth of the mainland. Referred to by Mahatma Gandhi as the "Evergreen city of India",the city is characterized by its undulating terrain of low coastal hills and busy commercialalleys. With almost 745,000 inhabitants per the 2001 census, it is the largest and mostpopulous city in Kerala; the wider urban agglomeration having a population of about onemillion.The city is the state capital and houses many central and state government offices,organizations and companies. Apart from being the political nerve centre of Kerala, it isalso a major academic hub and is home to several educational institutionsORIGIN OF NAMEThiruvananthapuram literally means "City of Lord Anantha" in Malayalam. The namederives from the deity of the Hindu temple at the centre of the city. Anantha is the serpentShesha on whom Padmanabhan or Vishnu reclines. The temple of Vishnu reclining onAnantha, the Sri Padmanabhaswamy temple is the most recognizable iconic landmark of the city. The city was officially referred to as

Trivandrumin English until 1991, when thegovernment decided in favour of Thiruvananthapuram. However, the city is still widelyreferred to as "Trivandrum".

AREAS OF INTERESTTHIRUVANANTHAPURAMIt is the capital city of Kerala. The Kawadiyar palace, the museum, the zoo, theChitralayam art gallery with a large collection of paintings, the Sri Padmanabha Swamytemple and the aquarium are the main attraction of the city. Ponmudi, 56 kms fromThiruvananthapuram is a pleasant hill resort. The Padmanabhapuram palace, a monumentfamous for its moral painting, is located near Thiruvananthapuram.KOVALAM BEACHIts is one if the finest beaches in India and the most attractive tourist center of Kerala. Itis 13 kms south of Thiruvananthapuram.PONMUDIIts is one of the tallest peaks in Kerala and an attractive hill station. It is about 1 ½ hourdrive from the capital city.MUSEUM AND ART GALLERIESTHIRUVANANTHAPURAM MUSEUM :Palayam road , Thiruvananthapuram .This museum has a collection of 19thcentury oil paintings , old coins , culture , in stoneand in plaster of Paris , copies of moral paintings etc

PADMANABHAPURAM PALACEDisplays articles of archaeological importance like royal beds , paintings , epigraphs ,arms etc.WHERE TO BUYSpecial local handicrafts rosewood carving , ivory carving , coir products , snake boatmodels.AREASBheema Palli, East Fort, Statue JunctionPLACE TO WORSHIPCHRISTIAN

St mary’s church , PalayamHINDU

Padmanabha Temple, East Fort.

Attukal Devi Temple, East Fort.

Vinakaya Temple, East Fort.MUSLIM

Juma Masjid, Palayam

CHAPTER -4DEMAND QUANTIFICATIONDemand quantification is a part of Market research and broadly includes:a) Determining the size of both current and potentb) Accessing Market trendsc) Demand & sales forecastingHOTELS AND THEIR FACILITIESSL.No Name of the Hotel No. of roomsOccupancy Product1 South Park 83 65% 53952 Leela hotel and Resort 194 65% 126103 Mascot hotel 64 60% 38404 Muthoot hotel 58 70% 40605 Taj green cove 20 70% 1400Total 419 27305

1.Hotel South Park Rooms83 RoomsFacilities Doctor on Call, Safe Deposit Locker Facility, In-house Laundry, 24 Hours CurrencyExchange Facility, Free Multi Channel CCTV including Movies, Free Parking, LeftLuggage Room2.Leela Hotel and ResortRooms194Facilities Business Center, Swimming Pool, Health Club, Recreation Club, Book Shop, BeautyParlor, Travel Counter, Conference Hall, Discotheque, Shopping Center, Restaurants

3.Muthoot Hotel Rooms58 roomsFacilities Business Center, Swimming Pool, Health Club, Recreation Club, Book Shop, BeautyParlor, Travel Counter, Conference Hall, Discotheque, Shopping Center,Restaurants

4. Mascot HotelFacilities 64 rooms,24 hour room service/ Coffee shop, Satellite television,Restaurant , Bar, Health club, Laundry , Conference hall , Doctor call,Currency exchange, Travel assistance , Car hire.5. Taj Green CoveBusiness Center, Swimming Pool, Health Club, Recreation Club, Book Shop, Beauty Parlor, Travel Counter, Conference Hall, Discotheque,ShoppingTotal Product1. Average occupancy =Total no of rooms= 27305419= 65.16Assuming that break-even occupancy is 60% for a three star hotelTherefore demand for the room for the proposed hotel

20 2.Total potential of rooms = Total rooms X Average OccupancyBreak even occupancy= 419 X 65.1660= 453.913. Demand = (Average Occupancy –B.E.O) x Total roomsB.E.O= (65– 60) x 41960= 34.914.Maximum Number of rooms = Demand 34.91X 100 = x 100B.E.O 60= 58.18Since the assumption made are not fully validated it is suggested ahotel project of 45can be promoted inTRIVANDRUM 21 CHAPTER -5TECHNICAL DETAILS OF THE PROPOSED HOTEL

PROFILE OF THE PROPOSED HOTELNAMEHOTEL FORT MANORSTAR CATEGORY 3 STARNUMBER OF ROOMS 45ADDRES Pattom, Pattom palace P.O,Trivandrum, Kerala-695004

ABOUT THE FORT MANOR HOTELAccommodation consists of elegantly appointed rooms that range from the suiteto the pent house suites. Each features a seating area and balcony. Luxurious marblebathrooms with Victorian style freestanding bathtubs overlook a private walledcourtyard.

CHAPTER -5TECHNICAL DETAILS OF THE PROPOSED HOTELPROFILE OF THE PROPOSED HOTELNAMEHOTEL FORT MANORSTAR CATEGORY 3 STARNUMBER OF ROOMS 45ADDRES Pattom, Pattom palace P.O,Trivandrum, Kerala-695004ABOUT THE FORT MANOR HOTELAccommodation consists of elegantly appointed rooms that range from the suiteto the pent house suites. Each features a seating area and balcony. Luxurious marblebathrooms with Victorian style freestanding bathtubs overlook a private walledcourtyard

22TheFORT MANORHotel has45 ROOMS.The Main features of the hotel are:ROOMS TARIFF

• 20

SINGLE rooms, 2500

• 20DOUBLE rooms, 3500

• 5Deluxe suites 4000

• 1 multi cuisine restaurant ( THE REGENCY- 50 Pax)

• 1 Bar ( LAGOONA- 30 Pax)

• 1 Banquet Hall, Conference Hall & Board Room(420 Pax)Name of the hotel

“HOTEL FORT MANOR”Star category3 starLocationTrivandrumTypePrivate ownershipPropose sitePattom, TrivandrumNo. Of rooms45Facilities offeredRestaurant, AccommodationBar, Car parking etcMeans of FinanceICICIManpower135

AMENITIES

• Air conditioned room

• Airport transfers

• Audio visual equipped

• Baby care

• Banquet facilities

• Bar

• Business center

• Cable TV

• Car parking

• Doctor on call

• Fax service

• Fire safeguards

• Laundry facilities

• Money changer

• Parking

• Photocopy services

• Power back-up

• Restaurant

• Safe deposit

• Travel desk

BANQUET FACILITIES (420 PAX)

• OHP presentations

• Public address systems – lectern, table, and lapel microphones

• Exhibitions – design and execution

• Business center

• Full communication facilities – National and international

• Printing, stationary, delegate kits

• Video coverage and photography

CHAPTER -6RECOMMENDED MARKETING MIXMarketing is the process of planning and executing the conception, pricing,promotion and distribution of ideas, goods and services to create exchanges that satisfyindividual and organizational objectives. The marketing mix refers to the appointment of the effort, the combination, the design and integration of elements of marketing in to aprogram, which is on the basis of an appraisals of the marketing forces, will vest achievethe objective of an enterprise of a given time.MARKETING MIX:In common parlance, marketing is the process of selling something at a shop ormarket place. A market is regarded as a single or an aggregated or relationship betweenconsumers and producers who are separated by place and time and have a potential tostrike an exchange of goods and services. Marketing is concerned with business and thefunctions, product planning, pricing, selling and advertising.When the functions mentioned above are interlocked in a planned and systematicmanner to attain a given objective. They merge their identity in what is called themarketing mix in short; it just means the mixing of marketing ingredients, which are alsopopularly known as the four P’s viz

Adequate advertising, sales, promotion and personnel selling to create interest anddesign for the product among customers for the proposed hotel can be based upon theconcept of the customer segment aimed at promote the market strategy.The four basic aspect of marketing are:

• Place

•

Product

• Price

• Promotion An optional marketing mix, hence involves from a creative blinding of ingredientsor elements, so that the product or services is offered to the market under the conditionsmost favorable to the attainment of marketing objectives.PLACE:The place can define as “The aggregate of forces or conditions within whichbuyers and sellers make decision that result in the transfer of goods can be segmentedgeographically into:

• Region or place

• Climate

In the geographic base, regional differences in terms of topography, climate,population and its density, from the base for market segmentation and differentiatedmarketing effort.Choosing the right location is an important and vital decision for any hospitality business.Certain factors have to be taken into account to decide the right place. Some of thefactors that decided the selection of proposed hotel place are:

Railway station and bus stand are 5Kms respectively.

Main City is just 2 km from the proposed site.

Easy accessibility to town area.

PRODUCT:A product is a bundle of utilities and accompanying services. The proposed three starhotel would be a three-floor building with the following facilities.

Car Parking

Banquet Facilities

Telephone in all Rooms

TV with Channels in all Rooms

Central Air Conditioning system

Multi- Cuisine Restaurant

Bar

24 Hours Room Service

86RESTAURANT (50 Pax)Year No. of coverssold/dayAveragecover chargeNumber of daysTotalRs in LakhsI 30 300 365 32.85II 35 325 365 41.51III 40 350 365 51.10IV 45 375 365 61.59V 50 400 365 73.00

87ROOM SERVICE (45 Rooms)Year No. of coverssold/dayAveragecover chargeNumber of daysTotalRs in LakhsI37 300 365 40.51II39 325 365 46.26III41 350 365 52.37IV43 375 365 58.85V45 400 365 65.70 88BANQUET & CONFERENCE HALL (420 Pax)Year No. of coverssold/dayAverage percoverNo. of days TotalRs in LakhsI300 400 365 483.00II330 425 365 511.91III360 450 365 591.30IV390 475 365 676.16V420 500 365 766.50