presentation hotel industry finish
TRANSCRIPT
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Introduction to hotel industry
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Structure of the industry.
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Hotels in India are broadly classified into segmentsby the ministry of tourism, government of India. Therating are given based on general features andfacilities offered. These ratings are reviewed every 5
years.
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STAR RATED
HOTELS
5 DELUXE & 5: LUXURY AT HIGH
PRICE , 27 % GOVT.APPROVED ROOMS
FORMS 30% OFINDUSTRY
BUILT OVER
18000 sq.m AREA
2 & 1 :AROUND TOURIST
SPOT, PREFERRED
BY DOMESTIC
TOURIST
4 & 3 :FOR MIDDLE LEVEL
BUSINESS
EXECUTIVES/LEISURE
TRAVELLERS
Eg : ITC,TAJ GROUP,
OBEROI GROUP,
ITDC
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HOTELS
STAR
RATED
HOTELS
HERITAGE
HOTELS
BUDGET
HOTELS
FACILITY
HOTELS
RESORTS
UNCLASSI-
FIED
5 DELUXE
5
4
3
2
1
HERITAGE CLASSIC
HERITAGE GRAND
HERITAGE
BUSINESS HOTELS
AIRPORT HOTELS
HONEYMOON
HOTELS
MOTELS
GUEST HOUSES
LODGE
LUXURY
BUSINESS
LEISURE
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HERITAGE
CLASSIC:
HOTELS
CONSTRUCTEDBETWEEN
1920 - 1935
HERITAGE
GRAND:
HOTELS
CONSTRUCTEDPRIOR TO
1920
HERITAGE:
HOTELS
CONSTRUCTEDAROUND
19351950
HERITAGE
HOTELS
CHARACTERISED BYLESSER CAPITAL EXPENDITURE AND
AFFORDABILITY.
OPERATE FROM FORTS, PALACES, CASTLES, RIVER
LODGES, HERITAGE BUILDINGS ETC.
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SPECIALLY EQUIPED WITH CONFERENCE
ROOMS, SEMINAR HALLS, INTERNET
FACILITIES ETC. TO SUIT THE CORPORATE
GUESTS.
Eg: INTER-CONTINENTAL, CROWNE PLAZA
BUSINESS
HOTELS
AIRPORT
HOTELS
LOCATED NEAR AIRPORTS AND SUITABLE
FOR SHORT STAY TRAVELLERS.
ARE FOUND NEAR ALL MAJOR CITY
AIRPORTS.
HONEYMOON
HOTELS
MOSTLY LOCATED AT HILL STATIONS AND
SPECIALLY FASCILITATED TO SUIT THE
COMFORTS OF HONEYMOON COUPLES.
Eg. HOTEL WOODVILLE PALACE, CARLTON
HOTEL, HOTEL HONEYMOON INN ETC.
FACILITY HOTELS
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Key consumer segments.
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The business traveler: the business traveler is abusiness man or corporate executive traveling forbusiness proposes. This segment includes
corporates, both foreign and domestic, who openoffices in hotels for start-ups ,corporates who make aextended stay either for a long duration project orwaiting for permanent accommodation.
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The leisure traveler: the leisure traveler is a indian orforeign traveler whose primary purpose of visit is
holiday and sight-seeing.
Airline cabin crew: airline cabin crew forms another
important segment because of the repetitive andguranteed nature of the business they provide.
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SWOT Analysis.
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India's rich cultural heritage: with a historical backdropof 5,500 years, India is one big package of culture and
legend which never fails to captivate the imaginationof the visitor. Along with natural splendors like theHimalayas, the indo-gangetic plains, topical forestsand long coastline. A visit to the country is a changing
spectacle of religions ,customs, festivals , sights andsounds.
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Demand-supply gap: Indian hotel industry is currentlyfacing a mismatch between the demand and supply ofrooms leading to higher room rates and occupancylevels. With 95,000 odd rooms in the country, the size
of the hotel industry represents an abysmal figure forIndia's size and growth prospects. Though newcapacity are expected to come in the next 5 years,demand will outpace sully in the short to medium term.
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Government support: Till a few years ago, the Indiangovernment had a total apathy towards promotion oftourism. In fact, the industry did not find a place in the
governments fund allocation. Things have, however,witnessed a change. The government seems to haverealized the importance of tourism and is willing tospend towards the development of the industry. The
Incredible India campaign is a product of thisrealization. The focus on infrastructure, modernisationof airports, open sky policy, development of newtourist destinations and circuits, more fund allocation
towards tourism are some of the initiatives taken bythe government to promote tourism. The Indian hotelindustry stands to gain from this proactiveness shownby the government.
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Poor support infrastructure: India is currentlyspending a miniscule amount compared with itsneeds, on infrastructure. China is spending seventimes as much as India on infrastructure (excluding
real estate) in absolute terms. In 2003, total capitalspending on electricity, roads, airports, seaports andtelecom was US$150 bn in China (10.6% of GDP)compared with US$21 bn in India (3.5% of GDP).
However, over the past 2-3 years, the government hasrealized the importance of infrastructure and hasfocused on improving it.
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Opportunities. Rising Income: While there has been much talk about
record number of foreign tourist arrivals, very little hasactually been said or done about domestic tourism, which,according to our estimates, has registered a 40% annualgrowth in the last three years and is currently estimated at
300 m travelers. Per capita income grew by an impressive7.1% in 2005, while Gross Domestic Savings touched anall time high of 28%. Significantly, the present-dayconsumption boom in India has been influenced more byhigher disposable income rather than lower savings. Thisis good news, as income induced spending is likely tosustain itself for a longer period. Higher disposableincomes are also expected to enhance the concept oftraveling for leisure.
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Open sky benefits: The opening up of the aviation industry in Indiabrings exciting opportunities for the hotel industry (airlines transportaround 80% of international tourists). Increased airline activity has
stimulated demand and has helped to improve India's troubledinfrastructure. Increased competition among airline companies willfurther lead to the development of new and improved services. Alsothe open skies policy has benefited both international and domestictravel.
New business opportunities: We believe that, over the next threeto five years, the biggest surge in accommodation demand isexpected to come from commercial zones that are being developedin metro suburbs and secondary markets. Mixed-use developmentprojects that include retail and commercial space have also gainedmomentum in the last 24 months and will continue to be an attractiveoption. This provides a unique opportunity for hospitality projects.Also the new concept, which is going to gain importance is that ofbudget hotels (started by Indian Hotels Ginger, the erstwhileIndione). Due to their inherent nature of operation, associated costsand flexibility, budget hotels will be better suited to withstand the nexteconomic downturn as and when it takes place
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Threats. Event risk: Dependency on foreign tourism can be a
double-edged sword as travel decisions are based on
global patterns and events that happen elsewhere canhave serious impact the performance. Events like 9/11,SARS outbreak and Afghanistan and Iraq wars haveseverely impacted the tourism industry in the past and thethreat remains.
Increasing competition: Global hospitality majors like theFour Seasons, Shangri-La and Aman Resorts are allmaking their entry into the Indian market. They are not theonly ones who are turning their attention to India. TheHilton Group is deciding on a comeback and has tied upwith the Oberoi Group. Two other groups - the CarlsonGroup and the Marriott chain are furiously hunting for newhotels in India's top cities. This will increase thecompetition for the existing Indian hotel majors.
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The outlook for the hospitality market in India is optimisticand will continue to remain so, in our opinion. Theeconomys buoyancy, initiatives to improve infrastructure,
growth in the aviation and real estate sectors and easing
of restrictions on foreign investment will fuel demand forhotels across star categories in the majority of markets.Indias hotel industry is increasingly being viewed as
investment-worthy, both within the country and outside,and several international chains are keen to establish orenhance their presence here. We anticipate that, over thenext three to five years, India will emerge as one of theworlds fastest growing tourism markets and will be hard to
ignore.
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Major market players.
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THE MAJOR PLAYERS IN THE HOTEL INDUSTRY CAN
BE BROADLY CLASSIFIED INTO Public Players AND
Private Players.
PUBLIC SECTOR PLAYERS:
ITDC HOTELS
Hotel Corporation Of India
PRIVATE SECTOR PLAYERS:
ITC HOTELS
INDIAN HOTELS COMPANY LTD.(THE TAJ HOTELS
RESORTS & PALACES)
OBEROI HOTELS (EAST INDIA HOTELS)
Hotel Leela Venture
Asian Hotels Ltd.
Radisson Hotels & Resorts
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ITC HOTEL GROUP SEGMENTATION
ITC
HOTELS -
LUXURY
COLLECTI-ON:
SUPER
DELUXE
LOCATEDAT
STRATEGIC
BUSINESS &
LEISURE
LOCATIONS
ITC -
SHERATON
HOTELS:
OFFER
COMFORT
SERVICE TO
GLOBAL
TRAVELLER
AND A
CHANCE TO
CONNECT
5 STAR
SPECIALLY
FOR THE
BUSINESS &
LEISURE
TRAVELLER
FULL
SERVICE
PROPERTIE
S ALL OVER
INDIA
IDEAL
FOR
BUDGET
TRAVELLER
CHAIN OF
PALACES,
FORTS,
HAVELIS &
RESORTS
WELCOM
HOTELS:
WELCOM
HERITAGE:
FORTUNE
HOTELS:
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ITC: DEVELOPMENTS
ITC-WELCOMGROUP HAS PIONEERED THE CONCEPT OF
"BRANDED ACCOMMODATION" IN THE HOSPITALITY
INDUSTRY. BRANDING LED TO THE SEGMENTATION OF
ROOMS WHICH WERE TERMED AS BRANDED EXECUTIVE
CLUB, THE TOWERS AND ITC ONE.
IN 2007, ITC-WELCOMGROUP TIED UP WITH STARWOOD TO
LAUNCH ITS PREMIUM BRAND, THE LUXURY COLLECTION
THE COMPANY HAS MORE THAN 75 HOTELS IN INDIA WITH
ABOUT 5,500 ROOMS AND IS DEVELOPING 27 MORE
PROPERTIES THAT WILL ADD ABOUT 3,000 ROOMS.
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THE TAJ GROUP OF HOTELS
SEGMENTATION
TAJ LUXURY
HOTELS
TAJ PALACE,
TAJ MAHAL,
TAJ BENGAL,
TAJ WEST END
OFFER FINEST
STANDARD OF
HOSPITALITY &
SERVICE
TAJ BUSINESS
HOTELS:TAJ PRESIDENT,
TAJ RESIDENCY,
TAJ CONNEMARA,
TAJ BLUE
DIAMOND
OFFER
MULTICUISINE
RESTAURANTS &
BEST BUSINESS
FASCILITIES
TAJ LEISURE
HOTELS:
TAJ BEACH
RESORT,
TAJ CULTURAL
CENTRE,
TAJ GARDEN
RETREATS
LOCATED AT
BEACH RESORTS,
PALACES, PILGRIM
CENTRES ETC.
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TAJ HOTELS, RESORTS AND PALACES COMPRISES57 HOTELS IN 40 LOCATIONS ACROSS INDIA WITH
AN ADDITIONAL 18 INTERNATIONAL HOTELS.
TAJ WAS THE FIRST TO INTRODUCE SICHUAN,
THAI, ITALIAN, MEXICAN, AND CALIFORNIAN
CUISINE INTO THE COUNTRY.
THE TRAVEL DAILY NEWS REPORTED THAT THE
TAJ GROUP OF HOTELS HAD A TURN OVER OFRS. 1823.18 CRORES WITH THE YEAR ENDING ON
MARCH 31, 2008.
TAJ : DEVELOPMENTS
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THE OBEROI GROUP
OF HOTELS
THE OBEROI GRAND
HOTEL
THE TRIDENT HOTEL
THE OBEROI HILTON
THE WILDFLOWERHALL
THE HOTEL AMARVILAS
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CHALLENGES
FOR HOTEL
INDUSTRY
Shortageof skilledemployeesIntense
competitionand image of
India
Manualback-end
Humanresourcedevelopment
Lack ofadequateinfrastructuredevelopment
Shortage of
rooms
Retaining
qualityworkforce
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CASE STUDY
Abstract
Indian Hotel Company Limited (IHCL), the leading Indian
hospitality concern, has joined hands with C.K.Prahalad tolaunch indiOne, a new concept that will redefine the hotelindustry and provide the company with a new growthopportunity. The caselet outlines the reasons for IHCL's entryinto the budget hotels segment and provides details on the
indiOne concept. Further, the caselet explains the design andimplementation of the concept. It discusses the implementationchallenges and the future plans of IHCL for this venture.Issues:
Budget hotels and its viability in Indian hospitality market. New product development in hospitality industry. Importance of segmentation and targeting in hospitality
services.
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In a absolute competitive market theprofitability of almost all theorganization is under pressure largelydue to recession in US and UK market
also .All organization therefore aretrying to control the operatingexpenses and expenses in hospitality
area are major concern and thereforemost of the organization are interestedin going budget hotels to control theirexpenses.
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