Main Features Of The Indian Hotel Industry Tourism Essay

Main Features Of The Indian Hotel Industry tourism EssayThe major players in the Indian hotel perseverance can be broadly classified advertisement into private players and public players. The major private players include Indian Hotels Company limited, East India Hotels modified (The Oberoi group), Asiatic Hotels and ITC Hotels. ITDC and Hotel Corporation of India atomic number 18 the major public sector players.sphere OutlookHotel industry depends largely upon the foreign tourist arrivals further classified into business get offers ( nearly 65% of the total foreign tourists) and leisure travelers. The following figures show that business as well as the leisure travelers (both domestic and international) formed major clientele for hotels in 2004.Over the last devil geezerhood, the hotel industry has seen higher growth rates due to greater number of tourist arrivals, higher occupancy rate (being around 75% in FY06) and significant increase in average room rate (ARR). The major factors contributing to this growth include stable economic and policy-making conditions, booming serve up industry, FDI inflow, substructure development, emphasis on tourism by the central as well as state governments and tax rationalization initiatives to ask down the tax rates in line with the international aims.Some of the main features of the Indian hotel industry include the following The industry is more leechlike on metropolitan cities as they account for 75% to 80% of the revenues, with Delhi and Mumbai being on top. The average room rate (ARR) and occupancy rate (OC) be the two virtually critical factors that determine profitability. ARR depends on location, brand image, star rating, quality of facilities and services offered. The occupancy rate depends on other seasonal factors. India is an ideal finale for tourists. Approximately 4.4 million tourists visit India every year. Thus the growth prospects are very high. In the hotel sector, a number of multinationals piss strengthened their presence. Players like tetrad Seasons are likewise likely to enter the Indian market in the near future. Moreover, Indian hotel chains are also expanding internation tout ensembley. A combination of all these factors could result in a strong emergence of budget hotels, which could potentially lower the mvirtuosotary value of travel and related costs.The industry can be classified into four segments 5 Star and 5 Star Deluxe. These are mainly situated in the business districts of metro cities and cater to business travelers and foreign tourists. These are considered to be very expensive. These account for about 30% of the industry. Heritage Hotels. These are characterized by less capital expenditure and greater affordability and include running hotels in palaces, castles, forts, hunting lodges, etc. Budget HotelsBudget hotels cater mainly to domestic travelers who favor reasonably priced accommodations with limited luxury. These are characterized by special seasonal offers and unspoilt services. UnclassifiedThese are low-priced motels spread throughout the country. A low-pricing policy is their only selling point. This segment accounts for about 19 % of the industry.Trends In Hospitality SectorTrends that will shape the future of hospitality sector are1. Low Cost Carriers2. Budget Hotels3. Service Apartments4. applied science5. Loyalty Travel1. Low cost carriersTravelers in general are more price sensitive to airfare than they are to hotel room rates. Often a low airfare will stimulate pick up for travel even if hotel prices are increasing. LCCs are a good option for business travelers, as they have advantages like low costs, more options and connectivity.2. Budget hotelsMore than 50 per cent of occupancy of a majority of hotels comes from the business travel segment. The average room rate (ARR) realized from business travelers is normally higher than from leisure travelers. Heightened demand and the healthy occupancy rates have re sulted in an increase in the number of budget hotels. Some of the new players entering into this category of hotels include Hometel, Kamfotel, court by Marriott, Country Inns Suites, Ibis and Fairfield Inn.3. Service apartmentsThe concept of service apartments, though a recent phenomenon in India, is an established global concept. Villas in Spain, flats in the UK and apartment complexes in the US have all created a viable market for those who want more than just a room in a hotel. Service apartments are the latest trend in accommodation, offering the comfort and convenience of a home without the hassles of having to maintain or look after it. Ideally suited for medium-to-long staying guests, service apartments are a natural choice for corporate employees or expatriates relocating to a particular city, non-resident Indians visiting the country for long spells and foreigners visiting the city for long durations.4. Techno put downyTravel and technology have become inseparable. Techno logy is making its own advances with high-tech video conferencing facilities, web cameras and virtual reality mode of conferencing. On-line bookings, e-ticketing, Wi-Fi meshwork connectivity, easy access to information, etc. are just a few areas where technology has completely changed the the way we travel.5. Loyalty travelToday, airline-credit card company tie-ups have brought a whole range of benefits to the travelers. These include insurance cover, upgrades, free tickets, access to executive lounges, and a host of other goodies.ITC Hotels LimitedITC Hotels ITC Hotel Maurya Sheraton Towers, New Delhi ITC Hotel Grand Maratha Sheraton Towers, Mumbai ITC Hotel sonar Bangla Sheraton Towers,Kolkata WelcomHotel Mughal Sheraton, Agra WelcomHeritage ( These hotels are spread over all over india and are currently operating in Rajasthan, Punjab, Himachal Pradesh, Madhya Pradesh, Uttaranchal, Jammu Kashmir, west Bengal, Tamil Nadu, Haryana and Karnataka.)MARKET capitalisationMonth lof tyLowAverageJuly 200669470.8161622.4965132.68August 200671935.5963162.1166907.27September 200671616.2968235.5169865.82October 200673136.7969172.7970595.60November 200671870.1166984.8269353.40December 200671557.7563306.1567001.52Key Stats RatiosQuarterlyAnnual(2006)Annual(TTM)Net Profit gross profit21.70%Operating Margin31.32%EBITD Margin34.70%Return on Average Assets18.35%Return on Average impartiality26.75%RECRUITMENT POLICYThe potential candidates who are looking forward to build their career in ITC Hotels should possess several qualities like integrity, intellectual rigor, a will do attitude, team skills, ability to think strategically, high energy, creativity and leadership.Forentry level, ITC relies on campus recruitments and visits various management and engineering institutes. Some of the institutes include IITs, IIMs, FMS, XLRI, etc.ITC also providessummer internships.The internships are for a total of 8 weeks during April July every year. For middle level opportunities , advertisements are placed on the company website and the interested and eligible candidates are invited to apply on-line. The middle management level provides opportunities in market, Finance, Human Resources, Information Technology, Logistics and legion(predicate) more.Indian Hotels CompanyThe Indian Hotels Company (IHC) is the parent company of Taj Hotels Resorts and Palaces. It was founded by Jamsetji N. Tata on December16, 1903. Currently the Taj Hotels Resorts and Palaces comprises 57 hotels at 40 locations crossways India. Additional 18 hotels are also being operated around the globe. During fiscal year 2006, the total number of hotels owned or managed by the Company was 75.The Taj hotels are categorized as luxury, leisure and business hotels. The Taj Luxury Hotels offer a wide range of luxurious suites with modern fitness centres, rejuvenating spas, and well-equipped banquet and meeting facilities. The Taj Leisure Hotels offer a complete holiday package that can be enjoy ed with the whole family.It provides exciting activities ranging from sports, culture, environment, adventure, music, and entertainment. The Taj Business Hotels provide the finest standards of hospitality, which helps the business trips to be ingatheringive. They offer well-appointed rooms, telecommunication facilities, effective service, specialty restaurants and lively bars, well-equipped business centres, and other conference facilities.ManagementChairman Mr. Ratan N TataManaging Director CEO Mr. Raymond Bickson heading Operating Officer, Leisure Hotels Ms. Jyoti NarangChief Operating Officer, Luxury Hotels Mr. Abhijit MukerjiChief Operating Officer, Business Hotels Mr. Jamshed S. DabooVice President-Legal Company secretary Dev BajpaiChief Financial Officer Mr. Anil P GoelFinancial selective informationKey Stats RatiosQuarterly(Mar 04)Annual(2006)Annual(TTM)Net Profit Margin4.86%11.93%5.03%Operating Margin8.24%16.75%7.77%EBITD Margin29.11%23.33%Return on Average Assets5.32%Re turn on Average Equity15.48%Market Capitalization in last 6 months (Rs.crores)MonthHighLowAverageJuly 20066983.185883.716640.63August 20067536.566745.187229.90September 20068093.457482.837835.64October 20068576.757911.818146.62November 20069046.918080.318681.29December 20069444.768400.559001.56 four new hotels in Bangalore Taj Group invests Rs.1,000 croreThe Taj Group of Hotels will invest about Rs 1,000 crore for constructing four new hotels in Bangalore. It has submitted an Expression of Interest to Delhi Airport International Limited (DAIL). The company has also submitted an Expression of Interest for build a top-class hotel in the airport vicinity. Besides the company has been allocated a site at Greater Noida for building a hotel, while it is keen on entering into a management contract for a hotel in Gurgaon. The Group was also eyeing to enter hotel business oversea like Maldives, Mauritius, Colombo, Boston and Sydney. The Group is also planning to explore seven more locations in Mumbai and increase its total room capacity to 2,000 in the commercial-grade capital in the next five years.This expansion of its budget hotels will generate numerous jobs in the industry. The group has also taken up the renovation and management of Rail Yatri Niwas, the well-known Delhi budget hotel owned by the railways, on a 15-year lease. As part of the deal with the Indian Railway Catering and Tourism Corporation (IRCTC), which currently runs it, the Taj group will renovate the Yatri Niwas and add food courts within the complex. The makeover will be done on a redesign-operate-manage-transfer basis. The hotel will be run under the Taj groups budget hotel brand, Ginger, which has hotels in Mysore, Bangalore, Thiruvananthapuram, Haridwar and Bhubaneshwar. Taj group of hotels will upgrade all four Rail Yatri Niwas hotels located in Delhi, Howrah, Ranchi and Puri.The Oberoi Group (EIH)The Oberoi Group was founded in 1934 by Late Rai Bahadur M S Oberoi. The group owns and/or ma nages 32 hotels with 3,193 rooms under names of Oberoi Hotels Resorts and Trident Hilton, a luxury backwater cruiser in Kerala and Oberoi flying Services, a division of EIH that provides commercial in-flight catering and operates airport lounges and restaurants. It has branches in five countries, situated in two continents (Asia and Africa).The chain operates the following hotels and resorts in IndiaThe Oberoi, New DelhiOberoi, Mumbai, MaharashtraThe Oberoi, Banglore, KarnatakaThe Oberoi Amarvilas, Uttar PradeshThe Oberoi Grand, Kolkata, West BengalThe Oberoi Udaivilas, Udaipur, RajasthanThe Oberoi Vanyavilas, RajasthanWildflower Hall, Shimla, Himachal PradeshThe Oberoi Cecil, Shimla, Himachal PradeshThe Oberoi Motor Vessel Vrinda, Kerela.The other businesses of EIH include Mercury Car Rentals Corporate Air Charters EIH Press Mercury Travels Flight CateringMARKET CAPITALIZATIONKey Stats RatiosAnnual(2006)Net Profit Margin22.32%Operating Margin30.45%EBITD Margin48.13%Return on Ave rage Assets8.81%Return on Average Equity21.09%The market capitalization of EIH as on march 21, 2007 was Rs. 3,748.74 cr.Oberoi Group ventures into Middle East hospitality industryOberoi Group will run two hotels in Abu Dhabi and Dubai to tap the growing Middle East tourism market. Oberoi will manage a city hotel as well as one resort stead in the UAE capital. The company has also signed an agreement for a hotel in Dubai, which is part of a 800- million-dirham property project being developed by ranee International. The companys development plans are focused on the Middle East and Asia. It has 32 hotels in five countries and is planning to open new properties in several locations, including Marrakesh, Muscat, Maldives, Cambodia and Thailand.It is also planning to launch its luxury cruiser on the Nile, The Oberoi Zahra, in October this year with an idea to redefine the paradigm of luxury on Nile. The Oberoi Zahra, Luxury Nile Cruiser comes with 25 luxury suites and two Grand suites. The Grand suites have their own private decks and outdoor Jacuzzis. With the Indian economy growing fast, Oberoi is also looking at a number of new sites in India cities, including Hyderabad, Pune, Bangalore, New Delhi and Mumbai. It currently has 11 brand hotels in India. Oberoi was also ranked ninth among the top 10 leading chains, hotels, resorts and spas across the world, according to the 2007/2008 Worlds Top Hotels, Resorts and Spas survey report released by Zagat Surveys.Radisson Hotels ResortsRadisson Hotels Resorts Radisson hotels are a worldwide chain of 435 hotels with a total of 102,000 guest rooms, in 61 countries. The maiden Radisson Hotel was built in 1909 and was purchased by Curt Carlson in 1962 and is still owned by his Carlson Companies. Radisson Hotels International is a fully owned subsidiary of the Carlson Hospitality Worldwide, which is one of the major operating groups of Carlson Companies Inc.Carlson Hospitality brands include Regent International Hotels , Radisson Hotels Worldwide, Country Inns and Suites by Carlson, Park Hospitality, Carlson Vacation Ownership, and Carlson Lifestyle Living. Carlson companies also include the Carlson Wagonlit Travel, Carlson Leisure Group, Carlson Marketing Group and a worldwide marketing services company.With more than 1520 hotel, resort, restaurant and cruise ship operations in 79 countries, Carlson Companies provide employment to 190,000 lot in more than 140 countries.Scope Of Hospitality SectorIn 2003-04 the hospitality industry contributed only 2% of the gross domestic product. However, it is projected to grow at a rate of 8.8% between 2007-16, which would place India as the second-fastest growing tourism market in the world. This year the number of tourists visiting India is estimated to have touched the figure of 4.4 million. With this large figure, India is becoming the hottest tourist destination. The arrival of foreign tourists has shown a compounded annual growth of 6 per cent over the past 10 years. Besides, travel and tourism is the second highest foreign exchange earner for India. Moreover, it is also estimated that the tourism sector will account for nearly 5.3 per cent of GDP and 5.4 per cent of total employment.GDPEmploymentVisitor ExportPersonal TTCapital InvestmentGovt. ExpenditureOutlook for 20067.80%1.40%10.90%6.90 %8.30%7.70%Outlook for 2007-20166.60%1.00%7.80%6.70%7.80%6.60%Future of hospitality sectorTo boost up the growth of tourism in India, the government has proposed to invest Rs. 520 crore in 2007-2008. Tourism in expected to grow further over the next few years due to the changes taking place on the demand and supply sides. The factors that will account for the further growth of tourism will include the following stir in standards of living More disposable income Better education Long leisure time Aging populationOwing to growth of tourism sector, infrastructure will improve, competition will increase, new products will come into markets and b etter services will be provided. Due to the rapid growth in tourism, the hotel industry is also booming. Many international players like Le Meridien and Accor are heading towards Indian markets to expand their business. With governments full support in developing infrastructure, increase in demand, open sky policies and increased competition, the hospitality industry is getting consolidated and has many more opportunities to grow further.Challenges For Hospitality Industry1.Shortage of skilled employeesOne of the great challenges plaguing the hospitality industry is the unavailability of quality workforce in different skill levels. The hospitality industry has failed to retain good professionals.2.Retaining quality workforce memory of the workforce through training and development in the hotel industry is a problem and attrition levels are too high. One of the reasons for this is unattractive wage packages. though there is boom in the service sector, most of the hotel management gr aduates are joining other sectors like retail and aviation.3. Shortage of roomsThe hotel industry is veneer heavy shortage of rooms. It is estimated that the current requirement is of 1,50,000 rooms. Though the new investment plan would add 53,000 rooms by 2011, the shortage will still persist.4. vehement competition and image of IndiaThe industry is witnessing heightened competition with the arrival of new players, new products and new systems. The competition from neighboring countries and negative perceptions about Indian tourism product constrains the growth of tourism. The image of India as a country overrun by poverty, political instability, safety concerns and diseases also harms the tourism industry.5. Customer expectationsAs India is emerging as a destination on the global travel map, expectations of customers are rising. The companies have to focus on customer loyalty and repeat purchases.6. Manual back-endThough most reputed chains have IT enabled systems for property ma nagement, reservations, etc., almost all the data which actually make the company work are filled in manual log books or are simply not tracked.7. Human resource developmentSome of the services required in the tourism and hotel industries are highly personalized, and no amount of automation can substitute for personal service providers. India is focusing more on white collar jobs than toothsome collar jobs. The shortage of blue collar employees will pose various threats to the industry.