Last updated: June 17, 2019
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The cordial reception industry of India is expected to turn at a rate of 8.8 % from 2007-16, puting India the second-fastest turning touristry market in the universe. Advancement like monolithic investing in hotel substructure and unfastened sky policies which are made by the authorities are all aimed at impeling growing in the cordial reception sector.

Hotel and cordial reception industries are the biggest employment generators in the state. Towards assisting its growing, the authorities should confabulate substructure position to the hotel industries, several revenue enhancement issues besides need to be rationalised. Further licenses and licences which are required for the hotel operations needs to be rationalised by offering a “ individual window ” mechanism.

The hotel industry is divided into 4 classs:

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Large hotels

Medium hotels

Resort hotels

Small hotels

MARKET SHARE OF THE MAJOR HOTELS IN INDIA:

TIE -UPS OF INDIAN HOTELS WITH INTERNATIONAL HOTELS:

Most participants, relieving of IHCL and EIH, have entered into marketing Affiliation with major international hotel ironss. Therefore we have Hyatt Regency which are tied up with AHL, Leela tied up with Kempinski and ITCH holding a franchisee understanding with ITT Sheraton.

For the Indian hotel proprietors and international hotel chains the benefit is common, Tie-up with an international hotel concatenation will set the hotel on the planetary map. Associations with international trade name play a major function in image edifice and pulling foreign tourers. However value of the international trade name will acquire diluted if a foreign entity enters an understanding with several Indian companies.

MARKET SHARE OF TARIFF PLANS BY DIFFERENT HOTELS

Luxury hotels operate under individual duty construction whereby the foreign tourers are charged in dollar footings whereas the domestic invitee is charged the tantamount sum in rupees. The luxury hotels earn about two-thirds of their gross from foreign tourers. Leisure travelers constitute about 76.5 % of the entire tourer reachings whereas concern travelers constitute 21 % of the entire reachings. The balance is accounted by pupils.

Hotels benefit from rupee depreciation as over 60 % of grosss in the luxury hotel Segment is in foreign currencies. Therefore any depreciation of the rupee goes straight to the bottom line ( FOREX income is besides to the full revenue enhancement exempt ) , as none of the costs are straight linked to the exchange rate. The hotel debt environment is besides bettering. While many states are hampered by a still sulky economic system, those with a low involvement rate environment with comparatively stable-banking conditions will supply chances for hotel investors to raise capital. For hotel loaners, from a risk/return footing, there has ne’er been a better clip to supply new capital to this industry in India.

CONTRIBUTION TOWARDS ECONOMY

The hotel and restaurant industry of India was Rs. 658.89 billion during 2007-08. Travel & A ; Tourism Industry of India was valued at US $ 35.73 billion in 2007, lending 3.56 % to India ‘s GDP. The figure of foreign tourers geting to India reached 5.08 million compared with 4.45 million in the twelvemonth 2006, demoing growing of 14.16 % . India ‘s portion in international tourer reachings at planetary degree bit by bit improved from 0.46 % in 2004 to 0.49 % in 2005 and farther to 0.52 % in 2006 and 0.56 % in 2007.

The figure of domestic tourers in India was 526.57 million compared with 461.76 Million in 2006, demoing growing of 14.03 % . There are 1,437 hotels approved and Classified by the Ministry of Tourism, Government of India, with a entire capacity of 84,327 hotel suites as on December 31, 2007. Indian hotel industry is presently adding about 60,000 quality suites, which are expected to be ready by 2012.

INTERNATIONAL TOURIST CONTRIBUTION IN INDIA

The foreign tourer reachings in India increased at CAGR of 5.5per cent from 2.29 Million in 1996 to 3.92 million in 2005. Significantly, the majority of international reachings into India, both in 2004 and 2005, have been concern travelers. Main ground for this addition has been following cardinal factors:

India ‘s strong GDP growing.

Opening of sectors of the economic system to private sector/ foreign investing.

Strengthening of ties with the developed universe.

Reforms in air power sector which led to better connectivity with many states ( such as ASEAN ) and created extra capacity on bing paths ( for e.g. USA, Middle East ) .

Besides, debut of low cost air hoses besides contributed to the demand. The addition in International flights, place capacity and frequence into the state and the determination to let private air hoses like Jet Airways and Air Sahara to wing overseas has had a positive impact on tourer and concern reachings into India, by manner of supplying extra seats.

3.1.2 NATURE OF COMPETITION:

It is the most competitory market.Business travellers drive over 70 per cent of the Indian cordial reception concern and the race to suit them, and make it good, is hotting up. But with current demand surpassing supply, hotels in the large metropoliss have managed to up their rates to fit those in Paris and London.

The major competition comes from the other companies in the same sector.so the challengers are to be found and do their primary and secondary schemes which makes the company competitory in the market. There are besides pricing schemes which play fewer functions in competitory market and should believe of the non pricing schemes which can be more competitory in the market.

The pricing of a hotel like this one is done on system called “ rate of the twenty-four hours ” based on demand. As the suites get taken the monetary value goes up and on a busy twenty-four hours a room like this one in Mumbai or Delhi will be every bit much as you would hold to pay for one in Paris or London.

Adding more installations to the five star rated hotels like Wi-Fi, watering place, gyms, on-line engagement etc. to keep their guest truenesss which give competitory advantage to its company.

To go competitory in the market the flexible pricing is the key. Some suggested stairss to realine rates and sections to the changed market topographic point ; derive control of concern ; and increase profitableness are:

Create an on-line engagement presence.

Ensure that the hotel ‘s on-line engagement engine is portion of the hotel ‘s web site, and controlled by the hotel, non by a 3rd party or GDS-based system.A

Ensure that the online booking engine is the best and accomplishes the hotel ‘s ends.

Ensure that the online booking engine is easy to utilize from a client ‘s position.

Expertly create and keep an on-line distribution and maximization scheme to guarantee the hotel ‘s visibleness.

Promote and guarantee that the lowest published rates are on the hotel ‘s ain web site, to advance client trueness, as done with the air hoses.

Establish a new market cleavage theoretical account, for greater control of the concern. Eliminate RACK RATE and replace with SELL RATE, defined as Rack, Promotional, Consortia, and any other client non affiliated with any price reduction.

A simplified sample version is:

Sell Rate

Corporate Rate

Group Rate

Weekend Rate

Establish the Sell Rate based on awaited demand forms, after the nucleus concern and group blocks are factored in. The rate fluctuates on a day-to-day footing.

Set rates in all market sections within the scope of your competitory set to set up placement.

TAJ GROUP OF HOTELS:

A Tata company shall to the full endeavor for the constitution and support of a competitory, unfastened market economic system in India and abroad, and shall collaborate in attempts to advance the imperfect and wise liberalization of trade and investing by a state. Specifically, a Tata company shall non prosecute in activities that generate or support the formation of monopolies, dominant market places, trusts and similar unjust trade patterns.

A Tata company shall market its merchandises and services on its ain virtues and shall non do unjust and deceptive statements about rivals ‘ merchandises and services. Any aggregation of competitory information shall be made merely in the normal class of concern and shall be obtained merely through lawfully permitted beginnings and agencies.

Direct Rivals:

Oberoi Hotels

Oriental Hotels

ITC Welcomgroup

Hotel Leela etc.

Potential Target market: The upper category of the society is targeted. i.e. the richer people in the society. Their menus or duties are high as the luxuries provided by them are besides standard and 5-star. Therefore, this is in context to the Indian subdivisions of Taj Hotels.

OBEROI GROUP OF HOTELS ( EAST INDIA HOTELS LTD. ) :

Team Street is out with an investing thought that could assist the portfolio in the current market conditions. The recent rectification in the market has been crisp as the benchmark index or the Sensex has given up more than 7 per centum from a recent high of 21,108.

OBEROI PROPERTIES RECOGNITION INTERNATIONALLY:

The Oberoi Vanyavilas, Ranthambore

Rated the 2nd best resort in Asia

Rated the 2nd best hotel in the World

The Oberoi Udaivilas, Udaipur

Rated the best hotel in Asia

Rated 4th best hotel in the World

The Oberoi Amarvilas. Agra

Rated the 2nd best hotel in Asia

Rated the 8th best hotel in the World

The Oberoi Rajvilas, Jaipur

Rated the fifth best hotel in Asia

Rated amongst the top 25 hotels in the World

Wildflower Hall, Shimla in the Himalayas

Rated the 5th best resort in Asia

The Oberoi Rajvilas, Jaipur

Rated No.1 hotel in Asia

Rated 2nd best hotel in the World

The Oberoi Udaivilas, Udaipur

Rated No. 2 hotel in Asia

Rated 4th best hotel in the World

The Oberoi Amarvilas. Agra

Rated No. 3 hotel in Asia

Rated 6th best hotel in the World

3.1.3 SWOT ANALYSIS

Strength:

1. Natural and cultural diverseness: India has a rich cultural heritage. The “ integrity in diverseness ” ticket attracts most tourers. The coastlines, cheery beaches, backwaters of Kerala, snow capped Himalayas and the quiescent lakes are unbelievable.

2. Demand-supply spread: Indian hotel industry is confronting a mismatch between the demand and supply of suites taking to higher room rates and tenancy degrees. With the privilege of hosting Commonwealth Games 2010 there is more demand of suites in five star hotels. This has led to the rapid enlargement of the sector.

3. Government support: The authorities has realized the importance of touristry and has proposed a budget of Rs. 540 crore for the development of the industry. The precedence is being given to the development of the substructure and of new tourer finishs and circuits. The Department of Tourism ( DOT ) has already started the “ Incredible India ” run for the publicity of touristry in India.

4. Addition in the market portion: India ‘s portion in international touristry and cordial reception market is expected to increase over the long-run. New budget and star hotels are being established. Furthermore, foreign cordial reception participants are heading towards Indian markets.

Failings:

1.Poor support substructure: Though the authorities is taking necessary stairss, many more things need to be done to better the substructure. In 2003, the entire outgo made in this respect was US $ 150 billion in China compared to US $ 21 billion in India.

2. Slow execution: The deficiency of equal acknowledgment for the touristry industry has been haltering its growing chances. Whatever stairss are being taken by the authorities are implemented at a slower gait.

3. Susceptible to political events: The internal security scenario and societal agitation besides hamper the foreign tourer reaching rates.

Opportunities:

1.Rising income: Owing to the rise in income degrees, Indians have more trim money to pass, which is expected to heighten leisure touristry.

2. Open sky benefits: With the unfastened sky policy, the travel and touristry industry has seen an addition in concern. Increased air hose activity has stimulated demand and has helped better the substructure. It has benefited both international and domestic travels.

Menace:

1. Fluctuations in international tourer reachings: The entire dependence on foreign tourers can be hazardous, as there are broad fluctuations in international touristry. Domestic touristry demands to be given equal importance and steps should be taken to advance it.

2. Increasing competition: Several international big leagues like the Four Seasons, Shangri-La and Aman Resorts are come ining the Indian markets. Two other groups – the Carlson Group and the Marriott concatenation – are besides looking frontward to fall in this race. This will increase the competition for the bing Indian hotel big leagues.

CHALLENGES FOR HOSPITALITY INDUSTRY

1. Deficit of skilled employees: One of the greatest challenges blighting the cordial reception industry is the inaccessibility of quality work force in different accomplishment degrees. The cordial reception industry has failed to retain good professionals.

2. Retaining quality work force: Retention of the work force through preparation and development in the hotel industry is a job and abrasion degrees are excessively high. One of the grounds for this is unattractive pay bundles. Though there is roar in the service sector, most of the hotel direction alumnuss are fall ining other sectors like retail and air power.

3. Deficit of suites: The hotel industry is confronting heavy deficit of suites. It is estimated that the current demand is of 1,50,000 suites. Though the new investing program would add 53,000 suites by 2011, the deficit will still prevail.

4. Intense competition and image of India: The industry is witnessing heightened competition with the reaching of new participants, new merchandises and new systems. The competition from neighbouring states and negative perceptual experiences about Indian touristry merchandise constrains the growing of touristry. The image of India as a state overrun by poorness, political instability, safety concerns and diseases besides harms the touristry industry.

5. Customer outlooks: As India is emerging as a finish on the planetary travel map, outlooks of clients are lifting. The companies have to concentrate on client trueness and repetition purchases.

6. Manual back-end: Though most reputed ironss have IT enabled systems for belongings direction, reserves, etc. , about all the information which really make the company work are filled in manual log books or are merely non tracked.

7. Human resource development: Some of the services required in the touristry and hotel industries are extremely personalized, and no sum of mechanization can replace for personal service suppliers. India is concentrating more on white neckband occupations than bluish collar occupations. The deficit of bluish collar employees will present assorted menaces to the industry.

SWOT ANALYSIS OF MAJOR HOTELS:

TAJ GROUP OF HOTELS:

Strengths:

The group has tremendous power and strengths, which makes it the best and competitory, some of them are:

It consists of 75 belongingss in 40 locations across India and 18 international hotels.

Its fashionable assortment of hotels like ; Taj exotica, Taj campaign, The gateway hotels, Ginger hotels, Jivas spa etc.

Its effectual and efficient direction techniques and staff.

Its trade name name.

The presence of Taj Hotels, Resorts and Palaces in assorted states like United Kingdom, France, Germany, Italy, Dubai, Singapore, Australia, Japan, Russia and the United States of America.

Procuring direction contracts at Palm Island, Jumeirah in Dubai, Saraya Islands in Ras Al Khaimah, Aldar Group in Abu Dhabi, UAE Langkawi in Malaysia and Thimpu in Bhutan.

The assorted enterprises taken like ; rollout of Customer Feedback System, Tata Business Excellence Model, IT initiatives, Ginger hotels etc.

Failing:

Taj hotels being such a large trade name, has a batch of advantages but every large company faces some odds and so does Taj. Some of its failing ;

Its difficult to keep such a immense concatenation of subordinates and there are more opportunities of bad lucks in direction.

Its immense rivals like Oberoi, Leela, Oriental, ITC etc are besides supplying same installations and therefore it becomes a failing for Taj hotels.

Its really dearly-won for the Indians to afford the duties and service charges set by Taj hotels. Therefore, they loose a major portion of their market portion.

They need a batch of investing.

As Taj hotels is a popular group, it is ever in the eyes of the terrorists, as taj has already faced such an incident. Therefore, it proves to be a failing some times, to be so popular.

Opportunities:

The Group is poised strategically to take advantage of the undermentioned state of affairs:

In the background of a healthy economic system holding its positive radioactive dusts on the Tourism Sector taking to rapid growing in markets in India, South Asia and cardinal gateway metropoliss in source-market finishs.

Rapid enlargement in both International and Domestic finishs, with top-of-the-line Luxury, Leisure and Business belongingss.

Meeting turning demand in the budget and mid-market sections.

Widening the merchandise portfolio into related offerings viz. luxury abodes, wildlife Lodges and wellness watering place.

Menaces:

The menaces identified by the Group are related chiefly to the markets in which the Group operates and general factors related to the touristry industry. Significant among these are:

Cheaper international airfares, increasing affordability of travel to International finishs, particularly South East Asia, Europe and Australia.

Turning presence of international cordial reception ironss viing in the Luxury and Business sections, to run into extra demand state of affairs.

Appreciating Indian Rupee vis-a-vis the US Dollar, ensuing in lower realization on foreign exchange net incomes.

Slowdown of international demand ensuing in decrease of grosss.

OBEROI GROUP OF HOTELS:

Strengths:

Cost advantage

Asset purchase

Effective communicating

High R & A ; D

Invention

Online growing

Loyal clients

Market portion leading

Strong direction squad

Strong trade name equity

Failings:

Bad communicating

Diseconomies to scale

Over leveraged fiscal place

Low R & A ; D

Low market portion

No online presence

Not advanced

Not diversified

Poor supply concatenation

Weak direction squad

Weak existent estate

Opportunities:

Acquisitions

Asset purchase

Fiscal markets ( raise money through debt, etc )

Emerging markets and enlargement abroad

Invention

Online

Merchandise and services enlargement

Coup d’etats

Menaces:

Competition

Cheaper engineering

Economic lag

External alterations ( authorities, political relations, revenue enhancements, etc )

Exchange rate fluctuations

Lower cost rivals or imports

Maturing classs, merchandises, or services

Monetary value wars

ITDC:

Strength:

One of the oldest five star hotels in India preferred by a huge figure of tourers every bit good as localites.

Comfortss provided are province of the art and of really high quality.

Staff is known to be really hospitable and supportive of their invitees.

Has the largest conference hall in India and hence it ‘s the most preferable conference hall for most of the of import conferences held in India.

Provides Privilege Card for their frequent invitees which lure more figure of people to go their regular clients.

It has New Delhi ‘s most magnificentA Banquet locale.

The architecture is still considered as a benchmark to most of the edifices that are created today.

Failings:

Monetary values are higher than other five star hotels in New Delhi.

There have non been many alterations in the edifice since the clip that it has been set up.

Harmonizing to the invitees the walls are soiled and the hallways are non maintained good which makes many of them believe twice about coming back at that place.

It is rather far off ( 15kms ) from the international airdrome because of which many invitee opt for hotels closer for their ain convenience.

They seem to trust on their past awards and are non taking any new enterprises to fulfill their clients.

3.2 DEMOGRAPHICS OF BUYERS- MARKET SEGMENTATION:

CLASSIFICATION OF HOTELS:

Categorization is based on many standards and sorting hotels into different types is non an easy undertaking. The hotel industry is so huge that many hotels do non suit into individual good defined class. Industry can be classified in assorted ways, based on location, size of belongings etc. The chief hotel ironss of India are: The Taj Group of Hotels, the Oberoi Group and ITC Welcome group.

Some of the international ironss are Hyatt, Marriott, and Le Meridian etc. these belongingss have besides come up in India now.

1. Based on Location

City centre: By and large located in the bosom of metropolis within a short distance from concern Centre, shopping arcade. Ratess are usually high due to their location advantages. They have high traffic on weekdays and the tenancy is by and large high.

Motels: They are located chiefly on main roads, they provide lodging to highway travelers and besides provide ample parking infinite. The length of stay is normally nightlong.

Suburban hotels: They are located in suburban countries, it by and large have high traffic on weekend. It is ideal for budget travelers. In this type of hotel rates are reasonably low.

Airport hotels: These hotels are set up near by the airdrome. They have transit invitee who stay over between flights.

Resort hotels: They are besides termed as wellness resort or beach hill resort and so depending on their place and location. They cater a individual who wants to loosen up, bask themselves at hill station. Most resort work to full capacity during extremum season. Gross saless and gross fluctuate from season to season.

Floating hotels: As name implies these hotels are established on luxury line drives or ship. It is located on river, sea or large lakes. In sail ships, suites are by and large little and all furniture is fixed down. It has long stay guest.

Boatels: A house boat hotels is referred as boatels. The SHIKARAS of Kashmir and KETTUVALLAM of Kerala are houseboats in India which offers epicurean adjustment to travellers.

Rotels: These fresh discrepancies are hotel on wheel. Our really ain “ castle on wheels ” and “ Deccan Odessey ” are trains supplying a epicurean hotel atmosphere. Their inside is done like hotel room. They are usually used by little group of travellers.

2. Based on Size of Property

Small hotel: hotel with 100 suites and less may be termed as little hotels.

Medium sized hotel: hotel which has 100-300 suites is known as medium sized hotel.

Large hotels: hotel which have more than 300 suites are termed as big hotels.

Mega hotels: are those hotels with more than 1000 suites.

Chain hotels: these are the groups that have hotels in much figure of locations in India and international locales.

3. Based on the Level of Service

Economy/ Budget hotels: These hotels meet the basic demand of the invitee by supplying comfy and clean room for a comfy stay.

Mid market hotels: It is suite hotel that offers little life room with appropriate furniture and little bed room with king sized bed.

Luxury hotels: These offer universe category service supplying eating house and sofas, concierge service, meeting suites, dining installations. Bath linen is provided to the invitee and is replaced consequently. These guest suites contains supplying, graphics etc. premier market for these hotels are famous persons, concern executives and high superior political figures. Example: Hyatt Regency, New Delhi.

4. Based on the Length of Stay

Transeunt Hotel: These are the hotel where invitee stays for a twenty-four hours or even less, they are normally five star hotels. The tenancy rate is normally really high. These hotels are situated near airdrome.

Residential hotels: These are the hotel where invitee can remain for a minimal period of one month and up to a twelvemonth. The rent can be paid on monthly or quarterly footing. They provide sitting room, bed room and kitchenette.

Semi residential hotels: These hotels incorporate characteristics of both transient and residential hotel.

5. Based on Subject

Heritage hotel: In this hotel a invitee is gracefully welcomed, offered room that have their ain history, serve traditional culinary art and are entertained by common people creative person. These hotels put their best attempts to give the glance of their part.

Example: Jai Mahal castle in Jaipur.

Ecotels: these are environment friendly hotels these hotel usage eco friendly points in the room. Example: Orchid Mumbai is Asia foremost and most popular five star Ecotels.

Boutique hotels: This hotel provides exceeding adjustment, furniture in a themed and fashionable mode and caters to corporate travellers. Example: In India the park Bangalore is a boutique hotel.

Watering place: is a resort which provide curative bath and massage along with other characteristics of luxury hotels in India Ananda watering place in Himalaya are the most popular Spa.

6. Based on Target Market

Commercial hotel: They are situated in the bosom of the metropolis in busy commercial countries so as to acquire good and high concern. They cater largely business communities.

Convention hotels: These hotels have big convention composite and cater to people go toing a convention, conference.

Example: Le meridien, Cochin, is a hotel with largest convention centre in south India.

Resort hotels: These leisure hotels are chiefly for vacationists who want to loosen up and bask with their household. The tenancy varies as per season. The ambiance is more relaxed. These are spread out in huge countries so many resorts have solar powered carts for the conveyance of invitee.

Suite hotels: These hotel offer suites that may include compact kitchenette. They cater to people who are relocating act as like attorneies, executives who are off from place for a long concern stay.

Casino hotels: Hotel with preponderantly chancing installations comes under this class, they have guest room and nutrient and operation excessively. These hotels tend to provide leisure and holiday travellers. Gambling activities at some casino hotels operate 24 hours a twenty-four hours and 365 yearss.

Today ‘s ways of booking make it hard to place the intent of the trip. Section by default the single engagements for short Wednesday corsets as concern. Identify as leisure the engagement of a dual room over the week-end.

As the new engineering was developing, corporate travel sections, every bit good as the independent consumer, turned to go agents to acquire the best price reductions. As the GDS engineering influenced engagement and purchasing patterns, extra sections were created, ensuing in the undermentioned market section theoretical account:

Rack Ratess: Without any associations to justify price reductions, the Rack Rated client paid the published rate, which was the highest rate.

Consortia Ratess: This was the same client who booked through a travel agent utilizing the GDS and received a 5 % -10 % price reduction off Rack Rates.

Corporate Ratess: Having met the hotel ‘s measure uping standards, such as volume, concerns were guaranteed discounted rates.

Group Rates: With a block of suites, rates varied based on clip of twelvemonth and the nature of the group.

Weekend Ratess: Individual leisure travellers, normally within a thrust distance to the hotel.A

Promotional rates: These rates were originally used meagerly and used as a agency to excite concern by utilizing discounted rates to anyone, irrespective of affiliation.A

Domestic Consumer is the largest section of the hotels & A ; motels industry in India accounting for 52.9 % of the industry ‘s entire value. The domestic concern section histories for a farther 24.4 % of the industry.

Class

% Share

Domestic Consumer

52.9 %

Domestic Business

24.4 %

International

22.7 %

India histories for 5.1 % of the Asia-Pacific hotels & A ; motels industry value. Japan accounts for a farther 39.5 % of the Asia-Pacific industry.

Class

% Share

Japan

39.5 %

China

32.5 %

South Korea

5.8 %

India

5.1 %

Rest of Asia-Pacific

17.1 %