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CHAPTER-2
GROWTH AND PROSPECTS OF HOTEL INDUSTRY IN
GUJARAT
2.1 Introduction of Hotel Industry
2.2 Hotel-The concept
2.3 Origin of the word Hotel
2.4 Background of Hotel Industry
2.5 Hotel Industry in India
2.6 Major Player of Hotel Industry
2.7 Classification of Hotels
2.8 Career Opportunity in Hotel Industry
2.9 Different Departments in Hotels
2.10 Structure of The Hotel Industry in India
2.11 Hospitality Management
2.12 Tourism in The Gujarat State
2.13 Tourism and Gujarat Government
2.14 Recent Trends in Hotel Industry of Gujarat
70
2.1 INTRODUCTION OF HOTEL INDUSTRY
One of the fastest growing sectors of the economy of our time is the hotel
industry. The hotel industry alone is a multi-billion dollar and growing
enterprise. It is exciting, never boring and offer unlimited opportunities. The
hotel industry is diverse enough for people to work in different areas of interest
and still be employed within the hotel industry. This trend is not just in India, but
also globally.
Modern hotels provide refined services to their guests. The customers or guests
are always right. This principle necessitated application of management
principles in the hotel industry and the hotel professionals realized the
instrumentality of marketing principles in managing the hotel industry.
The concept of total quality management is found getting an important place in
the marketing management of hotels. The emerging positive trend in the tourism
industry indicates that hotel industry is like a reservoir from where the foreign
exchange flows. This naturally draws our attention on hotel management. Like
other industries, the hotel industry also needs to explore avenues for innovation,
so that a fair blending of core and peripheral services is made possible. It is not
to be forgotten that the leading hotel companies of the world have been
intensifying research to enrich their peripheral services with the motto of adding
additional attractions to their service mix. It is against this background that we
find the service mix more flexible in nature.
The recruitment and training programmes are required to be developed in the
face of technological sophistication. The leading hotel companies have been
found promoting an ongoing training programme so that the personnel come to
know about the use of sophisticated communication technologies.
2.2 HOTEL – THE CONCEPT
At the outset, we go through the concept of hotel. The common law says that
hotel is a place where all who conduct, themselves properly and who being able
71
and ready to pay for their entertainment, accommodation and other services
including the boarding like a temporary home. It is home away from home where
all the modern amenities and facilities are available on a payment basis.
It is also considered to be a place where tourist stops, cease to be travellers and
become customers. The definition presented by hotel operators to authorities of
the National Recovery Administration in Washington is found to be a more
comprehensive definition, presented by Stuart McNamara. The definition states
that, “ Primarily and fundamentally, a hotel is an establishment which supplies
boarding and lodging not engaged in inter – state commerce or in any intra –
state commerce, competitive with or affecting inter – state commerce (or so
related that the regulation of one involves the control of other).”
The hotel may furnish quarters and facilities for assemblage of people for social
business or entertainment purposes and may engage in retaining portion of its
premises for shops and businesses whose continuity (i.e., proximity) is deemed
appropriate to a hotel. The assemblage of people for social business and
entertainment purposes makes it essential that hotels are also furnished with a
big conference hall where the maximum possible accommodation is available.
We also call it the function room.
Initially the term motel was meant for local motorists and foreign tourists
travelling by road. They serve the needs and requirements of these travellers and
meeting their demand for transit and accommodation. Some of the important
services offered by the motels are parking, garage facilities, accommodation, and
restaurant facilities.
Motels are found located outside the city, preferably by the side of high ways
and important road junctions. The accommodation in this is more in the category
of a ‘chalet facility’. In USA, the motel accommodation is ranked at par with
hotel accommodation.
72
2.3 ORIGIN OF THE WORD “HOTEL”
Before 1760 people used to go to inns for having their lunch, dinner etc .It was
the place where families used to host their guest inns owner used to provide
lodging and boarding facility service to their guest.
To world “hostel” was used then it was called “hostelier” which means head of
unit or the place. The Norman people invented the word “hotel”. The word
“hotel” was originally in England, officially from 1760. The real growth of
modern hotel was originated in “U.S.A” with opening of “City Hotel” in New
York in the year 1974. This was the first building erected for the hotel purpose.
This period also saw the beginning of chain operation under the guidance of
E.M.STATLER. It involves big investment, big profits and trained professional
to manage business.
The repreciation in 1930 had a disaster effect in a hotel industry after the World
War II and brought a tremendous up surge to hotel industry with continuous
prosperity of hotel industry.
Mass travel is a modern phenomenon that emerged after World War II. Mass
tourism continues to grow as political freedom, economic wherewithal and social
equality spread across the globe. With the economic engine of development
73
running at full steam, there was a growth in international travel and thereby
growth in hotel industry.
Estimates abound as to the importance and size of house keeping. Certainly, its
economic contribution is critical to the global economy whether as a service to
the business community.
2.4 BACKGROUND OF HOTEL INDUSTRY
Prior to the 1980’s, the Indian hotel industry was a nascent and slow growing
industry primarily consisting of relatively static, single hotel companies.
However, Asian games in 1982 and the subsequent partial liberalization of the
Indian economy generated tourism interest in India with significant benefits
accruing to the hotel and tourism sector in terms of improved demand patterns.
Fortunes of the hotel industry are tied to the fortunes of tourism and the general
business climate in the country, which is why the economic liberalization
initiatives implemented since 1991, led to a soaring demand and supply gap in
the hotel industry.
HOTEL ACCOMMODATION 23
23
DrM.K.Patel, HRD practice in service Industry, 1st
Edition,p 82)
74
The hotel sector forms one of the most important segments of the tourism
industry with high potential for employment generation and foreign exchange
earnings. To give impetus to this sector, the government provides tax benefits
and other incentives. The industrial policy has now placed hotels and tourism
related activities as a priority industry.
The Ministry of Tourism classifies functioning hotels under the star system into
various categories from one to five stars deluxe and a newly introduced category
of heritage hotels. The Ministry also reclassifies these hotels after every three
years to ensure that they maintain the requisite standards. The Hotels and
Restaurants Approval and Classification Committee set up for the purpose has
representatives from the central government, State governments and hotel and
travel industry associations.
2.5 HOTEL INDUSTRY IN INDIA
Hotel Industry in India has witnessed tremendous boom in recent years. Hotel
industry is inextricably linked to the tourism industry and the growth in the
Indian tourism industry has fuelled the growth of Indian hotel industry. The
thriving economy and increased business opportunities in India have acted as a
boom for Indian hotel industry. The arrival of low cast airlines and the associated
price wars has given domestic tourists a lots of options. The “Incredible India”
destination campaign and the recently launched “Atithi Devo Bhavah” (ADB)
campaign have also helped in the growth of domestic and international tourism
and consequently the hotel industry.
In recent years government has taken several steps to boost travel & tourism
which have benefited hotel industry in India. These include the abolishment of
the inland air travel of 15% reduction in excise duty on aviation turbine fuel to
8% and removal of a number of restrictions on outbound chartered flights,
including those relating to frequency and size of aircraft. The government’s
recent decision to treat convention centres as part of core infrastructure, allowing
75
the government to provide critical funding for the large capital investment that
may be required has also fuelled the demand for hotel rooms.
According to a report, hotel industry in India currently has supply of 110000
rooms and thee is a shortage of 15000 rooms fueling hotel room rates across
India. According to estimates demand going to exceed supply by at least 100%
over the next 2 years. Five star hotels in metro cities allot same room, more than
once a day to different guests. Receiving almost 24 hour rates from both guests
against 6-8 hours usage with demand-supply disparity, hotel rate in India are
likely to rise by 25% annually and occupancy by 80 over the next two years.
This will affect the competitiveness of India as a cost effective tourist
destination.
To overcome, this shortage India hotel industry is adding about 60,000 quality
rooms, currently in different stages of planning and development, which should
be ready by 2012. Hotel industry in India is also set to get a fillip with Delhi
hosting 2010 Common Wealth Games. Government has approved 300 hotel
projects nearly half of which are in the luxury range. The future scenario of
Indian hotel industry looks extremely rosy. It is expected that the budget and
mid-market hotel segment will witness huge growth and expansion while the
luxury segment will continue to perform extremely well over the next few years.
2.6 MAJOR PLAYERS IN THE HOTEL INDUSTRY
(i) The Indian Hotels Company
The Indian Hotels Company and its subsidiaries are collectively known as Taj
Hotels Resorts and Palaces, recognized as one of Asia's largest and finest hotel
company. Incorporated by the founder of the Tata Group, Jamsetji N Tata, the
company opened its first property, The Taj Mahal Palace Hotel, Bombay, in
1903. The Taj, a symbol of Indian hospitality, completed its centenary year in
2003. Taj Hotels Resorts and Palaces comprises 59 hotels at 40 locations across
India with an additional 17 international hotels in the Maldives, Mauritius,
76
Malaysia, United Kingdom, United States of America, Bhutan, Sri Lanka, Africa,
the Middle East and Australia.
The company has had a long-standing commitment to the continued development
of the Indian tourism and hospitality industry. From the 1970s through the 1990s,
the Taj played an important role in launching several of India's key tourist
destinations. Working in tandem with the Indian government, the Taj developed
resorts and retreats while the government developed roads and railways to India's
hidden treasures.
(ii) ITC/ Sheraton Corporation
ITC's Hotel division was launched on October 18, 1975, with the opening of its
first hotel - Chola Sheraton in Chennai. ITC –Welcome group Hotels, Palaces and
Resorts, is today one of India's finest hotel chains, with its distinctive logo of
hands folded in the traditional Namaste is widely recognized as the ultimate in
Indian hospitality. Each of the chain’s hotels pays architectural tribute to ancient
dynasties, which ruled India from time to time. The design concept and themes of
these dynasties play an important part in their respective style and decor.
With more and more hotels being added at strategic destinations, the group has
joined hands with the Sheraton Corporation to strengthen its international
marketing base. A successful marketing franchise for almost 25 years now, there
are currently 10 ITC – Welcome group Sheraton hotels, and more in the pipeline.
77
(iii) The Leela Group
Founded in 1957 by Capt. C.P. Krishnan Nair, the Leela Group is engaged in the
business of ready-made garments and luxury hotels and resorts. The Leela
Kempinski, Mumbai and The Leela, Goa and the newly opened Leela Palace
Kempinski New Delhi are some of the best hotels in India, and have also won
considerable international acclaim.
(iv) The Bharat Hotels Group
The Bharat Hotels group is a major player in India’s tourism and hotel sector. It
operates its hotels under ‘THE GRAND’ banner and its present portfolio of hotels
incorporates FOURTEEN luxury hotels in the five-star deluxe segment. These
include InterContinental ‘The Grand’ hotels in New Delhi, Mumbai, Goa &
Srinagar and The Grand Ashok Bangalore, The Grand Laxmi Vilas Palace
Udaipur and The Grand Temple View Khajuraho.
(v) The EIH Ltd (The Oberoi Group)
Asian elegance is the key to running hotels, if you ask EIH (better known as The
Oberoi Group). The company owns and operates about 20 luxury hotels, about 10
mid-range hotels, and two inland cruises; The Oberoi Group operates primarily in
India, but also in Australia, Egypt, Indonesia, Mauritius, and Saudi Arabia. Most
of the company's luxury properties bear the Oberoi banner.
(vi) India Tourism Development Corporation (ITDC) / The Ashok
Group
India Tourism Development Corporation (ITDC) was established in 1966 as an
autonomous public sector corporation, entrusted with the task of helping develop
tourism infrastructure and promoting India as a tourist destination. The ITDC
Ashok Group of hotel chains manages some of the best five star and luxury tour
hotels in the Indian hospitality industry. The hotels run by the ITDC Ashok
Group of hotel chains may be divided into different categories; these are elite
hotels, comfort hotels and classic hotels. The ITDC Ashok Group of hotel chains
manages 33 hotels in 26 different tourist destinations all over India. The
management of Ashoka Group believes in offering the best in the hospitality
78
industry and the staff at each of the hotels run by the group is especially trained to
be courteous and efficient.
(vii) Jaypee Hotels Ltd
Jaypee Hotels Limited primarily engages in the ownership and operation of hotels
in India. The company owns three Five Star Deluxe Hotels, namely Jaypee Palace
Hotel at Agra, and Jaypee Vasant Continental and Jaypee Siddharth Hotel at New
Delhi. It also manages the operation of the hotels Jaypee Residency Manor at
Mussoorie and Jaypee Green Resorts. In addition, Jaypee Hotels involves in
construction operations. The company is headquartered in New Delhi, India.
Jaypee Hotels Limited is a subsidiary of Jaiprakash Associates Limited.
• Foreign Trade Policy
The Foreign Trade Policy announced in April, 2006, offered following incentives
to the hospitality industry: Hotels and Restaurants are allowed to import duty free
equipment and other items including liquor, against their foreign exchange
earnings under the Served from India Scheme. As in previous years, this
entitlement is 5per cent of previous year’s foreign exchange earnings for hotels of
one-star and above (including managed hotels and heritage hotels) approved by
the Department of Tourism and other service providers in the tourism sector
registered with it. The stand-alone restaurants will be entitled to duty credit
equivalent to 10per cent of the foreign exchange earned by them in the preceding
financial year (instead of the earlier 20per cent). Service exports in Indian
Rupees, which are otherwise considered as having been paid for in free foreign
exchange by RBI, will now qualify for benefits under the Served from India
Scheme. Also, foreign exchange earned through International Credit Cards and
other instruments as permitted by RBI for rendering of service by the service
providers shall be considered for the purposes of computation of entitlement
under the Scheme.
Benefits of the Scheme earned by one service provider of a Group company can
now be utilized by other service providers of the same Group Company including
managed hotels. The measure aims at supporting the Group service companies
79
not earning foreign exchange in getting access to the international quality
products at competitive price and providing services of international standards.
This new initiative allows transfer of both the script and the imported input to the
Group Service Company. The earlier provision allowed transfer of imported
material only.
• FDI in Hotel and Tourism Sector
100 per cent FDI is permissible in the sector on the automatic route. The term
hotels include restaurants, beach resorts, and other tourist complexes providing
accommodation and/or catering and food facilities to tourists. Tourism related
industry include travel agencies, tour operating agencies and tourist transport
operating agencies, units providing facilities for cultural, adventure and wild life
experience to tourists, surface, air and water transport facilities to tourists, leisure,
entertainment, amusement, sports, and health units for tourists and
Convention/Seminar units and organizations.
2.7 CLASSIFICATION OF HOTELS
(i) Commercial Hotels Cater mainly to business clients and usually offer
room service, coffee shop, dining room, cocktail louge, laundry and valet
service as well as access to computers and tax services.
(ii) Airport Hotels are located near airport and are a conveniently located to
provide any level of service from just a clean room to room service and
they may provide bus or limousine service to the air lines.
(iii) Conference Centers are designated to specifically provide meeting space
from groups, they provide all service and equipment necessary to handle
convention.
(iv) Economy hotels provide a limited service and are known for clean rooms
at prices meeting just the basic needs of travelers.
(v) Suite or All-Suite Hotels are hotels which offer spacious layout and
design. Business people like the setting which provides space to work and
entertain separate from bedroom.
80
(vi) Residential Hotels used to very popular typical residential hotel offers
long term accommodations.
(vii) Casino Hotels are often quite luxurious. Their main purpose is in support
of the gambling operation. Casino hotels often offer top name
entertainment an excellent restaurant.
(viii) Resort Hotels are the planned destination of guests, usually vacationers.
This is because resorts are located at the ocean or in the mountains away
from inner cities. Resort hotels may offer any form of entertainment to
keep their guests happy and busy.
• GENERAL CLASSIFICATION OF HOTEL INDUSTRY
(A) ON THE BASIS OF STANDARDS Like most of the countries in world, India also has hotels divided in different
categories depending on their location, facilities, infrastructure and amenities
provided. All the star hotels in India are government approved with continuous
control on the quality of services offered.
(i) Five Star Hotels: The most luxurious and conveniently located hotels in
India are grouped under Five Star Deluxe Hotel categories. Five Star Deluxe
in India are globally competitive in the quality of service provided, facilities
offered and accommodation option. These are top of the line hotels located
mostly in big cities. These hotels provide all the modern facilities for
accommodation and recreation matching international standards in
hospitality. In such type of hotel HR department are established separately
and to execute and to follow the concept of HR strictly, HR professional are
hired.
(ii) Four Star Hotels: A rung below five star hotels are Four Star Hotels, these
hotels provide all the modern amenities to the travelers with a limited budget.
Quality of services is almost as high as the five stars and above categories.
These kinds of hotels are there for the travelers with limited budget or for the
81
places which might not get the tourist traffic associated with larger cities. In
such type of hotel concept of HR is more or less followed.
(iii) Three Star Hotels: These are mainly economy class hotels located in the
bigger and smaller cities and catering to the needs of budget travelers. Lesser
in amenities and facilities, these hotels are value for money and gives good
accommodation and related services on the reduced price. Services would be
stripped down version of higher categories of hotels but sufficient to fulfill
customer basic needs. In such type of hotel concept of HR may or may not be
present. If present all functions of HRD is curtailed.
(iv) Two Star Hotels: These hotels are most available in the small cities and in
particular areas of larger cities. Catering to the backpacker tourist traffic,
these hotels provide all the basic facilities needed for general accommodation
and offers lowest prices. In this type of hotel concept of HR is absent.
(v) One Star Hotels: The hotels with most basic facilities, small number of
room’s locations in the far-flung areas are grouped under One Star Hotel
category. These hotels are best when customer is looking for cheapest
available accommodation option. In this type of hotel concept of HR is alien
words.
(B) ON THE BASIS OF NATURE
(i) Heritage Hotels24
Heritage hotels in India are best if one is looking for sheer elegance, luxury and
loyal treatment. They are not just another accommodation options but tourist
attractions in themselves. Exquisitely designed and decorated, meticulously
24
DrM.K.Patel, HRD practice in service Industry, 1st
Edition, P 83)
82
preserved, high standards of service and ethnic cultural motifs helps the tourists
get the complete experience of an India.
A new classification of heritage hotels has been introduced to cover functioning
hotels in a palaces, havelis, castles, forts and residences built prior to 1950. As
the traditional structures reflects the ambience and lifestyle of the bygone era and
are immeresly popular among the tourists, the scheme is aimed to bring such
properties not to be lost due to decay or unused.
(ii) Beach Resorts Hotels
Peninsular India bounded by Arabian Sea, Bay of Bengal, Indian Ocean and the
two emerald archipelagos of Lakshadweep and Andaman and Nicobar have a
long coast line of around 7500 km, offering an amazing array of beaches, some
popular, some not so well known. Thus location of resort is the basic point of
attraction for tourists.
(iii) Wild Resorts Hotels
A wildlife tour is incomplete if one does not actually live in a forest for a few
days. It means living in a rest house or a tent the midst of the dense wilderness
and waking up to the twittering of birds.
(iv) Government Approved Hotels
These are the hotels, which might not have applied for star categorization or
small enough to find them in the list. Many of the wildlife resorts, lodges and
hostels are government approved providing a minimum level of accommodation
facilities at far off places.
(v) Residential Hotels
The residential hotels work as apartment house. Often we call them apartment
hotels. The hotels charge rent on monthly, half – yearly, or yearly basis. They are
generally located in big cities and towns where no meals are served to the
customers. Initially, the residential hotels were developed in the USA. The
services offered here are comparable to an average well managed home.
83
(vi) Commercial Hotels
The commercial hotels are meant for the people who visit a place of trade and
commerce or business purposes and therefore these hotels are found located at
the commercial or industrial centers. They focus their attention on individual
travelers and are generally run by owners.
(vii) Floating Hotels
The floating hotels are located on the water surface. The places are sea, river,
and lake. These hotels provide with all the facilities and services made available
in a good hotel. In the leading tourist generating countries of the world we find
the practice of using old luxury ships as floating hotels.
(C) WORLD RECORD SETTING CLASSIFICATIONS 25
(i) Largest
In 2006, Guinness World Records listed the First World Hotel in Genting
Highlands, Malaysia as the world’s largest hotel with a total of 6,118 rooms.
(ii) Oldest
According to the Guinness Book of world Records, the oldest hotel still in
operation is the Hokshi Ryoken, in AwazuOnsen area of Komastu, Japan which
opened in 718.
(iii) Tallest
Burj Al Arab in United Arab Emirates is the tallest building used exclusively as
a hotel. However, the Rose Tower, also in Dubai, which has already topped Burj
Al Arabs height at 333 m (1,093ft), will take away this title upon its opening.
25Atulsrivastava, Tourism Planning and Management, 1stEdition, p 170)
84
2.8 CAREERS OPPORTUNITIES IN THE HOTEL INDUSTRY
(i) The industry offers more career options than most: - No matter what kind
of work we enjoy and wherever our aptitudes lie, there is a segment of the
industry that can use ours talents.
(ii) The work is varied: - Because hotels and restaurants are complete
production, distribution and service units, and managers are involved in a
broad array of activities.
(iii) There are many opportunities to be creative: - Hotels and restaurants
managers might design new products to meet their needs of their guests;
produce training programs for employees; or implement challenging
advertising, sales promotions and marketing plans.
(iv) Hospitality jobs are not nine-to-five jobs: - Hours are highly flexible in
many positions.
Many more opportunities are waiting in a queue. With these the role of HR is
drastically change. Its fields of operation in today’s worlds knew no boundary.
Each day it is confronted with new challenges in new division of hotels.
Therefore before knowing the role of HR it is essentials to know different
department of the hotels as well their functions.
• FACILITIES AVAILABLE IN HOTELS
• Room service
• Self parking
• 24-hour front desk
• Hair salon
• Business services
• Bar/lounge
• Parking (free)
• Business center
• Safe-deposit box - front desk
• Laundry service
85
• Babysitting or child care
• Restaurant(s) in hotel
2.9 DIFFERENT DEPARTMENTS IN HOTELS
The departments are classified on accounts of it function. They are as follows:-
(A) CORE FUNCTIONING DEPARTMENT
(i) Food and Beverage (F&D) Department
F & B deals mainly with food and beverage service allied activities. Different
divisions are there in F & B like Restaurants, Speciality Restaurants, Coffee
Shop (24 hrs.), Bar, Banquets, Room service etc. Apart from that they have
Utility services (Cleaning).
(ii) Front Office Department
The front office is the command post for processing reservations, registering
guests, settling guest accounts (cashiering), and checking out guests. Front
desk agents also handle the distribution of guestroom keys and mail,
messages or other information for guests. The most visible part of the front
office area is of course the front desk. The front desk can be a counter or, in
some luxury hotels, an actual desk where a guest can sit down and register.
86
(iii) Housekeeping Department
The housekeeping department is another important department in hospitality
world. Housekeeping is responsible for cleaning the hotel’s guestrooms and
public areas. This department has the largest staff, consisting of an assistant
housekeeper, room inspectors, room attendants, a house person crew, linen
room attendants and personnel in charge of employee uniforms. They may
also have their own laundry and valet service. Hotels with laundry and valet
equipment may use it only for hotel linens and uniforms and send guest
clothing to an outside service where it can be handled with specialized
equipment.
(iv) Food Production Department
Food production deals with the preparations of food items. It basically
engaged in preparing those dish, which are ordered by the guest and
afterwards is catered by the F&B department. Cuisine like Indian,
Continental, Thai, Italian, Konkani (Coastal Sea Food), South Indian,
Chinese, Mexican, etc. Different Chefs are appointed for the specialty
cuisine.
(B) SUPPORT DEPARTMENT (COST CENTERS)
(i) Marketing & Selling Department
Sales and marketing has become one of the most vital functions of the hotel
business and an integral part of modern hotel management. It includes
packaging for selling, sales promotion, advertising and public relations. The
marketing division is charged with the responsibility of keeping the rooms in
the hotel occupied at the right price and with the right mix of guests.
(ii) Engineering and Maintenance Department
The energy crisis throughout the world has given a great importance to the
engineering department of a hotel. This department provides on the day-to-
day basis the utility services, electricity, hot water, steams, air-conditioning
and other services and is responsible for repair and maintenance of the
87
equipment, furniture and fixtures in the hotel. The engineering department
has an important role in satisfying the guest- demand and helping to maintain
the profit level of the hotel. The cleaning, up-keep, repair, replacement,
installation and maintenance of property and its furnishing, machinery and
equipment are the joint responsibilities of Engineering/Maintenance and the
Housekeeping Department.
(iii) Finance, Accounting and Control Department
A hotel’s accounting department is responsible for keeping track of the many
business transactions that occur in the hotel. The accounting department does
more than simply keep the books-financial management is perhaps a more
appropriate description of what the accounting department does. Whereas the
control department is concern with cost control guidelines by way of
reducing in investment, reduction in operating cost, control of food service
costs, control of beverage costs, labour cost control, etc.
(iv) Safety and Security Department
The security of guests, employees, personal property and the hotel itself is an
overriding concern for today’s hoteliers. In the past, most security
precautions concentrated on the prevention of theft from guests and the hotel.
However, today such violent crimes as murder and rape have become a
problem for some hotels. Unfortunately, crime rates in most major’s cities are
rising. Hence today security department also concentrate on these additional
criminal activities too.
(v) Administration Department
Top organizational members usually supervise the Administration
Department in a hotel. This department is responsible for all the work
connected with administration, personnel, manpower, employee’s welfare,
medical, health and security.
88
(vi) Human Resource Development
This department has newly taken step in hotel industry and within a short
span of time it has become a very important part of the organization. It plays
the role of facilitator between the bargain able cadre and non-bargain able
cadre.
This department is the topic of our discussion. The practice, which this
department and their staff perform, is going to be learned in the light of
following project.
TABLE: 2.1
2.10 STRUCTURE OF THE HOTEL INDUSTRY IN INDIA
As of December 2005 (available figure) there are following number and category
of hotels. Table: 0.00 show the structure of hotel industry before five year.
Sources: Ministry of Tourism, Government of India.2005
Hotel Chains
They comprise major players including Indian Hotels Company Limited (the Taj
Group) and associate companies, EIH Limited (the Oberoi Group), ITC Hotels
Star Category No. of Hotels No. of Rooms
5-Star Deluxe 82 18764
5-Star 92 11332
4-Star 132 9401
3-Star 704 31039
2-Star 587 19031
1-Star 212 695
Heritage 83 2216
To be classified 50 5127
Total 1934 103973
89
Limited (the ITC Welcome Group), Indian Tourism Development Corporation
(ITDC) and Hotel Corporation of India (HCI) (the latter two being under the
Public Sector). Most of these chains had an established presence in one or more
metro cities prior to the tourism boom of the 1980s. Subsequent to the tourism
boom, these chains aggressively expanded their presence in other locations. The
private players among the hotel chains are industry leaders and have well-
established brand identities across the different industry segments.
2.11 HOSPITALITY MANAGEMENT
Hospitality and hotel management are two most important segments
interdependent and interlinked to each other. Without hospitality it would have
been very difficult for hotel business to survive. It is therefore, very essential that
both these industries should be managed professionally and in a particular
manner. Hotel management has in fact become a science itself and several new
strategies and innovations are being introduced in hotel industry to make it at par
with international standard.
The hospitality industry has traditionally hired people from many different
cultural and ethnic backgrounds. Within hotel and restaurant companies with
international operations, managers have to deal with cultural diversity of the
work force and the guests. It is obvious that effective managing of this diversity
90
is a requirement at all levels of a hospitality organization, and that the companies
in the forefront of managing diversity will have a competitive edge.
Human relation skills are the ones most needed and most used by any hospital
manager at any level, though lower level managers use more technical skills, and
upper level managers use more conceptual skills. Human relation skills are
required at all the level of management along with other skills. These involve the
ability to interact effectively with many different people. Poor interpersonal
skills represent the single biggest reason for failure, especially in the early and
middle stages of a manager’s career.
• SERVICES IN THE HOSPITALITY INDUSTRY 26
The first step in managing service is to make it an important part of the mission
statement of the company. A mission statement typically describes what kind of
business the company is in, what its mission, or purpose is, and what it believes
in. for instance, the holiday inn chain of hotels offers convenience at moderate
price. The hotels are conveniently located near airports or city centers and either
has a restaurant or are near eating places, the rooms are clean and comfortable.
Implicit in its mission are various service objectives, the organization must be
sure to know and understand its customers.
Once the mission statement and service objectives are clear, a service strategy
must be developed to clarify and implement them. A key part of the plan should
be to establish service performance standards. Performance standards translate
work requirements into levels of acceptable or unacceptable performance, and
they need to built into the job descriptions and and evaluation forms. For
example.
(i) Customers are greeted within one minute of sitting down.
26DrM.K.Patel, HRD practice in service Industry, 1stEdition, p 91
91
(ii) Customer complaints are resolved immediately, and the dinning room
manager is notified.
(iii) The server looks directly at the customers when speaking to them.
(iv) The server checks back with each party at least once during the meal.
(v) Meals are accurately served.
(vi) Refills are taken back before the customer orders them.
(vii) The server is always in proper uniform.
• USERS OF HOTEL INDUSTRY
In marketing hotel services, it is important to know about the different types of
users availing the services with diverse aims and objectives. This would ease the
task of marketers specially while studying the behavioural profile.
The following is the classification of different categories of domestic and
foreign users.
• DOMESTIC:FOREIGN:
Pilgrims Political representatives
Students Trade representatives
Officials Educationists
Film stars etc.Tourists, Sportsmen etc
Executives NRI
VIP
92
2.12 TOURISM IN THE GUJARAT STATE
A separate Tourism Department was established in 1973 to identify and develop
the tourism potential in the State. This was followed by the creation of Tourism
Corporation of Gujarat Limited in 1978 which was entrusted with the task of
undertaking and developing tourism-related commercial activities. The
Corporation is presently engaged in a variety of activities such as creation of
lodging and boarding facilities for the tourists and other aspects of tourist
acilitation such as transportation, packaged tours, wayside catering along the
National and State Highways, arranging cultural festivals, organizing exhibitions
and producing and distributing maps, posters, brochures and pamphlets. The
Corporation has set up accommodation facilities at Chorwad, AhmedpurMandvi,
Porbandar, Veraval, Hajira, Ubharat and Tithal. Similar facilities at pilgrimage
centres like Palitana, Somnath, Dwarkja, Pavagadh and Dakor have also been set
up by the Corporation. One of the recent tourist attractions introduced by the
Corporation in collaboration with the Indian Railways is a special tourist train.
The Royal Orient Train which connects up various tourist destinations straddling
the Gujarat and Rajasthan State. However, the Corporation has suffered losses
due to a number of organizational constraints. In order to minimize these losses
and also to provide better services to the tourists, the Government has
undertaken privatization of some of the commercial property units of the
Corporation.
93
In spite of possessing a variety of tourist attractions such as wildlife, scenic
beauty, pilgrimage centers, exotic traditional crafts and festivals, beaches,
hospitality of the region and a varied healthy and tasteful cuisine, the State has
not been able to accelerate the pace of tourism in comparison to other states. In
1991, the State did declare a tourism policy but it did not elicit adequate
response from the private sector since the policy contained only a handful of
benefits while the implementation was tardy due to legal and administrative
constraints. This was at a time when the Government of India had already
declared tourism as an industry and a large number of states had followed suit.
This enabled the tourism industry to avail of incentives, reliefs, benefits
available to the industry in those states.
While other state Governments made successful efforts in developing tourism
within their states, the relative inability of the Gujarat State to harness and
develop its full tourist potential may be attributed to a combination of factors
such as lack of effective policies, inadequate infrastructure, ineffective
marketing and lack of decent facilities for the tourists.
The main rationale for formulating a comprehensive tourism policy is rooted, on
one hand,in the convergence of socio-economic spread benefits, environment -
friendliness and employment potential of tourism industry and on the other, in
the growing demand for tourism products in the State, brought by a rapid
industrial growth in the State during the recent years that has led to tremendous
increase in number of business travelers.
World class supporting infrastructural facilities substantially influence the
quality of tourism services but ultimately, it is quality of human resource that
significantly govern the development process. The significant development in
the field of tourism industry of information super highway has been found
changing the perception of everything. The motive of managing human resource
is to make available to the tourism world class professionals besides making the
process of development of human resources cost-effective.
94
The tourism industry in India has become one of the most efficient and
dependable earners of precious foreign exchange revenue for the country. Not
only the centre but the state government too has begun to invest in tourism.
Infrastructure and facilities to capitalize on this growing industry. Tourism is one
of the largest industries in the world. Scores of countries buse their economy
upon it. Even in India it is the second largest foreign exchange earner (Rs.11,000
crores a year). We propose to set up a new goal of attracting at least 10 million
tourists to India within 5 years, so that we can earn at least 50,000 crore rupees
as foreign exchange every year.
• GUJARAT THE TOURIST HUB Gujarat is a proactive government & aggressive marketing, untapped tourism
opportunity, strategic location unique blend of pilgrims, adventure hill station,
beaches, heritage, desert etc available in the state.
(i) Business Tourism
Gujarat is most industrialized state in the country with high performance of
Indian and global companies. It includes 18 new sezs under implementation
along with various other industrial parks.
(ii) Archeological & Heritage tourism
The state having a wide variety of historical forts, places, dargahs, temples and
places of historical importance in India’s freedom struggle. These sites are still
virgin and have a huge potential for developments also include world heritage
sites like lothal and dholaveera, champaner and the heritage walk.
(iii) Cultural tourism
Gujarat state has a unique art & handicraft like bhandani, kutchhiwork,bamboo
craft and khadi unique festivals and fairs like navratri, makarsankrati,
sharadpoornima, mahashivratri and tarnetar festival.
95
(iv) Religious tourism
Gujarat is home to multitude devotional centers and temples with famous
religious centers like Dwarka, Dakor, Ambaji, Palitana, Somnath, Shamlaji,
Bahucharaji, Pavagadh, Akshardham, Swaminarayantemple, Jain temples
recently made a Mahatma mandir in Ghandhinagar.
(v) Fun tourism
The state include availability of beaches, diverse, landscape from forests to
deserts ,hills to plain land, modern tourism sites like dirve-in, science city, water
parks, theme based parks, and others like parks, zoos, lakes, museums, libraries,
shopping malls and multiplexes.
(vi) Wild life tourism
Gujarat is habitat for the world’s rarest as well large number of fauna & flora,
Founa includes Asiatic lions, wild ass, blackbucks, bears, monkeys, nilgai,
paradise, flycatcher, Chinkaras, doplhins, whale shark and migratory birds like
flamingoes, pelican, starks, flora includes species of khair, sadad, timru, babul,
salai, khakro, ber, asundro and bordi.
The state also has national park/sanctuaries at gir national park, vansada national
park, nalsorovar bird sanctuary, Kutch bustard sanctuary and velawadar black
buck sanctuary.
TOURISTS ATTRACTIONS
• FAIRS & FESTIVALS OF GUJARAT
Various fairs and festivals are celebrated in every month in Gujarat. Some of the
main festivals which are celebrated in Gujarat are the Kite Flying Festival or
Makar Sankranti, Navaratri Festival, Sarkhej Fair and Tarnetar Fair. The
Navratri festival is celebrated during September-October and devoted to the
three goddesses of the Hindu mythology. The Kite Flying Festival is celebrated
96
on 14th January. On this day, the people of every age fly kites of various shapes
and sizes.
• GIR NATIONAL PARK
The Gir National Park and wildlife sanctuary is located about 65 km south east
in the Junagadh district of Gujarat. Gir National Park is one of the India’s finest
wildlife sanctuaries located in Gujarat. This national park is set up in an area of
1412 square km. of lush deciduous forests. This national park was established on
18th September 1965 as a Forest Reserve to conserve the Asiatic lion. This
sanctuary is the final refuge of the rare Asian lions which roamed freely two
centuries ago throughout Middle East and some parts of India. Sasan, with a
forest rest house, is the headquarters of the sanctuary. Various deciduous forests,
grasslands, acacia scrub, wetlands and the seven rivers forms the topocharty of
this wildlife sanctuary.
• SABARMATI ASHRAM
“Being a Gujarati, I thought I should be able to render the greatest services to the
country through the Gujarati language. And then as Ahmedabad was an ancient
centre of hand loom weaving, it was likely to be most favourable field for the
revival of the cottage industry of hand spinning. There was also a hope that, the
city being capital of Gujarat, monetary help from its wealthy citizens would be
more available than any other place”.
This was an explanation given by Gandhiji for choosing Ahmedabad as is hub of
activities. Gandhiji selected a place on the bank of the river Sabarmati very close
to the Saint Dadheechi’s temple as well as from Jail and a crematorium. Gandhi
used to remark, "This is the right place for our activities to carry on the search
for Truth and develop Fearlessness for on one side are the iron bolts of the
foreigners and on the other, thunderbolts of mother nature." After building a few
essential structures, activities in ashram stated full fledged in 1917.
97
Gandhiji had driven all the major activities of independence as well as upliftment
of the society from this Ashram which was popularly known as Sabarmati
Ashram. He stayed in the ashram for many years before he finally proceeded for
a march to Dandi to break the salt law on 12 March 1930. Before starting the
march to Dandi, Gandhiji declared that he will not return to the ashram before
the independence of the country.
• NAGOA BEACH
Nagoa Beach is located in the Nagoa hamlet of the Bucharwada village in Diu.
Diu Island lies on the offshore of Gujarat mainland, yet it has the feeling of
being on a Mediterranean island. Nagoa Beach stretches for about 2 km from one
end to the other. This long, palm-fringed beach is very beautiful and quiet and is
in the horse-shoe shape. This beach is one of the most beautiful, white sanded,
crescent shaped beach and perfect for swimming, wading, relaxing and for water
sports like jet skiing, knee board surfing, pony and camel riding.
98
TABLE: 2.2
TOURIST VISITED GUJARAT 27
Month 2010- 11
From Gujarat
Tourist from other States
Total Domestic
Tourists
NRI Tourists
Grand total
April 1132638 383240 1515878 30878 1546756
May 1165967 321925 1487892 33507 1521399
June 1197942 345542 1543484 28641 1572125
July 1116881 321318 1438199 27186 1465385
August 1149078 336822 1485900 25200 1511100
Sept 1291769 333846 1625615 26524 1652139
Oct 1250286 367457 1617743 30610 1648353
Nov 1270707 369853 1640560 31815 1672375
Dec 1403329 436605 1839934 38571 1878505
Jan 1389479 373638 1763117 40474 1803591
Feb 1372279 306588 1678867 38127 1716994
Mar 1341832 236695 1578527 34885 1613412
Total 15082187 4133529 19215716 386418 19602134
As far as concern with tourist visiting a Gujarat the statement showing present
tourists flow of state. The tourist come from the different city of Gujarat between
months April to March is 15082187, and tourist flow come from the different
27Gujarat Tourism Report.2010-11
99
state of India is 4133529.The total domestic tourist flow is 19215716.As far as
concern with tourist flow in Gujarat NRI/NRG ratio is 386418.
• HOTELS IN GUJARAT
The large number of hotels in Gujarat offers a wide range of accommodation
option to the tourists. The hotels in Gujarat welcome tourists with warm
hospitality and admirable service. Tourists can be at case in choosing from the
wide a range of hotels in Gujarat, which ranges from a luxurious five star hotel
to a cheap budget hotel accommodation. These hotels are designated to suit the
budget. The hotels in Gujarat are equipped with modern comforts and are
beautifully decorated. The hotels of Gujarat also provide facilities for dining,
business and recreating to the guests coming in.
The rooms and suites of the hotels in Gujarat are tastefully furnished to make the
tourists feel at home when they are away on a leisure tour or on a business tour.
Although the amenities provided at the Gujarat Hotels differ with the star
category of the hotels, but the basic facilities that are required by a tourist while
touring are provided to the guests in all the hotels in Gujarat.
Hotels in Gujarat also venture out to provide excellent business facilities to the
corporate travelers. The conference halls and the board rooms of the hotels
facilitate the guests organize business meetings, corporate events and formal
banquets.
We see seven types of hotels in Gujarat commercial hotel, airport hotels,
conference hotels, economy hotels, suite or all suite hotels, resident hotels and
also a resort hotel.
100
2.13 TOURISM AND GUJARAT GOVERNMENT 28
According to a report, in a bid to boost tourism industry, the Gujarat government
has announced a policy which encourages promotion in hospitality sector and
Medical Tourism.
Nitin Patel, Urban Development Minister, Gujarat said, "Gujarat is fast
developing both in industrial and agricultural sector. It is moving towards
becoming an economic hub and in this backdrop the state government wants to
provide latest facilities to industrialist and tourists. The state government is also
keen on promoting Medical Tourism in the state so as to provide advanced
healthcare facilities at affordable prices. For promotion of hospitality and
medical services we have announced a new policy that would encourage
stakeholders to make more investments."
As per the policy, hoteliers and those desirous of setting up hospitals can
construct buildings up to 22 floors, for which necessary changes have been made
in building rules. Special provisions and relaxation have been introduced for
constructing hospitals and hotels, as part of this policy. For hotels, relaxation has
been given in parking space, Floor Space Index (FSI), swimming pools, and
structural designs. For hospitals also similar provisions and relaxation have been
made in the policy such as FSI, parking space and location of hospital in
correlation to road width. Now hospitals can be constructed alongside of a 30
meter wide road.
28The Times Of India
101
• HERITAGE HOTELS IN GUJARAT SEEK BREATHING SPACE 29
In spite of having over 300 potential heritage hotel properties, the state of
Gujarat has roughly 15 such hotels. The heritage hotel industry, too, is facing
stagnancy as no new properties are coming up.
"They have been telling the government to preserve the heritage properties. To
give typical feeling of heritage hotel we need interest free loans but nothing has
been done so far. Currently loans are not viable for most of the owners," says
Harendrapal Singh, secretary of Heritage Hotels Association of Gujarat
(HHAG).
While the annual expenses could be around Rs 8-9 lakhs on variables like
electricity, wages and other running expenses, the annual turnover is also around
Rs 10-15 lakhs for an average heritage hotel in Gujarat. Owners feel better loans
and better marketing could help the industry garner more tourists which is
mostly attracted to the neighbouring state of Rajasthan.
"It is frustrating at times because the growth is slow in heritage hotels industry in
Gujarat. Moreover, while Kerala and Rajasthan’s government have helped
the industry a lot in marketing, in Gujarat the industry receives kind of a step
motherly treatment," adds Singh.
According to HHAG, there are about 32 members in the association and 15
heritage hotels in Gujarat with about 180 rooms.
Industry experts say that the season for these heritage hotels begin from October
15 till March 15. However, while recession time saw some footfalls in these
hotels, the same has almost dried up this year. For instance, Rajmahal Palace
Wadhwan in Surendranagar, is having a tough time generating its running costs.
"Footfalls were there during the recession time. But this year business has been
stagnant. And maintenance and other running expenses become difficult to bear
29Report Writen by VinayUmarji | 2010-09
102
especially when the footfalls are less," says SiddharthSinh of Rajmahal Palace
Wadhwan.
Moreover, while properties in places like Jambughoda and Poshina grew from 6
and 5 rooms in 1994 and 1995 to 20 and 30 in 2010, respectively, expansion of
properties has almost come to a standstill.
"The need for support from government in terms of incentives is at the highest
among these heritage hotel owners. This has also kept new hotels from joining
the bandwagon as well," says an industry expert.
• CHALLENGES FACE BY HOTEL INDUSTRY OF GUJARAT 30
Luxury hotels in Gujarat are facing an acute shortage of manpower. With a
number of new hotel projects checking into the state the number of rooms have
doubled in the past 18 months – existing players are finding it tough to retain
employees.There are around 4000 rooms in premium category hotels in Gujarat
– Ahmedabad has over 1300.0 There are over 1500 additional rooms likely to be
added over the next two years international brands like Aloft, Radission, Park
Plaza, Crowne Plaza, Hyatt among others are set to start operations in the
state.“Existing players have little supply of skilled manpower.
In the last one year, we have doubled salaries. Annual expenses of a hotel’s
salary bill was less than 10% of earlier. Now it accounts for high as 17 to 20%
for a premium category hotel,” said NarendraSomani, President Hotel and
Restaurant Association of Gujarat. Recently, Somani purchased flats in Surat to
offer accommodation to lure qualified people for his recently launched 5 star
hotel in the diamond city. Nearly 200 freshers come out from four to five
recognized hotel manager institutes in Gujarat. However, the demand is for over
2000 people says Rajesh Sinha, a hospitality expert. As a thumb rule two people
get employed per room at a luxury hotel.Sinha, who works as a vice president at
a 5 star hotel has resigned to head an international brand in Ahmedabad. Right
from stewards, senior guest service associate, assistant general manager up to top
30Times of India, 5-11-2011, Tuesday
103
level executives, salaries in Gujarat are 15-20% higher than hotels in
neighbouring state he says.MrinalSarkar, general manager with Le Meridian –
Ahmedabad says cut throat competition and poaching activities have resulted
into unreasonable salaries at all levels.Forget major cities like Ahmedabad,
Surat, Vadodara and Rajkot small place like Sasan would are set to have six
more new luxury hotels over the next two years. “We are finding it difficult to
get staff for our project. People do not want to come to remote places even if
they are being offered higher packages, says chairman of the Rajkot based
Sanjayraj group, which is coming up with a 100 room property near SasanGir.
2.14 RECENT TRENDS IN HOTEL INDUSTRY OF GUJARAT 31
If the memorandum of understanding (MOUs) in the Global Investor’s Summit
is any indication, the hospitality sector here is set to boom in the next two years.
With infrastructure developing rapidly, it is no surprise that at least 10 new
hotels are expected to be set up in the diamond city at an investment of Rs. 2000
corer.
An official from Surat Municipal Corporation (SMC) said, “In most of these
projects, land is already available and in a number of them, the process of
development has already been initiated. Many of these people are builders who
want to diversify.
SanatReliya of South Gujarat Hoteliers Association said, “This is the time when
people see an opportunity to cash in on the future. Major investments for the
hotels up to 3 star levels are talking place in Station cluster area, whereas 3, 4
and 5 star category hotel projects are put up in the airport cluster area.”
31The Times of India Date: 18 January, Tuesday 2010
104
With Surat’s population likely to cross 45 lakh by 2011 end and likely to cross
45 Lakh by 2011 end and likely to double in a decade, investors see tremendous
opportunities in this sector.
However, the high cost of land has inflated the cost of the projects by about 25
percent. “Land is at a premium, but in the hospitality sector, return on
investment is also not so fast. We need a gestation period of five years to break
even. In such a scenario, it is advisable to go in for such projects only if you
have land available with you.” Said a developer, who has signed a MOU for a
150 room hotel project and aims to complete the project in two years time.
Another developer who is planning a 5 star hotel facility and a tie up with an
internationally renowned hotel group said, “The Centre has dragged the issue of
an operational airport and air connectivity of Surat for too long, but we expect
that things will move and we want to be ready to cash in when it happens in
three years.”
SMC has entered into a MOU with three developers for hotel projects in
Abhava, RundhVesu and GaviyarMagdalla whereas about seven developers have
entered into a MOU with the tourism department for developing the properties.
In fact, apart from hotels about three developers have signed MOU’s for
developing huge entertainment parks on the outskirts of the city.
Bangalore-based hospitality group Royal32 Orchid is set to expand its footprint
in Gujarat. The company plans to open one hotel each in Vadodara and surat as
part of its strategy to double the number of hotels in the country over the next
one year.
“Royal Orchid Hotels (ROH) has chalked out a Rs 500-crore investment plan for
calendar year 2010 to expand its presence in India to take the count to 20 from
the current 13,” said ChenderBaljee, chairman and managing director of the
32The Times of India Date: 26 March, Friday 2010
105
company. The company had raised funds through an intitial public offering
(IPO) in 2006 to fund its expansion plans.
“Just few months ago a four-star category hotel Royal Orchid Central became
operational in Ahmedabad at an investment of Rs 42 crore. Now, we are opening
a budget hotel on Race Course Road in Vadodra. We are scouting for land for
another Greenfield project in Surat. “saidBaljee.
He said that recently the company had taken a heritage property on lease near
Mysore form Karnataka government. “we are also looking at heritage properties
in Gujarat to run a hotel on management contract basis,” he added.
ROH owns five hotels in Bangalore, two in Pune and one each in Ahmedabad,
Mysore, Jaipur, Hyderabad, Mysore, Jaipur, Hyderabad and Goa. Five more
hotels are almost on the verge of completion in Navi Mumbai, Jaipur, Mumbai,
New Delhi and Hyderabad. The company is also expanding owerseas as it is
developing aRs 100 crore beach resort project in Tanzania on 30 acres of land.
• Saraf Hotels’ view on the Gujarat Hotel Industry Mr. Amit Saraf from Saraf Hotels recalled his visit to Ahmedabad five years
ago, when he had to decide whether he needed to setup a hotel in the city. Back
then, he had decided against it. However, the vast difference in infrastructure
development and various initiatives from Government since then have finally
resulted in his group coming up with a four star Hyatt hotel at Ashram road in
Ahmedabad.
Mr. Saraf lauded the efforts being taken up by the Government, but he also
remarked that availability of land was indeed a challenge. „With the growth that
the State has seen and is seeing, the private land owners are not willing to sell
land at reasonable rates‟, he expressed his concern. Value of land is very crucial
for hotel projects. He requested the Government to enhance the speed of
approvals because when the project cost is land intensive (which is the case for
hotel industries), the interest component is typically high. The faster a project
can be executed, the better it is for the investor.
106
• SUGGESTIONS FROM ITC
ITC has over 100 hotels and is still counting. ITC hotels operate under the
following four brands:
ITC prefixed hotels (luxury segment – present in most metros); Welcome Hotel Grand (5 star in metros / mini-metors); Fortune (good quality - value for money); and Welcome Heritage Brand (restored palaces, forts and haveli). Mr. Ranvir Bhandari, Vice President, North Region, and GM - ITC Maurya gave
his insights into the following aspects of the hotel industry that Gujarat should be
aware of.
• Investment climate
When the global financial meltdown hurt the world GDP, the hospitality industry
suffered in the process as well. Today, to make investments in this sector, the
right investment climate must exist. Mr. Bhandari complimented the government
by acknowledging that Gujarat has indeed done well to boost investment climate
in the State. „Security and safety is another big issue in this sector, in which
again, Gujarat has done a pretty good job‟, Mr. Bhandari said.
• Training needs “Bricks and mortars don’t make the hotel industry – it is about people‟, Mr.
Bhandari remarked. Gujarat should put greater efforts in ensuring that more
training facilities catering to the hospitality industry are set-up in the State.
• Environmental considerations Today‟s investments are not about economic value alone. In the speed of
development and wealth creation, environment is being depleted significantly.
Therefore today‟s investments should also create value for the environment by
ensuring that the depleting resources are replenished and societal values are
107
retained. Mr. Bhandari suggested that building designs should look at
monuments of the future. Whilst it is important that the services that are
provided be of world class, the raw materials used should also be friendly to the
environment.
Mr. Bhandari was of the opinion that if Gujarat has to work out a USP, it is very
important that the triple bottomline strategy is adopted (social, economic and
environmental). He informed that in most ITC hotels, one leaves behind zero
carbon foot print because the properties have been turned water positive, waste
water-cleaning positive etc. Two of the ITC properties even have LEED
plaltinum ratings (in Bangalore and Gurgaon respectively).
• Building Design Laws Mr. Bhandari made it clear that some of the Government laws pertaining to
building designs are archaic and need to be looked at afresh. Some States have
moved fast in this regard and therefore Gujarat should try matching the pace.
• Incentives Any investor in the hotel industry would like to bring down the main cost of
building and land which is quite high. Mr. Bhandari requested that the hotel
industry be treated like any other infrastructure industry and therefore the same
incentives and rebates must be given. „This is very fundamental‟, he remarked.
• Fast-track approvals Mr. Bhandari announced that ITC is very happy to invest in Gujarat and is
working to bring all its brands to the State. But he requested the Govenment that
implementation should be put on fast-track mode. In response to Mr. Kamat‟s
question in the same context, he informed that ITC took between 6 to 8 months
to get all the permissions for setting up its latest property in Gujarat – which as
Mr. Kamat remarked, was a long duration. Mr. Kamat further added that if
projects have to be put on fast-track, a single window system should not have
more windows inside it.
108
• Hyatt, Kamat to enter hospitality business in Gujarat Juniper Hotels Pvt. Ltd (JHPL), which has a tie up with Chicago-based Hyatt
Hotels Corp., is setting up a five star hotel in Ahmedabad under the brand name
Hyatt Regency at an investment of Rs 400 crores, while Kamat Hotels (India)
Ltd is planning to set up two three star hotels Gujarat with an approximate
investment of over Rs 50 crore, officials of the firms said.
With tourist inflow rising in Gujarat, hospitality sector players have started
showing their interest in setting up new hotels and restaurant. Juniper Hotels Pvt.
Ltd (JHPL), which has a tie up with Chicago-based Hyatt Hotels Corp., is setting
up a five star hotel in Ahmedabad under the brand name Hyatt Regency at an
investment of Rs 400 crores, while Kamat Hotels (India) Ltd is planning to set
up two three star hotels Gujarat with an approximate investment of over Rs 50
crore, officials of the firms said. "We are setting up a 300 room, five star hotels
in Ahmedabad on Ashram Road. We have already acquired two acres of land for
this project which will be completed by 2013. The hotel will have The company
will invest Rs 400 crore in this project," Amit Saraf, vice president, JHPL, said
on the sidelines of a seminar 'Gujarat Tourism and Civil Aviation Exploring
Investment Opportunities' jointly held by Gujarat government and the Federation
of Indian Chambers of Commerce and Industry (Ficci). JHPL owns Grand Hyatt
in Mumbai. He said with rising tourist arrivals and commercial activities gaining
pace in Gujarat, the demand for good hotels has also gone up.
"They have timely entered the state," Saraf said. Vithal V. Kamat, executive
chairman and managing director of Kamat Hotels Ltd, said the firm which had
pulled out from Gujarat 20 years ago has revived its plans for the state. "We used
to own a hotel in Vapi, (in Valsad district of Gujarat) but we closed it down 20
years ago. However, now with good infrastructure development in the state we
have revived our focus on the state," Kamat said. The firm is currently scouting
land in major towns including Ahmedabad to set up two hotels, he said. "We will
set up a three star hotel with 80 room capacity under the brand name of Orchid
109
while another hotel with same capacity will be set up under the brand name of
Vits," he said. He added per room investment will be Rs 30 lakh which turns out
to be around Rs 50 crore for both the hotels which will come up by 2013. Kamat
said the firm will also set up 10 highway restaurants in the state.
"They are also planning to set up 10 highway restaurants in Gujarat with an
investment of Rs 15 crore. This is a very viable business in Gujarat as demand
for highway food joints in the state is tremendous," he said. Similarly,
McDonalds India, which has 24 highway restaurants across including one in
Gujarat, is planning to add 30 highway restaurants in the state within the next
three years. "We see a bright opportunity in highway restaurants as most tourists
prefer to travel by road in the state. We will be setting up 30 highway restaurants
in the state with an estimated investment of Rs 2.5 crore in each restaurant," said
Nishit Pandey, director alliance, corporate affairs and administration, Hard
Castle Restaurants Pvt Ltd that manages McDonald’s restaurants. However,
viability of more hotels in Ahmedabad is in doubt, said Narendra Somani,
president, Gujarat Hotels Association, a body of hotel owners in Gujarat.
"He don't think that additional capacity will be very viable in Ahmedabad as
total capacity in the city is 2,000 room (three and five star hotels) while average
occupancy rate is only 60%-70%. In peak seasons, the occupancy rate goes up to
80% and some time 100%," Somani said. He said by 2011, another 1,000 room
capacity is likely to be added which will not leave any room for the late comers.
"Mariott Courtyard and Gateway Hotel are the only two five star hotels in
Ahmedabad and these two hotels also reduce their rates considerably during the
off season. If third five star hotel enters then it may create a price war in hotels
during off seasons," he said. Somani is also the chairman of Bhagwati Banquets
and Hotels Ltd which operates hotels in Ahmedabad, Surat and Rajkot under the
brand name of The Grand Bhagwati. He added highway restaurant business is
more viable as very few branded food chains are there in Gujarat. "There are
very few big players in highway restaurants in the state which includes Reliance
110
Fresh and Honest. There is more room for highway restaurants in Gujarat than
three star-five star hotels," Somani said.
• FUTURE TRENDS IN HOTEL INDUSTRY 33
Demand levels are likely to improve in 2010/11 as economic growth gathers
momentum and companies increase spending on travel. With expectations of
healthy salary increases within the corporate world, discretionary spending is
expected to increase further, especially on leisure travel. The amount of new
supply proposed within many markets remains an area of concern, especially as
numerous projects that were proposed during the heady days see completion and
open in the next one year. Previous declines in occupancy levels were mainly the
result of an increase in supply. In the long term, the demand supply gap in India
is very real and that there is need for more hotels in most cities.
The shortage is especially true within the budget and the mid-market segment.
There is an urgent need for budget and mid-market hotels in the country as
traveler’s looks for safe and affordable accommodation. Various domestic and
international brands have made significant inroads into this space and more are
expected to follow as the potential for this segment of hotels becomes more
obvious.
Tourism as an instrument of economic development and employment generation
particularly in remote and backward areas is well organized the world over. It is
a large service industry globally and plays an important role in achieving growth
with equity. During the period 2002 to 2009 India witnessed an increase in the
Foreign Tourist Arrivals (FTA) from 2.38 million to 5.11 million. In 2009 the
growth rates in FTA’s fell by 3.3%. Foreign Exchange earnings from Tourism
increased from Rs. 15064 corers in 2002 to Rs. 54960 corers in 2009 with a
growth rate in earnings of 8.3% in 2009 vis-à-vis 2008. The year 2009-10
witnessed heightened engagements of the Ministry of Tourism with the states to
strengthen initiatives to promote tourism to a new height.
********** 33109th Annual Report 2009-10 by The Indian Hotel Company Ltd.