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A PROJECT REPORT ON
APPLICATION OF MARKETING MIX SUCCESS IN HOSPITALITY
Guided By Submitted ByRITU BAJAJ ANKUR GUPTA LECTURER Roll No.03820803909
Bhagwan Parshuram Institute Of Technology(Aff. to Guru Gobind Singh Indraprastha University)
CERTIFICATE
This is to certify that the summer training project (MBA- ) entitled“A Study of
Application of Marketing Mix in Hospitality” done by Mr. Ankur Gupta , roll no.
03820803909 is an authentic work carried out by him at under my
guidance. The matter embodied in this project work has not been submitted earlier for
the award of any degree or diploma to the best of my knowledge and belief.
Date :
RITU BAJAJ
Lecturer
BPIT,MBA-DEPRTMENT
DECLARATION
I, ANKUR GUPTA , hereby declare that the project report prepared by me under the
guidance of Ms. RITU BAJAJ , Lecturer ,BPIT on “A Study of Application of
Marketing Mix in Hospitality Sector in India” is an original project report and I
have not copied it from anywhere. It is my own preparation.
ANKUR GUPTA Ms.RITU BAJAJ
Enrolment no.-03820803909 LECTURER
.
ACKNOWLEDGEMENT
I have prepared this study paper for the “A Study of Application of Marketing Mix
in Hospitality Sector in India”. Quite frankly, I have derived the contents and
approach of this study paper through discussions with colleagues and other persons
who are also the students of this course as well as with the help of various Books,
Magazines and Newspapers etc.
I would like to thank to my Research Guide Ms. RITU BAJAJ,Lecturer,BPIT-
MBA. I would also like to give my sincere thanks to a host of friends and the teachers
who, through their guidance, enthusiasm and counseling helped me enormously. I
think there will be always need of improvement. Apart from this, I hope this study
paper would stimulate the need of thinking and discussion on the topics like this one.
ANKUR GUPTA ENROLLMENT NO. 03820803909
EXECUTIVE SUMMARY
India is booming in the Hospitality Sector. We can very well apply and raise our
awareness of environmental issues from a business and ethical perspective. By
providing case studies, information and real-life examples, I want to encourage
readers to learn to apply key marketing principles to solve hospitality marketing
problems and take advantage of new opportunities.
Understand key marketing management concepts and principles. Learn a disciplined
approach to the analysis and management of hospitality marketing challenges. Apply
the ideas, concepts, and principles to the Hospitality business to develop innovative
and profitable strategies and programs.
Upon completion of this project report, I will be able to:
Compare product, sales, and marketing orientation strategies.
Utilize the role of the marketing mix and the 4 P’s of marketing.
Describe the conflicts that can arise between, marketing and operations
departments.
Define the hospitality service marketing system and analyze the importance of
an internal marketing system.
Compare and contrast the macro and microenvironment of hospitality
marketing.
Define target markets.
Explain the different segmentation strategies used in marketing.
Apply the role of marketing information and research to the decision making
process.
Define the concept of distribution.
Describe how feasibility studies are used in marketing.
Explain the role of various pricing strategies use in the hospitality industry.
Calculate a simple break-even analysis.
Explain the product life cycle and apply it to case studies.
Describe the communication mix and the role of advertising in marketing.
Explain the role of PR and personal selling in hospitality marketing.
TABLE OF CONTENTS
Cauterization Titles Page No.:
CHAPTER – 1 INTRODUCTION
Future Scopes And New Launches
Objective Of The Study
CHAPTER – 2 LITERATURE REVIEW
The Great Indian Hospitality Boom
Commercial Demand
Extended-Stay Products
Mixed-Use Development Projects
Mice
Consulting & Valuation
Property Tax Services
Hospitality Investment Banking - Capital Corp
Investment Services
Asset Management & Operational Advisory
Hotel Management
Restaurant Management
Executive Search
CHAPTER – 3 RESEARCH METHODOLOGY
Secondary Data
Domestic Tourism Study By NCAER
Primary Source
Presentation Of Data
The Movers And Shakers
Services Management: An Insight Into Hospitality Industry
CHAPTER – 4 PRESENTATION OF DATA & DATA ANALYSIS
The Booming Tourism Industry
Tourism Contribution To The Indian Economy
Travel & Tourism's Economic Impact
Recent Development In Tourism Industry
Hotels In India
Global Scenario Of Hospitality
Selling Vs Marketing Processes:
Best Practices By Hotels
The 4 P’s Of Marketing
CHAPTER – 5 DATA ANALYSIS
CHAPTER – 6 FINDINGS
Hospitality: The Technology
Interviews With Travel Agents
CHAPTER – 7 CONCLUSION
CHAPTER – 8 RECOMMENDATIONS
CHAPTER – 9 BIBLIOGRAPHY
CHAPTER – 10 ANNEXURE
Questionnaire
CHAPTER – 1
INTRODUCTION
Over the last decade, there has been a growing awareness within the global hotel
industry of the relevance for environmental protection issues. Hotel corporations are
seen to be changing their image by engaging in environmental initiatives. Some hotels
even go further to include social responsibility issues in their agenda. Greater
awareness on the potential economic and other less direct benefits of environmentally
friendly measures, coupled with the establishment of many “watch dog” and support
organizations such as the International Hotel and Restaurant Association (IHRA) and
Green Hotel Association (GHA) has fueled the rise of “green” and/or responsible
hotels in many established tourism destinations. Nevertheless, environmental and
social measures are not the traditional core competency of a hotel. Thus, “green” and
responsible measures may require additional investment and organizational change.
From a business perspective, additional investments are futile if they do not result in
higher market share. Simply put, a hotel's “green” and responsible measures are
meaningless if met only with consumer apathy. Therefore, to justify the need for
hotels to engage in responsibility measures, one of the questions that must be
answered is-do the tourists’ care about hotels' social and environmental
responsibility? Unfortunately, there is still little empirical knowledge of tourists'
demand for responsible hotels, particularly within the context of a developing country
such as Malaysia. This paper attempts to narrow the gap of information by providing
a preliminary outlook on the “demand” of tourists for green and socially responsible
hotels in Penang Island, Malaysia. Specifically, it looked at the main criteria tourists
use when choosing a hotel, their preferences as well as their attitude, interest and
opinion relating to a hotel's green and socially responsible measures
FUTURE SCOPES AND NEW LAUNCHES
Hotel Benchmark Launch Country Survey For India
In response to the rapid growth of the hospitality sector in India over recent years,
Deloitte has launched an India edition of the Hotel Benchmark Survey. The India
survey is another first for Deloitte's Hotel Benchmark team and is being showcased
this week in New Delhi at the World Travel Tourism Council's 5th Global Travel &
Tourism Summit. This is the first time ever that comprehensive monthly rate and
occupancy performance data has been available on the India hotel market. The new
survey tracks 20 markets across the country - providing analysis by population, size of
hotel, star rating, market area and city.
Hotel performance in India is booming. Lower costs of travel following the
liberalization of the airline industry as well as reduced security concerns due to
improved relations with Pakistan have helped boost performance. Considering the
depressed performance during the Kashmir situation, mid 2006 into 2007, revenue per
available room (repair) has not only returned to previous levels but has also exceeded
performance achieved prior to this incident. For the 12-months to February 2007,
repair in hotels throughout India (mid-market and above) increased by 29%,
compared to the same period ending February 2004. A strong economy and increasing
inward investment have elevated India's international profile. With a domestic tourism
market roughly one third of the total international arrivals received by all global
markets - it's exciting to watch. The evolving business dynamics in India continue to
provide the hospitality industry further potential for impressive growth as an
international destination.
Hotel companies are responding to the growing domestic market by adding India to
their development agenda for mid-scale products. In addition to Indian Hotels'
successful launch of a new mid-scale product, Indian, hoteliers are busy preparing for
the introduction of international brands like Ibis, Holiday Inn Express and Courtyard
by Marriott to India.
Infrastructure and geo-political concerns continue to limit India's ability to develop as
a tourist destination. Fortunately recent government initiatives including the
liberalization of the airlines and tourism awareness campaigns such as 'Incredible
India' and 'Atithi Devo Bhavah' - take India one step closer to achieving its true
potential.
The table below provides an indication of hotel performance by showing selected
markets from the new India edition of the Hotel Benchmark Survey. A more detailed
review of India's hotel performance will be featured in Hotel Benchmark’s fortnightly
newsletter India hotel performance- selected markets 12-months to February 2007
Source: Hotel Benchmark Survey by Deloitte
Commenting on the launch of the India survey, Julia Felton, Executive Director of
Hotel Benchmark at Deloitte said: "We are delighted to be the first to provide
hoteliers with monthly performance data on markets across India. Given the sheer
volume of the ever-increasing domestic tourism market, vigorous growth of the airline
industry and the expanding business community - it is not surprising that global hotel
companies are racing to increase their presence in India."
The Hotel Benchmark Survey is the leading provider of hotel performance data across
Asia Pacific currently tracking 41 cities and 115 markets in the region. India is the
18th monthly performance survey to be launched under the Hotel Benchmark banner.
The Hotel Benchmark Survey contains the largest independent source of hotel
performance data outside of North America and tracks the performance of over 6,500
hotels and 1.2 million rooms every month. Monthly surveys are produced on the
following areas:
Four regional rate and occupancy surveys covering Asia-Pacific, Central and South
America, Europe and the Middle East & Africa.
12 country/sub-reional rate and occupancy surveys for Australia, Benelux, China,
Germany, India, Italy, New Zealand, Nordic Countries, Southern Africa, Spain, Qatar,
and UK.
Two city rate and occupancy surveys for London and Paris.
Monthly profitability surveys on Germany and London.
On an annual basis we produce profitability surveys tracking performance across all
regions of the world.
Daily HotelBenchmark tracks rate and occupancy everyday to provide weekly surveys
for London, Amsterdam, Heathrow, Hamburg, Frankfurt and Dubai. Coverage is
building rapidly since launch in January 2007.
OBJECTIVE OF THE STUDY
Application of marketing strategies, contribute effectively success in business
operation. Hospitality Sector is applying marketing strategies to develop a
competitive advantage in the market through this project I want to study the
application of Marketing mix Strategies for achieving success in Hospitality Sector.
CHAPTER – 2
LITERATURE REVIEW
THE GREAT INDIAN HOSPITALITY BOOM
Has India reached its peak in terms of hospitality development project potential and
are most cities in India now in an oversupply situation? What is a prudent market
positioning and entry strategy for India?
A series of ambitious economic reforms aimed at deregulating the country and
stimulating foreign investment have moved India firmly into the front ranks of the
rapidly growing world economies. Skilled managerial and technical manpower that
match the best available in the world and an educated middle class whose size
exceeds the population of the USA or the European Union, provide India with a
distinct cutting edge in global competition. Today, India is one of the most exciting
emerging markets in the world be it aviation, real estate, retail, banking, health care
services or hospitality. After a five-year downward spiral starting 1997-98, the
hospitality industry in India witnessed a visible revival only by the second half of
2006-07, thanks to strong domestic travel trends and a positive economic and
investment environment. The industry, despite being an important component of the
economy, contributed only 2% of the GDP in 2006/07. According to recent estimates
of the WTTC Indian tourism demand will grow at 8.8% over the next ten years (from
2005-15), which would place India as the second most rapidly growing tourism
market in the world. This is expected to result in a growth of 7.1% in total travel and
tourism GDP and an increase of 0.9% in travel and tourism employment. With an
estimated 26,000 rooms in the branded hotel segment, the size of the hotel industry
continues to represent an abysmal figure for India’s size and growth prospects. Based
on the forecasted growth in demand we expect that another 100,000 to 125,000 rooms
will need to be added, across the country, in the next five to seven years, to be able to
meet the increase in demand. Our preliminary research indicates that, at best, there are
currently only 45,000-50,000 rooms under different stages of planning and
construction that are expected to enter the market in the branded segment in the next
five years.
Has India reached its peak in terms of hospitality development project potential? Are
most cities in India now in an oversupply situation? What is a prudent market
positioning and entry strategy?
The great Indian Hospitality Boom, is it for real?
This seems to be a million-dollar question... my view on key factors that will drive
future demand and on niche markets that offer a unique potential for development.
Weekend Getaways and Integrated Travel Circuits
While there has been much activity in hospitality projects in metro cities, very little
has actually been done to tap the potential of domestic tourism, which is currently
estimated at 250 million travelers. According to our estimates, there will be sustained
demand for weekend travel at major gateway destinations and these markets will grow
in the range of 35-40 percent annually in the next three to five years. India’s Per
capita Income growth will also continue to witness robust growth. Significantly,
higher disposable income rather than lower savings has influenced the present-day
consumption boom in India. This is good news, as income induced spending is likely
to sustain itself for a longer period and higher disposable incomes are also expected to
enhance the concept of traveling for leisure thus providing the necessary impetus to
destination travel within Integrated Travel Circuits.
COMMERCIAL DEMAND
The Indian economy’s performance has been impressive and the macro economic
outlook is expected to continue providing momentum for growth. With a targeted
8.0% annual growth in the economy, we expect demand for room nights across key
commercial destinations across India to grow annually at an average of 16-20 percent
over the next three to five years. There is a huge demand for prime commercial space
in Tier II cities within India. Hotels positioned between budget and mid-market levels
and having an international brand affiliation continue to provide the most attractive
opportunities, across most secondary markets.
EXTENDED-STAY PRODUCTS
India has firmly established itself as a world leader in the IT & ITeS and BPO space.
The developments and expansions planned within this segment remain encouraging.
The entry of new companies, typically, generates significant room night demand
during the start-up period, as processes are set up and executives travel for training.
Although there are very few branded extended stay products in India, the size of the
extended-stay market segment is estimated to be in the range of 11.0% - 13.0%. There
is a Hugh demand for accommodation facilities offering extra amenities such as fully
equipped kitchen, home-like furnishings and finishes, and an exercise facility.
Development of dedicated serviced apartments that make the extended time away
from home more comfortable and offers value for money is another segment that offer
hugh potential.
MIXED-USE DEVELOPMENT PROJECTS
A keen observer of the hotel market would agree that India has been guilty following
a herd mentality when it comes to hotel developments. Almost all development
strategies are directed towards building a prototype hotel that looks just same as it’s
10-year old neighbor hotel! Over the next three to five years, the biggest surge in
accommodation demand is expected to come from commercial zones that are being
developed in metro suburbs and secondary markets. Mixed-use development projects
that include retail and commercial space have also gained momentum in the last 24
months and will continue to be an attractive option for developments in large land
parcels. This provides a unique opportunity for hospitality projects. Areas such as
Whitefield in Bangalore, Navi Mumbai, Manesar near Gurgaon, the International
Airport commercial zone in Hyderabad, Rajarhat and Salt Lake City in Kolkata,
Kharadi and Kalyani Nagar in Pune, and the Ahmedabad-Ghandinagar highway will
witness large levels of commercial development and are attractive locations for new
hotel projects.
MICE
Currently there is an acute demand-supply imbalance scenario due to lack of quality
hotels. In most markets, insufficient room availability and high rates create conditions
that are not conducive for large international conferences to be held. Logistical
bottlenecks and lack of appropriate infrastructure in these markets also pose a
problem. Various state governments in India have expressed keen interest in
convention centre developments. Existence of a convention centre generally induces
substantial room night demand and a strong growth opportunity exists for products
that adopt an aggressive marketing strategy for the MICE segment, as within a few
years demand from this category is likely to rebound very strongly.
HVS International is a hospitality services firm providing industry skill and
knowledge worldwide. The organization and its specialists possess a wide range of
expertise and offer market feasibility studies, valuations, strategic analyses,
development planning, and litigation support. Additionally, HVS International
supplies unique knowledge in the areas of executive search, investment banking,
environmental sustainability, timeshare consulting, food and beverage operations,
interior design, gaming, technology strategies, organizational assessments, operational
management, strategy development, convention facilities consulting, marketing
communications, property tax appeals and investment consulting. Since 1980, HVS
International has provided hospitality services to more than 10,000 hotels throughout
the world. Principals and associates of the firm have authored textbooks and
thousands of articles regarding all aspects of the hospitality industry
HVS International is a hospitality services firm providing industry skill and
knowledge worldwide. The organization and its specialists possess a wide range of
expertise and offer market feasibility studies, valuations, strategic analyses,
development planning, and litigation support. Additionally, HVS International
supplies unique knowledge in the areas of executive search, investment banking,
environmental sustainability, timeshare consulting, food and beverage operations,
interior design, gaming, technology strategies, organizational assessments, operational
management, strategy development, convention facilities consulting, marketing
communications, property tax appeals and investment consulting. Since 1980, HVS
International has provide hospitality services to more than 10,000 hotels throughout
the world. Principals and associates of the firm have authored textbooks and
thousands of articles regarding all aspects of the hospitality industry.
Services include:
CONSULTING & VALUATION
Our services include development consulting and project management, impact
studies, management contract analysis and negotiation, franchise evaluation, operator
selection, lease reviews and negotiations, litigation support and acquisition due
diligence.
We are the leading industry experts retained by almost every major hotel owner,
lender and operator to assist with their valuation needs.
PROPERTY TAX SERVICES
HVS Property Tax Services represents hotel and restaurant clients on a wide variety
of property tax assessment issues. Our comprehensive range of services includes
evaluation of value for assessment purposes, using income capitalization, cost, and
sales comparison methods; filing of petitions with appropriate taxing authorities;
informal negotiations with tax assessing authorities; and representation in the
protest/abatement process on all property determined to be overvalued for assessment
purposes. We also provide services to potential purchasers of hotels and restaurants,
by assisting with due diligence on property tax issues, analyzing property tax
implications of a potential purchase, and determining purchase price allocations.
Hospitality Investment Banking - Capital Corp
HVS Capital Corp is the hospitality investment banking division of HVS
International. As such, the company is involved in essentially three business
activities:
Financing arrangements for debt and equity for existing and proposed hotels,
resorts and golf properties
Investment sales, both buy-side and sell-side activities for existing hotels, resorts
and golf and timeshare
Capital Advisory which involves assistance in public/private hotel projects, plus
assistance in workout and delinquent hospitality debt situations
INVESTMENT SERVICES
Operating within the European marketplace, HVS Investment Services acts on behalf
of clients in the sale, purchase and financing of hotels. Assignments include
individual assets and portfolios, with transactions having been successfully concluded
in most major European markets.
Asset Management & Operational Advisory
This division tailors a comprehensive approach that helps each property achieve its
full potential in increased profitability, smoother operations and optimal asset value.
Hotel Management
HVS Hotel Management provides independent third party management services to
owners of lodging properties. HVS also provides receivership and due diligence
services to institutional owners of distressed hotels.
Restaurant Management
A full service management firm that focuses on the challenges of hotel food and
beverage service. The firm's principals have a proven track record in improving
profitability, price/value and customer satisfaction. Working together with the firm's
Managing Director and world-renown restaurateur and operator, Larry Forgione, HVS
also has the ability to attract the industry's brightest culinary talent.
EXECUTIVE SEARCH
In perhaps no other industries is the impact of personnel as great as lodging, gaming
and restaurants. Take advantage of our Executive Search division's impeccable
performance record to optimize the economic value of your organization.
Organizational Assessments - Performance Cultures
Through the use of organizational surveys, leadership strategies and executive
coaching, HVS/The Ference Group assists hospitality organizations in "Achieving
Peak Performance."
Convention, Sports & Entertainment Facilities Consulting
Provides independent and objective economic and financial consultingand advisory
services to public agencies and private developers involved in convention,
entertainment and sports facilities. The division is dedicated to helping clients
implement projects by providing rigorous analysis during the planning process and
expert advice on development decisions.
Food & Beverage Services
By combining hands-on observation and experience, masterful knowledge of the
hospitality industry, and unparalleled access to information, HVS brings proven
expertise to the conception, development, management and appraisal of successful
ventures in the restaurant industry.
Gaming Services
HVS Gaming Services professionals have worked in every major gaming market in
the U.S.A. on projects ranging from multi-use riverboat complexes to Las Vegas
mega-resorts. Services include real estate appraisal, feasibility studies, market studies,
site evaluations, land evaluations, the analysis of gaming supply and demand and
economic conditions.
Interior Design
The service provides superior interior design services for the hospitality industry. It is
comprised of hospitality designers with extensive experience not only in interior
design, but in hotel real estate appraisal, marketing, operations, and finance.
Marketing Communications
HVS Marketing Communications provides sales, marketing, public relations and
operational strategies for the hospitality industry, in order to boost occupancies and
provide more effective rate/yield management. Specialties include marketing and
public relations programs for hotels, restaurants and destinations. Services provided
are: operational reviews, with respect to marketing; marketing plan development;
coordination with a hotel's flag; sales action steps development; pre-opening
marketing activities; sales training and direction; publicity and promotions; and web
marketing.
Technology Strategies
Offers innovative and practical technology solutions for a new lodging environment.
With an eye toward increased revenues and lower operational expenses, HVS
Technology Strategies performs "technology due diligence" on behalf of hotel owners
and operators.
Timeshare Consulting & Resort Development Services
This division offers strategic counsel to companies looking to enter the vacation
ownership industry. The core timeshare and fractional ownership consulting services
provided include market analysis, feasibility studies, cash flow modeling and financial
projections, appraisals/valuations, industry research and surveys, business strategy for
new entrants, litigation support, and acquisition due diligence. Additional timeshare
and fractional ownership services are provided through the Resort Development
Services (RDS) unit of the Timeshare Division. RDS Services include project
acquisition services, assistance in securing branding and marketing alliances, help
with partnering needs related to new projects, arranging equity partners etc.
CHAPTER – 3
RESEARCH METHODOLOGY
SECONDARY DATA
DOMESTIC TOURISM STUDY BY NCAER
Department of Tourism, Government of India had commissioned a study on domestic
tourism by National Council of Applied Economics Research. This report, which
relates to 2008-2009 has been released recently. According to NCAER this is the
time study of its kind undertaken in the country. They covered almost 8-lakh
households across the country in two rounds in collecting the data and spent a total of
18 months on the study, including 12 months in data collection. Before we give the
findings, it will be useful to give the definitions which were relied upon by them.
Tourist: The UN/WTO (World Tourism Organisation) defines visitors as "any person
travelling to a place other than that of his/her usual environment for less than 12
months and whose main purpose of the trip is other than the exercise of an activity
remunerated from within the place visited." Visitors are further sub-divided into two
categories: tourists, who must stay one or more night in the place visited, and same-
day visitors, comprising visitors who visit a place and return the same day (Please
note that this definition does not require stay in a paid accommodation. It just require
minimum one night stay away from home).
This definition recognises the following categories as characterising the main purpose
of travel for tourists: (a) leisure, recreation and holidays, (b) visiting friends and
relatives, (c) business and professional (including for study), (d) health treatment, (e)
religion and pilgrimage, and, (f) sports.
Tourist households: A household in which at least one member was a tourist during
the reference period.
Tourist trips: A trip is defined as consisting of both travel to the destination(s) and
return to the usual environment of the visitor. A trip is counted as part of tourism if it
conforms to the definition of tourist travel given earlier.
Tourist Expenditures: All expenditures related to acquisition of goods and services for
a trip, made by the visitor or on behalf of the visitor before, during and after the trip.
Day Tourism is confined to a single day, as distinct from the definition of tourism
based on "at least one night away" from the usual home environment. We give the
summary of statistical figures and findings of the study in the box.
Summary of Domestic Tourism Statistics (2008)
Urban Rural All India
Estimated households
(Million)
55.2 140.6 195.7
Estimated tourist
households (Million)
21.9 64.9 86.8
Number of trips (Million) 60.9 168.6 229.4
Number of package trips
(Million)
1.3 2.6 3.9
Number of tourists
(Million)
157.0 392.4 549.4
Number of same day
tourists (December 2008)
67.0 176.0 243.0
Number of trips per 2.78 2.60 2.64
households
Number of tourists per trip 2.58 2.33 2.39
Average expenditure (Rs.)
per trip
2,043 1,160 1,389
Average expenditure (Rs.)
per package trip
2,129 1,288 1,558
Average expenditure (Rs.)
per same-day trip
119 78 89
Distribution of tourists by
purpose (%)
Business & Trade 10.7 6.6 7.7
Leisure & Holiday 8.7 5.0 6.0
Religious & Pilgrimage 16.2 12.9 13.8
Social 52.9 61.0 58.9
Others 11.6 14.4 13.7
Total 100.0 100.0 100.0
Appendix - VIII: Statewise Number of Trips and Domestic Tourists (Million)
States/Regions Urban Trips
Tourists
Rural
Trips Tourists
Total
Trips Tourists
Chandigarh 0.21 0.76 0.03 0.09 0.24 0.85
Delhi 4.18 12.11 0.38 0.91 4.56 13.03
Haryana 1.07 2.52 2.55 7.10 3.61 9.63
Himachal
Pradesh
0.29 0.61 2.16 4.76 2.45 5.37
Jammu &
Kashmir
0.45 1.87 1.24 4.57 1.69 6.43
Punjab 2.25 5.66 4.84 10.77 7.09 16.43
Uttaranchal 0.36 0.98 0.65 1.74 1.01 2.72
Uttar Pradesh 5.22 14.84 22.39 45.95 27.61 60.79
NORTH
REGION
14.03
39.35 34.24 75.89 48.27 115.25
Andhra
Pradesh
4.03 9.49 16.39 35.26 20.42 44.75
Karnataka 7.94 19.11 14.47 31.89 22.41 51.00
Kerala 1.35 3.29 5.48 14.12 6.83 17.41
Pondicherry 0.08 0.24 0.07 0.13 0.15 0.37
Tamil Nadu 4.95 13.74 8.65 20.51 13.60 34.25
SOUTH
REGION
18.35 45.86 45.06 101.92 63.40 147.78
Bihar 1.95 3.93 9.27 22.18 11.21 26.11
Jharkhand 0.64 1.97 4.22 13.50 4.86 15.47
Orissa 1.40 3.21 7.22 17.70 8.62 20.92
Sikkim 0.01 0.01 0.09 0.34 0.09 0.35
West Bengal 3.67 10.40 9.84 24.59 13.51 34.99
EAST
REGION
7.66 19.53 30.64 78.32 38.30 97.84
Daman & Dui 0.00 0.01 0.02 0.05 0.02 0.06
Goa 0.10 0.29 0.17 0.47 0.27 0.76
Gujarat 3.48 7.15 6.72 15.11 10.20 22.25
Maharashtra 8.35 21.55 17.25 40.07 25.60 61.62
WEST
REGION
11.94 29.00 24.15 55.70 36.09 84.69
Chattisgarh 0.42 1.17 4.56 9.15 4.99 10.33
Dadar Nagar
Haveli
0.01 0.02 0.04 0.10 0.05 0.12
Madhya
Pradesh
3.67 9.42 12.65 27.37 16.32 36.80
Rajasthan 3.66 10.16 11.25 30.89 14.91 41.05
CENTRAL
REGION
7.75 20.77 28.50 67.52 36.26 88.29
Arunachal 0.02 0.04 0.22 0.45 0.24 0.49
Pradesh
Assam 0.61 0.97 3.82 7.48 4.43 8.45
Manipur 0.12 0.45 0.44 1.50 0.56 1.95
Meghalaya 0.05 0.13 0.32 0.60 0.37 0.73
Mizoram 0.18 0.37 0.15 0.30 0.32 0.68
Nagaland 0.10 0.37 0.33 1.13 0.43 1.50
Tripura 0.07 0.20 0.71 1.60 0.78 1.80
NORTH-
EAST
1.15 2.54 5.98 13.05 7.14 15.59
ALL INDIA 60.87 157.05 168.58 392.39 229.46 549.44
Appendix - IX: Ranking of Major Places Visited by Domestic Tourists Travelled for
the Purpose of Leisure, Holiday, Religious and Pilgrimage
Rank Places % of Tourists (in ascending order)
47 Khujraho 0.14
46 Ratnagiri 0.22
45 Gaya/ Budha Gaya 0.24
44 Dwaraka/ Jamnagar/ Surat 0.26
43 Bilaspur 0.34
42 Srinagar 0.39
41 Udaipur 0.48
40 Vellore 0.59
39 Ajanta Elora 0.60
38 Mahabaleshwar 0.61
37 Ujjain 0.67
36 Mussourie 0.81
35 Mount Abu 0.82
34 Nainital 0.99
33 Kullu Manali 1.00
32 Udapi, Hubli 1.02
31 Kanyakumari 1.02
30 Jaipur 1.05
29 Nasik 1.13
28 Hydrabad 1.15
27 Shimla 1.17
26 Amarnath 1.21
25 Varanasi 1.26
24 Ooty 1.31
23 Goa 1.45
22 Kodi Kanal 1.51
21 Vishakhapattnam/
Trivandrum
1.53
20 Agra 1.59
19 Mumbai 1.66
18 Chennai 1.66
17 Badrinath/ Kedarnath 1.82
16 Kolkata 1.96
15 Balaji 2.56
14 Darjeeling 2.59
13 Shirdi 2.70
12 Sabrimala/ Mona 2.75
11 Allahabad 2.85
10 Amritsar 3.12
9 Ajmer Sherif 3.53
8 Mathura/ Virandawan 3.65
7 Nainadevi/ Ch.purni 3.66
6 Delhi 4.73
5 Haridwar 4.82
4 Bangalore/ Mysore 5.64
3 Vaishno Devi 7.49
2 Puri/ Bhuwaneshwar 7.87
1 Tirupati/ Tirumala 10.38
ALL PLACES 100.00
PRIMARY SOURCE
Having had in-depth discussions with various industry bodies from around the world,
it became apparent to the organisers that there was also a need for an additional
segment within the exhibition dedicated to the food and hospitality industry - the
result is that using the considerable expertise that dmg world media Dubai has built
through the annual Hotel Show which is staged in Dubai, HII (Hospitality
International India) will now run alongside III and ICON for the first time this year.
With over 155 hotels currently under active development in India, there is growing
global interest in a market that is as yet relatively untapped. 'With their traditional
markets being highly saturated, manufacturers and service providers are looking for
new regions where they can generate new sales,' said John Lee, Project Manager III,
ICON & HII, dmg world media Dubai. 'This applies to all three segments of the event
- India as a country is working extremely hard to develop its travel and tourism
industries, and this is creating huge investment in the hotel construction, fitting and
interiors sector.'
Bangalore is the most active state in India, with 27 new hotels with 6,100 rooms due
to be completed by 2008. The objective of constructing over 155 new 4 and 5 star
hotels (plus a large number of economy hotels), is to help bridge the huge gap
between demand and availability that is hampering growth.
"While the demand for rooms has risen significantly, the room supply has only
marginally increased in the key cities,' said Manav Thadani, Managing Director of
global hospitality consultants HVS International. 'This has led to a sharp increase in
average room rates in Bangalore, Delhi, Goa, Hyderabad, Kolkata, Mumbai and Pune
- this shortage to continue till the new developments are completed and operational.
It's also highly encouraging to see new hotels are coming up in tier II & III cities such
as Agra, Kochi, Ahmedabad, Jaipur and Visakhapatnam.' Alongside the massive
development in Bangalore, Delhi is also expected to have 27 new hotels (20 of which
will be in Gurgaon) comprising more than 4,900 rooms. "The growth will be
supported by significantly improved road and transport infrastructures, the
privatisation of Delhi airport and the demand for hotels rooms that will be generated
by the Commonwealth Games, which are staged there in 2010.' added Thadani. With
tourist arrivals to the country showing positive growth over recent years, the long-
term outlook for all sectors of the hospitality industry, from construction to interiors
and hotel products and services, are highly positive. This has, in turn, resulted in more
international brands recognizing the latent potential of the market and entering the
country with plans for hotel chains. Real estate developers have also shown keen
interest, and there are plans for a number of mixed land use development projects that
include hotel, retail and commercial space - Dubai-based Emaar Properties is just one
company that has expressed great interest in developing shopping malls across India.
'The international focus on the Indian market is evident from the number of bookings
that are flooding in from all over the world,' With the majority of the four and five
star hotels implementing the latest IT and environmentally sustainable systems into
their properties, there is also heavy demand for technologically advanced systems,
including applications for both front and back of house.
PRESENTATION OF DATA
Sovereign splendour
One wintry December morning, the city of Bombay got a new landmark with the opening of the Taj
Mahal Hotel. It was the culmination of a visionary’s dream. Jamsetji Tata, the founder of the Tata Group,
wanted to give Bombay a magnificent hotel, the finest in the country.
The remarkably luxurious hotel with 30 private suites cum apartments and 350 double
and single rooms boasted of electrical lights, passenger lifts and refrigeration —
things unheard of at the time. The innovations were a result of Jamsetji Tata’s visits to
major international cities in his endeavour to offer guests the comfort that was on par
with the best in the world.
Circa 2007
Hundred years later, the management is walking the global road once again. The
world has changed significantly; India has embraced globalisation, along with other
countries. The scale of operations in the company has increased. From one hotel in
Bombay, the Taj Group has gone on to 53 in India and 12 at various international
destinations.
To maintain its status as the very best hotel chain across the globe, the Taj Group is
preparing to equip itself to meet the challenges of the next 100 years. "The challenge
for an organisation that has a tradition of a 100 years lies in how to revisit what you
do and improve it so that you don’t become stagnant, that you keep up with the trends
in the world today," says Raymond Bickson, managing director of Indian Hotels.
The Taj is already present in most of the key Indian cities and the scope for domestic
growth is limited. Outside India it has hotels in Sri Lanka, Dubai, Oman, Nepal, UK
and Maldives. Now the company seeks to expand its vision. "The Taj brand is a high
profile business for the Group. We want to become important global players in the
Hospitality industry and leverage the Tata brand on an international scale," says Mr
Bickson
Mr Bickson ticks off the target expansion list: "From India we move westwards to the
Indian Ocean (Maldives, Mauritius, Seychelles), then there is Africa and the key
gateway cities like London, New York, Shanghai and Beijing." The Australasian and
Gulf markets are also opportunity regions.
The success of the Taj Exotica Resort & Spa in Maldives has boosted the confidence
of the management, reinforcing that they can compete with the best international
brands. For the Taj Group, it is the prototype resort of the future. They have already
signed agreements for Mauritius and Seychelles and will soon set up a similar
property in Sri Lanka.
Mr Bickson avers, "Our strategy to be asset-light will allow us to move in quickly.
We are looking at management contracts. Four Seasons works on the same model.
They have many hotels around the world but own only a few. But the level and
standard of service is the same everywhere. That is what we are trying to do too."
His vision for Indian Hotels is to be atop the pyramid of the hotel business today and
a benchmark in the luxury segment among brands such as Four Seasons and Ritz
Carlton. "These are aspirational brands and we want to be among them."
In the last three years, the Group has focused on creating the infrastructure and
platforms to drive efficiency at both the front and back end. A Wide Area Network
(WAN) now connects all properties allowing for better communications and
incorporation of centralised reservation and customer applications. The Taj is also the
first chain in the world to have wireless Internet access in most properties.
Technology is also helping the Group capture guest trends and preferences to provide
more personalised services.
The star in the technology arena for the Taj is the interactive system being rolled out
in the heritage wing of the Taj Mumbai. A 42-inch plasma display with surround
sound, a personal computer with a wireless keyboard, digital streaming movies or
mp3 music gives the guest his private entertainment centre. A cutting edge of product
development in hotels, the facility is offered by a select few, like the Dorchester
Group.
The Group is leveraging IT resources in the Tata Group to benchmark against the best
globally. The Wildfire project, a value driven model catering to what Mr Bickson
considers a greatly under-served market is based on design and technology. It is
utilitarian but contemporary in efficiency and looks. Coming up in areas such as IT
parks and industrial towns, the model is scaleable as well as replicable in emerging
markets like Afghanistan and Iraq.
THE MOVERS AND SHAKERS
"While infrastructure and technology can move this industry, it is the people who
make it run.
To this end it is focusing on three key issues. The first is upgrading the bench
strength. "A different mind and skill set is required to go global in the hospitality
industry." Positions that call for a global make up have been identified.
The global manager’s position is crucial to such a set up. Global managers bring with
them first-hand experience of global quality and luxury. This leads to cross learning
and builds confidence that the Group can compete with the best in the world.
Mr Martyris is also working on creating a talent pool of people who will be as
comfortable working in Shanghai as in New York or Mumbai. According to Mr
Martyris, global managers should be able to understand the nuances of international
business, to build a team of people from different cultures and most importantly, to
imbibe the Tata culture of compassion and concern. They should be a people's people
and culturally sensitive.
High caliber international general managers are being brought into India and
underpinned with one or two top Indian managers to enable mentoring. In this way,
when the expatriate manager moves to another property, one of the Indian managers
can move into his position. About 12 expatriates have already been brought in. An
interesting twist to this strategy is to bring in the best global manager who is also an
Indian.
Mentoring is followed up with training. The intellectual input involves sending
executives for the Harvard general manager programme. "Working with an expatriate
combined with intellectual training from Harvard can completely change the way
people think," says Mr Martyris. The final building block is for young managers to
gain overseas work experience when an international property opens up.
Mr Martyris is working on bringing an international mix of senior executives into
Indian Hotels. Their induction and cultural integration are critical areas.
In all this, the biggest challenge lies in managing the internal system. The mentoring
process or the buddy system was started to counter the anxiety within the company. A
Personal Development Plan (PDP) for individuals provides the road map for their
career growth. A talent management process is also in place with the help of which
every individual has been charted according to potential and ability, and is groomed
accordingly. "My greatest conviction is that it is not salaries that drive people at work
but learning and career goals," concludes Mr Martyris.
With people, products and properties being groomed on this footing, the Taj is ready
to take on the globe. Circa 2103, the Taj may well be the
jewel not only in India's but the world's crown as well
Come travel time and India's middle class faces a problem
that's as typical as it is common: finding hotel
accommodation that's safe, clean, comfortable and, most
importantly, affordable. More often than not, they have to
compromise on parameter or the other. This is set to change in the coming years
following the launch of the indiOne brand. Promoted by Indian Hotels Company,
which also operates the Taj Group of Hotels, indiOne is positioned to meet the need
for what it terms 'smart basics' accommodation. Targeted at budget travellers and
tourists, indiOne offers an innovative hospitality model where the emphasis is on
delivering quality hotel rooms at low cost.
The first indiOne property, at Whitefield in Bangalore, opened for business on June
25, 2007, and it has already notched up an occupancy rate of close to 80 per cent.
Clearly, this is an idea whose time has come, but the economics of operating and
sustaining low-cost, high-quality hotel rooms is not easy.
The indiOne model was arrived at and adopted after extensive qualitative and
quantitative research on travel patterns, hotel usage, service needs and the
expectations of travellers. The research findings indicated a rich customer base for
indiOne, and it included domestic traders, self-employed professionals, pilgrims,
backpackers and domestic tourists. What these people were looking for in their hotel
accommodation was pretty much similar: affordability, hygiene and safety on the one
hand, and informality, stylishness, warmth and modern amenities on the other.
indiOne is primed to provide all of this and more.
Indian Hotels established a wholly owned subsidiary, Roots Corporation, to run the
indiOne show, before handing the designing of the project to UK-based architects
Young & Gault and the Indian firm, Incubis. Roots is looking to have 1,500 rooms
operational under the indiOne umbrella in the next one year, with properties in temple
towns and smaller urban centres. The company also has plans to take the brand
overseas.
The larger objective behind the launch of indiOne was explained by Ratan Tata, the
chairman of the Tata Group, when he unveiled the Bangalore property. "One of the
challenges identified [for Indian Hotels] was to innovate and to lead," he said. "This
spirit of innovation is evident in the indigenous development of indiOne. It is a giant
step forward for Indian Hotels."
Speaking at the same function, Raymond Bickson, the managing director of Indian
Hotels, emphasised the business logic powering indiOne. "The dynamics of the entire
[hospitality] industry has changed over the last few years," he said. "A category such
as the smart basic hotel has emerged as a compelling business opportunity. We do
believe that significant demand exists in the metros and in secondary and tertiary
cities across the country." With the goodies it has on offer, indiOne is hardly a no-
frills hotel in terms of facilities, but this is no five-star extravaganza. Just 25 people
run the 101-room Bangalore property. There is no room service, no porters, and
guests have to carry their laundry to the counter. The hotel has 72 single rooms, 20
double rooms (with separate beds for those who travel together) and eight larger-sized
rooms. Additionally, there is a special room for the disabled.
SERVICES MANAGEMENT: AN INSIGHT INTO HOSPITALITY
INDUSTRY
The hospitality industry is one of the fastest growing industries today with more and
more people traveling for business as well as for pleasure. India today offers hotel
facilities at par with the world standards and has the capacity to cater to ever growing
investment demand in infrastructural development. It is also one of the largest
employers in the country with a potential to provide jobs to the ever increasing
population of the country. Lately the demand for hospitality related educational
progammes has also increased. Despite all these trends we still find that many players
in this sector are still far away from understanding the benefits of international
standard and practices of this industry. The Indian hospitality industry has still not
been able to full incorporate the new management practices to the extent that it should
have. Why is this so? Services Management: Insight into Hospitality Industry is an
attempt to document the current research on international practices in the industry
which if adopted could bring long lasting rewards to the Indian industry. The book
illustrates the dynamics in hospitality industry and focuses on various aspects such as
strategy, marketing, human resource management, information technology and
productivity. The research included in this book bring an international context to the
hospitality industry thereby making it more universal in its approach. The book is
divided into various chapters where each can be read as an independent piece of
research work to facilitate those that want to focus on specific areas.
CHAPTER – 4
PRESENTATION OF DATA AND DATA ANALYSIS
DATA ANALYSIS AND FINDINGS
Full Of Promise - The Development of India's Hotel Industry, India's hotel industry
has entered the global stage, supported by its growing economy and the development
of the 'Incredible India' tourism brand. Previous security concerns due to the Kashmir
situation have reduced due to improved relations with Pakistan. Meanwhile the cost of
travel has fallen following the government's liberalisation of the airline industry.
Given that these two main barriers to travel have been tackled, not surprisingly, hotel
performance has benefited.
With India capturing the attention of the world, Deloitte has responded by dedicating
the 18th edition of the Hotel Benchmark Survey to report each month on the country's
hotel performance. In this article we explore the dynamics of India's domestic and
international markets and the implications for its hotel industry. We also examine how
the airline industry has paved the way for the improved infrastructure needed by India
to ensure future tourism growth.
On the move - domestic tourism explodes
To put the size of India's gigantic domestic market into perspective, it equates to over
one third of total international arrivals received by all markets globally. While current
mid-market players like Choice Hospitality India, Best Western, Fortune Park and
Sarovar Park Plaza have catered for domestic tourism for some time - this market has
recently exploded and demand is growing.
As the domestic market continues to expand, the escalating economy provides the
rising middle classes with increased disposable income. The arrival of low cost
airlines and the associated price wars have given domestic tourists more options than
ever before. The 'Incredible India' destination campaign has also helped the growth of
many domestic markets including religious tourism. As a next step, the government
has recently launched the 'Atithi Devo Bhavah' (ADB) campaign aimed at increasing
awareness of tourism in India.
To respond to the needs of this growing giant, companies like Choice and Best
Western plan to significantly increase their portfolio over the next two years, by 100%
and 50% respectively. Other hotel companies have also taken steps to ensure they
benefit from the country's huge domestic demand. Indian Hotels launched its IndiOne
brand with huge success last June in Bangalore. Accor has entered into a joint venture
with InterGlobe Enterprises to introduce 25 Ibis branded hotels, the first arrived in
2007. The DS Group has recently entered the hospitality industry with its newly set
up DS Hotels Ltd and has projects lined up in Jaipur, Udaipur, Shimla, Manali and
Goa. The DS Group plans to project the Kolkata property as a "destination centre"
with the project up and running by 2010. InterContinental signs six management
contracts across India
InterContinental Hotels Group (IHG), the world's largest hospitality group in terms of
the number of rooms, recently announced the signing of six additional management
contracts in India. The company announced the signing of major management
contracts for InterContinental Pune and Holiday Inn Hinjewadi Pune in Western
India; Holiday Inn Ernakulam, Cochin, and Crowne Plaza, Cochin; the Crowne Plaza
New Delhi in North India and another Crowne Plaza in Southern India. This follows
IHG's signing last year with Today Hotels to manage the Crowne Plaza Today
Gurgaon, which is scheduled to open in June this year.
Starwood signs eleven new hotel contracts in India
Starwood Hotels & Resorts has signed eleven new franchise agreements with ITC. As
a result, travellers in India will soon have access to 23 hotels in the country under the
Sheraton, Westin, The Luxury Collection and Le Méridien brand umbrellas.
As part of the agreement and following significant renovations in recent months,
seven existing Sheraton hotels in India will be re-flagged under Starwood's The
Luxury Collection brand. Additionally, franchise agreements for three existing
Sheraton hotels have been extended and an existing Welcomhotel in Delhi will be re-
branded as a Sheraton. The seven Luxury Collection hotels are located in Bangalore,
New Delhi, Agra, Hyderabad, Mumbai and Kolkata and the four Sheraton properties
are located in Chennai, Jaipur and New Delhi.
Catching the eye of the international market
Despite the international market being significantly smaller than India's domestic
market, it also shows promising growth. The country's appeal to international visitors
has previously been affected by the political situation in Kashmir as well as the global
events of the past few years. However this has now improved due to relative geo-
political stability and international economic growth. Tourism in India is also
benefiting from the stronger economies of India's two major source markets, the
United Kingdom and the United States. The peace talks with Pakistan have also
improved the situation, with the ongoing cricket test series between the two countries
further instilling confidence of future harmony.
Currently corporate travel dominates the international arena. The Indian subsidiary of
Kuoni estimates that 80% of foreigners staying in their hotels are there on business.
While corporate business will naturally continue to expand as the economy grows,
there is enormous untapped potential in the country's leisure market. "Incredible
India" has focused not only on promoting traditional holiday attractions and cultural
experiences, but on defining unique markets from medical to religious tourism. In
fact, India has already seen growing Japanese arrivals due to the promotion of
Buddhist travel.
But India still faces many challenges in attracting the international traveller. This will
continue whilst the government addresses the quality of India's infrastructure.
Although the World Travel and Tourism Council rated India second in price
competitiveness (after Brazil) there are many factors which need to be dealt with to
encourage foreign visitors. Poor roads, overstretched railways and old airports
discourage international travellers. Add to that hotel taxes higher than most Asian
countries and a bureaucratic visa process - and you start to get a clear picture of the
challenges facing India.
Maximising hotel performance
According to the new India edition of the HotelBenchmark Survey by Deloitte, the
growth in hotel performance is impressive. As indicated in the graph below, all
markets tracked by the survey reported double-digit growth in the twelve months to
February 2007 compared to the same period the previous year. This is not surprising
given the global economic growth in 2006, India's bustling domestic economy and
reduced travel barriers.
Key Indian markets revPAR growth - 12 months to February 2006 versus same period
in 2007
Source: HotelBenchmark Survey by Deloitte
Amongst the unique features of the hotel industry in India is the sheer volume of the
domestic market. Hotels receive twice as many domestic guests as international
guests. With most branded supply in India sitting in the top tier of the market, the
hotel industry is currently very top heavy. While many companies are addressing the
needs of the growing domestic market for more economical hotel products, most
projects are still in development. Future growth of the hotel industry will not be
helped by archaic land laws that make construction of new hotels time-consuming and
expensive.
What is interesting to note, is that the demand for hotel rooms far exceeds the
country's supply. While an opportunity exists to develop the hotel industry to meet
this demand, India experiences large seasonal shifts in demand and corporate
travellers currently represent the bulk of guests. Due to the lack of a widely
distributed business mix, annual occupancies and average room rates in India did not
rank very high in the 2007 HotelBenchmark Global Ranking Index. The industry must
explore ways to seize untapped potential demand whilst addressing the down-time to
maintain profitable operations. Developing a more diverse business mix is key.
CIVIL AVIATION IN INDIA - AN OVERVIEW |
New Delhi, India, October 19, 2007 - Domestic and international traffic have seen an
acceleration of growth in recent years. In the 12 months to 31 March, 2007, airlines
carried 35 million domestic passengers (up 39.5% year-on-year) and 22.4 million
international passengers (up 15.1%). This follows domestic traffic growth of 28% the
previous year and 20% the year before. Domestic traffic has consequently doubled in
the space of three years.
The Centre for Asia Pacific Aviation, a special consulting and research practice,
projects domestic traffic will grow at 25-30% per annum and international traffic at
15%, until 2010. The domestic market size is expected to cross 60 million and
international traffic 40 million by the end of 2010.
NEW AIRLINES
The boom in the aviation sector has attracted several new entrants. Until 2006 there
were three main scheduled domestic airlines – Jet Airways, Indian Airlines and Air
Sahara. Since August 2006, they have been joined by Air Deccan, Kingfisher
Airlines, SpiceJet, Paramount Airways, Go Air and IndiGo.
The industry is now moving towards consolidation with the confirmation of the Air
India-Indian merger, Jet Airways, acquisition of Air Sahara, and the controlling stake
taken in Air Deccan by the parent of Kingfisher Airlines.
FLEET EXPANSION
In order to meet the expected traffic growth mentioned above, new and incumbent
carriers are placing significant aircraft orders. Indian carriers have approximately 480
aircraft on order for delivery up to 2012, which compares very impressively with a
fleet size of 310 aircraft operating in the country today.
Almost 150 aircraft have been added in the last two years alone for scheduled services
(at a rate of up to six aircraft a month in the domestic market), with a further growth
in excess of 50 aircraft in the general aviation category.
Some of the aircraft on order will be used for replacement rather than expansion.
However, India’s fleet will reach approximately 500 to 550 by the end of 2010 and
the general aviation fleet will be 300 plus by 2010 compared with 177 today.
FINANCIAL PERFORMANCE
According to industry sources, the combined airlines of India are expected to have
posted a loss of approximately $500 million the financial year ended 31 March, 2007.
However, the industry has the prospect of returning to profitability in 2008-09.
NEW HORIZONS
Domestic airlines meeting certain qualifications (five years of operation and fleet size
of at least 20 aircraft) have now been granted permission to operate to international
destinations.
INTERNATIONAL POLICY
Government policy in the are of bilateral air services agreement has evolved to one
which sees air connectivity as being essential for trade and tourism. As a result, the
government has granted increasingly liberal access to foreign carriers to operate
services to India. Existing carriers have been increasing services and a number of
airlines have entered the market for the first time in the last couple of years.
Total seat entitlements under bilateral agreements between India and all countries
have increased 123% between Summer 2007 and Summer 2007 to reach 46.48
million seats per annum. The frequency entitlements, for example, between India and
Europe (including the UK) has increased from 70 flights per week to 204 flights
during the same period.
On the India-US route, annual traffic has increased from 447,000 in 2006-07 to
827,000 in 2006-07, an increase of 85% in just three years.
International air services agreements will increasingly be driven by India’s strategic,
economic and political interests. The government has removed the need for
mandatory commercial agreements with the national carrier for any additional
operations by foreign airlines. Existing commercial agreements will only remain in
force until 2009, India has taken a decision to incorporate multiple designation in
bilateral agreements.
India has been following an open-sky for policy for all cargo services since 1993,
under which designated foreign airlines are permitted to operate unlimited air
services, to/through any point in India via any intermediate point, to any beyond point
and vie-versa, utilizing any aircraft type, with full traffic rights except cabotage.
The government has also taken an in-principle decision to accede to the Cape Town
Montreal conventions.
FOREIGN DIRECT INVESTMENT
Under current regulations, the foreign direct investment (FDI) limit in domestic
airlines is 49% through the automatic route, although foreign airlines are not
permitted to hold equity. Non-resident Indians may invest up to 100%. The Ministry
of Civil Aviation is reviewing a proposal to increase the foreign direct investment
limit to 74% in the non-scheduled and ancillary sector. Some of the highlights of the
investment policy are as follows:-
For Greenfield airport projects, 100% FDI is permitted through the automatic route;
For existing airport facilities, there is 100% FDI, with the Foreign Investment
Promotion Board’s approval required for FDI beyond 74%;
For air transport services, there is an FDI cap of 49% through the automatic route and
100% for Non-Resident Indian investment through the automatic route;
The Ministry of Civil Aviation proposes to liberalize the FDI policy further in most
sectors, details of which are under consideration.
AIR INDIA-INDIAN AIRLINES MERGER
The Government has merged the two state-owned carriers into a new company, which
will strengthen their operations. The new airline is the largest in the country, with a
fleet size of almost 120 comparable to other airlines in Asia, and a further 111 aircraft
on order.
The merged entity will have an integrated national and international footprint, and
will enable these two airlines to pool their resources, achieve synergies, face
competition and establish new benchmarks for efficiency and reliability. The formal
merger of the two airlines has been completed in August 2007 and integration of
operations will proceed in a phased manner over the next two years.
The merger is in keeping with the industry trend of moving towards consolidation to
achieve synergies and reduce costs. The merged airlines will be able to offer an
integrated schedule from interior points in India to various international destinations
and vice versa, offering seamless connectivity to passengers.
A larger and stronger public sector national carrier will also increase regional
connectivity to hitherto under-serviced and un-serviced destinations.
The state-owned Indira Gandhi Rashtriya Uran Academy is planning a $15 million
investment, in conjunction with the private sector, to upgrade and expand its
capacity. The Airports Authority of India is also planning to establish a world-class
flying school at Gondia in Maharashtra. At least five other international operators
(including Airbus and Boeing) are evaluating investment opportunities in India.
FREIGHT AND LOGISTICS
India’s increasing international trade, combined with a strong domestic economy, will
continue to drive demand for airfreight and logistics. Meanwhile, all major
international express freight operators are reporting strong growth in the Indian
market. New dedicated cargo airlines are planning to launch shortly.
Massive investment plans in the organized retail sector, as well as in high-value
manufacturing, will require the support of sophisticated logistics facilities.
India’s economic development will require the support of dedicated freight cities with
multi-modal interchanges, state-of-the-art cargo terminals, cold storage facilities, and
electronic data interchange systems. The Indian government is shortly expected to
grant permission for the development of a major cargo hub in centrally located
Nagpur.
GENERAL AVIATION
The general aviation sector in India, comprising non-scheduled operations, such as
business jets and charter, is currently very underdeveloped by international standards,
with 177 registered non-scheduled aircraft and approximately 150 private aircraft,
compared with at least 150,000 in the US. Rising affluence, record corporate
profitability and increasing tourism are all expected to drive growth in this sector.
India now has its first fractional ownership corporate jet programme. The number of
aircraft in the non-scheduled category is likely to increase to 300 by 2010. A proposal
is under review to increase the foreign direct investment limit in the non-scheduled
aviation category from 49% to 74%.
MRO
In the light of the significant planned expansion of India’s fleet, opportunities in
maintenance, repair and overhaul (MRO) are also emerging. Given low labour costs
in India and the significant pool of engineers, efficient world-class MRO operations
would have the potential to attract offshore work from across Asia and beyond.
Airbus and Boeing have both confirmed plans to establish MRO facilities in the
country. Meanwhile, a number of third-party providers have also expressed interest,
e.g. SIA Engineering, ST Aerospace, Lufthansa Technik and AAR, along several
major companies keen to enter this sector.
INTERNATIONAL POLICY
Bilateral talks are held at regular intervals, depending upon the growth of traffic,
based on the principles of mutual benefit and reciprocity. Diplomatic considerations
and the overall economic interest of the country are also taken into account. Some
highlights of the development/policy an international aviation are as follows:
India has so far entered into Air Services Agreements with 102 countries.
A total of 64 airlines of 50 countries are presently operating to India, out of which
25 foreign airlines of 25 countries are providing unilateral operations.
The Indian scheduled carriers together operate to 28 countries.
In view of the huge unused bilateral rights which India has access to, it was
decided in 2007 to permit private scheduled carriers with five years’ domestic
experience and a minimum fleet size of 20 aircraft to operate international routes.
Gulf/West Asia, South-East Asia, UK/Europe and USA are some of the major
markets as far as international traffic to/from India is concerned.
Recent years have witnessed a significant growth in air capacity out of India. Our
air services arrangements with ASEAN and SAARC countries have been
liberalized considerably.
Tourist charter guidelines have also been liberalized by removing all restrictions on
frequency, size of aircraft and points of call, subject to availability of immigration and
customs facilities for inbound inclusive tour charters.
LIBERALIZATION OF AIR SERVICES
In accordance with the policy of liberalization in the civil aviation sector and with a
view to attract more foreign passengers, the government has adopted a liberal
approach in the matter of granting traffic rights under bilateral agreements with
various foreign countries.
A revised Air Services Agreement was signed with the US to increase cooperation in
the aviation sector. Under this agreement, both sides can designate any number of
airlines to operate services to any point in the territory of the other country, with full
intermediate and beyond traffic rights.
Similarly, traffic rights were enhanced with various other countries also in order to
enable greater connectivity to/from India. These countries included Australia, UK,
Germany, China, France, the Netherlands, Belgium, Canada, Singapore, Mauritius,
New Zealand, UAE, Thailand, Italy, Russia, Taiwan, Finland, Maldives, Tanzania,
Japan, Sri Lanka, Kuwait, Italy, Japan, Spain, Oman, Scandinavian countries, Egypt,
etc. This will not only lead to increased flights and improved connectivity to/from
India, but also provide more commercial opportunities for all operating carriers.
NEW AIR SERVICES AGREEMENT
The signing of a new Air Services Agreement is the first milestone to achieve for the
purpose of establishing air connectivity with new countries. Recently, a number of
new Air Services Agreements have been initialed/signed based on modern practices in
civil aviation sector. Air Services Agreements with some countries were signed some
time back and required updating in view of the changing circumstances and
developments in international civil aviation, and with respect to newer standards and
recommended practices. These countries include the US, UK, Australia, Brazil, New
Zealand, Iceland, Finland, Tunisia and Qatar.
BRIEF HISTORY, BRIGHT FUTURE
This is the age of specialisation. Every one is aiming at core competency to remain
competitive. Non-core activities are outsourced. Thus, outsourcing is intended to
improve efficiencies, building core competence and ensure that the customer gets the
best for his money. At the same time, areas of non-core competence are being done
away with. Further, outsourcing has hidden benefits such as rationalisation of cost and
flexibility in the long run. The concept of project hospitality has developed precisely
due to these factors. Although relatively new in India, project hospitality has been
prevalent abroad for many years.
The origin of project hospitality in India lies in maritime hospitality. Ships anchoring
at Indian ports or sailing on the high seas required various services like catering,
housekeeping and laundry, janitorial, medical and shop on-board. All these services
were generally outsourced by ships not only for convenience but also out of necessity.
The shipping industry, which is labour-intensive, is always looking to reduce the
number of people on its pay roll and outsourcing non-core activities was one avenue
to do so. Now project managers are adopting a similar principle in the execution of
projects.
The opening up of the Indian economy since 1991 has played a vital role in the
growth of project hospitality. Many international companies are active in India and
have taken up several projects for execution. The real fillip to the sector came when
the Indian oil and gas sector was opened up for private and foreign companies.
Offshore blocks were taken up by foreign companies like Cairn Energy and Niko
Resources which brought various service providers to India. Thus, project hospitality
began to be recognised as a sector only in the late 1990s. Project hospitality as an
outsourcing option is mainly restricted to offshore oil and gas drilling and it is yet to
spread to other sectors. The chief reason is the cost factor. Says Ashok Bhambhani,
Managing Director, Global (India) Hospitality Services Pvt. Ltd, a major player in
project hospitality: "We are not interested in domestic projects like road construction
and pipeline laying. Here the workers are paid low salaries and they cannot afford our
food. For example, our lunch may cost Rs 50 per plate whereas a worker working on a
road project gets wages of Rs 3,000 per month. He cannot afford our food." John
McCracken, Operations Manager, Universal Sodexho agrees, "We are not interested
in projects like road construction and pipeline laying as the people working on such
projects cannot afford our food. Besides, in such projects our infrastructure has to be
moved frequently from one place to another." Indeed, quality comes with a price tag.
The low margins in sectors like roads and pipelines can be compensated by huge
volumes. And, sooner or later, entrepreneurs will make a beeline for these sectors
which will see hectic activity in the coming days and months.
Project hospitality is definitely a sunrise industry and is waiting to be exploited. The
government's increased thrust on infrastructure development will only help this
industry to grow faster in the near future. Says John McCracken, "There is good scope
for business in mining, oil and gas, and power as many big projects are lined up. The
future is looking good and many projects are coming up in mining, power and oil
sectors. We are planning to expand our activities to take advantage of the situation."
Others project hospitality providers may not be far behind.
OCCUPANCY RATES
Consider the chart below. The hotel sector benefits from both holiday and business
travel. Holiday travel in India is generally seasonal in nature. Historically, over 60%
of total tourist arrivals into the country is during the period between September-May.
On the other hand, business travel is a factor of various factors. This includes
government’s effort to promote India as a tourist destination, long-term economic
growth prospects and higher foreign participation arising by hike in FDI and FII
holding limits in Indian companies and joint ventures.
For the last few years inbound (coming into the country) tourists have been around
2.5 m while out bound (going out of the country) tourists have been around 30 m. Out
of the inbound, a large part of the travelers to the country are of the business class,
while the rest are leisure segment. Connectivity between cities in the form of better
road infrastructure, airports and seaports also play a vital role in increasing the share
of India in the global tourist pie. India is a country of various cultures and has some of
the world-class heritage sites, which when promoted in the global arena, can attract
the global tourist.
On the domestic leisure travel front (i.e. people traveling within India for both
commercial and leisure reasons), there is lot of seasonality involved. Besides, as
income increases, aspiration level of the population also gains ground and
consequently, spills over into better occupancy rates for hotel chains. While it may
not be true for luxury hotels, players in the budget hotel sector and time-share
segment benefit in a large way.
Average room rates (ARRs)
Without getting into complexities, there are three classes of rooms in a hotel i.e.
business, leisure and luxury. It is important to understand that room rates are less
elastic to a fall in price at the higher end of the segment (luxury) than at the lower end
of the spectrum (business/leisure). Therefore, even in a downturn, players like Indian
Hotels are relatively able to maintain higher operating margins than EIH. Established
players in India have an edge over MNCs and the unorganized segment, due to
properties near heritage sites.
Competition also plays a vital role in determining the sector’s ARRs. Currently, the
big hotels have average occupancies of 60%. This points to excess supply. That itself
is sometimes a dampener on ARRs.
The global scene
International hotels are derive a big chunk of revenues from casinos and betting
arenas. Margins in this segment are also higher. But for Indian hotel majors, setting
up casinos and betting arenas is not allowed according to Indian laws. However, when
domestic hotels are compared to international hotels then they are fairly competitive
in terms of average room revenues.
How to put a value to a hotel chain? Net Asset Value (NAV) is the answer.
For arriving at a Net Asset Value
Setting up a 5 star hotel = Rs 30-35 m*
Add = Cash + investments
Deduct = Debt
Net Asset Value (NAV) Total
Divide No. of Shares
NAV per share = Rs x
Compare with current market price
* depending upon the area of setup
Coming to the NAV of domestic hotels, on the basis of replacement cost method let
us see the value of the hotels at current prices. By NAV we can arrive at the actual
value of the properties of the hotels. Based on that, NAV per share can be calculated,
which gives the actual value the shareholder should be paying for being a part of the
company. However, for hotels, which have been in the industry for a period of time
their NAV would be on the higher side, as the property bought would be at a much
lower rate than the present times. Like for instance the NAV of Taj and Oberoi Hotels
would be higher than that of ITC Hotels and other hotels.
Key things to look at before investing in a hotel stock
What are the strategy and the capex plans of the company over the next 5-10 years?
As mentioned earlier, hotels are capital intensive in nature having long gestation
periods, which not only has a bearing on the free cash flows of hotels but also affects
the return on capital employed (ROCE) for a period of time. So the bigger the capex
plan, the more caution one should exercise. This criteria is favorable for established
hotel chains.
Economic cycles also determine earnings prospects (during a downturn, properties are
cheaper and hotel chain generally tend to increase capacity). Moreover, in tough times
like September 11, hotel stocks take a beating. It is at this time that the established
players should be looked at, for when the concerns fade away, these will be the first
ones to benefit from an economic upturn.
A hotel chain should not be leveraged on any specific segment i.e. luxury or leisure.
Though elasticity is lower at the premium end, when tourist flow is affected, this
player could be the worst hit. Diversification reduces volatility in earnings, to an
extent.
Here's a graph of changes in employment in the construction, manufacturing, services,
and government sectors since 2007. To make the comparisons easier, the employment
dated are normalized to equal one in January, 2007. The dashed line shows constant
employment:
Here are the growth rates, which show the same information in a different way:
These graphs do not give a sense of magnitude, i.e. they do not say which of these
series contributes the most to employment. Here is the average contribution to total
employment for each series since 2006, i.e. the simple average by sector since 2007:
And finally, here are the changes in employment for each sector since 2007. The 2006
start date is chosen arbitrarily, but I think this gives a good sense of what has been
happening in recent years:
Tourism Industry in India
THE BOOMING TOURISM INDUSTRY
India has the potential to become the number one tourist destination in the world with
the demand growing at 10.1 per cent per annum, the World Travel and Tourism
Council (WTTC) has predicted. In India, the Government spending on tourism is
153rd in the world at 0.9 per cent. China spends 3.8 of its budget on tourism and rates
fifth in receiving the largest tourist arrivals (31.2 million) after France, U.S., Spain
and Italy. India gets only 2.6 million tourists on an average per annum.
The WTTC's Tourism Satellite Accounting Research (TSAR), which measured
tourism's share in the national economy in 160 countries over the last 10 years, has
found a global shift away from Europe to Asia and the Far East in the last 10 years.
According to WTTC study while outbound tourism had grown over last 10 years from
76 million to 179 (with the boom in the economy), the inbound traffic has remained
almost static at 2.6 million arrivals. Business travel and tourism are also poised to
grow in the coming decade. But because business travel has unique features of higher
spending, requirement of services, higher expectations, world-class standards,
telecommunications, efficient and convenient travel schedules, the public sector has to
assess this growth and plan its services and policies to serve the growing segment.
Major attractions in India are the world's highest mountains, miles of coastline with
excellent beaches, tropical forests and wildlife, desert safari, lagoon backwaters,
ancient monuments, forts and palaces, adventure tourism and the Taj Mahal. The
tropical forests in Uttaranchal, Madhya Pradesh, Karnataka, Orissa, Kerala and
Rajasthan can be developed into major tourist attractions. Being located virtually
midway between Europe and the Far East, Europe and South East Asia/Australia,
India has a strategic advantage. Since all international flights have to, out of necessity
fly over India, the country can develop one or two international airports with the best
of transit facilities, inducing passengers to break journey and thereby facilitating
visitor export.
The earlier setbacks in global tourism have strengthened the Department of Tourism's
resolve to promote India's tourism through aggressive marketing strategies. The
campaign under the banner of 'Incredible India' includes a wide ranging advertisement
campaign in all prime print publications besides a global television campaign
encompassing prominent English, French, German and Italian channels and an
innovative online campaign on the world's most popular websites. The 'marketing
mantra' for the Department of Tourism is to position India as a global brand to take
advantage of the burgeoning global travel and trade and the vast untapped potential of
India as a destination. It has also planned to promote spiritual tourism and its unique
techniques of yoga, siddha, ayurveda and unani system of dealing with mental and
physical rejuvenation by placing before the world, through tourist spots. A record 2.8
million tourists made their way from various parts of the world to India in calendar
2006, registering a rise of 15.3 percent over 2007, while as many as 4.5 million
Indians traveled abroad accounting for a rough 30 percent growth. Tourism is directly
linked with the economic growth of a country. The country's gross domestic product
is expected to grow 8.1 percent in 2006, up from 4.3 percent in 2007.
The performance of India's tourism is noteworthy against the backdrop of two
dreaded events; the Iraq war and severe acute respiratory syndrome (SARS), that had
affected global travel significantly in 2007, forcing vacationers across the world to
rein in their travel or holiday plans. According to a department of tourism, a
predominant section of the India-bound traffic were leisure travelers who were
originally headed for the United States and South Asian countries, but chose India
instead due to SARS and the gulf war fears. The Department said travelers from the
United Kingdom and United States comprised about 30 percent of all inbound traffic
in 2007. The United States, however, still continues to be the top destination of
Indians going abroad.
TOURISM CONTRIBUTION TO THE INDIAN ECONOMY
It is not hidden that tourism is among India's important export industries. Even with
comparatively low levels of international tourist traffic, tourism has already emerged
as an important segment of the Indian economy. Tourism also contributed to the
economy indirectly through its linkages with other sectors like horticulture,
agriculture, poultry, handicrafts and construction.
TRAVEL & TOURISM'S ECONOMIC IMPACT
Travel & Tourism – encompassing transport, accommodation, catering, recreation and
services for visitors – is one of the world’s highest priority industries and employers.
In India, Travel & Tourism's economic impact includes:
Total Demand
India Travel & Tourism is expected to generate INR1,846.3 bn (US$38.8 bn) of
economic activity (Total Demand) in 2007, growing (nominal terms) to INR7,027.7
bn (US$90.4 bn) by 2014. Travel & Tourism Demand is expected to grow by 8.8%
per annum, in real terms, between 2007 and 2014.
Employment
India T&T Economy employment is estimated at 24,456,600 jobs in 2007, 5.6% of
total employment, or 1 in every 17.8 jobs. By 2014, this should total 27,790,000 jobs,
5.7% of total employment or 1 in every 17.5 jobs. The 11,404,000 T&T Industry jobs
account for 2.6% of total employment in 2007 and are forecast at 12,441,200 jobs or
2.6% of the total by 2014.
Gross Domestic Product
India's T&T Industry is expected to contribute 2.0 per cent to Gross Domestic Product
(GDP) in 2007 (INR618.4 bn or US$13.0 bn), rising in nominal terms to INR2,002.3
bn or US$25.8 bn (2.1 per cent of total) by 2014. The T&T Economy contribution
(percent of total) should rise from 4.9 per cent (INR1,477.4 bn or US$31.1 bn) to 5.2
per cent (INR4,972.5 bn or US$64.0 bn) in this same period.
Capital Investment
India Travel & Tourism capital investment is estimated at INR485.3 bn, US$10.2 bn
or 7.2 per cent of total investment in year 2007. By 2014, this should reach NR1,663.9
bn, US$21.4 bn or 7.8 per cent of total.
Personal And Business Travel & Tourism
India Personal Travel & Tourism is estimated at INR927.3 bn, US$19.5 bn or 5.0 per
cent of total personal consumption in year 2007. By 2014, this should reach
INR3,612.9 bn, US$46.5 bn or 6.1 per cent of total consumption. India Business
Travel is estimated at INR114.5 bn, US$2.4 bn in year 2007. By 2014, this should
reach INR387.4 bn or US$5.0 bn.
Exports
Visitor Exports play an important development role for the resident Travel & Tourism
Economy. India Travel & Tourism is expected to generate 6.7 per cent of total exports
(INR283.2 bn or US$6.0 bn) in 2006, growing (nominal terms) to INR1,267.3 bn or
US$16.3 bn (5.4 per cent of total) in 2014.
Tourist Arrivals in India from Australasia
(2000 to 2007)
Jan. to Dec. % Change
Country of Nationality
1997 1998 1999 2000 2001 1998/971999/9
82000/9
92001/0
0
Australia 50,647 57,807 73,041 53,995 52,691 14.1 26.4 23.8 -2.4
American Somoa
312 3,651 4,188 2,992 -1,070.2
014.7 -28.6 -
New Zealand
11,409 14,720 18,324 11,551 11,700 29 24.5 -22.4 1.3
Fiji 1,379 1,917 3,000 1,541 1,422 39 56.5 -11.2 -7.7
Others 1,640 2,117 2,684 480 291 29.1 26.8 47.2 -
Total 65,387 80,212 1,01,237 70,559 66,104 22.7 26.2 12.9 -2.2
Grand Total
19,73,647
19,74,815
20,25,031
21,52,926
25,37,282
0.1 2.5 6.3 -4.2
Classification of Tourists According to Purpose of Visit
-2006
Country of Nationality Arrivals (In Number)Proportion to the Total (%)
Business(In Number)
ConferenceEducation &Employment
Tourism &Others
South-East Asia
Indonesia 7767 5 0.5 0.2 94.3
Malaysia 57869 2.1 0.1 0.1 97.7
Philippines 7199 5.5 0.5 0.3 93.7
Singapore 42824 5.8 0.2 0.1 93.9
Thailand 18623 2.1 0.2 0.4 97.3
Total 139975 3.5 0.2 0.2 96.1
Australasia
Australia 52691 4.7 0.3 0.1 94.9
NewZeland 11700 4.1 0.4 0.1 95.4
Others 90 2.2 1.1 0 96.7
Total 64481 4.6 0.3 0.1 95
Grand Total 2537282 2.8 0.1 0.2 96.9
Indian visitors to Australia 2006 - 2007Visitors ‘000 % Change
1992 9.6 -
1993 9.7 10.4
1994 12.1 24.7
1995 17.1 41.3
1996 21.3 24.6
1997 26.1 22.5
1998 29.4 12.6
1999 33.6 14.3
2000 41.5 23.5
2001 48.2 16.1
2002 45 -6.6
Indian visitors to Australia have been growing regularly except for the dip in 2007.
Visitors could have been less due to the outbreak of SARS in 2002, which affected the
whole tourism industry.
Indian visitors by main purpose of journey 1999 – 2002
Indian visitors by travel party description 1999 – 2002
Average expenditure for Indian visitors by expenditure item 2002
Average (AUD$)
Shopping - items for use in Australia 155
Other transport fares 153
Phone, internet, fax and/or postage 110
Organized tours 90
International airfares bought in Australia 85
Entertainment 75
Self-drive cars, rent-a-cars, campervans 31
Domestic airfares 28
Petrol and oil for self-drive cars or other vehicles 12
Horse racing and gambling 6
Other 101
Indian visitors by State/Territory visited 2001 - 2002
Outbound market to IndiaOutbound market is the number of passengers traveling from Australia to India. From
the past data series, the percentage of returning passengers has been calculated as 99.9
% historically.
No. of Passengers (Est.) Returning Non-returning Total market size
2004 97704 97606 98 195310
2005 104250 104146 104 208396
2006 111965 111853 112 223818
2007 119578 119458 120 239036
2008 127351 127224 127 254575
Inbound market from India
Inbound market is the number of passengers traveling from India to Australia. From
the past data series, the percentage of returning passengers has been calculated as 78.5
% historically.
No. of Passengers (Est.) Returning Non-returning Total market size
2002 45000 35325 9675 80325
2003 47790 37515 10275 85305
2004 50992 40029 10963 91021
2005 54765 42990 11775 97755
2006 58489 45914 12575 104403
2007 62291 48898 13393 111189
Total Air Market between India- AustraliaTotal Air market
2004 299417
2005 321573
2006 343439
2007 365764
MEASURES TAKEN FOR TOURISM PROMOTION
Recently, Indian government adopted a multi-pronged approach for promotion of
tourism, which includes new mechanism for speedy implementation of tourism
projects, development of integrated tourism circuits and rural destinations, special
capacity building in the unorganized hospitality sector and new marketing strategy.
A nation wide campaign, for creating awareness about the effects of tourism and
preservation of our rich heritage & culture, cleanliness and warm hospitality through a
process of training and orientation was launched during 2004-05. The aim was to
rebuild that sense of responsibility towards tourists among Indians and re-enforces the
confidence of foreign tourist towards India as a preferred holiday destination. More
than 6500 taxi drivers, restaurant owners and guides trained under the programme.
Government also took several other initiatives to promote Indian tourism industry and
increased the plan allocation for tourism i.e. from Rs 325 crore in 2003-04 to Rs. 500
crore in 2004-05. Road shows in key source markets of Europe, Incredible India
campaign on prominent TV channels and in magazines across the world were among
the few steps taken to advertise Indian tourism. In addition a task force was set up to
promote India as prominent health tourism destination.
However, in order to attract more visitors, India still needs to upgrade its airports,
roads and other infrastructure to global standards. Even with the recent surge, tourist
arrivals are just a mere percentage of those in such popular Asian destinations like
Bangkok and Thailand.
RECENT DEVELOPMENT IN TOURISM INDUSTRY
India Tourism office at Tokyo won two International Awards in Tour Expo held at
Daegu in Korea for excellent tourism promotion. Indian Pavilion won the Best Booth
Design Award as well as Best Folklore Performance Award competing with major
players in tourism such as China, Japan, Thailand, Malaysia and Canada.
The theme of pavilion was the Buddhist pilgrimage in India. Multi promotional
activities undertaken by Tokyo office drew a large crowd to India Pavilion, which
added colours to the entire travel show. The Korea’s leading newspapers published on
the front page the Incredible India booth’s photographs highlighting various aspects.
The live Yoga performance and Indian traditional snacks at the pavilion were enjoyed
very much by the visitors.
HOTELS IN INDIA
No doubt India is one of the dream destinations in the world,
which fascinates the tourists coming to India. India offers the
best accommodation facilities to the travellers coming from
all across the globe. The hotels in India are not only
competitive but also luxurious and comfortable in all respects,
satiating the tourists at the end of the day. The distinctive
features of Indian hotels are high standard and quality
accommodation catering to the needs of clients at the most reasonable rates. The
availability of Hotels in India ranges from Luxury Hotels, Standard Hotels, Budget
Hotels to the Heritage Hotels In India. Not to forget is the fact, that there are also
several Indian and International Hotel Chains in India offering excellent hospitality
services to the business as well as discerning travellers. Throughout the entire length
and the breadth of the country that is exceptionally rewarded with tourist destinations
the hotels in India make your trip a memorable one.
Exactly a century ago, Jamshetji Nusserwanji Tata's dream was concretised when the
Taj Group's first hotel, The Taj Mahal Palace & Tower, Mumbai, was opened on
December 16, 1903. It is said to have cost £500,000 -- or Rs 2.5 million -- then.
Legend has it that it was not a very enjoyable experience that made Tata foray into the
hotels arena. Somewhere towards the end of the 19th century, Tata is said to have
taken a foreigner to a dinner in a hotel, only to be stopped at the entrance by the
doorman.
The marketing mix is the combination of marketing activities that an organisation
engages in so as to best meet the needs of its targeted market. Traditionally the
marketing mix consisted of just 4 Ps.
GLOBAL SCENARIO OF HOSPITALITY
The hospitality industry in Japan is now shifting into a new era of turnaround where
various opportunities exist in value enhancement. With 20-years of lasting experience
as the premier provider of business advisory services to the hospitality industry in
Japan, and strong insights into both the operational and asset/financial aspects of
businesses in this market, Global Management Directions (GMD) Hospitality and
Leisure Group help the leading industry players succeed in owning, operating, and
investing in their hospitality assets and businesses.
SELLING vs MARKETING PROCESSES:
ADVERTISING, TARGETTED PROMOTIONS & MARKETING
EXPENSES
Hotels do promotions through various channels to attract their holiday guests. The
most effective channel appears to be brochures to travel agents. Other strong channels
of promotions are direct mail, sales calls, joint promotions with travel agents, hotel
websites and print advertising. Only 30% of the responding hotels are doing
advertisements in the press and the low figure is perhaps due to the fact that a large
number of the responding hotels were small hotels who would not have the budgets
for such media advertising.
We asked the hotels certain questions which would show whether they were
maintaining data like the markets from which their guests were coming, profile of
their high revenue customers, percentage of their repeat customers. We also asked
them if they were doing targetted promotions to the high priority target markets and
high revenues paying customers. The main thrust of asking these questions was to
draw the attention of the hotels to focused promotions which were likely to pay high
dividends.
Hotels are on the average spending 10 to 20 percent of their total revenues in sales &
marketing including payroll expenses. This figure is much higher in lower star
category hotels compared to 4 star, 5 star and 5 star deluxe. For example, 5/5D hotels
reported that only 5.5% of their revenues were being spent on sales & marketing
while 4 star hotels were spending 8.43%. In comparison, lower star category hotels
are spending much higher percentage of their revenues on this head, ranging between
10% and 17%. This could be due the fact that the total revenues of 4/5 star hotels are
high and a smaller percentage would also translate to a significant amount. It is also
possible that additional amounts are being spent on marketing for such hotels by their
chain head offices.
BEST PRACTICES BY HOTELS
We asked for best practices being adopted by certain hotels who enjoyed an average
annual occupancy of more than 70%. It appears that many hotels do similar good
things to get higher occupancy and higher revenues, but highlighting these practices
may help all the hotels in focusing on certain practices that may appear to be usual
and routine on paper, but are still neglected in actual operations.
PROCESS: FOCUS ON: MEANS ARE: END GOAL
SELLING ProductsPromoting
Hyping
Profits from
Sales Volume
MARKETING User NeedsPlanning
Marketing Mix (4P's)
Profits from
Satisfied Customers
Planning vs Forecasting?
In a business plan, companies will generally make a "forecast" of sales revenue on a
month by month basis for the next few years. Where do the numbers come from?
How can a company say that in November of next year it will generate sales of $2.3
million from Product A? Is this a guesstimate?
If a company says it "plans" to achieve sales of $2.3 million, it is implied that there
are specific activities which have been defined that will lead to this target. For
example, the distribution channels for the product must be defined. Pricing
assumptions have to be tested and adjusted. Advertising budgets and schedules must
be worked out. Most importantly, the resources required to achieve the desired sales
level must be calculated. How many salespeople will be needed? What level of
technical support is necessary?
These points may seem obvious. Yet, many companies take the "let's run it up the
flagpole and see what happens approach" to marketing.
The 4 P’s of Marketing
The 4 Ps of marketing are Product, Price, Place, and Promotion. Think of each of
these as a variable, which control. The idea is to set these variables in such a way so
that sales will take place. cannot "make" a customer pull out her credit card, but can
certainly help her in coming to a decision by setting the "right" price, the retail
location, the level of advertising and even product attributes such as color or
perceived quality. control everything but the customer herself. These variables are all
interdependent. Taken together, they constitute a certain mix. This is often referred to
as the marketing mix. In defining this mix it is also necessary to take into account r
competitor's mix as well as r overall corporate goals and objectives. The idea is to
come up with a mix that will clearly differentiate r products from those of r
competitors while considering r corporate goals. For example, r company may wish to
offer a high-end luxury type of product since r competitors are addressing the mass
market and this is consistent with r company's goal of owning the market for top-of-
the-line products of this category.
Product
What is it that are selling? A good marketing manager will be particularly interested
in knowing what "need" addresses? Engineers like to think in terms of what problem
does it solve? Engineers would think in terms of its functional specifications and
marketing people would think more in terms of its features and benefits.
Manufacturing people will be thinking about how to make it and along with the
accounting group they will be wondering what it costs to make (or buy). Hopefully,
they won't be wondering and will defer instead to rigorous analysis. In any event, the
product is the "currency" which ultimately gets exchanged for cash. Denny Doyle,
consultant and author (founder of Digital Equipment Canada), always told me that the
product is that which trade for cash. In other words, r customers want r product and
want their cash and all do in business is trade those two items.
What is Price? The answer may not be as obvious as one may think. Price is not just
the sticker price or the price invoiced. It goes deeper. For example, what about terms?
If can have 30 days to pay for a purchase or as we often hear on radio commercials for
household furniture, "nothing down, no interest, low monthly payments starting next
year!", or car dealers offering financing of 2.68% on automobile purchases. A good
example of clever pricing was Xerox's decision to "loan" customers the Xerox 914
(the first commercial push-button office copier) and to charge them only $.05 per
copy. As a product moves through the distribution channels, e.g. from manufacturer to
distributor to dealer to customer, there are prices set along the way. The
manufacturer's selling price to the distributor becomes the distributor's cost. Is that
"cost" in line with competing products which the distributor might carry instead? Is
the cost low enough so that dealers will have enough margin in order to want to carry
the product? Obviously, it is important to understand pricing and margins along the
distribution path. Ultimately, the price to the consumer or last purchaser in the chain
must be such that it is competitive. Who sets this price? Does the manufacturer or the
dealer have the final say? Can the manufacturer in any way control the price of his
product when it hits the street (i.e. retail level)? Most importantly, can the
manufacturer make (or sub-contract) the product for a cost to him which allows him
to meet his profit objectives given the retail price target?
How do price a very innovative, one-of-a-kind product? How do price a "commodity"
(if there is such a thing) product? Are pricing too low and leaving money on the table?
Or, are pricing resell out of the market. Presently, there is very strong demand for
Harley-Davidson motorcycles and delivery times are running over six months. Since
only the Harley company makes a Harley, should it raise prices and take advantage of
the strong demand? If demand for r product is lagging, should drop price - especially
if the product life cycle has peaked?
There are various pricing strategies that have probably heard about. For example,
mark-up pricing is the setting of a price based on one's cost. This may be appropriate
when reselling a product used in providing a service. For example, an auto mechanic
may mark up her cost of auto parts by 50%. This may be a simple way for her to
determine selling price and from her experience this is in line with what other
mechanics are doing. However, it may be totally inappropriate to set pricing based on
cost in the case of a near-commodity item. It should be noted that if are constrained
by both r pricing and costs, then unless are a particularly efficient operator, it may not
make sense to be in this business.
Another pricing strategy is that of market "skimming". In this case, start with fairly
high prices (especially in the absence of competition) and lower r prices over time as
start to keep up with the demand or as competition begins to move in. What is r
product "worth" to the buyer? Perhaps her perception of what it is worth is very high.
Ideally, could start lowering prices until reach an optimal sales volume without
oversupplying r market.
For so-called commodity products, a going-rate pricing approach is often followed. If
are selling gasoline to motorists, it would be very difficult to charge a price per litre or
gallon which is noticeably different from that charged by gas stations nearby. So
unless’re the only station on a 200 km stretch of desert highway, would likely charge
the going-rate prices.
Currency is another important aspect for technology companies to consider. Because
the markets for technology based products are usually global, should price r products
in U.S. dollars, the currency used for international trading. Might even consider
pricing on an FOB (Free on Board) Destination basis. For example, if I am selling
optical encoders to machinery makers in Germany, it might behoove me to price on
an FOB Stuttgart basis. This means that the German customer does not have to
calculate freight, duty, etc. in order to come up with a true landed cost. When I was
selling video terminals in Germany in the 1970's, I priced in Deutschmarks, FOB
Frankfurt. This meant that I was taking more risk with respect to currency
fluctuations, freight and insurance charges, but by consolidating large volumes to
Frankfurt, I was able to greatly reduce air freight expenses thereby offering a
competitive price to my distributors.
There are many business and marketing theories on pricing. It is not possible to do
justice to this interesting and complex topic herein. The important thing to remember
is that this, perhaps next to the product itself, is one of the most important P's of
marketing and set it.
Place (i.e. distribution)
Placement if the product is crucial. There are often many paths (i.e. channels) which a
product can take in going from r shop to the customer. A channel "map" can be drawn
in order to visualize this keeping in mind all the middlemen, agents, shops, stores, etc.
along the way. Defining a channel strategy is not simply an arbitrary matter. Bear in
mind that all middlemen along the way are, in essence, in partnership with to sell
something to the end-user. Therefore, r product and its other 3 P's must be such that
various resellers in r channel have their needs (e.g. margin objectives, volumes) met.
There is also the question of control. When AES Data launched the world's first word
processor in the early 1970's, it signed up the Lanier company in the USA to handle
U.S. sales. However, Lanier was selling the AES product under its own label, i.e. the
Lanier name and when Lanier decided to switch to another supplier of word
processors (as competition emerged), AES had little control over its U.S. customers.
To gain a foothold in the U.S. market, it had to start from the beginning in a market
which it created! Even if Lanier sold the AES products under the AES name, the
channel would still be owned by Lanier in that Lanier had its own loyal customer base
along with sales and service offices to support this customer base.
A choice of channels may also be dictated by cost constraints. If it is considered too
expensive and risky to advertise and promote a new product in an established market,
it may make more sense to go the Lanier routes in which case r partner will absorb the
up-front sales expenses allowing concentrating more on product development.
At the risk of oversimplifying, a good practical way to determine, or at least analyze,
appropriate channels for r product would be to start at the point of final purchase.
Who is the final consumer or user of r product? Where does that person look when
buying r type of product? If she buys this product from an office products retail store,
then where does that retailer obtain his products... and so on? Once the various
channels have been identified, it is easier to determine which ones make the most
sense or which ones offer the path of least resistance.
The choice of channels may also have a significant bearing on pricing. For example,
in the AES/Lanier case, it was possible for AES to offer very attractive pricing to
Lanier because Lanier was absorbing the promotional and distribution costs. This
gave Lanier an incentive to focus on sales and marketing and not compete with AES
by also manufacturing such machines.
Promotion
Promotion is that term which many people confuse with the word "marketing". For
many, the words promoter and marketer are synonymous. But, as we know,
promotion is just one of the four P's and a good "marketer" is not just a good promoter
but also a good planner and a good listener.
Promotion can take many forms: advertising in various media, events, press releases,
trade shows, brochures, flyers, and internet sites to name a few. Promotion means to
create awareness although awareness is just the beginning. Good promotion compels
the buyer to buy. The "need" for the product must be addressed. How does it solve the
customer's needs (even needs he doesn't know he has)?
Promotion is unlimited. There is virtually no limit on the amount of TV, radio, and
newspaper advertising that one can do. When Apple announces the Macintosh in
1984, it used a various "shocking" television advertisement that was aired during the
American Super Bowl broadcast. What an audience! What an impact! And then it was
followed up with an inundation of print advertising as well as focused trade
publications and trade shows. Of training, this also resulted in extensive "free" media
coverage because of the news worthiness of this innovation.
What works best for a technology company? The following chart may provide some
insight with respect to the importance of the various tools which can be used.
Importance of Promotional Tools Used by High-Tech Firms:
Creative marketing people will come up with events and techniques that will leave
lasting impressions. One event that I will never forget occurred in the mid-1980 only
a year after the birth of the Compaq computer company as the first serious IBM PC
clone. Compaq achieved broke a sales record by hitting US$111 million of sales in its
very first year of existence. I was at a national computer conference in Toronto.
Compaq was hosting a hospitality suite - a common practice at events such as this. I
received an invitation and expected the usual hors d'oeuvres and drinks. But, when I
arrived I found that the hospitality suite was the entire Grand Ballroom in the hotel.
The Internet
The internet, especially the World Wide Web (www) will have a profound impact on
marketing. It is totally revolutionizing the marketing function. In the few short years
(since approx. 1995) since the web has surfaced, the technology and its benefits have
been globally embraced by technology and non-technology businesses and customers.
Even so, we are just seeing the beginning. Market strategy (the 4P's) will not just be
affected by the internet; it will be driven by it. Companies cannot afford not to be
internet ready and internet-literate. The so-called technically-challenged managers
will face a rough time if they miss the boat on this juggernaut. "e-commerce" (i.e.
electronic commerce) is the wave of the future. We will be able to instantly gain
information on competing products' prices, distribution methods, promotion, etc. The
internet will not only provide customers with information, it will in itself be a channel
for the shopping, ordering, and delivery of products.
The Marketing "Mix"
The 4 P’s are r marketing "mix”. Control the 4P’s. They are r "independent"
variables. The dependent variable is sales volume. This is the output that gets by
defining the inputs - i.e. the 4 P's. How do choose this mix? That is the challenge!
There are various tools that might be helpful in this regard. For example, the "Product
Space Map" lets plot r product's price vs performance against others in the market.
Can then decide how want to position resell with respect to r competitors while at the
same time keeping in mind r corporate objectives.
The important points to remember about the four P's of marketing are:
4 P’s are interdependent (each depends on the others)
4 P’s constitute r "Marketing Strategy"
control these (independent variables)
Product is only one "P"
Sales volume is the dependent variable
must "own" r market (define it so can lead it)
CHAPTER – 5
DATA ANALYSIS
In a year-over-year comparison with 2004 survey data, event marketing remains the
top marketing tactic for ROI, globally, as indicated by 23% of respondents. Event
marketing also shares "top ROI driver" status in North America (20%), along with
public relations (18%), web marketing (18%), and direct marketing (18%). In fact,
Event View '05 respondents indicate more than a quarter of total marketing
communication budgets are allocated for event marketing programs and more than a
third of all respondents anticipate their event marketing budgets increasing in the
future.
As critical as budget dollars, closer integration with other marketing disciplines is
identified as a key means to event success. For more than 80% of respondents,
aligning and coordinating with a broader marketing campaign's sales, marketing and
public relations strategies - before, during and after an event - significantly heightens
the success of an event.
The MPI Foundation is the fundraising and research funding arm of Dallas-based
Meeting Professionals International (MPI), the world's largest association for the
meetings profession with more than 20,000 members in 60 countries. According to
David A. DuBois, CMP, CAE, executive vice president, the MPI Foundation and vice
president, corporate services, MPI, "Face-to-face programs must be tied very closely
to corporate business objectives, not planned separately in a vacuum. By integrating
comprehensively with all elements of a campaign, a company can capitalize on
synergies, efficiencies and resources they might not otherwise realize, delivering the
highest return on marketing dollars investment possible."
New to the 2005 survey was a line of questioning on the topic of procurement and its
influence on event marketing. When asked to rate procurement's role in event
marketing, more than 50% of respondents indicated it had some role in the selection
of event marketing resources, with nearly 25% reporting that procurement's role will
be increasingly influential in years to come.
Comparisons of findings by geography reveal differences in market conditions,
priorities and maturity. In North America and Europe, the percentages, per geography,
of respondents indicating that event marketing would "increase in importance"
significantly increased from 2004 findings. In North America, 49% of respondents
report that event marketing will grow in importance (an increase from 42% in 2004),
while 52% in Europe report similar confidence in the discipline (an increase from
45% in 2004). However, Asia Pacific's view of the importance of event marketing has
decreased over the last 12 months, with 67% of respondents in this geography citing
future increased importance of event marketing, as opposed to 74% in 2004.
Although across the globe, event marketing is reported to drive the best ROI, next-
best ROI drivers vary by region. While in North America and Europe, public
relations, web marketing and direct marketing virtually tied with events in ROI, in
Asia Pacific, public relations (15%) and print advertising (18%) fell next in line
beneath event marketing (34%).
Customer and employee relationship enhancement is the most important event success
criteria reported across all geographies, with North American respondents assigning it
a 4.3 (on a scale of 5) mean score, and Europe and Asia Pacific respondents
designating a 4.2 score.
The final Event View '05/'06 report, an evaluation of the current use of and
anticipated demand for event marketing among corporations globally, thoroughly
explores the discipline's changing role, levels of investments and perceived
effectiveness compared to other marketing mix elements. The full Event View '05
Survey report is available upon request of either Jane Berger or Kelly Schulz (contact
information above).
Ernst & Young Forecasts Growth in Global Hospitality Industry for 2008
The outlook for the global hospitality industry remains positive for 2008, according to
Ernst & Young LLP's latest global activity report on hospitality industry trends. The
report forecasts strong operating performance growth worldwide, with China and
India leading the pack. "We are seeing major international hotel companies push
ahead in emerging markets, such as China, India, and Eastern Europe, with new
development programs aimed at establishing strong footholds in those fast growing
geographies," said Michael Fishbin, leader of Ernst & ng's hospitality advisory
practice in the United States. "In response to the global chase for better investment
fundamentals, the global hospitality industry should expect increased capital flow
from U.S.-based investors to several international markets, mostly Latin America,
Caribbean, Asia and Europe," said Fishbin. "And the U.S. can also expect increased
investment in its own hospitality industry from investors in the Middle East."
The report suggests that the Winter Olympics (Italy), FIFA Soccer World Cup in
Germany and Commonwealth Games in Australia are likely to contribute to improved
performance of hospitality companies in those countries. Similarly, the run up to the
2008 Summer Olympics in China is expected to further accelerate development
activity there.
The Ernst & ng report looked at recent hospitality industry developments in key
regions around the world:
Eastern Europe and Russia should offer the best opportunities for investors and
developers, with opportunities for higher growth rates and lack of room inventory
following the opening of those markets. In Latin America, the hospitality market is
still recovering as the economies in the region continue to stabilize. International
investors are migrating to the region to develop upscale and luxury developments.
Strong growth and continued investment is expected to continue in the Caribbean in
2006. However, the threat of another active hurricane season -- and a resultant retreat
in U.S. demand -- looms over the islands.
The Asian region will be carried by strong growth in China, where tourist demand is
expected to double the global growth rate. Major hotel companies are trying to expand
into the Chinese markets in nearly every industry segment. Also, Japan has seen a
leap in the development of luxury hotels.
India's hospitality market should see rapid growth in the coming year as that country
continues opening its markets to the world. Local and international hotel companies
are actively expanding their brands there, especially in the budget segment.
In the Middle East, hospitality sector investments are in abundance as governments
diversify their economies and join private investors to develop major tourism-related
projects.
Australia enters 2006 with significant momentum created by positive hospitality
industry growth in 2005, predominantly due to a significant increase in Chinese
visitors. With limited supply additions, operating performance in Australia is expected
to continue to expand in 2006.
"Our in-country experts are seeing new development and construction projects
underway," said Fishbin. "But they also see the sometimes complicated landscape in
terms of tax implications, regulatory compliance and other opportunity costs.
Understanding the full risk profile of new projects -- especially in emerging countries
-- will be essential for hospitality companies looking to deliver shareholder value."
CHAPTER – 6
FINDINGS
The Strategic Challenge
Technology does not come without a high price tag, and leveraging these investments
requires strategic and organizational insight. Management is challenged to ask: How
should technology be factored into strategy and business planning? What is the degree
of current and future investment in information? How should technology investments
be allocated?
Figure 1
Industry-wide standards are one of the key strategic issues, given the industry’s
historic tendency to lag in how technology is built and integrated. Indeed, 82 percent
of executives surveyed believe the closed architecture of the industry’s technology
has had a negative financial impact on the industry, and three quarters believe this
will continue in the five years to come. Furthermore, about two-thirds of respondents
believe that the industry’s technology advances have been slowed as a result.
Addressing the problem of standards in the industry is the American Hotel and Motel
Association’s Hospitality Industry Technology Integration Standards (HITIS) project.
This project is making progress toward the goal of mitigating the problem in future
years—although as our survey results suggest, there remains plenty of concern.
During the last five years, the proprietary nature of most hospitality industry systems
has also slowed the advancement of technology. Approximately two-thirds of
respondents believe the impact has been negative, while only 27 percent take the
positive view. The majority of respondents (57 percent) still are concerned about the
impact of closed architectures and proprietary systems on the advancement of
technology.
Technology planning is clearly on the minds of these executives. Most respondents
(91 percent) indicate that their technology strategy is currently integrated in their
company’s general business plan, with virtually all respondents heading in this
direction by the year .
Hospitality and the Technology Vendors
Figure 2
Along with concern about the negative impacts of the industry’s technology on its
finances and its degree of advancement, are concerns regarding some of technology’s
providers—the vendors. Here the concern relates to the staying power of those that
are designing, selling, and supporting systems. Ninety-one percent of respondents are
concerned about this problem and close to half of these are "very concerned."
Executives in corporate management and those at the hotel level are of a common
mind on this. And the study tracks this same concern across company types, although
it appears that it is more pronounced among independent, non-branded companies
than with their larger chain brethren. Because of their scale and buying power, these
larger companies tend to have better established relationships with their vendors and
are thus more confident of their vendors’ ability to sustain the consistent delivery of
quality technology products and services.
Approximately three out of four of the executives surveyed believe that hospitality
technology vendors will tend to consolidate over the next several years to become
single-source providers offering totally integrated systems.
Strategic Direction
Figure 3
While most mission statements (92 percent) have some reference to a "customer
focus," only a minority (28 percent) reference technology as an element in the
company’s mission. This suggests that while most hospitality companies are clear on
their customer orientation, they are unsure of whether technology should be a
principal driver to success. Predictably, the larger chains are more technology focused
in their mission statements than are so-called "independent" (non-chain) companies.
Setting the strategic direction for technology appears to fall to the senior executives of
hospitality enterprises. Two-thirds of respondents indicate an involvement of the chief
financial officer, while chief information officers are involved at 57 percent of
companies, followed by CEOs (52 percent), general managers (50 percent) and chief
operating officers (42 percent).
Allocating Investment Resources
Figure 4
Networked communications in various media have become significant business
drivers for companies across all industries. To measure their importance in
hospitality, we asked executives about where they are allocating resources. The study
makes it abundantly clear that these media are of immense significance. Most
hospitality industry executives (80 percent) report their companies are investing in
Internet, intranet, and extranet technology, and that they are currently part of their
organizations’ overall strategic plan. And close to all respondents (93 percent)
indicate that such investments will be part of their future plans.
During the last three years, hospitality organizations have spent the equivalent of 3.1
percent of their revenue on IT investments. And during the next three years they plan
to increase this spending to approximately 4 percent of revenue—suggesting an
approximate one-third increase in spending.
These executives report that property management systems (PMS) represent their top
priority for IT spending during the next three years. Investment priorities follow with
yield management, reservation systems, sales and catering systems, e-mail/Internet,
database marketing, point-of-sale, food and beverage, guestroom technologies, and,
finally, kiosks for guest check-in and check-out.
Figure 5
Technology in the Organization
Figure 6
The success of a company’s technology strategy will require a firm commitment from
all levels of the organization. The study addresses a range of issues relating to
organizational impact, including the structure of the IT function within the
organization, current and future methods of technology training, and how companies
will be integrating their systems in the future.
As to integrating the ways in which people communicate and share their work, most
hospitality organizations currently have local area networks (LANs) within their
hotels and if they don’t, they plan to by . Less than half of the executives, however,
report the use of so-called wide area networks linking their hotels to their corporate
offices. By , some 62 percent plan to do so. Forty-two percent of the executives
surveyed report their organizations have intranets (a web-based internal network). But
this should jump to 72 percent by . And finally as to extranets that link to other
companies’ networks of suppliers or customers, 19 percent indicate they have such
structures in place today, with this ratio growing to close to one-half by .
In terms of how technology organizations are structured, there is significant variation
within the industry. Close to three-quarters of respondents indicate that their company
has a separate IT department, whereas nearly one-quarter place IT responsibility with
a key senior executive. A small minority has no internal function. They outsource IT
needs to a third party. Of those with separate departments, the reporting lines vary—
43 percent report to the company’s CFO, while other senior executives are less
involved (CEOs—17 percent; CIOs—17 percent; COOs—12 percent; and GMs—9
percent). For those without separate IT departments the property’s controller or CFO
tends to pick up the IT responsibility most of the time (61 percent), with general
managers trailing at 17 percent.
Sales and Marketing
Figure 7
Technology may take on its most visible form in the customer-focused hospitality
enterprise of the future with its support for the sales and marketing functions.
Technology, for example, is continuing to transform customer access points—how the
industry reaches the consumer. Rapid changes are occurring in the ways that
customers communicate with hospitality companies. Predictably, our respondents rate
web sites the most highly (3.8 out of a total score of 5). Smart cards (3.2) and kiosks
(2.6) follow in importance.
While the industry is making progress in automating the sales function, it has made
little headway in applying technology-based solutions to other areas of marketing.
Provided with a series of application choices, 55 percent of respondents indicate they
currently have automated customer acquisition and retention analysis, with close to
three-quarters indicating plans to have such automation in place by .
Figure 8
As a big part of the industry’s "real estate" and the place where the customer expects
not only comfort but convenience and service as well, the guestroom is where
technology applications can and will provide competitive advantage. Voice mail is the
dominant item with an 84 percent adoption rate among these organizations, with on-
demand movies and dual phone lines reported by two-thirds of respondents. In-room
Internet access is next at 57 percent, followed by fax/copier/printers at 38 percent.
Trailing are interactive television (26 percent), cordless phones (17 percent), and e-
mail (16 percent).
Most companies (90 percent) have a web site on the Internet. And the competitive
pressure is clearly on full tilt for the minority that do not. Indeed, virtually all of those
without a current presence plan to have one within the next two years. The larger
chains have clearly been the early adopters with the highest rate of web presence (92
percent), while smaller independent companies still have some modest catching up—
they indicate an 85 percent presence.
Figure 9
With the industry moving rapidly toward Internet offerings, the relative importance of
distribution channels is set to change dramatically in coming years. Today, an
estimated 4 percent of all reservations are channeled through the Internet, but this is
forecasted to grow to 11 percent by . Global distribution systems (GDS) currently
account for an estimated 14 percent of all reservations and should show moderate
growth to 16 percent by . Central reservation systems (CRS) are projected to grow
slightly from a current estimated share of 21 to 22 percent, with hotel-based
reservation departments currently estimated at a 55 percent share and set to decline to
43 percent.
Figure 10
Integrating the rooms’ inventory of a hotel property into a central reservation in what
is called a "single image" so that all reservation access points are showing the same
status at the same time is an obviously productive deployment of technology in the
hospitality industry. While today only 28 percent of respondents indicate their
organizations have such a single image, some 47 percent indicate they plan to have
such a system in place by.
Technology and the Customer Relationship
How hospitality organizations manage the customer relationship will clearly form a
dividing line separating the top-performing companies from others that are less
competitive. Our study, as a result, put the focus on how hospitality companies use
technology to manage this relationship, now and in the future. Key success factors
include how companies integrate disparate customer touch-points and collect,
evaluate, model, and leverage customer information for sales and marketing purposes
and in the pursuit of enhanced customer loyalty.
Figure 11
Executives report continuing efforts to integrate critical systems such as PMS and
CRS. But as hospitality companies devote more attention to knowing their customers,
they are considering the integration of not only PMS and CRS, but also data
warehouses into fully integrated "customer information" systems (CIS). But like the
adoption of technology elsewhere in the industry, the pace is slow. Approximately 13
percent of respondents report they have installed a CIS system; most have been
introduced during the last several years. Another 11 percent have a plan for a CIS and
the capital allocated (mostly for completion within the next three years). An
additional one-half of respondents report having considered the development of a CIS
and the possibility of putting a plan together.
Such plans can be expensive. For those with the capital allocated, approximately one-
half indicate that their systems will cost anywhere from $1 million to $6 million, with
the balance reporting an expenditure of less than $1 million. Clearly there is
significant variation. For large chains, the expenditures can significantly exceed these
figures, depending on the features involved and the state of their current technology—
particularly as it relates to consistency of systems, especially at the property level.
Figure 12
Hotel sales and marketing executives have historically segmented their customer base
by travel motivation (business, leisure, convention, etc.). But we were surprised to
find that just over two-thirds of respondents report segmenting customers according to
their relative value, with three-quarters planning to do so by . The deployment of
technology in this effort is in all likelihood limited. But since 88 percent of those not
valuing customers currently indicate that they would if technology facilitated the
process, we should see much more of this activity in the future.
Yield management—which began life in the airline industry and has long since
migrated to the hospitality business—is an important tool in the maximization of
revenues. Its development has been largely facilitated with the deployment of
technology against complex algorithms that track historical data and project business
volumes against key variables. Of Hospitality respondents, 60 percent indicate that
their organizations have a yield management system in place. And of these, nearly
two-thirds are integrated into the organization’s property management system, while
41 percent are connected to the CRS. For those without a system, just over one-half
report plans to develop one. In sum, it is clear that these systems are fast taking hold
in the industry.
Determining who your customers are is always a challenge in a business as
geographically dispersed as the hospitality industry, and one with so many
intermediaries and customer touch points (e.g., CRS, PMS, web site, GDS, and POS).
How our industry tracks its customers is therefore of some interest, most particularly
in terms of how technology will facilitate the process. Currently the leading method
appears to be the somewhat low-tech analysis of registration cards (3 percent),
followed by telephone or mail surveys (31 percent), electronic data warehousing (20
percent) and web site data analysis (7 percent). By , technology will evidently force a
change of habit with the increasing utilization of web site data analysis at 20 percent
and electronic data warehousing at 21 percent. Registration cards and telephone and
mail surveys will continue their decline to 27 percent and 22 percent respectively.
Figure 13
Knowing who your customers are is one thing, but determining their satisfaction is
clearly another. And the profile of methods being used currently is not especially
encouraging. In-room questionnaires—the industry standard for decades—currently
remains the dominant form (41 percent of all applications), followed by mail surveys
(27 percent), in-room television surveys (14 percent), telephone surveys following
checkout (10 percent) and computerized surveys upon checkout (7 percent).
By , the distribution is expected to change with in-room questionnaires set to decline
to 28 percent, along with mail surveys (22 percent). Offsetting the decline is the rise
of in-room TV surveys (20 percent) and computerized surveys at checkout (15
percent). Post departure telephone surveys will continue to trail at 10 percent.
Figure 14
While only 30 percent of respondents characterize the current collection of customer
information in their organizations as "fairly extensive" to "extensive," many more (62
percent) expect it to be this way by . Interestingly, fewer respondents (22 percent)
indicate that such information is "extensively" disseminated throughout their
organizations but again, more (52 percent) expect it to be this way in the future.
Hospitality : The Technology makes it clear that the majority of hospitality
organizations have intensive initiatives underway for technologies at every level of
the organization. Investments are growing and the awareness of strategic requirements
is on the rise. Indeed, how technology is used will be one of the key drivers of the
bottom line as we cross into the new millennium. Strategic, operational, and financial
issues will continue to challenge management in making wise investments and using
these tools effectively in the organization.
HOSPITALITY: THE TECHNOLOGY
Hospitality: The Technology is the third in a series in the Hospitality initiative, which
has been designed to define critical issues that the industry will face in the next
millennium. Hospitality : A View to the Next Millennium identified major trends and
strategic issues focused around market, product, organization, technology, and capital.
Hospitality : The People addressed organization and strategy, recruitment and
staffing, training and development, performance, reward, and recognition. Now,
Hospitality: The Technology, completed this year, addresses strategy, organization,
sales and marketing, customer information, and operations as they relate to
technology and its future role in the industry.
The Report
In addition to a comprehensive report on the data, findings, and conclusions from the
survey research, Hospitality : The Technology showcases hospitality organizations
that are pursuing cutting-edge technology innovations. These best practices are
worthy of note and should be regarded as additional indications of where the industry
is heading.
ANALYSIS OF RESPONSES
An analysis of 165 responses out of 1100 questionnaire sent nationwide revealed
some interesting statistics:
A majority of respondents (53%) were restaurants that achieved an average check
of between Rs 200 and Rs 400.
The total number of employees employed by 66% of the restaurants is under 40
with only 3% respondents employing more than 100 employees. The sample
therefore represented mid-size restaurants, which are a majority in the country.
With regards to questions on tip and sharing of tips, 83% of the respondents do
not levy any service charge on the restaurant bill. In comparison, 77% of the
respondents do not charge a service charge in banquets. A majority of the
respondents (60%) have tip pools.
INTERVIEWS WITH TRAVEL AGENTS
We interviewed 19 travel agents in the cities of Delhi, Mumbai & Ahmedabad to get
their views on the domestic leisure travel in India. They were interviewed on
questions that were tailored to those aspects of leisure travel which directly relate to
hotels and which is the core content of our study. Travel agents in Mumbai &
Ahmedabad told us that 60 to 80% of persons going on holiday in India book their
packages and hotel stay through the travel agents. This trend is not so strong in North
Indian cities as the bookings through travel agents may be only in the range of 20 to
30% through TAs in Delhi. Travelers in Delhi like to book directly with the hotels and
like to do their own negotiations. At present, there are very few bookings through
websites of the hotels and there is no visible trend for growth in this segment in the
near future. It is estimated that about 15% of holiday travel in USA is being booked
online and this channel may show a huge growth in the developed countries in the
future.
Travel agents told us that about 60% of holiday travellers might be going on packages
offered by the hotels. Some travel agents have placed this figure at as high a level as
85%. Most of these packages are solely hotel-related. Only packages in Goa and to a
smaller extent in Kerala may include airfares also. Travel agents also told us that the
popularity of hotel packages has grown tremendously, as only about 20% of holidays
sold by them were on packages till about 4 years ago and the figure has now jumped
to about 60%. Most hotel packages include room, breakfast and one or more meals,
and there are additional features like airport pickup, etc. According to travel agents,
hotels in Goa offer the best value for money packages while those in Kerala are also
catching up. Hotels in North Indian destinations such as Manali and Shimla offer poor
value packages.
There is also a recommendation for more flexible packages and guests being given a
choice of picking certain items from a list, depending on their situation (e.g. if they
are traveling with family or are more indoor or outdoor oriented), needs and
preferences. For example, a hotel could give a choice to the customer to pick a
complimentary service out of a list containing say one hour ayurvedic massage,
beauty saloon treatment for the lady, certain number of bottles of beer, some tennis
lessons, certain hours of billiards or certain hours of free car for sightseeing and
shopping. There is a range of possibilities for innovative ways of offering services for
greater customer satisfaction. In fact, there is a growing trend of customized packages
being created for their guests by resorts in USA. The customers could go to the
website of the hotel and post their preferences from a range of services being offered
by the resort. The resort could then make a customized package for the guest
including some complimentary services and some paid services. The guest could
respond on the net, even talk to the concerned manager and fix up details of what he is
going to take out of the services on offer. Some hotels have also hired what they call
guest engagement managers whose job is to make personalized packages for guests
and produce a high customer satisfaction. Travel agents also had many complaints
against the hotels on the matter of packages and services. Some hotels offered a lot
and did not deliver on the promises. Some of them provided poor facilities with no
renovation for many years. Many hotels kept low paid untrained staff, who could not
speak properly in English and provided poor services to guests. Travel agents said that
they liked to go for branded or reputed upper-end hotels for sending their customers.
The travel agents keep on taking hotels out of their list, on receipt of complaints from
guests or clients. They also said that they had a much bigger stake in the satisfaction
enjoyed by their customers in the hotel, compared to the hotel itself. A particular
person or a family may not go to the same hotel again for a holiday, but he may come
back to the same travel agent for different holidays in different destinations every
year. One travel agent said that about 60% of his clients were repeat customers. They
are, therefore, very keen to send their guests to only those hotels which maintained
good facilities and provided good customer satisfaction through their services. Travel
agents also complained about undercutting of their business by the hotels that prefer
direct bookings from the customers rather than their coming through the travel agents.
Hotels tend to offer lower rates to direct customers and at times also give them better
located rooms. This is being done more in the case of conference delegates, corporate
incentives and FITs compared to the packaged holidays. In fact, some bigger travel
agents said that they did not like to promote a hotel or an entire destination if the
hotels act funny with them on rates. They said that this kind of thing was less in
places like Goa compared to destinations like Shimla and Manali.
CHAPTER – 7
CONCLUSION
The Capital offers a diverse view of capital sources and use across the international
hotel industry. By and large, that profile is positive as capital providers indicate a
willingness to finance the industry, albeit with relatively strong underwriting
standards. Hospitality management in the future, however, will need to compete head-
to-head against other investment opportunities, some of which are highly appealing in
terms of risk-adjusted returns, in the global financial markets. Accessing capital will
not only be a key challenge for management in the future, but a driver of industry
transformation as hospitality organizations embrace new ways of doing business and
serving the customer in the years ahead.
For many hospitality organizations, technology advances are at the vanguard of
opportunity, yet they represent one of management’s biggest challenges. Adopting
new technology systems and processes can be a bit like rebuilding a ship at sea.
Change is often essential, but integration of new systems to support strategic goals
without disturbing customer service or operations often requires a fine-tuned
balancing act. The best-intentioned investments can go awry.
The Technology—goes beyond the tools themselves to address key strategic and
organizational issues. Our focus—how technology will drive value for the industry in
the future, with a particular emphasis on how it will support customer-focused
hospitality organizations.
CHAPTER – 8
RECOMMENDATIONS
Recommendations to the hotel administrators (star category-wise), suggesting viable /
practical ways of rationalizing existing manpower through their optimal utilization to
cut operational costs and prodigality. This will result in improved efficiency and
better profit margins.
The attributes for a successful global hotel Group include emphasis on core
competence and the basics of the service or the product. "You must focus on a few
key points that will help reach the goal. The legendary Domestic hotels hospitality
forms the core competence for Indian Hotels while the key focus areas are renovation,
brand building, technology and people training.
Globalisation, like most important matters, begins at home. As the luxury hotels
constitute over 70 per cent of the company’s profits and attract international guests,
the focus is increasingly on revving up the product and the service.
"In the last five years, some of our competitors have raised the benchmark for luxury.
We feel that the quickest way to showcase our hotels is to renovate our luxury
palaces," says Mr Bickson.
The Domestic hotels Mahal Palace and Towers, Mumbai; Domestic hotels Lake
Palace, Udaipur; Rambagh Palace, Jaipur; and Falaknuma Palace, Hyderabad; are
being refurbished and repositioned in the first step to building the Domestic hotels as
a global preferred brand and offer global luxury standards and best practises.
Luxurious state-of-art spas are replacing the old-fashioned ‘health club’ concept. A
personalised butler service seeks to evoke the lifestyle of the erstwhile Indian
maharajas.
The ongoing revolution in cuisine has been accompanied by innovations as well.
Though the Group was the first to introduce international cuisine in India, today its
Food and Beverages business is competing with free standing, niche restaurants.
Thus, new concepts such as contemporary Indian cuisine have been introduced.
Internationally recognised chefs and restaurants will also be introduced into the
Domestic hotels properties. The name Domestic hotels evoke luxury, splendour,
warmth and hospitality. And that’s what we want to offer to anyone who stays with us
The challenge in this is that the Domestic hotels brand appears on diverse properties
from the luxurious Domestic hotels Mahal in Delhi to the touristy Domestic hotels
Gateway in Chiplun. "These products are dissimilar or of very different service
standards. The brand does not have a very clear cut luxury connotation, Also, in terms
of image, what the brand stands for today may not necessarily be what we want it to
stand for in the future".
The Group has recently commissioned Landor Associates to ideate on the brand
architecture. The issues being debated include bringing about a change in the existing
strategic business units, changing the personality of the basic brand (should it be
associated with only some hotels?) and the branding of a future international
acquisition under the Domestic hotels flagship. It hopes to get these answers and more
by early 2004.
Alongside, Domestic hotels is focusing on creating awareness in key and emerging
markets and raising levels in existing markets. The marketing and sales teams have
been strengthened overseas and are supplemented by PR agencies. "We need to
strengthen what the brand stands for in terms of quality and luxury. Globally the
Domestic hotels should be reinforced as an international luxury hotel with an Indian
soul and touch to it though the degree of Indianness would vary in each country. "Our
target segment, globally, is the frequent individual traveller who seeks that mix of
warmth and efficiency.
Brand Marketing in the Hospitality Industry - Art or Science?
It was not so long ago that you could virtually count the leading brands in the hotel
industry on one hand. Hilton, Sheraton and Inter-Continental -among the industry's
standard bearers for years spring immediately to mind. In the wake of the huge
expansion of the last decade, however, an abundance of brands gained at least a
tenuous foothold in the marketplace as the segmentation fostered by our industry's
Branding - A Mixed Record of Success
During the 1980s, the hotel industry saw an explosion of new brands, most
particularly in the ultra-competitive U.S. marketplace, but also in several countries in
Europe, including the United Kingdom and France. Stymied either by the real estate
crash of the early 1990s or simply a casualty of poor strategic brand visioning, many
of these brands never achieved the required critical mass to flourish. As a
consequence, a multitude of names continue to struggle for the customer's attention,
some of which cannot compete as national or even regional brands. Furthermore, in a
globalizing marketplace, national brand presence itself may not be sufficient for
success in the future.
Technology - Change Agent and Ally
In the hospitality industry, as in all arenas of commerce, technology represents one of
the strongest forces for change, while having had a significant impact on brand
marketing. Hotel reservation systems have been shifting from voice to electronic
Global Distribution Systems and are now on the verge of consumer access via the
Internet. The increasing role played by the Internet should slowly affect booking
patterns in the future as inexpensive consumer access to hotel product becomes
available. This, of course, has potential implications for the benefits associated with
the branding of hospitality products. On the plus side, global communications that
bring branded products and services closer to the customer should encourage wider
recognition. On the negative side, if hotel products can be accessed visually and
directly by distant consumers, the presumed uniformity of standards under today's
brand identities will be more closely scrutinized as customers' buy decisions are being
made. At that point, brands will then have to deliver what they promote - something
that is not always the case in the today's market. And as for the definition of a
"marketplace" in tomorrow's electronic world - it will clearly have become the
"marketspace."
FRANCHISING THE STRENGTHS
Franchising as a business seems to have achieved more respectability in the hotel
industry than ever before as some franchised brands command noticeable leads in
terms of awareness, product strength and value. While franchising historically has
been associated with budget and mid-market brands, it is now being used with
increased frequency to expand more upscale brands. Previous concerns relating to the
difficulty of controlling wayward hotel owners and operators, who are not
maintaining the higher standards expected in the upscale end of the business, have
been mitigated by improvements in the organization of franchise support systems and
the increasing volume of excellent independent management companies.
BRAND STRATEGIES & MARKETING
Hotel owners and independent managers play an important role in deciding on the
brand strategy to be pursued by individual properties. We often see managers of hotel
properties change their brand affiliation in the search for a more productive
reservation system. To some, the production of a branded reservation system and the
impact on average room rate are the acid tests of what works and what doesn't. Other
attributes of a brand are perhaps just as relevant - consistency, sales office support, the
matching of the brand's positioning with the property's optimum segment mix, image,
future development plans on a system-wide basis and the impact of additional brand
development in the local marketplace are some of the other factors to be considered.
Understanding the total dynamic at work in selecting the optimum brand is a complex
task that thus requires careful analysis.
CHAPTER – 9
BIBLIOGRAPHY
REFERANCES
Adams, M. E. (1982). Agricultural extension in developing countries. Burnt Mill,
Harlow, and Essex: Longman
Bathgate, F. (Ed.). (1956). Experiment in extension-The Goon Sathi. London: Oxford
University Press.
Baxter, M. (1990). Agricultural extension investment. In D. C. Misra (Ed.), Training
and visit system of agricultural extension in India in action. New Delhi: Ministry of
Agriculture, Government of India.
Bhasin, K. (1976). Participatory training for development. FFHC/AD. Bangkok:
FAO.
Blanckenburg, P. V. (1984). Agricultural extension systems in some African and
Asian countries. FAO Economic and Social Development Paper 46. Rome: FAO.
Blum, A. (1987). The Israeli experience in agricultural extension and its application to
developing countries. In W. M. Rivera & S. G. Schram (Eds.), Agricultural extension
worldwide - Issues, practices and emerging priorities. London: Croom Helm.
Chattopadhyay, S., & Pareek, U. (1982). Managing organizational change. New
Delhi: Oxford & IBH Publishing Company.
Davis. L. E. & Taylor, C. (Eds.). (1979), Design of jobs. Santa Monica, CA: Good
Year.
FAO (1985). Report of the expert consultation on linkages of agricultural extension
with research and agricultural education. Bangkok: RAPA/FAO.
CHAPTER – 10
ANNEXURE
QUESTIONNAIRE
NAME: __________________
AGE : __________________
QUALIFICATION: __________________
1. How often do you visit a hotel?
…………..Less than once a week
…………..1-3 times a week
…………..4-6 times a week
……………Any other
2. What are the various ways in which you book? (Please tick all the relevant
options)
Traditional visiting
Internet
Any other, specify………………
3. What are the various features u wants in a hotel? (Please tick appropriate
option)
fooding
Ambience
Parking issue
Better price
Any other specifies………..
4. What are the price differences in hotels?
Low
medium
high
5. Do you used to arrange any party in hotels? If the answer is yes, please tick
the relevant option.
The price offered on the hotel is substantially lower (more than 15%) than
the price offered in the physical world
The price offered on the hotel is lower (up to 15%) than the price offered
in the physical world
The price offered on the hotel is higher (up to 15%) than the price offered
in the physical world
The price offered on the hotel is substantially higher (more than 15%) than
the price offered in the physical world
6. What do you feel about the hospitality service of a hotel?
Satisfactory
Unsatisfactory
7. Have you ever found a need to return something and get refund after using in a
hotel?
Yes
No
8. If yes, did you get a refund?
Yes
No
9. How the entire process of refund was conducted?
Easy Difficulty
No difference Any other experience……………
10. How much time was taken by the hotel in case of Refund
1-3 days 5-7 days Any Other ……………………
