Opening a Four Star Hotel in Faridabad

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HOSPITALITY PROJECT REPORT

Market Feasibility & Financial Viability

Opening a Four Star Hotel in Faridabad

SUBMITTED BY:

Nikita Pandey

UNDER THE GUIDANCE OF:

Mr. Divoy Chabra

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ACKNOWLEDGEMENT

I find it difficult to pen down my deepest sense of indebt towards my parents and family

members who soulfully provided me their constant support and the right input to undertake the

challenge of this proportion like all other spheres of life, for what I cannot measure but treasure.

They believed in me before I believed in myself. To whom I owe my wonderful today and dream

filled future.

I also owe my sincere thanks to Ms. Anjali Khanna, Head Of Department, Department of

Tourism & Hospitality, Lovely Professional University, Phagwara; a special thanks to Mr.

Divoy Chabra, Faculty Member, Department of Tourism & Hospitality, Lovely Professional

University, Phagwara for providing me the necessary infrastructure and platform to work on this

Research Study.

And last but not the least a special word of thanks to all my friends and colleagues for their

intermittent and timely doses of morale boosting, utmost care during my leaps and bounds and

for giving me constant support.

Nikita Pandey

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CERTIFICATE

This is to certify that Nikita Pandey bearing Registration no. 10905939 has completed her

capstone project titled, “Market Feasibility and Financial Viability for Opening a Four Star

Hotel in Faridabad.” under my guidance and supervision. To the best of my knowledge, the

present work is the result of her original investigation and study. No part of the dissertation has

ever been submitted for any other degree at any University.

The dissertation is fit for submission and the partial fulfillment of the conditions for the award of

.........................

Signature and Name of the Research Supervisor

Designation

Lovely School of Tourism & Hospitality

Lovely Professional University

Phagwara, Punjab.

Date :

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DECLARATION

I, Nikita Pandey, student of BHMCT under Department of Lovely School Of Tourism &

Hospitality of Lovely Professional University, Punjab, hereby declare that all the information

furnished in this dissertation / capstone project report is based on my own intensive research and

is genuine.

This dissertation / report does not, to the best of my knowledge, contain part of my work which

has been submitted for the award of my degree either of this university or any other university

without proper citation.

Date:

Signature and Name of the student:

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Table of Content

Chapter 01

1.1 Introduction to Tourism

1.2 Introduction to Hotel Industry

1.3 Review of Existing project in the same category.

Chapter 02

2.1 Objective

2.2 Need and

2.3 Scope of project.

Chapter 03

3.1 Project design

3.2 Detail about the project.

Market feasibility:

Target market.

Introduction to Marketing and marketing mix.

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Demand analysis and quantification.

Technical aspects & Manpower planning of the proposed Hotel.

Project Profile.

Financial Viability:

Tariff Structure.

Cost of the Project.

Sales Revenue.

Estimation of Expanses.

Working capital.

Financing the Project.

Estimation of Income

Profitability statement.

Cash Flow Statement.

Cost Benefit Analysis.

Break even analysis.

Debt service coverage ratio.

Sensitivity analysis.

Conclusion:

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Bibliography:

Annexure:

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Chapter 1

INTRODUCTION

1.1 INTRODUCTION TO TOURISM:

Tourism is defined as a composite of activities, services, and industries that delivers a travel

experience to individuals and groups traveling fifty miles or from their homes for purposes of

pleasure.

The business sectors comprising the tourism industry include: transportation, accommodations,

eating and drinking establishments, shops, entertainment venues, activity facilities, and a variety

of hospitality service providers who cater to individuals or groups traveling away from home.

Tourism product is not produced by a single business, nonprofit organization, or governmental

agency; rather, it is defined as “a satisfying visitor experience.” This definition encompasses

every activity and experience that a tourist encounters during his or her entire trip away from

home

The importance of tourism in the global economy

Prior to September 11th 2001, travel and tourism was the world’s largest, $3.6 trillion, industry,

generating 11% of global GDP, employing 200 million people, accounting for one in every 12

jobs and transporting nearly 700 million international travellers per year. This last figure is

expected to double by 2020.

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International tourism arrivals in developing countries have grown by an average of 9.5% per year

since 1990, compared to 4.6% worldwide1. The industry makes important contributions to

developing country economies, representing the second largest source of foreign exchange after

oil, although these countries currently have only a minority share of the international tourism

market (approximately 30%). The aftershocks of the events of September 11th in the industry are

impacting through a decline of tourists across the globe. In particular, destinations dependent on

the American market e.g. some Caribbean islands, and where destinations are predominantly

Muslim populations e.g. Indonesia.

Where tourism generates than 40% of GDP – small, low and middle income island nations in

the Caribbean and Pacific – the impact of September 11th has confirmed some developing

countries’ exposure to their dependency on tourism. Strategies to diversify and integrate their

economies to protect livelihoods from the adverse shocks caused to tourism by political and

natural disasters were already called for prior to September 11th and are even imperative now.

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Structure of the International Tourism Industry

It is important to understand the highly complex nature of measuring the impact of tourism. The

tourism product is made up of number of elements – travel to a destination, accommodation and

food, and services the tourist uses at the destination. It involves a diverse set of organisations and

TravelAgencies

TourOperators

Airlines, cruiselines, other means ofaccess

TOURISM DESTINATION

Tourist BoardsGround handlersAccommodationRestaurantsTransport operatorsAttractions

ORIGINATINGMARKET

SUPPORTSERVICES

InfrastructureUtilitiesHealthEducation &TrainingBanks/finance

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institutions – travel agents, tour operators, airline companies, hotels, guest houses, rented

accommodation, national and local tourist boards, national and local government

(developmental, regulatory), local entrepreneurs, local services (banks, hospitals etc), community

based organisations (CBOs) and Non-Governmental Organisations (NGOs).

In addition, tourism revenue is not calculated as a separate category in national accounts making

it difficult to assess its overall economic impact.

The role of institutional capacity must be underlined. Section 2 will analyse the multi stakeholder

approach required to understand and assess tourism enterprise development interventions. Here,

we note the importance of national and local institutional development capacity in tourism

support services, if tourism enterprise interventions are to maximise their potential positive

impacts while minimising their negative impacts. Examples include unclear land tenure

legislation and procedures, no effective land registry, and inadequate planning regulations and

their enforcement.

Tourism Typologies

‘Mass Tourism’ :

‘Mass tourism’ (70% of market share today) grew rapidly in the 60s and 70s mainly as a function

of increased disposable incomes. It was centred in North American and Western European

destinations, and some island destinations like the Caribbean. This tourism was, and is,

dominated by tour operators offering package tours to the sun, sea and sand, and often sex too.

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The product was about quantity, not quality. This product has been characterised by local

income revenues being concentrated in densely packed tourist destinations that employ migrant

labour from the hinterland and abroad. Local skills capacity remains low, with skilled,

management jobs often being carried out by ex patriots.

The big UK based tour operators (e.g.Thomsons, First Choice, Airtours) that dominate the

market are vertically integrated and own whole travel and accommodation product chains

creating economies of scale that out compete small entrepreneurs on price. With the trend away

from packaged four ‘S’s and demand for ‘authentic’, individual and varied experiences,

alternative producers now abound and compete on specialised product demand and quality.

With increasing disposable income in the 80s and 90s, and long haul travel becoming affordable

to Europeans and North Americans, new destinations in the ‘South’ were made accessible. The

mass tourism, package tour model was replicated in many of these destinations despite warnings

of the ‘boom/bust’ syndrome that was affecting destinations that competed on price alone.

(Butler, 1980)

‘Ecotourism’ to ‘Sustainable Tourism’:

The growing awareness of environmental and conservation damage caused by tourism, in

conjunction with the Rio Summit establishing the triple bottom line of environmental, economic

and social sustainability, saw development of new forms of tourism evolved in response to this

sensitive international climate. Green tourism, adventure tourism, nature tourism, community-

based tourism, heritage tourism are all labels that are generally encapsulated in the term

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‘ecotourism’ that this paper uses to describe as alternative forms of tourism to mass tourism.

These products’ market share is estimated at approximately 30%. While these products do bring

development to remote regions, and hence poorer areas, it is not proven that they generate less

damage and provide benefits than mass tourism.

‘Sustainable tourism development’ has been defined as tourism that “maximises the potential of

tourism for eradicating poverty by developing appropriate strategies in co-operation with all

major groups, indigenous and local communities”, (UN Commission on Sustainable

Development, 1999). This definition builds on, and goes beyond the WCED, 1987 definition of

sustainable development: “development that meets the needs of the present without

compromising the ability of future generations to meet their own needs” (WCED, Our Common

Future, 1987).

Ecotourism does not necessarily mean sustainable tourism. Rather, it is a term that is often used

by operators as a marketing tool to promote a product that is perhaps based in a pristine, rural

setting, or an authentic cultural environment. It does not mean that the product is sustainable in

terms of its impact on local community livelihoods and resources. At the centre of the PPT

approach is putting poor people and poverty at the centre of the sustainability debate.

However, it is the earlier, environmental definitions of sustainable development that have now

been embraced by the global travel and tourism industry. Their responsibilities to this definition

are largely targeted at environmental initiatives – e.g. waste and rubbish disposal and water

conservation. Addressing the socio-economic issues of tourism development has only been found

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in the domain of NGO backed community tourism projects. This, however, is now being

addressed in set of new initiatives.

Responsible tourism

A final recent distinction needs to be made between ‘responsible’ and ‘sustainable’ tourism. The

current debate on ‘sustainable tourism’ would, some argue (e.g. WWF UK), make “sustainable

tourism an unachievable ideal, not least because of the significant contribution that air travel

makes to climate changes.” The statement continues, “it is therefore useful to think about

‘responsible tourism’ within the context of a wider sustainable development strategy.”

For these applications guidance notes we are discussing IA in tourism enterprise intervention in

terms of all of the above definitions set out in Section 1.4, although now, most tourism enterprise

level intervention does come under the label of ‘sustainable development’ whether rural or

urban, macro or micro.

1.2 INTRODUCTION TO HOTEL INDUSTRY

One of the fastest growing sectors of the economy of our time is the hotel industry. The

hotel industry alone is a multi-billion dollar and growing enterprise. It is exciting, never boring

and offer unlimited opportunities. The hotel industry is diverse enough for people to work in

different areas of interest and still be employed within the hotel industry. This trend is not just in

India, but also globally.

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Modern hotels provide refined services to their guests. The customers or guests are

always right. This principle necessitated application of management principles in the hotel

industry and the hotel professionals realized the instrumentality of marketing principles in

managing the hotel industry.

The concept of total quality management is found getting an important place in the

marketing management of hotels. The emerging positive trend in the tourism industry indicates

that hotel industry is like a reservoir from where the foreign exchange flows. This naturally

draws our attention on HOTEL MANAGEMENT. Like other industries, the hotel industry also

needs to explore avenues for innovation, so that a fair blending of core and peripheral services is

made possible. It is not to be forgotten that the leading hotel companies of the world have been

intensifying research to enrich their peripheral services with the motto of adding additional

attractions to their service mix. It is against this background that we find the service mix

flexible in nature.

The recruitment and training programmes are required to be developed in the face of

technological sophistication. The leading hotel companies have been found promoting an

ongoing training programme so that the personnel come to know about the use of sophisticated

communication technologies.

Hotel – The Concept

At the outset, we go through the concept of hotel. The common law says that hotel is a place

where all who conduct, themselves properly and who being able and ready to pay for their

entertainment, accommodation and other services including the boarding like a temporary home.

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It is home away from home where all the modern amenities and facilities are available on a

payment basis.

It is also considered to be a place where tourist stops, cease to be travellers and become

customers. The definition presented by hotel operators to authorities of the National Recovery

Administration in Washington is found to be a comprehensive definition, presented by Stuart

Mc Namara. The definition states that, “ Primarily and fundamentally, a hotel is an establishment

which supplies boarding and lodging not engaged in inter – state commerce or in any intra – state

commerce, competitive with or affecting inter – state commerce (or so related that the regulation

of one involves the control of other).”

The hotel may furnish quarters and facilities for assemblage of people for social business or

entertainment purposes and may engage in retaining portion of its premises for shops and

businesses whose continuity (i.e., proximity) is deemed appropriate to a hotel. The assemblage of

people for social business and entertainment purposes makes it essential that hotels are also

furnished with a big conference hall where the maximum possible accommodation is available.

We also call it the function room.

Motel – The Concept

Initially the term motel was meant for local motorists and foreign tourists travelling by

road. They serve the needs and requirements of these travellers and meeting their demand for

transit and accommodation. Some of the important services offered by the motels are parking,

garage facilities, accommodation, and restaurant facilities.

Motels are found located outside the city, preferably by the side of high ways and

important road junctions. The accommodation in this is in the category of a ‘chalet facility’. In

USA, the motel accommodation is ranked at par with hotel accommodation.

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Origin of the word “Hotel”

Before 1760 people used to go to inns for having their lunch, dinner etc .It was the place

where families used to host their guest inns owner used to provide lodging and boarding facility

service to their guest.

To world “hostel” was used then it was called “hostelier” which means head of unit or the

place. The Norman people invented the word “hotel”. The word “hotel” was originally in

England, officially from 1760. The real growth of modern hotel was originated in “U.S.A” with

opening of “City Hotel” in New York in the year 1974. This was the first building erected for

the hotel purpose. This period also saw the beginning of chain operation under the guidance of

E.M.STATLER. It involves big investment, big profits and trained professional to manage

business.

Origin of Hotel Industry

The origin and the development of the hospitality industry is a direct outcome of travel

and tourism. There are many reasons for which a person may travel: business, pleasure, further

studies, medical treatment, pilgrimage or any other reasons. When a person travels for few or

more days, he may carry his clothes with him, but it is not possible for him to carry his food and

home. Thus two of thee basic needs –food and shelter- are not taken care of when he is

travelling. This is where the hospitality industry steps in.

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Before the wheel was invented, people undertook journeys on animals such as horses, camels

and elephants. In those days they used to travel in groups called “Caravans” for safety. However,

there was a limit to the distance they could cover in a day. At nightfall they avoided travel due to

the fear of wild animals and bandits, and also because of animal fatigue. Thus for the night halt,

they looked for a place that could provide them with water fuel to cook food and above all

security from wild animals and bandits.

The primitive lodging houses or inns originated essentially to cater to these needs of the

travelers. Throughout the world they were known by different names, such as dharamshala and

sarai in India, ryokans in Japan, paradors in Spain, pousadas in Portugal, coffee houses in

America, taverns and inns in Europe, cabarets and hostelries in France, mansionis and hospitia in

Switzerland, phatnal in Greece and relay houses in China.

The repreciation in 1930 had a disaster effect in a hotel industry after the World War II and

brought a tremendous up surge to hotel industry with continuous prosperity of hotel industry.

Mass travel is a modern phenomenon that emerged after World War II. Mass tourism continues

to grow as political freedom, economic wherewithal and social equality spread across the globe.

With the economic engine of development running at full steam, there was a growth in

international travel and thereby growth in hotel industry.

Estimates abound as to the importance and size of house keeping. Certainly, its economic

contribution is critical to the global economy whether as a service to the business community.

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Background of Hotel Industry

Prior to the 1980’s, the Indian hotel industry was a nascent and slow growing industry primarily

consisting of relatively static, single hotel companies. However, Asian games in 1982 and the

subsequent partial liberalization of the Indian economy generated tourism interest in India with

significant benefits accruing to the hotel and tourism sector in terms of improved demand

patterns. Fortunes of the hotel industry are tied to the fortunes of tourism and the general

business climate in the country, which is why the economic liberalization initiatives

implemented since 1991, led to a soaring demand and supply gap in the hotel industry.

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1.3Review of Existing Project

Park Plaza, Faridabad

Hotel Amenities:

General

Park Plaza Faridabad features an outdoor pool and a fitness facility. Dining is available at one

of the hotel's 4 restaurants. A bar/lounge is on site where guests can unwind with a drink.

Public areas are equipped with complimentary high-speed wireless Internet access.

This 4-star property offers access to a business center and audiovisual equipment. Event

facilities include a conference center, conference/meeting rooms, and banquet facilities. This

business-friendly hotel also offers a rooftop terrace, spa services, and tour/ticket assistance.

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For a surcharge, a roundtrip airport shuttle (available on request) is offered to guests.

Complimentary valet parking is available on site.

Air-conditioned public areas

Free parking

Spa services on site

24-hour front desk

Airport transportation (surcharge)

Elevator/lift

Valet parking

Free valet parking

Total number of rooms - 78

Audiovisual equipment

Banquet facilities

Bar/lounge

Business center

Multiple large conference rooms

Dry cleaning/laundry service

Event catering

Fitness facilities

Tours/ticket assistance

Free Wi-Fi

Rooftop terrace

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Room service (24 hours)

Number of meeting/conference rooms - 3

Conference center

Number of restaurants - 4

Swimming pool - outdoor

Internet

Available in all rooms: Free Wi-Fi

Available in some public areas: Free Wi-Fi

Parking

Free parking, Valet parking, free valet parking

Room Amenities

Minibar

Coffee/tea maker

Private bathroom

Shower only

Rainfall showerhead

In-room safe

Desk

Satellite TV service

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Free Wi-Fi

LCD TV

Dining

Veranda - This restaurant serves breakfast, lunch, and dinner.

Guests can enjoy alfresco dining (weather permitting).

24-hour room service is available.

Recreation

Recreational amenities at the hotel include an outdoor pool and a fitness facility.

Policies & Fees:

Check-in

Check-in time starts at noon

Check-out

Check-out time is noon

Payment Types

Accepted at this hotel: American Express, Carte Blanche, Diners Club, Discover, JCB

International, MasterCard, Visa

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Policies

Extra-person charges may apply and vary depending on hotel policy.

Government-issued photo identification and a credit card or cash deposit are required at

check-in for incidental charges.

Special requests are subject to availability upon check-in and may incur additional charges.

Special requests cannot be guaranteed.

Fees

The following fees and deposits are charged by the property at time of service, check-in, or

check-out.

Airport shuttle fee: INR 1700 per vehicle (one way)

Rollaway bed fee: INR 1000 per night

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CHAPTER-2

OBJECTIVE, NEED and SCOPE

2.1 OBJECTIVES:

1. To ascertain the market feasibility.

2. To study the existing hotels and facilities provided by them.

3. Planning of staffing and manpower.

4. To study various places of tourist destinations.

5. To obtain various cost based study analysis in order to determine the financial

viability of the project.

6. To study the financial viability of the project by using various concepts of accounting

like breakeven analysis , cash flow statement, profitability statements.

7. To outline in brief the various facilities to be provided in the proposed hotel project.

2.2 NEED OF THE PROJECT:

Faridabad, the south-eastern district in the state of Haryana, with the object of protecting

the Grand Trunk Road (now National Highway 2) which passed through the town. Thus

there is a scope for the en-route guests to have a stay in Faridabad.

Faridabad is the largest city and one of the major industrial hubs of Haryana. It generates

60% of the revenue of the state. 50% of the income tax collected in Haryana is from

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Faridabad and Gurgaon. As most of the visitors in Faridabad are business travelers and

there is a shortage to star properties, thus there is a great need for star category property.

Faridabad is famous for henna production from the agricultural sector while tractors,

motorcycles, switch gears, refrigerators, shoes and tyres are the famous industrial

products of the city. Thus it is quite obvious that in Faridabad every type of industry is

present. So there is a need of such projects to cater the need of the travelers.

2.3 SCOPE FOR THE PROJECT:

Faridabad is the major industrial city of Haryana. Thus there are a major crowd of

business travellers are coming. To cater those business travellers.

To know the type of cliental

To decide the type of facility

To design the tariff structure

To estimate the occupancy

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CAHPTER 3

3.1Project Design

Name of the hotel: Hotel Ciel

Type of property: a 4 Star Property

Number of Rooms: 62

Location: Hotel Ciel, Sec 12, Faridabad, HR

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Layout of the Hotel Ciel:

Front View of Hotel Ciel:

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Layout of Basement:

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Layout of Ground Floor:

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Layout of First Floor:

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Layout of Second Floor:

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Layout of Third Floor:

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Layout of Fourth Floor:

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3.2 About the Project

LOCATION

FARIDABAD

Faridabad is the largest city of Haryana state in northern India, in Faridabad district. It lies at

28°25′16″N Latitude and 77°18′28″E Longitude. The district shares its boundaries with the

National Capital and Union Territory of Delhi to its north, Gurgaon district to the west and Uttar

Pradesh to its east and south. Faridabad enjoys a prime location both geographically and

politically. The river Yamuna separates the District Boundary on the eastern side with Uttar

Pradesh. Delhi-Agra National Highway No.2 (Shershah Suri Marg) passes through the centre of

the district. The city has many railway stations on the Delhi-Mathura double track broad-gauge

line of the North Central Railway. The railway stations of Old Faridabad and New Industrial

Township (NIT) are the major ones.

Faridabad is the largest city and one of the major industrial hubs of Haryana. It generates 60% of

the revenue of the state. 50% of the income tax collected in Haryana is from Faridabad and

Gurgaon. Faridabad is famous for henna production from the agricultural sector while tractors,

motorcycles, switch gears, refrigerators, shoes and tyres are the famous industrial products of the

city.

For the ease of Civil Administration, Faridabad district is divided into two sub divisions viz.

Faridabad and Ballabgarh each headed by a Sub Divisional Magistrate. The Municipal

Corporation of Faridabad (MCF) provides the urban civic amenities to the citizens of

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Faridabad City. Palwal, Hodal and Hathin Sub Divisions are now part of newly created Palwal

District.

Geography

City is located on the plains of the Yamuna river. It is bordered by the Yamuna to the east and

Aravali Hills towards the west and southwest. Today, virtually all of the land has been

developing with residential housing as the population of the city swelled during the mid 1990s.

Much like the rest of India, the people of Faridabad rely on the ground water for their basic

needs which is the gift of good monsoon season.

Climate

The climate of Faridabad district can be classified as tropical steppe, semiarid and hot which is

mainly characterized by the extreme dryness of the air except during monsoon months. During

three months of south west monsoon from last week of June to September, the moist air of

oceanic penetrate into the district and causes high humidity, cloudiness and monsoon rainfall.

The period from October to December constitutes post monsoon season. The cold weather

season prevails from January to the beginning of March and followed by the hot weather or

summer season which prevails up to the last week of June.

The normal annual rainfall in Faridabad district is about 542 mm spread over 27 days. The south

west monsoon sets in the last week of June and withdraws towards the end of September and

contributes about 85% of the annual rainfall. July and August are the wettest months 15% of the

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annual rainfall occurs during the non monsoon months in the wake of thunder storms and

western disturbances.

Culture of Faridabad

The culture and tradition of Faridabad is similar to rest of country. It is the home of many culture

and traditions. Every festival is celebrated here with lot of enthusiasm.

People: Jats and Gujars are the main castes that resides in this city. They depict a picture of

happy and hardworking people. All the castes and communities represent communal harmony.

Languages: Hindi is widely spoken language in Faridabad while others are Haryanvi, English

and Punjabi are other languages.

Famous Restaurants: The famous restaurants of Faridabad are: Silk , Zosse – Crown Plaza,

Moksha, and Pind Baluchi.

Fairs and Festivals

People celebrate here every fair and festival with enthusiasm.

Gangore Festival: It is celebrated in Spring which falls in March to April. It is celebrated to

worship Gauri which is the deity of abundance. The procession is taken out with the water

immersion of Gangore and Ishar images.

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Surajkund Crafts Mela: Surajkund is an exhibition fair where handlooms and handicrafts are

displayed. It is held in every February. Its main aim was to aware tourists about the techniques of

crafting. Food Festival, dancing and singing of the participants are other major attraction of

Surajkund Crafts Mela.

Basant Panchami or Vasant Panchami: This festival is dedicated to Goddess Saraswati, the

deity of education and wisdom. People involved themselves in kites flying. Yellow is the

auspicious color of this occasion which is shown in their dresses to foods.

Transportation

Rail

DelhiMetroPurpleLine

Faridabad is on the broad gauge of New Delhi- Mumbai Line. New Delhi and Hazrat

Nizammudin Railway Station is about 25 km away from Faridabad Station. The trains for big

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cities like Mumbai, Chennai, Hyderabad are easily accessible from here. Local Trains runs

between New Delhi to Faridabad.

There are three railway stations in the city viz. Faridabad (FDB), New Town Faridabad (FDN)

and Ballabgarh (BVH). Earlier it was the last station of central railway, but now it has been

included in Northern railway. It is a very high revenue generating source for railways as

thousands of people move daily in local trains to and from Delhi for education/professions.

The Delhi Metro Rail Corporation is extending the metro rail service to the city as well.

Currently the services terminate at Badarpur at the Delhi-Faridabad border. It will cover the town

under Phase - III expansion of the Delhi Metro The fully elevated corridor, the longest Metro

line in the NCR, will be constructed at an estimated cost of Rs 2,533 crore by 2016 when the

Delhi Metro's Phase-III is expected to be completed.

Road

The National Highway-2 (Delhi-Mathura Road) passes through the city, and thus it is well

connected to nearby states. Roadways services of Haryana (Haryana Roadways) and

neighbouring states like Delhi Transport Corporation, Uttar Pardesh Transport Department, and

Madhya Pradesh Transport Department are easily accessible.

Air

Faridabad is served by Indira Gandhi International Airport, New Delhi.

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Tourism

Badkhal Lake

Dried Badkhal lake

Badkhal Lake was located in Badkhal village, 8 km from Delhi Border. The lake fringed by

Aravalli hills was a man-made embankment. Owing to unchecked mining in the neighbouring

Aravallis, the lake has totally dried up. There are functional Haryana Tourism restaurants in the

vicinity. A flower show is held every spring here. Its name is most probably derived from the

Persian word bedakhal, which means free from interference. Close to Badhkal Lake, is the

Peacock Lake, which is another picturesque spot.

The lake is dried up as of now and no lake exists apart from a dry ground.

Suraj Kund Tourist Complex and the crafts fair

Suraj Kund

Situated at a distance of around 8 km from South Delhi, it is an ideal picnic spot. The Suraj Kund

Lake here is surrounded by rock cut steps. Built by Surajpal Tomar, Suraj Kund represents the

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rising sun. Ruins of a Sun temple lie around the lake. The complex includes a beautifully done-

up Rajhans, a pool of fresh water – Siddha Kund; its waters said to have healing properties and a

garden.A delightful handloom and handicrafts fair is held here annually in February. Skilled

artisans from all over the country display the rich crafts tradition of India in the typical setting of

a rural Indian marketplace. Cultural programmes like folk dances, magic, acrobats and rural

cuisines are also a part of this colourful fair. One can also see traditional crafts being made and

buy them direct from the craftsmen. Food is served in Banana leaves and claypots.

Raja Nahar Singh Palace

Nahar Singh Mahal is also commonly known as Ballabgarh Fort-Palace was built by Balram the

predecessor of Raja Nahar Singh. As a matter of respect and remembrance this palace was given

the name of Raja Nahar Singh who died in a war of independence. This palace is known for its

architecture. This is located at main road entering in Ballabgarh market which is at a distance of

about 30 km from Delhi. The palace was recently worked with antiques and relics of a bygone

past.

Other visitor attractions

Shirdi Sai Baba Temple Society Popularly Known as Sai Dham Tigaon Road Faridabad

Shirdi Sai Baba Temple

Shiva Temple

St. Mary’s Orthodox Church

Dhauj Lake

Aravali Golf Course

Nahar Singh Cricket Stadium

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Town Park

Jharna Mandir village Mohabbtabad

Farid Khan's Tomb

mata vaishno devi mandir sansthan

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MARKET FEASIBILITY

TARGET MARKET

Faridabad is the industrial hub in Haryana. Faridabad is the largest city and one of the major

industrial hubs of Haryana. It generates 60% of the revenue of the state. 50% of the income tax

collected in Haryana is from Faridabad and Gurgaon. Faridabad is famous for henna production

from the agricultural sector while tractors, motorcycles, switch gears, refrigerators, shoes and

tyres are the famous industrial products of the city.

Thus the Target Market for me the business visitors visiting to Faridabad, Because my

project is a Business Hotel.

INTRODUCTION TO MARKETING AND MARKETING MIX

DEFINITION OF MARKETING

The word market is derived from the Latin work ‘Marcatus’ meaning goods or trade or a place

where business is conducted. The term marketing is defined as a ‘business activity planned at

satisfying to a reasonable extent, consumer or customer needs and wants, generally through on

exchange process’.

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The human needs are less and are important for his survival. The wants of people are many and

varied and change with time, place and society. The wants keep changing with life styles,

earning capacity of consumers, social values, education etc. Human intentions and decision to

acquire may not be the same due to existing conditions. A man like or intend to stay in a five star

hotel. He may decide (or acquire) a room in a three star hotel due to his tight financial position.

Kotler defines marketing as “a social and managerial process by which individuals and groups

obtain what they need and want through creating, offering and exchanging products of value

with others.

As per the definition by the American Marketing Association (AMA), marketing is “the process

of planning and executing the conception, pricing promotion and distribution of ideas, goods and

services to create exchanges that satisfy individual and organizational goals.”

‘Market’ traditionally is a place where buyers and sellers gather to exchange their goods.

With this concept of markets, it is seen that Marketing means working with markets to actualize

potential exchanges for the purpose of satisfying human needs and wants.

To meet the exchange process in the market, considerable skill and work is put by one party to

the transaction. To bring in the desired response from the other party in a market, the marketer

has to analyze, plan, implement and control activities.

Definition of Marketing Management, according to Kotler, is the process of planning and

executing the conception, the pricing, promotion and distribution ideas, goods and services to

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create exchanges that satisfy individual and organizational goals. He has thus approved the

definition of the AMA.

Marketing Management is engaged in influencing the level, timing the composition of demand in

a manner that will help an organization to achieve its objectives. Marketing Management is

basically demand management.

COMPONENTS AND CLASSIFICATION OF MARKET

Market is a social and economic institution which performs activities and provides infrastructure

for exchange of commodities between buyers and sellers. A market is not confined to a particular

geographical location, it exists wherever the fundamental forces of demand and supply exist.

Market Components

The following components are necessary for a market to exist:

Two parties are necessary – one buyer/s and secondly seller/s

Goods or commodity for transaction. Physical existence of goods is not necessary.

Business relation and communication between buyer and seller and

Demarcation-area or place there, uniform price or competition is not a condition.

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Classification of Markets

Based on nature and dimensions, markets are classified as under:

1. Area of Coverage

Local Market: Where buying and selling activities are taking place, where buyers and

sellers belong to same or nearby villages. These are for perishable items like vegetables.

Tehsil Level Markets: Market catering to buyers and sellers of taluka area. Buyers and

seller meet for their stock of food grains and other daily use items.

Regional Level Markets: Usually at district headquarters to cater to a larger area.

National Level: Buyers and sellers world over meet in this market. These are large scale

markets and business value and volumes are large. The items transacted include, silver,

gold, non-ferrous metals, petro goods and machinery. In the recent past, agricultural

commodities have also entered the area.

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2. Location

Village Market: The transactions between buyer and seller takes place in a small

village center called a village market or a Haat. This meet is periodical, usually once or

twice a week

Primary Market: The villagers take their agricultural produce to the nearby town or

Tehsil on bullock carts, buses or tractors-transaction in the town market takes place

between farmers and products.

Wholesale Markets: These markets are located at important commercial centers or

district headquarters. The arrivals from villagers and other markets are large in

quantities. The transactions take place among villagers, village traders and wholesalers.

There are specialized marketing functions that take place in this market. They are

commission agents, brokers, packers, weighment etc. These are also called Secondary

markets.

Terminal Market: This market caters to the final consumer or processor. These are

organized and modern markets. These markets are in cities or state capitals and deal in

many commodities.

3. Volumes of Trade

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Retail Markets: Where goods are brought and sold to consumers based on actual

requirements. The retailers purchases goods from the wholesale market and sell in small

lots to the nearby consumers.

Wholesale Markets: The wholesale markets are in big cities or commercial centers in a

district. The commodities are brought in bit lots bulk and sold in bulk. These markets

balance supply and demand fluctuations and also determine the prices of the

commodities being transacted. As such wholesale markets are an important part in the

market scheme.

4. Time Span

Short Period Market: These markets are for few hours or a day in a week. Generally

perishable goods like vegetables, fruits, milk, fish, mutton are traded. The prices are fixed

on the basis of demand pattern.

Long Period Market: Where perishable items for a long period are traded. The items are

food grains, oilseeds and oil. The prices are governed by supply as well as demand forces

in the market.

Permanent Market: Markets where commodities can be kept for any length of time like

machinery, steel furniture, manufactured goods.

5. Number of Commodities

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General Market: These markets deal in a large number of commodities and of different

quality and packages. The items are as groceries, foodgrains, oils, oilseeds, sugar etc.

Specialized Markets: Markets where only one or wo commodities are transacted are

called specialized markets. Examples are food grain markets, electrical markets, cotton

markets and vegetable markets.

6. Type of Transactions

Spot or Cash Markets: Where goods are exchanged immediately on payment of cash

Forward Markets: In this market, the timing of exchange of commodity and purchase

and sale of that commodity are not same. The goods are delivered at a later date.

Sometimes the goods are not delivered at all, only difference being in sales and purchase

price which are paid as per agreements.

7. Degree of Competition

Market are seen from perfect competition to pure monopoly. The markets may exist different

intermediate points. The markets are classified on the basis on basis of competition as under:

Perfect Markets: The perfect market in true sense does not exist. This presupposes that

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There are large numbers of buyers and sellers.

The buyers and sellers in the market have indepth knowledge of prices, demand and

supply.

Price are uniform in a geographical area-

Plus or minus cost of transportation from surplus to deficit market.

Plus or minus cost of storage over a period of time.

Plus or minus cost of converting the product from one to another.

Imperfect Markets: In this market, the conditions of perfect market are lacking. These are:

Monopoly market where there is only one seller of a commodity. He has sole control.

The prices are generally higher. When there is only one buyer, the market is termed

as monophony market.

Duopoly market is a market there are two sellers of a commodity in the market.

Where there are only two buyers in the market, it is called duopsony market.

Monopolistic competition: Where a large number of sellers are selling heterogeneous

and differentiated forms of a commodity, the situation is termed monopolistic

competition. Example – farmer has to choose between various makes or brands of

pesticides, pumpsets and fertilizers.

8. Nature of Commodities

Commodity Markets: Pertains to the types of goods like grains, cotton, sugar,

fertilizers etc.

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Capital Markets: Markets where shares, debentures and bonds are purchased and

sold as in share markets.

9. Government Intervention

Regulated Markets: Where markets are controlled by government or statutory rules and

regulations, pricing and distribution are as per laid down rules.

Unregulated Markets: The seller or trader makes his own rules for conduct of business.

These are not government rules for trading. The traders may exploit the situations.

10 Accrual of Marketing Margins

This is done on the basis of whom the marketing goes. These are usually cooperative market.

These are prevalent in milk, fertilizer and sugar industries. The margins are distributed to the

cooperative members.

11 Type of Population Served

Urban Market: Markets to serve the urban population.

Rural Market: Markets to meet demands originating from the rural population.

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MARKETING MIX

MARKETING SYSTEM

Marketing activity presently dealt with focused on the commercial transaction between a seller

and a buyer. The seller offers his commodities to the buyer to satisfy his needs and wants. The

buyer purchases the commodity or services as per his needs and demand.

Marketing Activity and Environment

The framework or environment in which marketing activity takes place is within and outside the

buyer and seller organizations – some are controllable and some are uncontrollable variables.

Some variables can be controlled by the seller that is one can plan, organize and perform –

whereas there are variables which are beyond and control.

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6 P’s of Hospitality:

1. Product:

The tourism product differs from other products due to the wide range it covers, including such

areas as accommodations, transportation, food, recreation and attractions. Often the product

includes intangibles such as history, culture and natural beauty. Many times the hospitality or

tourism product is viewed as more of “service” in the customer’s eyes. The closer we can

determine how to satisfy the customer’s needs, the more successful the destination will be.

2. Price

This refers to the amount customers pay for the product or service provided. A quality tourism

experience at a fair price is what the customer is looking for in most cases. Pricing should be

based upon clear-cut goals and objectives: survival, profit maximization, market share,

competition or positioning.

3. Place

The place where the customer buys the tourism product can vary greatly. Travel agents, tour

operators and tour wholesalers are a few examples of the distribution points for tourism products.

Look for new distribution points in which you can sell your services. Like Hotels, Resort etc.

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4. Promotion

A range of activities can be used to convince customers to buy the product, including

information kits, web sites, advertising, personal selling, sales promotion, travel shows, and

public relations.

Utilize tourist information centers, such as welcome centers. Participation with your state,

regional and local tourism offices and associations.

a. Before Inauguration : some of the methods that will be adopted in the promotion of

the hotel.

before inauguration are

i. Advertising : the advertising of the hotel will begin when the project is nearing

completion. The different that will be adopted are through local media , national media,

bill board and banners. By the appointments of sale executives , VIPs company officials

and head of institute can be contacted among with leaflets and folders.

ii. Data Base : this is sending personalized letter to executives of certain selected

companies all over India .

iii. Travel agent : the travel agent operating i the local market and those who passes

necessary license to represent the important domestic carries such as Airlines, Railways

and road transport are informed to promote the guest into the hotel

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b. After Inauguration : after the inauguration of the hotel the promotion of the hotel can

be done by

i. Food Festivals : food festivals should be held with wide publicity from time to time

ii. Discounts.: certain discount will be given to selected groups like :

-Children below the age of 5

- regular guest

-Educational tour groups

- VVIPS

5. People

The people who sell and service your product are an extremely important part of tourism

marketing. Friendly personal service and trained employees can make or break

a tourism business.

Because much of the tourism industry is based upon word- of-mouth advertising- particularly

about the service received- what your customers say after they depart can thrust your business

forward or send it into a downward spiral.

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6. Planning

An important part of a viable business plan is to develop a strategic marketing plan in an

effort to identify customer expectations. Research and planning also helps design and devise

means by which you can meet these expectations. Provides a road map. Is a working document.

To be effective the plan must be maintained, reviewed and revised.

Should have an annual marketing plan, with a component that mentions long-term goals as well.

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DEMAND QUANTIFICATION

Meaning of demand:

The amount of a particular economic good or service that a consumer or group of consumers will

want to purchase at a given price. The demand curve is usually downward sloping, since

consumers will want to buy as price decreases. Demand for a good or service is determined by

many different factors other than price, such as the price of substitute goods and complementary

goods. In extreme cases, demand may be completely unrelated to price, or nearly infinite at a

given price. Along with supply, demand is one of the two key determinants of the market price.

Types of demand

The different types of demands have been explained below as follows:

Individual demand:

It is the quantity of a commodity demanded by an individual consumer at a particular price

during a given period of time.

Market demand:

It is the total quantity of a commodity demanded by all the consumers in the market during a

given period of time.

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Joint demand:

When two or commodities are jointly needed to satisfy a single want, then the demand for such

goods are said to be joint demand.

Composite demand:

When a commodity is demanded for a number of uses, then the demand for that commodity is

said to composite in nature.

Competitive demand:

When two goods are close substitutes of one another, then the demand for such goods is said to

be competitive in nature.

Derived demand:

When demand for a commodity gives rise to demand for another commodity, then it is said to be

as a derived demand.

Variation in demand:

It refers to extension or contraction in demand which is exclusively due to change in the price of

a product.

Changes in demand:

Change in demand refers to increase or decrease in demand which is due to change factors other

than price of the commodity.

It refers to some inferior goods which are demanded in smaller quantities when their price falls.

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Direct demand:

Goods which yield direct satisfaction to a customer can be termed as the direct demand

Demand for 4 star hotel

Hotel industry is one of the biggest and smokeless industries. It’s the form of the hospitality

industry. Hotels widely depend upon the nature of the guests. The proposed “Hotel Ciel” could

be classified under 4 star categories, keeping in mind about the demand of rooms, tastes and

preferences of guests and the tourist inflow and outflow of the place.

Demand will be based on the average of the existing projects in Faridabad.

The no. of rooms and other things will be decided on the average rooms of those projects.

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Name of Hotel No. of Rooms Tourist Others Business Occupancy%

Park Plaza 70 34 11 66 64

Sarovar Portico 62 15 10 60 66

Rajmandir 54 27 25 59 70

Mahalaxmi 62 30 15 50 60

Average No. of Rooms = 70 + 62 + 54 + 62

4

= 62

Average Tourist clients = 34 + 15 + 27 + 30

4

= 26.5

Average Other Clients = 11 + 10 + 25 + 15

4

= 15.25

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Average Business Clients = 66 + 60 + 59 + 50

4

= 58.78

Average Occupancy% = 64 + 66 + 70 + 60

4

= 65%

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TECHNICAL ASPECTS and MAN POWER PLANNING

TECHNICAL ASPECTS

It is clear from the demand analysis that a hotel with 62 rooms

Hotel Ciel are discussed in this chapter. As the cost involved for the contribution of single room

is more or less equal to that of double rooms. Nowadays only double rooms are constructed.

BREAK-UP OF THE ROOM

TYPES OF ROOMS NO OF ROOMS

DOUBLE 40

SUITE 22

TOTAL 62

SIZE OF THE ROOM

a. Double Room => 15 X 14 =210 sq.ft.

Total area of double rooms = 16800 sq.ft.

b. Suite => 20 X 16 = 320 sq.ft.

Total area of Suite room = 3520 sq.ft.

Therefore

Total area of room = Area of Double Room + Area of Suite Room

=16800 + 3520

=2000 sq.ft

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HOTEL BUILDING

Basement

Basement Layout Square Feet

Accounts Department 340

Personal Department 300

Time Office 200

Receiving Area 300

House keeping 100

Fire escape 200

Passage and corridors 500

Laundry 500

Staff cafeteria 800

Locker(male) 400

Locker(female) 400

Stores 400

Purchase department 200

Uniform exchange room 200

Linen exchange room 700

General manager office 200

Engineering and maintenance department 230

Centralized A/C 700

Service lift 100

Security office 200

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T.V. channel music 170

Total 7140 sq. Ft

Ground Floor

Ground floor Square feet

Reception 700

Reservation 200

Telephone 200

Back office 300

Bell desk 200

Cashier 200

Lobby 1000

Travel desk 330

Florists 100

Guest stairs 60

Guest lift 70

Service lift 100

Service stairs 60

Shos\business center 600

Kitchen and room service cabin 1000

House keeping pantry 80

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Setback corridors 100

Fire escape 80

Bar cum restaurant 1000

Banquet hall 1250

Coffee shop 750

Guest toilet 160

Guest safety locker 60

Health club 640

TOTAL AREA 9240

First floor

First floor Square feet

Service lift 100

Fire escape 80

Guest stairs 60

Service stairs 60

Guest lift 70

Set back area and corridors 600


Double room (25) 11000

Speciality restaurant 1200

Room service 140

TOTAL AREA 13460 sq. Ft

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Second Floor

SECOND FLOOR SQUARE FEET

Service lift 100

Fire escape 90

Guest stairs 150

Service stairs 60

Guest lifts 70

Set back areas corridors 1700


Double room(15) 6600

Suites(05) 3200

Room service pantry 190

TOTAL AREA 12360sq. Ft

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Third floor

THIRD FLOOR SQUARE FEET

Service lift 100

Fire escape 80

Guest stairs 60

Service stairs 60

Guest lifts 70



Suites(8) 5120


TOTAL AREA 7360

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Fourth floor

FOURTH FLOOR SQUARE FEET

Service lift 100

Fire escape 80

Guest stairs 60

Service stairs 60

Guest lifts 70



Suites(9) 5760


TOTAL AREA 8410sq. Ft

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LEGAL REQUIRMENTS

Hotel License:

Hotel license is the certificate or document which deals with service where the public are

admitted for repose or consumption of any food or drink or any place where food is sold or

prepared to sale.

Generally following license are required in hotels

1.Labour License -- Labor Office

2.Bar License -- state excise

3.PF Reg. - PF authorities

4.ESI reg - ESI authorities

5.Licence to contractor -- Labor Office

These are licenses has to be take care by HR

01.PF

02.ESI

03.LABOUR LICENSE

04.CONTRACT LICENSE

05.FOOD LICENSE

06.M.C.H LICNESE

07.WIGHTS AND MEASUREMENT LICENSE

08.POLICE LICENSE

09.24HRS COFEE SHOP LICENSE

10.LPG AND DESIGL LICENSE

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11.31ST NIGHT LICENSE

12.ENTERTINEMENT LICENSE

13.AP POLLUSTION CONTROL BOARD LICENSE

1-Service Tax Registration

2-N.O.C from fire department

3-VAT/TIN /C.S.T Registration Certificate

4-C.M.O certificate for food license

5-Training Record of employees shift wise from Fire Department

6-Excise License

7-Luxury Tax registration

8-Paste Control Certificate

9- IATA Approval for tour handling, ticket booking/or agreement with travel & tour company

MANPOWER REQUIREMENT

MANPOWER REQUIREMENTS

The success of any service department depends to a large extent on the manpower and the

productive of its, work force. Success is personal management might be attached only with good

planning.

The shift time for the personal hotel will be:

Morning shift: 7am to 4pm

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Afternoon shift: 3pm to 12am

Night shift: 11pm to 8am

The manpower of the hotel will be disturbed as below

Sr. no. Description No. of Staff

1. General Manger 01

2. Assistant manager 01

3. PA to GM 01

4. FO Manager 01

5. Lobby Manager 01

6. Bell Captain 01

7. Bell Boys 04

8. Telephone Operator 02

9. Telephone Supervisor 01

10. Front office assistants 02

11. Executive Chef 01

12. Sous Chef 02

13. Chef de Partie 05

14. Commies 20

15. F&B Manager 01

16. Restaurant Manager 02

17. Banquet Manager 02

18. Captain 04

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19. Steward 16

20. Barmen 03

21. Room service Manager 01

22. Order Taker 03

23. Steward room service 06

24. Executive Housekeeper 01

25. Assistant Housekeeper 01

26. Floor Supervisor 04

27. Linen room supervisor 04

28. Uniform room supervisor 02

29. HK Store Supervisor 01

30. Housemen 15

31. Gardner 02

32. Kitchen Stewarding Supervisor 01

33. Asst KSt Supervisor 01

34. Pot Washer 04

35. Chief Engineer 01

36. Technicians 05

37. Security Manager 01

38. Security Personnel 04

39. Doorman 02

40. S & M Manager 01

41. S & M Executives 02

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42. Assistants 02

43. Personnel Manager 01

44. Asst. Personnel Manager 01

45. Assistants 02

46. Accounts Manager 01

47. Cashier 02

48. Clerk 02

49. Purchase Manager 01

50. Purchase Assistants 02

Total - 147

PROJECT PROFILE

Name of the industry : 4 Star Business Hotel

Location : Faridabad

Name of Hotel project : Hotel Ciel

Room statement : Total no. Of rooms - 62

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1st floor: Double Rooms - 20

2nd floor: Double Rooms - 25

: Suites - 02

3rd floor: Double Rooms - 3

: Suites - 4

4th floor: Double Rooms - 5

: Suites - 3

Therefore

Land area required is =25,000sq. Ft.

Total build up area =45,390sq. Ft.

Covered land =7,800sq. Ft.

Open area(garden and parking) =5,200sq. Ft.

1. By place I mean that selection of best location for the hotel. The location is considered as

one of the most important decision. Considering various barometers. Connected with

choosing of the location, a suitable site was finalized.

Hospitality Products Offered

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a. Proposed hotel will recruit professional managers and skilled professionals

b. Shall invite the culture of excellent service in the proposed hotel

c. Shall provide guest with many cuisines like continental, Chinese ,Awadhi

d. Shopping arcade: This is attached to reception counter. It consist of

>Travel desk

>Handicraft soft

>Chemist

>Banking facilities

>Beauty parlour

e. Business center

The hotel provides facilities for :

I.FAX

II.TELEX

III.E-MAIL SERVICE

IV.INTERNET

V.XEROX

These facilities provide efficient secretarial and other service which can increase the no of

business clients.

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e. Lockers: This is to help the guest who are carrying valuable like jewelry, currency or

very doc. Etc., to safe guard and prevent theft

f. Car Park: This is provided at the side of the hotel about 35-45 cars and 15 wheelers can

be asked here .

FOOD AND BEVERAGES OUTLETS OF THE HOTEL

ZAYKA 24 HOURS COFFEE SHOP

DAWAT E SHAN Awadhi cuisine specialty restaurant

11 am – 3 pm

7 pm – 11.30 pm

CHINA STREET CHINESE SPECIALITY

RESTAURANT

11 am – 3 pm

7 pm – 11.30 pm

ROOM SERVICE 24 HOURS

KESARIYA BANQUET HALL(UP TO 90 PAX)

MEHFIL BANQUET HALL(UP TO 300 PAX)

ACCELARATE – BAR 11 am- 11.30 pm

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FACILITIES IN THE ROOM

All rooms will have wall-to-wall carpeting. The minimum furniture will be abed, wardrobe,

suit case rack, writing desk, chair, sofa set and refrigerator .the suit will have an attached

living room with the required furniture provided with refrigerator provided with wine and

bar. All rooms wil have channel music ,colour t.v. ,a.c. and a telephone . all rooms will have

attached bathrooms with 24 hr hot and cold water supply. The bathroom will also have the

required toiletries such as soap, shampoo, toothbrush, paste, shaving kit, hairbrush, powder,

towels etc.

Guest stationary and a sewing kit will be provided with special room service menu card,

house keeping cards and telephone directory.

In order to ensure price for the products the hotel sells, is has to follow a method of fixing

the price .the two methods are

a. Follow the leads methods

b. Market penetration method

In this case market penetration method is used by keeping the price slightly lower than

the competition

TYPES OF ROOMS NO OF ROOMS

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Double rooms 40

Suite rooms 22

A complimentary fruit basket and cookies can be provided for the residential guest. Special

service are provided for VIPs and VVIPs

ROOM SERVICE

The room service will operate 24 hours. They will have a slightly concise form of the coffee

shop menu.

BUSINESS CENTER

A well equipped business centre will be incorporated to provide services to all machine, OHP,

etc.

FRONT OFFICE

As front office is a critical department in a hotel in view of its revenue generating capacity and

influencing hotel image. This department will contain a reception, cashier, telephones, bell desk

and reservation office.

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LOBBY

The lobby will be aesthetically decorated. It will be furnished with sitting arrangement. There

will be two elevators in the lobby.

FOOD AND BEVERAGES PRODUCTION

This department will handle the production of all F & B items. The food will be nutritionally

prepared and aesthetically presented.

HOUSE KEEPING

The housekeeping office will be situated in the basement area. This department is very important

to upkeep the hotel the hotel. The laundry comes under this department.

PERSONNEL DEPARTMENT

This department controls the staff in the hotel and also controls the administration of the hotel.

Its office is located in the basement.

ENGINEERING AND MAINTENANCE

This department is responsible for the maintenance of furniture, fixture and for rectifying faults

in electric equipments, etc. This department will be situated in basement.

ACCOUNTS DEPARTMENT

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This department handles all different accounts of all departments in the hotel and settles them

accordingly. This department will be situated in the basement area.

MARKETING GOALS

Marketing is an important and integral part of any enterprise. It follows of the organization, that

is marketing desires goals from an organization. gives goals of an organization and its marketing

arm.

Organization Marketing

Growth Product

Sales growth

Market development

Diversification

Profitability Maximum sales revenue

Maximum contribution

Market Penetration Market leadership

Innovation

Consumer satisfaction

Image Company image

Brand image

Social image

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Goals of Organization and Marketing

SELLING AND MARKETING CONCEPTS

Selling concept holds that, if left alone, a customer will ordinarily not buy enough products of

the organization. the organization must, therefore, go for aggressive selling and invest in

promotional campaigns. This is a common man’s approach. The aim is to sell what an

organization makes rather than make what the market wants.

On the hand, marketing is a business philosophy that is opposed to the selling concept. The

marketing concept holds that the key to achieve goals of an organization consists of being

effective than its competitors in evolving and executing marketing activities towards determining

and satisfying the needs and wants of target markets. The concept is put is few words – “find

wants and fill them” or “meeting needs profitably”. The difference between selling and

marketing are detailed in below.

Concepts Starting

Points

Focus Means End

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The Selling

Concept

Factory Products Selling and

Promoting

Profits through

sales through

The Marketing Target Customer Integrated Profit through

Concepts Market Needs Marketing Customer

Satisfaction

MARKETING PRACTICES

The marketing philosophies have to be put in place by actions for success. These are broadly

categorized as:

Organization structure and

Marketing strategies and leadership.

Organization Structure

Each company has its own structure to meet the organizational goals and its target market

segment. The approaches are by:

Territory – like north, south, east etc. or by states

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Function – Subdividing marketing based on functions like advertising, market planning

and market research

Product – as per product say air conditioners, coolers, washing machine

Customer – example, kids wear, means wear

Markets – domestic, export markets

Project – example, pipeline project, civil construction project and

Matrix – A multi- product company uses combination of the above to get best results.

CONCLUSION

Tourism is one of the fastest growing and the largest industry in the world. It had tremendous

potential for earning foreign exchange. Yielding tax revenue, providing employment and

promoting the growth of backward region. The objectives of this report are to find out whether a

4 star hotel will be feasible in Faridabad.

So this project is undertaken to find out the feasibility of the proposed hotel. According to the

survey on the demand analysis it has been noted that a 70 room hotel is feasible. Hence a hotel

with 62rooms has been proposed. This proposed hotel will be having the best facilities, which

are up to the best standards provided in the industry.

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FINANCIAL VIABILITY

TARIFF STRUCTURE

TYPE OF ROOM SINGLE OCCUPANCY DOUBLE OCCUPANCY

DOUBLE 2500 2750

SUITES 3600 3650

Note : 1) Service charges of 6% on food and beverage

2) 15 % luxury tax on room

All Public Area: Ground Floor

All Guest Rooms: 1st, 2nd, 3rd and 4th Floor

86 | P a g e

FACILITIES PROVIDED

Restaurant – DAWAT E SHAN (Awadhi Cuisine) and MINGS GARDEN (Chinese Specialty)

Coffee Shop – ZAYKA

Bar - ACCELARATE

Banquet Hall - KESARIYA, MEHFIL

Channel Music System

Centralized AC

Shopping Arcade

Travel Desk

Bank

Locker

Health Club

24 Hours Room Service

Cable TV

Parking

Laundry

Double Rooms and Suite Rooms

Capsule Elevator

Managing finance is essential for the firms or business concerns , because finance occupies a

very important role in any business enterprise. As an entrepreneur he has to have the capacity

87 | P a g e

and efficiency in managing different kinds of finance. A complete study of financial

management determines the financial viability of an industry with the help of concepts of

financial management and the organizer takes the decision for the industry. The decision can be

investment decision, financial decision and dividend decision. So far investment decision has

been converted to indulge long term and short term investment within the industry. It also

includes different types of cost and expenditure.

The financial decision includes the decision pertaining to management of capital during the long

run and short run. Thus anytime an industry needs two types of finances:

Long term finance

Short term finance

Long term finances include borrowing from financial, using funds from share, etc. The short

term includes the management of working capital. Analysis has to be made with majority long

term finance and short term finance. With regards to this certain management concepts have

been used in this project to arrive at the financial viability pertaining to the proposed hotel. The

concept used all debt equity ratio, revenue and expenditure, operating profit, return on

investment, net cash flow chart determining through making provision for depreciation, taxes,

interest on loans, break even analysis, break even percentage to analyze whether the entrepreneur

can survive in the business or not.

It is not only enough if the entrepreneur manages long term finances but he also has to manage

day-today expenditure in his firm. This has to be studied under the concept of working capital

management which includes the statement called funds flow statement comprising of sources and

88 | P a g e

application of funds. Apart from this, the financial management satisfies the entrepreneur in

achieving his target not only in short term but also over a period of time.

With the above said information I would like to determine financial viability of a 4 star hotel in

Faridabad called Park Plaza Faridabad. Any firm or industry needs to be studied under the

condition of the financial surroundings; financial management plays a very important role in the

financial viability of this project. This is possible with reference to the performance of the

industry in the revenue earning, expenditure incurring, working, and capital, etc.

Financial management

Is mainly concerned with the procuring funds in the most economic and productive manner

deploying the funds in the most profitable way in the given situation , planning, future operation,

and controlling current and future performance and development through different tools . the key

objective of financial management is to maximize the value of the company regarding the

investment, dividend and current assets

Financial decision

The decision whether the entire capital should be raised from the equity capital or a part of it is

to be raised from loans

89 | P a g e

Investment decision

It is concerned with how much the company should invest in what project

Current asset management

It is necessary for maintenance a balance between current assets and current liabilities.

Dividend decision

It is basically a financial decision. This is so because profit is source of fund. The dividend

decision is a comprehensive decision between paying reasonable dividend and rating balance

profit in revise.

Debt service coverage ratio

It is the ratio which shows whether the revenue covered every year after statutory deduction are

efficient to service the debt. In other words, if the break even point is not attained its an

indication of profitability in the business , such as a situation will have o be maintained for the

future year to come.

OPERATIONAL DEFINATIONS

90 | P a g e

Cash flow and fund flow statement

It refers to the rearrangement of the various financial data as to clearly indicate the various

sources from which there is inflow of cash and fangs and the purpose for which they are applied.

Ratios

A ratio is a numerical value which exposed in the form of co-efficient percentage or as

proposition.

Returns on investments

It refers t the ratio which indicates the profit that will be earned every year when compared to the

investment in the project

91 | P a g e

COST OF PROJECT

ANALYSIS AND INTERPRETATION

The current chapter deals with the analysis and interpretation. Financial tools such as ratio

analysis, the funds flow statement, the breaker even analysis such similar analytical tools have

been made to arrive at a clear and accurate understanding. Facts are observed from the analysis,

interrelated descriptively for the understanding of the project concepts

The analytical aspects of the project study begins with the cost of the project and means of

financial and proceed on with the estimation of revenue and expenditure for six years into the

future while also providing a fair understanding of the working capital requirements, to

understand the depreciation of fixed assets , the statement of profitability and return on invest

and the likes

ESTIMATED COST OF PROJECT

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PARTICULARS RS. In Lakhs

Cost of land 570.75

Building and civil work 288.36

Plant and machinery 140.85

Furniture and fixtures 57.25

Miscellaneous fixed assts 13.16

Margin for contingency 107.037

Preliminary and pre-operation

expenses

33.1

TOTAL COST OF THE

PROJECT

1210.50

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SALARY and WAGES

ADMINISTRATIVE Salary(Rs. Per person )

General manger 1 50000

Assistant manager 1 32000

PA to General manager 1 19000

Total 3 101000

Front Office:

FRONT OFFICE Salary(Rs.)

Front office manager 1 28000

Lobby manager 1 20000

Bell captain 1 10000

Bell boys 4 7000

Telephone operators 2 8000

Telephone supervisor 1 7500

Front office assistant 2 19000

Total 12 99500

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Food and Beverage Production:

FOOD AND BEVERAGE (PRODUCTION) Salary (in Rs.)

Executive chef 1 40000

Sous chef 2 30000

Chef de Partie 5 60000

Commis 20 160000

Total 28 290000

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Food and Beverage Services:

FOOD AND BEVERAGE (SERVICE) Salary(Rs.)

F&B manager 1 30000

Restaurant Manager 2 40000

Banquet manger 2 36000

Captains 4 34000

Stewards 16 120000

Barmen 3 18000

Total 25 278000

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Room Service:

ROOM SERVICE Salary(Rs.)

Room service manager 1 10000

Rom service order taker 3 19500

Steward 6 36000

Total 10 65500

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Housekeeping:

HOUSE KEEPING Salary(Rs.)

Executive housekeeper 1 22000

Assistant house keeper 1 18000

Floor supervisor 4 40000

Linen room supervisor 2 20000

Uniform room supervisor 2 18000

Housekeeping stores 1 8000

House men 15 105000

Gardeners 2 8000

Total 28 239000

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Kitchen Stewarding:

KITCHEN STEWARDING Salary (Rs.)

Kitchen stewarding supervisor 1 8500

Assistant kitchen stewarding supervisor 1 7000

Dish and pot washers 4 16000

Total 6 31500

Engineering and Maintainance:

ENGINEERING AND MAINTENANCE Salary(Rs.)

Chief engineer 1 7500

Technicians 5 20000

Total 6 27500

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Security:

SECURITY Salary(Rs. )

Chief security manager 1 6500

Security personnel 4 22000

Door man 2 10000

Total 7 38500

Sales and Marketing:

SALES AND MARKETING Salary(Rs.)

Sales and marketing manager 1 14000

Executive 2 20000

Assistant 2 16000

Total 5 50000

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Personnel Department:

PERSONNEL DEPARTMENT Salary (Rs.)

Personnel Manager 1 16000

Assistant personnel manager 1 12500

Assistant 2 15000

Total 4 43500

Accounts Department:

ACCOUNTS DEPARTMENT Salary(Rs. Per person)

Accounts manager 1 14000

Cashier 2 20000

Clerks 2 17400

Total 5 51400

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Purchase Department:

PURCHASE DEPARTMENT Salary(Rs. Per person)

Manager 1 16000

Assistant 2 18000

Total 3 34000

TOTAL NO. OF EMPLOYEES = 147

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SALES REVENUE

ESTIMATED SALES REVENUE FOR SIX YEARS

The fooling illustrated table shows the estimation from different sources for the six years of

operation under varied occupancy. The revenue generating areas of the hotel are the rooms

which give the maximum sales followed by revenue generating areas are the travel desk, book

shop, laundry, florist, etc.

70% of the revenue is expected from the rooms, 25% from the F&B outlets and rest 5% from the

other revenue generating areas, majority of the revenue approx. 65% comes from the standard

rooms and 35% from the suite rooms

SALES REVENUE (IN LAKHS)

Year 1 2 3 4 5 6

Occupancy % 65 70 75 80 85 85

Double room 486 522 567 603 648 729

Suite room 79 86 93 99 106 119

Total (a) 1099 1182 1283 1365 1466 1649

103 | P a g e

Coffee shop 146.89 150.32 152.50 159.54 164.93 170

Specialty

Restaurant

144.75 159.62 161.8 165 169.43 171.28

Bar 187.71 199.83 219.17 280.34 338.92 392.86

Banquets 96.61 108.14 132.17 176.18 265.19 315.23

Room service 63.58 87.24 105.83 169.13 239.28 296.45

Total (b) 347.9 395.21 457 645.45 842.39 1004.54

Laundry 39.74 49.97 59.05 63.6 65.83 68.24

Health club 15 16.9 17.93 18 18.47 19.04

Car rental 14.485 18.17 21.47 23.12 23.97 24.78

Shopping arcade 13.75 14.21 14.98 15.64 16 16.96

Business centre 18.06 22.17 26.84 28.91 29.9 30.97

Travel desk 13.75 14.21 14.98 15.64 16 16.97

Others 15 16.9 17.93 18 18.47 19.04

Total (a+b+c) 1518 1668 1847 2125 2428 2778

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OPERATIONAL EXPENSES

ESTIMATED OPERTAING EXPENDITURE FOR SIX YEARS

The table illustrates different levels of expenditure for the first six years of the operation. The

cost revenue ratio is estimated from figures available from the industry. It can be noted that the

cost percentage are based on the fourth and sixth year. This is due to the maintenance and

refurbishment cost which is expected to occur at the end of this year

However, the bank overdraft brings an additional in expenditure for the firm as interest which is

payable per annum

YEAR 1 2 3 4 5 6

Occupancy 60% 65% 70% 80% 85% 90%

ITEM In lakhs

Fuel(1.6 % 0f Total sales) 25.29 26.68 29.55 34 38.85 44.45

Water(0.75 % of total sales) 11.38 12.59 13.85 15.94 18.21 20.83

F&B cost(13% of F&B sales) 45.53 51.37 59.41 83.91 109.51 130.59

Telephone(0.8% of total

sales)

12.64 13.34 14.77 17 19.42 22.22

Electricity(0.91% of total

sales)

13.91 15.17 16.80 19.34 22.09 25.27

105 | P a g e

Maintenance(1.16% of total

sales)

17.70 19.34 21.43 24.65 28.16 32.22

Wages( increased by 5%

every year)

164 172.2 180.4 188.6 196.8 205

Admn/marketing(1.75% of

total sales)

26.59 29.19 32.32 37.19 42.49 48.61

Replacement(2.3% of total

sales)

35.41 38.36 42.48 48.87 55.84 63.89

Repairs (1.03% of total sales) 15.71 17.18 19.02 21.88 25 28.61

Corporation/Tax(1.23% of

total sales)

18.71 20.15 22.71 26.14 29.86 34.17

Misc expenses(0.41% of total

sales)

6.32 6.83 7.57 8.71 9.95 11.38

Total 393.19 421.4 460.3 526.23 595.69 667.24

INTERPRETATION

The above table shows the statement of expenditure for six years. This calculation is used to

calculate the net expenditure during the year. A certain percentage of sales is taken to calculate

the expenditure like fuel, water, telephone, F&B cost, maintenance cost, various taxes, etc., The

total of all expenditure is taken and later subtracted with the revenue to get the profitable

statement.

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WORKING CAPITAL REQUIREMENT

WORKING CAPITAL REQUIRED FOR SIX YEARS

The working capital funds are planned to be met partly by banks as overdraft and partly by

promoters. A month’s capital requirement for raw material is estimated to be 15% and F&B cost

at the corresponding year

The salaries and wages expenditure has o be met by the promoters itself. The liquid cash portion,

which is 1 lakh also has to be raised by the promoters fund.

As per recent notification of RBI, the working capital for a unit should be 20 % of total annual

sales. Using this norm the working capital required for the first four years of operation is

furnished below:

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( in lakhs)

Year Sales Working capital

(WC)

20% 0f sales

Margin money

for WC

(MM)

20% of WC

Banks finance

Wc-mm

1st 1518 303.6 60.72 242.88

2nd 1668 333.6 66.72 266.88

3rd 1847 369.4 73.88 295.52

4th 2125 425 85 340

5th 2428 485.6 97 388.6

6th 2778 555.6 111.12 444.48

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FINANCING THE PROJECT

MEANS OF FINANCE

HDFC@ 16% pa - 1438.45 lakhs

SHARE CAPITAL - 221.3 lakhs

PROMOTORS - 331.95 lakhs

Government subsidy - 221.3 lakhs

DEBT= Rs. 1438.45 Lakh (term loan from HDFC)

Equity= (Subsidy+ Unsecured loan+ Promoters Capital)

=(221.3+221.3+331.95) = 774.55

a) Debt Equity Ratio (D.E.R) : 1438.45: 774.55= 1.85: 1

b) Break Even Point (B.E.P) : 24%

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ESTIMATION OF INCOME

Items 1st year 2nd year 3rd year 4th year 5th year

Operating

levels

65.00% 70.00% 75.00% 80.00% 85.00%

Room Sales 1099 1182 1283 1365 1466

F & B Sales 323.93 394.28 469.02 550.08 634.91

General

Stationery

2.40 2.40 2.50 2.70 2.76

In-house

service

38.32 43.21 49.64 56.65 63.80

Health Club 29.20 35.51 43.80 53.33 60.22

Total In Lakhs 1492.8 1657.2 1848 2027.76 2227.6

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PROFITABILITY STATEMENT

STATEMENT OF PROFIT PROFITABILITY AND CASH FLOW

Items 1st year 2nd year 3rd year 4th year 5th year 6th year

Operating

profit

1265.04 1268.22 1288.63 1477.42 1733.34 2034.6

Interest on

long term

loan

230.18 191.68 153.38 115.02 76.67 38.2

Depreiciation

chap- XII

77.66 58 45.65 36.14 29.68 25.04

Preoperative

&

preliminary

expenses

written off

41.38 41.38 41.38 41.38 41.38 41.38

Interest on

Unsecured

Loan

44.26 35.4 28.32 22.56 18.14 14.5

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Profit before

tax

868.94 938.7 958.48 1280.74 1562.68 1910.41

Tax 40% 347.58 375.48 383.29 512.29 625.07 764.16

Surcharge

(8%)

27.8 30.03 30.67 40.98 50 61.13

Profitable tax 549.16 593.25 605.86 809.43 987.61 1207.38

Depriciation 77.66 58 45.65 36.14 29.68 25.04

Preoperative

&

preliminary

expenses

41.38 41.38 41.38 41.38 41.38 41.38

Available

surplus

668.2 692.63 693.1 886.95 1058.67 1273.8

Long term

loan

instalment

230.18 191.68 153.37 115.02 76.67 38.2

Unsecured

loan

44.26 35.4 28.32 22.56 18.14 14.5

112 | P a g e

Net cash

flow

393.76 465.55 511.41 749.37 963.86 1221.1

This table illustrates the profits and also the cash position at the end of the year.

Depreciation in all fixed assets is calculated by diminishing the value method ( W D V- Written

Down Value Method). This is written off at the rate of 15% per annum on building and

structures, 33.3% per annum on miscellaneous fixed assets.

The term loan and unsecured loans are to be paid back in 7 years after starting the operations,

owing to fluctuating occupancy rates and expenditure levels, by which time the business is

expected to have stabilized.

The balance amount would be paid back in the following years by which time the business would

be stabilized.

The income tax payable is 40% on profit before tax with 8% surcharge on tax.

The preliminary and pre-operative expenses made during construction period is to be written off

in the first 10 years of operation.

A higher degree of depreciation and interest rates cause a project loss in revenue and due to this,

income tax and profit before tax are the loss in the first year.

On the other hand the depreciation that is accounted does not affect the fund position. All these

results in a higher level of net cash flowing in the first year.

113 | P a g e

CASH FLOW STATEMENT

Source of find Constructio

n (3 year

period)

1st year 2nd year 3rd year 4th year 5th year

Promoters contribution 331.95

Long term loan 1438.45

Share capital 221.3

Govt subsidy 221.3

Gross profit 393.76 465.55 511.41 749.37 963.86

Depreciation 77.66 58 45.65 36.14 29.68

Preoperative &

preliminary exp.

41.38 41.38 41.38 41.38 41.38

Total in Lakhs 2213 512.8 564.93 598.44 826.89 1034.92

114 | P a g e

COST BENEFIT ANALYSIS

Cost benefit analysis

Total fixed assets =Rs. 2079.27

Add: - total working capital =Rs. 1233.64

TOTAL (A) =Rs. 3312.12

Total sales for 6 years= Rs. 12364 lac

Less:- a) Cost of F & B expenses (for 6 years) Rs. 5173.04

b) Cost of fuel (for 6 years) Rs. 345.18

c) Cost of power (for 6 years) Rs. 431.5

Total Rs. 5949.72

TOTAL(B)= Sales – (a+b+c)= 6414.28

C. Capital intensity of a project

C= B/A

= 6414.28/3312.12= 1.94

MORE THAN 1 IS BENEFICIAL FOR THE ECONOMY

LESS THAN 1 IS NOT BENEFICIAL FOR THE ECONOMY

115 | P a g e

BREAKEVEN ANALYSIS

It is a study of cost revenue and sales. It finds out the volume of sales required by the firm cost

and revenue to be equal. The break even point is the point when the net incomes zero. It is a

situation of no profit and no loss.

The Break even analysis explains to us the relationship between cost revenue and output that

helps a firm sell to its full competence. This analysis forms an important bridge between the

plans of the firm and business behavior.

LIMITATIONS OF BREAK EVEN ANALYSIS

This analysis has a number of limitations as the data collected is not on the cost and revenue

functions. The limitations are as follows:-

If in static, everything is sold at constant selling price but in reality larger volumes

may not be sold at same price.

The way future is projected with the part is not correct.

116 | P a g e

Factors like technological changes, improved management have been overlooked.

The cost revenue output relation is linear which is true for a small volume of output.

Assumed for the 3rd year operation occupancy= 75%

1. Estimated revenue: 1848 (Rs. In Lakhs)

2. Fixed costs ( fixed overheads):

a) Power 40% : 17.71

b) Salaries and wages : 45.28

c) Interest on long term loan: 153.38

d) Insurance and legal exp. : 1.77

e) Depreciation : 45.65

f) Advertisement and publicity: 88.54

g) Administration & general expenses: 17.71

Total 370.04

3. Variable Cost:

a) Raw material : 187.60

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b) Electricity and power 60% 28.40

c) Repairs and maintenance 10.00

d) Interest on working capital 3.54

e) Misc expenditure 50.00

Total 279.54

4. CONTRIBUTION TOWARDS OVERHEADS

= Income- Variable Cost

=1848-279.54= 1568.5

5. BREAKEVEN POINT

= [Fixed overheads/Contribution] x 100

= [370.04/1568.5] x 100

=24 %

6. ABSOLUTE BREAKEVEN POINT

= [Breakeven point x % of occupancy] / 100

= 18

7. BREAKEVEN TURNOVER

= [estimated revenue x absolute breakeven] / 75

= 443.52 (Rs. in lakhs)

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DEBT SERVICE COVERAGE RATIO:

DEBT SERVICE COVERAGE RATIO (DSCR) for the year is calculated by dividing the total

coverage including tax, depreciation, preliminary and pre-operative expenses by the total debt

from first year to sixth year. The average DSCR is calculated by dividing the total of all debt

ratios by six. Thus average DSCR comes out to be:

Coverage-A 1st year 2nd year 3rd year 4th year 5th year 6th year

Profit before

tax

549.16 593.25 605.86 809.43 987.61 1207.38

Depreciation 77.66 58 45.65 36.14 29.68 25.04

Interest on

long term

loan

230.18 191.68 153.38 115.02 76.67 38.2

Preliminary

and

preoperative

expenses

41.38 41.38 41.38 41.38 41.38 41.38

Total 898.38 884.31 846.27 1001.97 1135.34 1312

119 | P a g e

Coverage -

B

1st year 2nd year 3rd year 4th year 5th year 6th year

Interest on

long term

loan

230.18 191.68 153.38 115.02 76.67 38.2

Installment

on long

term

239.7 239.7 239.7 239.7 239.7 239.7

Total 469.88 431.38 393.08 354.72 316.37 277.9

Average DSCR = Coverage A- Coverage b

= 6078.27/ 2243.33= 2.7

It is more than one so it is beneficial.

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SENSITIVITY RATIO

Sensitivity Ratio

A. Change in income for 1% change in occupancy

= income (3rd year)/ occupancy (3rd year)

= 1847.0/ 70

= 26.38

B. Change in cost for 1% change in occupancy

= variable cost (3rd year)/ Occupancy (3rd year)

=558.37/ 70

=7.97

C. Sensitivity in income for 1% change in occupancy

=A/ B

= 26.38/ 7.9

= 3.3

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CONCLUSION

The total cost of the project is estimated at Rs. 1210. 50 lakhs. There are 62 rooms out of which

40are double rooms and 22 are suite rooms. The hotel also provides facilities like coffee shop,

conference hall, specialty restaurant, bar, travel desk, etc.

The estimated income and expenditure have been arrived by keeping in view the economic cost

in which service can be offered to the prospective customer. The debt equity ratio is 1:85:1 a

well combination of debt and equity finance. The ratio of depreciation of assets and preliminary

and preoperative expenses has been kept down fairly reasonable limit, which should prove to be

satisfactory.

122 | P a g e

BIBLIOGRAPHY

Books

1. Khurana R. & Ravichandran A.N. Strategic Marketing Management: Concepts and Class

(1995), Global Business Press, New Delhi.

2. Reich A.Z., Marketing Management for the Hospitality Industry: A Strategic Approach

(1997), John Wiley & Sons Inc., New York.

3. Porter, M.E. Competitive Strategy. Techniques for and analyzing industries and competitors

(1980), New York, Free Press, pp. 89, 149.

4. Abbott P. and Lewry S. (1991), Front Office: Procedures. social skills and management.

Butterworth Heinemann.

5. Coltman, M. (1991), Financial Control for your Hotel. John Willey & Sons, Inc.

6. Kasavana M. and Brooks R. (1995), Managing Front Office Operations. Fourth Edition,

Educational Institute.

123 | P a g e

Websites

www.fhrai.com

www.hotelinteractive.com

www.thomsonlearning.co.uk

www.hcima.com

www.ehotelier.com

www.hotelier&caterer.com

www.fooddude.com

www.biz.yahoo.com

www.restaurant.org

www.hotel-online.com

www.cio.com

www.entrepreneur.com

www.mckinseyquarterly.com

124 | P a g e

ANNEXURE

ANNEXURE

Cost of Land = Land Required in Sq ft X Rate per Sq ft

= 25,000Sq.ft X 2,000Sq.ft

= Rs.500 lakhs

10% for Conveyance =Rs.50 lakhs

4.15% for Site Development = Rs.20.75 lakhs

Total =Rs.5, 70, 75,000

=Rs.570.75 lakhs

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COST OF BUILDING

DESCRIPTION AMOUNT

Total Built up Area (Sqft) 57970 sq. ft.

Rate/Sq ft 400/ sq. ft.

Cost 231,88,000

15% of Electrical Work

34,78,200

4.36% on Plumbing & Drainage 101,09,97

5% on Consultant 11,59,400

Total 28836597 (Rs.)

Therefore the cost of building is Rs 288.36 lakhs.

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PLANT & MACHINERY

Items Cash in lakhs

Central Air Conditioner 17.725

Elevators 12.475

‘Generator 16.7375

Transformer 16.475

Bore Well 8.00

Boiler 14.475

EPABX 5.75

Instruments 6.7375

Exhaust & Ventilation 11.00

Close Circuit Television 7.00

127 | P a g e

Kitchen Equipment 15.475

Fire Fitting 9.00

Total 140.85

128 | P a g e

FURNITRE and FIXTURE:

GUEST ROOMS & SUITES

Items Price(Rs/ piece) Nos. Total (in Lakhs)

Twin Bed 5,000 11 0.55

Double Bed 11049 51 5.6349999

Side Table 1841 135 2.4856

Chairs 1860 100 1.86

Coffee Table 3180 84 2.672

Cupboard 3333 84 2.8

Luggage Rack 4004 62 2.4823

Magazine Rack 3358 62 2.082

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T.V. Stand 2984 84 2.50623

Carpet 4839 62 3.00

Mirror 1038 124 1.287

Washbasin

Bathtub

Water Closet

13515 62 8.379203

Upholstery 3000 124 3.3306666

Dressing Table 3965 84 2.95

Fixtures - - 3.00

Total 45.02

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FOOD & BEVERAGES OUTLET

RESTAURANT

Items Price Nos. Total

Tables 2461 13 0.32

Chairs 646 52 0.336

Side Station

7500 4 0.30

Décor & Upholstery

35600 All Inclusive 0.356

Fixtures 32800 All Inclusive 0.328

Music system 25,000

1

0.25

Bar counter 40600

1

0.406

Total - 2.30 lakhs

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ROOM SERVICE

Item Price (RS) No’s Total (Lakhs)

Breakfast Trays 266 20 0.0532

Tea Trays 160 30 0.048

12” Salvers 266 15 0.040

9” salvers 208 10 0.0208

Trolleys 1530 4 0.0612

Racks 2680 3 0.0804

Order-Taker Cabin, Desk 7120 1 0.0712

Misc 3000 1 0.030

TOTAL 0.405

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BANQUET / CONVENTION HALLS

Item Price (RS) No’s Total (Lakhs)

Tables 3000 100 3.0

Chairs 100 300 3.0

Carpet 3000 4 0.12

Podium 2000 2 0.04

P A system 7000 1 0.070

12” salvers 666 12 0.08

Fixtures and Upholstery 0.406

TOTAL 6.716

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STORES, PURCHASE AND HOUSE KEEPING

Item Price No. Total (Lakhs)

Cupboard 3000 6 0.18

Racks 2500 5 0.125

Shelves 2500 8 0.20

Bins 1000 6 0.06

Fixtures --- 0.18

TOTAL 0.823

ADMINISTRATION


Tables 3000 5 0.15

Chairs 1000 15 0.15

Fixtures --- --- 0.08

TOTAL 0.38

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RECEPTION AND LOBBY


Counter 3500 6 0.21

Sofa Set 9000 3 0.27

Luggage Carrier 6000 1 0.060

Stationary --- --- 0.13

Safe Deposit 2000 1 0.02

Cup Board 10000 1 0.10

Fixtures --- --- 0.18

Miscellaneous --- --- 0.10

TOTAL 1.07

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STAFF CAFETERIA


Tables and chairs (attached

benches)

3000 15 0.45

Fixtures --- --- 0.09

TOTAL 0.54

Grand Total = 57.254

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MISCELLANEOUS FIXED ASSETS

F&B Outlets

RESTURANT/BAR

Item Price (RS) No.

(Inc Par Stock)

Total (Lakhs)

Table Cloth 250 39 0.078

Napkins 60 156 0.022

TOTAL 0.10

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BANQUETS/ CONFERENCE

Item Price (Rs) No’s

(Inc Par Stock)

Total (Lakhs)

Table Cloth 300 150 0.5

Napkins 60 600 0.132

Frills 400 150 0.316

TOTAL 0.95

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GUEST ROOM / SUITE ROOM LINEN

Item Price (Rs) No.

(Inc Par Stock)

Total (Lakhs)

Double Bed Sheet 2250 35 0.48

Single Bed Sheet 1371 20 0.45

Blankets 1160 62 0.58

Blanket Cover 556 72 0.40

Mattress 1,112 72 0.80

Mattress Protector 605 72 0.435

Bed Covers

(single, double)

604 72 0.435

Pillow Cover 195 200 0.39

Hand Towel 375 80 0.30

Bath Towel 543 80 0.435

Bath Mat 543 80 0.435

Feather pillows 218 200 0.435

TOTAL 6.01

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KITCHEN STEWARDING

Item Price per set (Rs) No (sets) Total (Lakhs)

Glasses 80 250 0.20

Chinaware 140 200 0.28

Cutlery 72 250 0.18

Flat Ware 120 200 0.24

Miscellaneous --- 0.03

TOTAL 1.2

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BANQUETS

Item Price per set (Rs.) No. (sets) Total (Lakhs)

Glassware 224 250 0.56

Chinaware 253 300 0.76

Cutlery 133 300 0.40

Flat Ware 150 400 0.60


TOTAL 2.904

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STAFF CAFETERIA

Item Price (RS) No.( per set) Total ( Lakhs)

Plates 350 120 0.42

Spoons 127 150 0.19

Forks 126 150 0.19

TOTAL 0.8

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MISCELLANEOUS HOUSEKEEPING ASSESTS

Item Price (Rs) No’s Total (Lakhs)

Vacuum Cleaner 3000 3 0.30

Cleaner Mug 2000 4 0.10

Mops 150 10 0.20

Brooms 70 10 0.18

Squeezer 80 10 0.12

Duster 10 100 0.075

Waiters Cloths 10 100 0.15


TOTAL 1.2

Grand Total: 13.16

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MARGIN OF CONTINGENCY

1. Cost of Land = 570.75

2. Cost of Building = 288.36

3. Plant and Machinery = 140.85

4. Furniture and Fixture = 57.25

5. Miscellaneous Fixed Assets = 13.16

Margin of Contingency = 10% on 1-5 = 107.03

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PRELIMINARY AND PRE-OPERATIVE EXPENSES

Item Amt (lakhs)

Salary and Wages 13.70

Loan Procurement and Application 2.25

Project Fee 5.00

Registration and Establishment Fees -

Insurance 4.25

Advertisement and Publicity 3.00

Deposits

1. Electricity

2. Telephone

3. Water supply

1.00

1.50

1.00

Miscellaneous Expenses and Contracts 1.40

TOTAL 33.1

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MANPOWER REQUIREMENT AND COST

SALARY &WAGES (YEARLY)

Sr. no. Description No. of Staff Amount Total

In lakhs

51. General

Manger

01 50,000 6

52. Assistant

manager

01 32,000 3.84

53. PA to GM 01 19,000 2.28

54. FO Manager 01 28,000 3.36

55. Lobby Manager 01 20,000 2.4

56. Bell Captain 01 10,000 1.2

57. Bell Boys 04 28,000 3.36

58. Telephone

Operator

02 8,000 0.96

59. Telephone

Supervisor

01 7,500 0.90

60. Front office 02 19,000 2.28

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assistants

61. Executive Chef 01 40,000 4.8

62. Sous Chef 02 30,000 3.6

63. Chef de Partie 05 60000 7.20

64. Commies 20 1,60,000 19.2

65. F&B Manager 01 30,000 3.6

66. Restaurant

Manager

02 40,000 4.8

67. Banquet

Manager

02 36,000 4.32

68. Captain 04 34,000 4.08

69. Steward 16 1,20,000 14.4

70. Barmen 03 18,000 2.16

71. Room service

Manager

01 10,000 1.20

72. Order Taker 03 19,500 2.34

73. Steward room

service

06 36,000 4.32

74. Executive

Housekeeper

01 22,000 2.64

75. Assistant

Housekeeper

01 18,000 2.16

76. Floor 04 40,000 4.8

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Supervisor

77. Linen room

supervisor

04 20,000 2.4

78. Uniform room

supervisor

02 18,000 2.16

79. HK Store

Supervisor

01 8,000 0.96

80. Housemen 15 1,05,000 12.6

81. Gardner 02 8,000 0.96

82. Kitchen

Stewarding

Supervisor

01 8,500 1.02

83. Asst KSt

Supervisor

01 7,000 0.84

84. Pot Washer 04 16,000 1.92

85. Chief Engineer 01 7,500 0.90

86. Technicians 05 20,000 2.4

87. Security

Manager

01 6,500 0.78

88. Security

Personnel

04 22,000 2.64

89. Doorman 02 10,000 1.2

90. S & M 01 14,000 1.68

148 | P a g e

Manager

91. S & M

Executives

02 20,000 2.4

92. Assistants 02 16,000 1.92

93. Personnel

Manager

01 16,000 1.92

94. Asst. Personnel

Manager

01 12,500 1.5

95. Assistants 02 15,000 1.8

96. Accounts

Manager

01 14,000 1.68

97. Cashier 02 20,000 2.4

98. Clerk 02 17,400 2.088

99. Purchase

Manager

01 16,000 1.92

100. Purchase

Assistants

02 18,000 2.16

Total - 147 164.448

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INCOME FROM TARIFF

DOUBLE ROOM

Year Room Tariff Occupancy Days/Year Total (Lakhs)

I 2500 65% 365 367.73

II 2500 70% 365 396.02

III 2500 75% 365 424.31

IV 2500 80% 365 452.6

V 2500 85% 365 480.88

VI 2500 85% 365 480.88

150 | P a g e

SUITE ROOM

Year Room Tariff Occupancy Days/Year Total (Lakhs)

I 3600 65% 365 529.54

II 3600 70% 365 570.27

III 3600 75% 365 611.01

IV 3600 80% 365 651.74

V 3600 85% 365 692.47

VI 3600 85% 365 692.47

Room Sales

I YEAR = Rs.897.27

IIYEAR = Rs.966.29

IIIYEAR = Rs.1035.32

IV YEAR = Rs.1104.34

V YEAR = Rs.1173.35

VI YEAR = Rs.1173.35

151 | P a g e

REVENUE FROM F & B OUTLETS

RESTAURANT/ BAR

Year Total

Covers

Occupancy

Average

realization

per cover

No of days

per year Total

(Lakhs)

I 150 65% 400 365 142.35

II 150 70% 400 365 153.3

III 150 75% 400 365 164.25

IV 150 80% 500 365 219

V 150 85% 500 365 232.68

VI 150 85% 500 365 232.68

152 | P a g e

COFFEE SHOP

Year Total

Covers

Occupancy

Average

realization

per cover

No of days

per year Total

(Lakhs)

I 180 65% 700 365 298.93

II 180 70% 700 365 321.93

III 180 75% 700 365 344.92

IV 180 80% 750 365 394.2

V 180 85% 800 365 446.76

VI 180 85% 800 365 446.76

153 | P a g e

BANQUET

Year Total

Covers

Occupancy

Average

realization

per cover

No of days

per year Total

(Lakhs)

I 300 65% 900 365 640.57

II 300 70% 900 365 689.85

III 300 75% 900 365 739.12

IV 300 80% 950 365 832.2

V 300 85% 1000 365 930.75

VI 300 85% 1000 365 930.75

154 | P a g e

F&B Sales

I YEAR = Rs.1081.85

IIYEAR = Rs.1165.08

IIIYEAR = Rs.1248.29

IV YEAR = Rs.1445.4

V YEAR = Rs.1610.19

VI YEAR = Rs.1610.19

Documents

Opening a Four Star Hotel in Faridabad