sip hotel industry

7/27/2019 sip hotel industry

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CHAPTER -1

INTRODUCTION

1.1 INTRODUCTION TO HOTEL INDUSTRY

Hospitality is all about warmth to someone who looks for help at a strange or

unfriendly place. It refers to a process of receiving and entertaining a guest with

goodwill. Hospitality in the commercial context refers to activities of hotels.

According to British laws a hotel is a place where a bonafied traveler

can receive food and shelter provided he is in a position for it and is in a fit condition

to receive. (Bonvin, 2003)The hotel industry is a 3.5 trillion dollar service sector within the globe economy.

The industry is cyclical in nature as dictated by the fluctuation that occurs with an

economy every year. Today hotel industry is one of a fastest growing sector in India.

It is expected to grow at a rate of 8% between year 2007 to year 2016. It is also

estimated that hotel industry and tourism will account for nearly 5.3% of GDP and

5.2% of total employment. The boom in travel and tourism industry has led to the

further development of hotel industry. (hospitality industry, 2009)

According to a report hotel industry in India currently has a supply of

110000 rooms and there is a shortage of 150000 rooms fuelling hotel rooms rates

across India. To overcome this shortage industry is adding 60000 quality room which

should be ready by 2014.

The future scenario of Indian hotel industry looks extremely rosy. It is

expected that the budget and mid-market hotel will witness huge growth and

expansion while the luxury segment will continue to perform extremely well over the

next few year. (Hotel sector analysis report, 2011)


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1.2 History background of the company

This all began in way back 1999 when with the efforts of Mr. Rajesh kumar waliaand their father late Mr. lakshman walia the hotel opened its doors. The iconic hotel

soon became the citys venue of choice for glittering balls, presidential visits and

political gatherings, making the name hotel Paras synonymous with place of

occasion.

The hotel was first to introduced E-conferencing technology in the city in 2005. The

hotel has scene many celebrities, political leaders and people for different

backgrounds. Tourism has always been a priority to the hotel. They introduced wild

life safari, track camping etc and other competitors followed their footsteps.

The hotel completed their 45 rooms construction and to add a lot of transformation in

2009. It altogether changed the image of hotel so as there fortune. Hotel became an

eye of attraction for the tourist and a place of hanging out for local city crowed.

(hotel introduction , 2009)

1.3 Product portfolio and business of the company

Hotel industry is known as the commercial context of hospitality.

The services provided by hotels are very diversified. The product portfolio of Hotel

Paras is also very strong.

List of services offered by the hotel is as follows

45 quality rooms available as according to the budget of customers of al class.

2 restaurants serving food of many types and specializing in Indian (Punjabi)

food.

1 conference hall with a capacity of over 120 person.

A special dine inn with a kitchen garden.


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1.3.1 Major business

The major business that hotel get is from the tourism. The 70% of the total sales

turnover of the firm is from tourists.

The hotel also enjoys a kind of monopoly in serving Indian food in the city as no

other competitor can serve the same quality and taste.

The hotel failed to get much business from the companies and corporate of the

city but looking forward to cover the same by many promotional programs.

1.4 Profitability

The firm has a total sales turnover of over Rs 90 lacs per year with the profit margin

of over Rs 63 lacs as stated by the previous year balance sheet of the firm.

The firms total sales turnover was just Rs 47 lacs in 2007 before the transformation

process.

The hotel has a target of Rs 1.05 cr for the next financial year and hotel is well on itsroad to achieve the target. (Hotel paras, Balance Sheets, 2013)

1.5 Market share and major competitors

The hotel has a privilege of being one of the old names in the market and the easyto access location over their competitors.

As where market share is concerned hotel holds the 2nd major market share after

the hotel Visco resorts. Hotel covers 35% of the total sales turnover of the hotels in

the city.

The major competitors of hotel are


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Visco resorts, mandi.

Hotel River bank

Hotel regent palm

Hotel velly view.

Organization structure

CEO

MR. Rajesh walia

Head manager

MR. raj kumar malhotra

front desk manager

Mr. dhyan singh thakur

supervisor (rooms)

Mr. Desh raj singh

supervisor (restaurant)

MR. sanjay verma


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1.6 SWOT ANAYSIS:

There are some strength too which is still making the hotel work successfully.

1.6.1 STRENGTH:

LOCATION:

According to me the biggest advantage which Paras hotels have is its location on the

running highway and when corporate comes from outside city they prefer to stay in this

hotel because it is easy to reach to the meeting point, or location which would probably

be near the highway and approachable to the tourists too.

HIGHLY SKILLED EMPLOYEES:

Employees working in the firm are person selling meetings and by using their personal

relations, they are doing good job for their hotel.

MORE TYPES OF ROOMS:

Hotel Paras is popular for its types of rooms.Like standard single and double, deluxe

premium and double, deluxe and executive suits. This quality differentiates Hotel Paras

from the other hotels.

EXPERIENCED STAFF:

Staff mostly from the marketing department is highly experienced and they have every

knowledge about the marketing and because they have worked in other hotels or

marketing departments of other companies before so they can understand the situation

very well.


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AFFILIATION:

One more big advantage the Hotel has is its affiliation, especially with the Hotels in

Manali so this helps a lot to transfer their guests in very moderate rates

TARGET MARKET:

Hotel Paras mostly deals with tourist customers as well as business clients.

MODERATE RATES:

Competitors of hotel Paras are Visco resorts, Holiday inn hotel, River Bank hotel, and

Valley View hotel .And compare to them rates of Hotel Paras are more adjustable.

1.6.2 WEEKNESS:

DISCREPANCIES AMONG STAFF:


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Thats what I have noticed that there is some unhealthy professional jealousy among

the people working in the organization. Which is effecting the Hotels performance over

all. And there is a bit less team work among employees

INCOMPETENT EMPLOYEES:

There are some incompetent but old employees which are working because of good

relationship with the owner which is decreasing the our all efficiency of the hotel.They

are now in some powerful positions which can be reason for the hotel decline in the

future hotel position.

SWIMMING POOL:

Mostly good hotels have swimming pools but not in hotel Paras because its location

does not allow them to make it. And there is no place left for building a swimming pool.

Sometimes customer prefers swimming pools.

LACK OF INTERNEES

They are not interested in for internships. They usually prefer full time workers. When I

was doing internship at that time I was the only internee in the whole hotel. Their

performance can improve by giving more opportunities internees.

FAVORITISM:

The promotions and bonuses etc are often powered by seniors favoritism or depends


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upon their wills and decision. This adds to the negative factors, which denominate the

employees thus resulting in affecting their performance negatively.

LACK OF SPACE:

With the growing needs I think the space of the hotel is bit less, they should do

something to solve this problem. Space gives a good open looks to the hotel like other

big hotels. But in thatit is hard to do so.

LACK OF GARDENS:

Gardens give a new and fresh looks to hotel where you can have seasons plants

growing seasons flowers and gives the broader looks to the hotel. And may be

customers like to have some open.

LESS ROOMS FOR A CROWDED SEASON:

In the overcrowded season of April-July hotel has seen the shortage of rooms. As the

demand of rooms increases by 200% and rooms available are far less. This adds to onr

of the limitation as the regular customers need suffer because of it.


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1.6.3 OPPORTUNITIES:

INNOVATION:

For growth everyone has to innovate and find new idea and make new solutions. Its not

easy to make an innovation but just to do anything in a new way is innovation. Hotel has

also planned to employ such plans to get there growth going.

LOW RATES:

Hotel has realized that by reducing the room prices in the off seasons the hotel can

take good business. But all this should be done by person to person basis. Hotel has

planned to give special discounts to regular business clients.

GROWTH OF THE BUSINESS SECTOR:

India is a developing country where business is growing day by day and as the business

grows the need of hotels will increase and there will be the opportunities , and thats the

reason why there are many projects building in the city.

INCREASE OF LINKS AND AFFILIATIONS:


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In the environment of competition a hotel can only grow by increasing its affiliation and

links. For obvious reasons hotel with better links with business customers will have

more guests. Hotel Paras has also increased their links and business over a period of

time and planning to go at a even higher level.

1.6.4 THEREATS:

.

THE DECLINE IN HOTEL INDUSTRY:

The Hotel industry is among the top three constituents of the world economy after oil

and autos and is growing faster than the petroleum and arms. It is larger than

automobile industry in Japan, agriculture in the U.S.A. and banking in Switzerland.

It is unfortunate to know that instead of growing with world trend, the tourism industry n

India has increased but at very slow pace as the revenue generated services. Its

importance can be judged by the fact that it is the only industry that earns the foreign

exchange without exporting anything.

The hotel industry with its charming and lively environment is apparently flourishing but

the reality negates the fact and depicts the other side of the story . Most of the hotels

and motels here, particularly in the far flung areas, hill stations and the tourists spots

and even in the major cities are dependent upon tourism, international business tri


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1.7 CONTEXT OF STUDY:

Aim of the study

To measure the change in sales turnover of the hotel in context of the change in

expenditure on sales promotion program and to recommend the appropriate ways to

achieve the maximum profit out of it.

The report also aims at improving the sales and promotion techniques and suggesting

the firm the limitations of the present promotional program.

Objective of the study

To study the impact of change in promotional programs on the sales turnover.

To analyze the impact of changing sales promotion techniques and to find out the

limitations of the previous planes.

To evaluate the level of business the firm gets from this trade promotion

program.

To recommend the firm about the new areas of enhancement in trade as well as

consumer promotion.

1.7.1 Relevance to the company :

This study can help the firm to understand that whether the expenditure on sales

promotion are worthwhile or not. It will help them to understand the level of such impact.

Company can find out those trade promotion techniques that gives no business to them

and try to minimize effort on such techniques.


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Chapter-2

Task Process

Task Process is the work done by the student and how he went

ahead with the task, and limitations with respect to task

completion related to the company.

ABOUT THE PROJECT

2.1 OBJECTIVE OF THE STUDY:

This report was commissioned to examine how sales turnover of Hotel Paras changes

with the application of promotional techniques.

The objective behind doing this study is to figure out the pattern of change of sales

turnover with the change in level of promotional techniques commenced before there

tourist season.

Change in level of promotional techniques?

From last few year hotel has understood the value of promoting the hotels name and

using trade promotions for attracting new business.

The previous promotional programs adopted by the hotel includes :

Covers references from other hotels in Manali, Shimal and Chandigarh.

Covers taxi unions of Chandigarh, Manali, shimla, and Delhi.

Few travel agents on commission bases from Manali,Delhi and Kolkata


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Change in level of promotion covers the following:

Joined some new big business associates (travel agents) from Delhi like pankire

travels, Swaghatam travels etc.

Attended 2 big trade fairs in Delhi and Kolkata covering a good chunk of localsmall travel agents, providing them catalogs, brochures and visiting card.

Made Online booking available directly on hotels website with exciting offers.

Meetings with the high level corporate managers of the city to introduce them to

the new corporate schemes for the bookings.

Covers more taxi unions in Chandigarh and Delhi providing them catalogs,

brochures and visiting card and introducing them to the new commission

schemes.

The task process I was assigned was to execute the promotional program

designed for the year 2013-14.

The promotional program for 2013-14 covers-

Visit to the taxi Union offices in Delhi, Manali and Chandigarh. Arrange Meetings with the high level corporate managers of the city to introduce

them to the new corporate schemes for the bookings.

Attend trade fairs in Delhi and Kolkata.

Maintain the daily account book, help the manager in evaluating the luxury tax.

Send emails to the clients and responding to their feedback and responses.


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Visit new business associates in Delhi and Chandigarh to convince them to enter

in to a contract for permanent bookings.

Plan to visit corporate offices in other cities in Himachal Pradesh or to arrange

meetings cum lunch parties to introduce them with new corporate planes.

2.2 To execute the same plane a design was made with different schedules and

time tables.

Time period Schedule

May 30 June 1 Tour Delhi to have a meeting with big travel

giants like Panikers, Swaghatam,Haryyson etc.

Cover old business associates and taxi unions.

June 1

June 4 Tour Chandigarh to have meeting new travelagents. Cover old business associates and taxi

unions.

June 5 June 7 Tour Manali to have meeting new travel agents.

Cover old business associates and taxi unions.

June 8 June 15 Planning for the lunch meeting with the

corporate managers of the city. It includes

Invitation to the offices, preparation of the

event and presentation for the event.


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2.3 Limitations while task completion -

I was not able to complete the whole promotion process which

was followed by the tourist season as the time required to

complete the assignment was not enough.

June 15 June 22 Attended trade fair arranged in ITC Morya, New

Delhi.

June 23 June 30 Attended trade fair arranged in Hyatt Regency

hotel, Kolkata.

June30 July15 Accounts handling, sending ebrochures,

compiling data for project.


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Chapter 3Analysis and discussion

3.1 Analysis

The objective of my study was to examine the impact of change in technique and

expenditure on sales promotion process over the sales turnover of the firm. To study the

same impact I have gone through the financial statements of the firm from the financial

year 2012 -13 to 2013-14 (till August 2013) .

The study draws attention to the fact that as according to the sales account and balance

sheet the sales turnover of the firm in 2012- 2013 was around Rs 52 lacs and the

expenditure incurred on the sales and promotion program was around 1.7 -1.9 lacs.

And in the financial year 2013-14 (till august 2013) the sales turnover came out to be

around 42 lacs. And as calculated the overall expenditure on the sales promotion

program was around 3.75 (from april 2013 till june2013).

To make the study more accurate and precise we have decided to take expenditure on

sales and promotion from month April to May and sales turnover from April to July. The

same financial information is presented in the following table.


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Particulars 2012-13(April-August) 2013-14 (April-august)

Sales turnover 35 lacs 42 lacs

Particulars 2012-13(April-June) 2013-14(April-June)

Expenses on sales

promotion program

1.7 lacs 3.75lacs


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To get the exact idea of the impact of the promotional program

and the conversion rate of trade promotion in depth study of the

reservation books and visitors entry book was done for the

months April- August 2012 and April-August 2013 and following

results were found.

Particulars April August (2012) April August (2013)

No of room

booking 1860 Rooms 2640 Rooms

In terms of

Sales (in

rupees)

2232000 3168000


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(Hotelparas, Fiancial statements, 2011-2013)

0

500

1000

1500

2000

2500

3000

2012 2013

No of Rooms

No of Rooms

0

5

10

15

20

25

30

35

2012 2013

sales (in rupees)

sales (in rupees)


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3.2 Discussion

As according to the analysis done on the impact of change in sales promotion

program over the sales turnover following interpretations can be made

Sales turnover has increased by 20% due to change in expenditure

incurred over sales promotion program and enhancement in the

promotional program by adding new business associates and attending

trade fairs in Kolkata.

Only Kolkatas trade fair benefited the firm by over 600 room bookings.

The increase in sales promotion expenditure from the year 2012- 13 is

about 120%, but the firm in the beginning of the project decided to

increase it by just 50%.

Even 120% rise in sales promotion expenditure could only get 20% rise in

sales turnover which is far less. But it should be included that theconversion time of such trade promotion is not limited to 3-4 months.

There benefits can be availed for long.

The main finding that can be considered from the study is that this trade

promotion program has increased the sales by 42%.

Sales turnover converted due to trade promotion was just 22.32 lacs

which increased to 31.68 lacs. And the number of reservation for such

rooms increased by 780 rooms which is quite impressive.


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The results of the promotional program could have been much more

favorable if the Manalis tourist season was not affected due to

natursudden climate change and Uttrakhands natural disaster.

Chapter 4

Summary, Conclusions and Recommendations

4.1 Summary

This report was commissioned to examine how sales turnover of Hotel Paras changes

with the application of changed and enhanced promotional techniques. It covered the

comparison of last year sales with the sales of this year after the promotional program

being commenced to increase the sales volume and to recommend the appropriate

ways to achieve the maximum profit out of it.

The research draws attention to the fact that the sales turnover of the firm in 2012- 2013

(April-August) was around Rs 35 lacs and the expenditure incurred on the sales and

promotion program was around 1.7 -1.9 lacs. But in year 2013-14 (April-August) the

sales were about 42 lacs and the expenditure incurred on the sales and promotion

program was around. The trade promotion program has increased the sales by 42%.

Sales turnover converted due to trade promotion was just 22.32 lacs in 2012-13 which

increased to 31.68 lacs. And the number of reservation for such rooms increased by

780 rooms which is quite impressive. The increase in sales promotion expenditure from

the year 2012- 13 is about 120%, but the firm in the beginning of the project decided to

increase it by just 50%.

Many of the promotional techniques did not contribute to the sales turnover and hence

have no conversion. Such techniques like sending E-broachers can be considered as

waste of effort and should be minimized.


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Conclusion and Recommendations

4.2 Conclusions:

The impact of this sales promotion program can be judged by

the fact that sales turnover for the same time period in 2013

increased by 7 lacs.

But the impact was not enough as the increase expenditure on

sales promotion was 5 fold more than the increase in actual

sales.

While considering the impact of sales promotion on sales it

should be included that the conversion time of such trade

promotion is not limited to 3-4 months. There benefits can be

availed for long.


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It was not possible to complete the whole promotion process

which was followed by the tourist season as the time required

to complete the assignment was not enough.

4.3 Recommendations

The time period selected for the sales promotion program is not

appropriate as it is very close to the tourist season and trade

promotion gets very less time to show results. The best suitable time

for such promotion is from January to April of every year.

The firm should minimize the trade promotion practices that have noconversion in to business like E-broachers, trade fairs in local areas

of Himachal Pradesh.

To attend more and more trade fairs and contact more travel agents

in Kolkata and areas adjoining to it as the response from the agents

was notable.

To plane and enhance the promotional programs in Maharashtra and

Gujrat and Rajesthan because as according to a survey 35% of the

tourist in post- tourist season come from these states.


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To try and execute a program with help of local authorities to promote

tourism in the city by highlighting the beautiful surroundings and

natural side scene.

Bibliography

Bibliography

Bhardwaj, C. R. (2013). balance sheets(2007-2013).

Bonvin, J. L. (2003). Retrieved from hospitalitynet:

http://www.hospitalitynet.org/news/4017990.html

hospitality industry. (2009, 11). Retrieved from wikipedia

hotel introduction . (2009, september). Retrieved from hotelnewparas.com: hotelnewparas.com

Hotel sector analysis report. (2011, november). Retrieved from equitymaster.com :

www.equitymaster.com/research-it/sector-info/Hotel-Sector-Analysis-Report.asp

paras, h. (2011-2013).financial statements. Mandi (HP) : Hotel new Paras .


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