HOTEL INDUSTRY
AN ASSIGNMENT ON HOTEL INDUSTRY
Submitted by
ANZAR SHERIF
1st year MBA
Institute of co-operative management
Poojapura
Trivandrum
Starting with hotel industry
General features
The travel and hospitality industry continues to be the sector, which has largely profited from the fast growing economy of India. Though First of the Year 2009 had been tough year with tourist inflow declining by 4% Year over Year on account of economic slowdown and terror attacks, it has grown at a CAGR of 13% in the past 5 years. Higher GDP growth, rising income, demand supply mismatch and strong government focus would continue to aid the industry.
India occupies forty-sixth position among the sixty tourist destinations in the world. A flourishing economy helped boost demand for the industry. To encourage the tourism sector, the government is planning to propose a conditional 10-year tax holiday for all tourism projects in the country. Companies will enjoy full tax exemption up to 50% of profits, but will qualify for tax benefits for the remaining amount only if they re-invest it in tourism projects.
The Centre and States are also working out a PPP (Public-Private-Partnership) model to increase hotel capacity. Efforts to diversify tourist attractions by offering new products such as wellness tourism, medical tourism and golf tourism are expected to have a positive effect on both foreign tourist arrivals and domestic tourism
The five star hotel segment has grown the fastest during the last five years clocking a CAGR(Compound Annual Growth Rate) of 12%. Further this segment can be divided into 3 sub-segments namely Luxury, Business and Leisure. The growth in this segment indicates the type of travelers coming into the country.
The Planning Commission's High Level Group on services sector has pegged the
room shortage in the country at 150,000 rooms by 2010, out of which more than
100,000 will be in the budget category. Not only the Indian hotel majors, but even
international players have lined up huge capex plans. Investments of US$ 11 bn
over the next 2 years are expected to be earmarked for the hotel industry in India.
Types of Hotels in Hospitality Hotel Industry
Commercial Hotels
Airport Hotels
Conference Centers
Economy Hotels
Suite or All-Suite Hotels
Residential Hotels
Casino Hotels
Resort hotels
The top players in hospitality sector
• ITC Hotels
• Indian Hotels Company Ltd. (The Taj Hotels Resorts & Palaces)
• Oberoi Hotels (East India Hotels)
• Hotel Leela Venture
• Asian Hotels Ltd.
• Hotel corporation of India
• ITDC
Some of the main features of the Indian hotel industry include the following:
• The industry is more dependent on metropolitan cities as they account for 75% to 80% of the revenues, with Delhi and Mumbai being on top.
• The average room rate (ARR) and occupancy rate (OC) are the two most critical factors that determine profitability. ARR depends on location, brand image, star rating, quality of facilities and services offered. The occupancy rate depends on other seasonal factors.
• India is an ideal destination for tourists. Approximately 4.4 million tourists visit India every year. Thus the growth prospects are very high.
• In the hotel sector, a number of multinationals have strengthened their presence. Players like Four Seasons are also likely to enter the Indian market in the near future. Moreover, Indian hotel chains are also expanding internationally. A combination of all these factors could result in a strong emergence of budget hotels, which could potentially lower the cost of travel and related costs.
The industry can be classified into four segments:
• 5 Star and 5 Star Deluxe. These are mainly situated in the business districts of metro cities and cater to business travelers and foreign tourists. These are considered to be very expensive. These account for about 30% of the industry.
• Heritage Hotels. These are characterized by less capital expenditure and greater affordability and include running hotels in palaces, castles, forts, hunting lodges, etc.
• Budget Hotels: Budget hotels cater mainly to domestic travelers who favor reasonably priced accommodations with limited luxury. These are characterized by special seasonal offers and good services.
• Unclassified: These are low-priced motels spread throughout the country. A low-pricing policy is their only selling point. This segment accounts for about 19 % of the industry.
Prospects
• According to the 2002 estimates of the World Tourism Organisation (WTO), international tourist inflow in India by 2020 would be 10 m, which means the tourist influx has to grow at a CAGR of 6.5% for the next 14 years. This makes the country one of the fastest growing tourist destinations in the world second only to China. As of FY08, the increase in the tourist arrivals is well inline with the WTO estimates.
• India accounts for 0.5% of world tourism. Strong GDP growth, improving infrastructure, confidence in the country's economic prospects, open sky policy and the 'Incredible India' campaign has improved the outlook for India. This positive outlook would increase the tourist arrival in the country and the hotel industry is expected to be the major beneficiary. Even domestic tourism is gaining momentum. Rising disposable incomes, cheaper airfares and better connectivity would continue to increase the demand for rooms.
• Many international hotel chains either have or are on the look out for setting up shop in the country. Companies like the Hilton and Hyatt group have already tied up with local giants East India Hotels and Asian Hotels. Others like Four Seasons, are on the lookout for a partner or would be setting up their own hotels, government permitting. This clearly shows that India is on the international tourism radar.
• Although prospects are promising, as mentioned earlier, any change in the global geo-political situations can and have adversely affected the performance of this sector. Also, the heightened demand for land, especially from real estate players has led to a steep escalation in the prices. Also, shortage of manpower is going to be a huge challenge going forward. Hotel players with a diversified portfolio across different segments are likely to be the key beneficiaries. This should be one of the determining factors while investing in this sector.
Earnings for Hospitality Hotel Industry
• Hotel Industry get Revenue in providing Rooms
• Hotel Industry get Revenue in providing Banquet Halls
• Hotel Industry get Revenue in Restaraunts
• Additional Hotel Industry get revenue as
o For telephone call services in hotels
o For laundry services in hotels
o For travel services in hotels
o For internet services in hotels
Hotel Industry Management Course:-
Hotel Industry plays a vital role in reducing the level of Unemployment, Even after Engineering, and Doctors, hotel industry proffession, comes with a great scope, hotel management teaches a lot to students, even the basic etiquites in hotel management course includes:-
• Online hotel management course helps in "How to deal with Customers to hotels?"
• Online hotel management course helps in " How to deal with emmergency situations in hotels?"
• What is the Basic Telephone Manners? can be known in Online hotel management course.
• Helps in Personality Development.
In India, National Council Of Hotel Management and Catering Technology (NCHMCT) is a semi Govt. Hotel industry Institute that has approx 30 centres in all over India. Apart from this there are thousand of other colleges that teach us about Hotel Industry.
And Hotel industry colleges and Hotel industry Institutes after completion of Hotel industry course provide the employment to their students in Brand Hotels.
Hotel industry training is also an very important part of this course, because Hotel industry studies are just the guides, but Hotel industry training makes one perfect, Hotel industry training also helps the students in selecting their area of interest as Food secton in Hotel industry and Hotel industry Beverage Production, Food and Beverage Services, Hotel industry accommodation operation, Hotel industry front desk, Computers in Hotel industry, Nutrition in Hotel industry, Hotel Engineering.etc.
Hotel industry Course also includes making a Survey Report on any topic in Final year, which makes the students go for research studies. Hotel industry reaserch courses helps in removing many disqualities of the candidates like shy, communication skills, English, lack of confidence, etc.
Department of Hotels that are available for guest 24 X 7:-
• Hotel industry kitchen department
• Hotel industry Food Production department
• Hotel industry Engineering department
• Hotel industry Front desk department
• Hotel industry Housekeeping department
• Hotel industry Food & Beverage Service department
• Hotel industry Gym/ Health Club/ Sports department
• Hotel industry Parking/ Shops department
• Hotel industry Parking/ Shops department
Hotel Industry Kitchen/ Food Production: Kitchen & food production is a department of hotel that responsible for food . Even hotels having Coffee Shop provides 24 hour services to the guest.
Hotel Industry Engineering:- If any problems come in room, bulb fuse, A/C not working , then we have to contact Hotel Engineers, they are also available 24 hours.
Hotel Industry Front desk:- Front desk is 1st impression on guest, if guest like this section then only he will go for other option like restaurant, laundry, etc. Front desk consists of young and energetic staff who is always (24 x 7) be there to help guest, they are also responsible for Business Centre, Internet Access. He is also responsible for making C-Form for Foreigner Clients, providing safety lockers to the guest. Taking Reservation by Telephone, E-Mails, and Fax from the guest. Also providing guest Money Exchange Services.
Hotel Industry Housekeeping:- Housekeeping are available 24 X 7 for guest, making their bedroom, bathroom, etc. Providing guest Laundry services, also do day to day room cleaning for guests.
Hotel Industry Food & Beverage Service:- They include providing guest the services whether in rooms, Restaurants or Banquets, or in Conference rooms.
Hotel Industry Travel Desk:- They are responsible for arranging day to day travels for the guest. They also do the ticket confirmation work, and also provides the information for sightseeing to the guests.
Gym/ Health Club/ Sports:- Medium and large hotels are providing Gyms, Swimming Pool, Health Club, Beauty Parlour, Saloon, games like Billiards, Pool, etc facilities to their guests. Most of the Hotels are providing these facilities complimentary with the rooms.
Parking/ Shops:- Few Star hotels providing big parking space, shops in the restaurant itself for the guest conveyance, so that they can get the things in hotel itself.
Types of Hotel Industry Jobs
Sno Hotel Industry Jobs
1 Hotel industry Accounting/Finance Jobs
2 Hotel industry Administration Jobs
3 Hotel industry Airline Staff Jobs
4 Hotel industry Chef - All Jobs
5 Hotel industry Chef - Banquet Jobs
6 Hotel industry Chef - Chef de Partie Jobs
7 Hotel industry Chef - Executive Chef Jobs
8 Hotel industry Chef - Pastry/Baker Chef Jobs
9 Hotel industry Chef - Sous Chef Jobs
10 Hotel industry Consultant Jobs
11 Hotel industry Corporate Office / Executive Jobs
12 Hotel industry Cruise Ship Staff Jobs
13 Hotel industry Destination/Event Manager Jobs
14 Hotel Engineering/Maintenance/Grounds
15 Hotel industry Entertainment Jobs
16 Hotel industry Food & Beverages - All Jobs
17 Hotel industry F&B - Banquets Jobs
18 Hotel industry F&B - Beverage/Sommelier Jobs
19 Hotel industry Rooms - Housekeeping Jobs
20 Hotel industry Rooms - Rooms Director Jobs
21 Hotel industry Security Jobs
22 Hotel industry Sports/Golf/Fitness Jobs
Hotel Industry Remuneration
STRENGTHS
1. Natural and cultural diversity : India has a rich cultural heritage.
The "unity in diversity" tag attracts most tourists.
2. Demand-supply gap : Indian hotel industry is facing a mismatch between the demand and supply of rooms leading to higher room rates and occupancy levels. With the privilege of hosting Commonwealth Games 2010 there is more demand of rooms in five star hotels. This has led to the rapid expansion of the sector.
3. Government support: The government has realized the importance of tourism and has proposed a budget of Rs. 540 crore for the development of the industry. The priority is being given to the development of the infrastructure and of new tourist destinations and circuits. The Department of Tourism (DOT) has already started the "Incredible India" campaign for the promotion of tourism in India.
4. Increase in the market share: India's share in international tourism and hospitality market is expected to increase over the long-term. New budget and star hotels are being established.
WEAKNESSES
1.Poor support infrastructure: Though the government is taking necessary steps, many more things need to be done to improve the infrastructure. In 2003, the total expenditure made in this regard was US $150 billion in China compared to US$ 21 billion in India.
2.Slow implementation: The lack of adequate recognition for the tourism industry has been hampering its growth prospects. Whatever steps are being taken by the government are implemented at a slower pace.
3.Susceptible to political events: The internal security scenario and social unrest also hamper the foreign tourist arrival rates.
OPPORTUNITIES
1.Rising income: Owing to the rise in income levels, Indians have more spare money to spend, which is expected to enhance leisure tourism
2.Open sky benefits: With the open sky policy, the travel and tourism industry has seen an increase in business. Increased airline activity has stimulated demand and has helped improve the infrastructure. It has benefited both international and domestic travels.
THREATS
1. Fluctuations in international tourist arrivals: The total dependency on foreign tourists can be risky, as there are wide fluctuations in international tourism. Domestic tourism needs to be given equal importance and measures should be taken to promote it and should be encouraged in a business oriented method .
2.Increasing competition: Several international majors like the Four Seasons, Shangri-La and Aman Resorts are entering the Indian markets. Two other groups - the Carlson Group and the Marriott chain - are also looking forward to join this race. This will increase the competition for the existing Indian hotel majors
Hospitality is all about offering warmth to someone who looks for help at a strange or unfriendly place. It refers to the process of receiving and entertaining a guest with goodwill. Hospitality in the commercial context refers to the activity of hotels, restaurants, catering, inn, resorts or clubs who make a vocation of treating tourists.
Helped With unique efforts by government and all other stakeholders, including hotel owners, resort managers, tour and travel operators and employees who work in the sector, Indian hospitality industry has gained a level of acceptance world over. It has yet to go miles for recognition as a world leader of hospitality. Many take Indian hospitality service not for its quality of service but India being a cheap destination for leisure tourism.
With unlimited tourism and untapped business prospects, in the coming years Indian hospitality is seeing green pastures of growth. Availability of qualified human resources and untapped geographical resources give great prospects to the hospitality industry. The number of tourists coming to India is growing year after year. Likewise, internal tourism is another area with great potentials.
In 2003-04 the hospitality industry contributed only 2% of the GDP. However, it is projected to grow at a rate of 8.8% between 2007-16, which would place India as the second-fastest growing tourism market in the world. This year the number of tourists visiting India is estimated to have touched the figure of 4.4 million. With this huge figure, India is becoming the hottest tourist destination. The arrival of foreign tourists has shown a compounded annual growth of 6 per cent over the past 10 years. Besides, travel and tourism is the second highest foreign exchange earner for India. Moreover, it is also estimated that the tourism sector will account for nearly 5.3 per cent of GDP and 5.4 per cent of total employment.
FUTURE
To boost up the growth of tourism in India, the government has proposed to invest Rs. 520 crore in 2007-2008. Tourism in expected to grow further over the next few years due to the changes taking place on the demand and supply sides. The factors that will account for the further growth of tourism will include the following:
Change in standards of living
More disposable income
Better education
Long leisure time
AND
Aging population
Owing to growth of tourism sector, infrastructure will improve, competition will increase, new products will come into markets and better services will be provided. Due to the rapid growth in tourism, the hotel industry is also booming. Many international players like Le Meridien and Accor are heading towards Indian markets to expand their business. With government's full support in developing infrastructure, increase in demand, open sky policies and increased competition, the hospitality industry is getting consolidated and has many more opportunities to grow further
That’s for a brief assignment that I could collect.
Thank you all
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