..

.
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A
RESEARCH PROJECT
SUBMITTED FOR THE PARTIAL REQUIREMENT AND
FULFILMENT OF THE BHM & CT PROGRAM AT
UTTEAR PRADESH TECHNICAL UNIVERSITY

Supervised by:
PROF. Dr. NEERAJ GUPTA

Submitted by:
SERAJ ALI

J. P. INSTITUTE OF HOTEL MAMNAGEMENT

& CATERING TECHNOLOGY, MAWANA ROAD, MEERUT

SESSION : 2014 -15

1

ARE TRAVEL AGENTS & TOUR

OPERATORS BENEFICIAL FOR GUEST
CONCERNED MANAGEMENT

A
ABSTRACT
SUBMITTED FOR THE DEGREE OF
BACHELOR
OF
HOTEL MANAGEMENT & CATERING TECHNOLOGY

Supervised by:
PROF. Dr. NEERAJ GUPTA

Submitted by:
SERAJ ALI

J. P. INSTITUTE OF HOTEL MAMNAGEMENT

& CATERING TECHNOLOGY, MAWANA ROAD, MEERUT

SESSION : 2014-15

Dr. Neeraj Gupta

CERTIFICATE

This is to certify that Research Project entitled ARE TRAVEL

AGENTS

&

TOUR

OPERATORS

BENEFICIAL

FOR

GUEST

CONCERNED MANAGEMENT has been completed by SERAJ ALI under

my supervision. To the best of my knowledge the present study is an
original and genuine research work and has not been submitted in parts or
in full, for the award of any degree anywhere.
I recommend the Research Project for the award of Bachelor
Degree in Hotel management & catering Technology

SERAJ ALI

PREFACE
In the first chapter efforts has been made to understand the concept of
TRAVEL AGENTS & TOUR OPERATORS BENEFICIAL FOR GUEST
CONCERNED MANAGEMENT. The Second chapter presents the research
design of the study. The Third chapter throws light on. Chapter fourth
presents... In chapter Fifth... The last
chapter summaries the conclusions of the present study and offer the
suggestions for the improvement of .
I express my heartfelt thanks to the officers and staff of ..not only
responding positively to my various queries, but also for providing me the
required resources material during my field survey.
I also express my sense of gratitude to Dr. Neeraj Gupta for providing me
the required statistical data and giving me his concrete and constructive
suggestions in completing my research work smoothly.
It is my privilege to thank Mr. Rohit Dayal, Director, and all the staff
member of J.P. IHM, Meerut to give their valuable guidance at every stage
during my research work
No amount of words can adequately express the debt, I owe to my revered
supervisor Dr. Neeraj Gupta, for his constant encouragement, able guidance
and thought provoking discussion during the course of the present investigation.
My natural and spontaneous thanks to my respected

Dr. Neeraj Gupta

for his enlightening, thought provoking and pains taking guidance and
supervision at every stage of this research work.
SERAJ ALI

ABSTRACT

This project is all about the Guest Cencerned Management and its existence in india.The project
will through a light on how the Guest Cencerned Management has grown from past and how
tourisim has been flourished with the support of this industry. The project will cover different
segments, players and structure of the Guest Cencerned Management .It will also make us
understand the contribution of Guest Cencerned Management towards the economy of the
country. The main of the study will be to find the different trends in Guest Cencerned
Management and what opportunity is seen for it in the future.

Contents
GUEST CONCERNED MANAGEMENT AN OVERVIEW.....................................................3
Atithi Devo Bhavo (guest is God)..................................................................................... 4
Accommodation........................................................................................................... 5
Bars & Clubs............................................................................................................... 5
Travel and Tourism....................................................................................................... 5
Service and Support...................................................................................................... 6
CONTRIBUTION TO INDIAN ECONOMY..........................................................................6
Future-wise................................................................................................................. 6
The driving force.......................................................................................................... 7
SWOT ANALYSIS........................................................................................................ 11
TRENDS IN HOSPITALITY SECTOR...............................................................................13
CHALLENGES FOR GUEST CONCERNED MANAGEMENT...............................................14
RECOMMENDATIONS................................................................................................. 15
Recommendations to the government...............................................................................15
Recommendations to the Guest Cencerned Management:......................................................16
FUTURE OF HOSPITALITY SECTOR.............................................................................. 16
HOTEL INDUSTRY OVERVIEW..................................................................................... 17
LEADING COMPANIES IN HOTELS................................................................................ 21
CONCLUSION............................................................................................................. 25

GUEST CONCERNED MANAGEMENT AN OVERVIEW

Hospitality is all about offering warmth to someone who looks for help at a strange or unfriendly
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 Guest Cencerned Management 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 Guest
Cencerned Management. The number of tourists coming to India is growing year after year.
Likewise, internal tourism is another area with great potentials.
The Guest Cencerned Management is a 3.5 trillion dollar service sector within the global
economy. It is an umbrella term for a broad variety of service industries including, but not
limited to, hotels, food service, casinos, and tourism. The Guest Cencerned Management is very
diverse and global. The industry is cyclical; dictated by the fluctuations that occur with an
economy every year. Today hospitality sector is one of the fastest growing sectors in India. It is
expected to grow at the rate of 8% between 2007 and 2016. Many international hotels including
Sheraton, Hyatt, Radisson, Meridian, Four Seasons Regent, and Marriott International are
already established in the Indian markets and are still expanding. Nowadays the travel and
tourism industry is also included in hospitality sector. The boom in travel and tourism has led to
the further development of Guest Cencerned Management. In 2003-04 the Guest Cencerned
Management 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.

Atithi Devo Bhavo (guest is God)

We have all heard this phrase many times during our childhood from our parents and grandparents. We can also find its presence in the earliest Vedas and religious epics. Hospitality is
deep-rooted in our traditions and comes as an integral part of our heritage. In very simple terms,
hospitality is the art of being warm to strangers and has been
Derived from the Latin word hospitalitem, this means friendliness to guests. The Guest
Cencerned Management covers a diverse range of establishments in the form of accommodation,
food and drinks. It includes:-

The concept of hospitality business started when people started traveling away on business and
they needed a place away from home which could cater to all their needs. Today hospitality has
evolved from the basic food and accommodation industry and taken a very important position in
almost all businesses. In fact, it has become a huge industry and drives economies across the
globe. The scope of hospitality/ service industry today is far more than one could have ever
imagined a few years back. Earlier people who graduated from a Hotel School could get
10

employed either in Hotels, Cruises or Airlines. But service is the BUZZ word for all businesses
today. Be it the Retail Sector, Banking Industry, BPO, Telecom world, Real Estate or any other
sector having direct customer contact, a person with hospitality background has an edge above
the rest, because of their sheer capability of understanding the needs of a customer better and
handling difficult customers/ situations efficiently. Hotel industry depends largely upon the
foreign tourist arrivals further classified into business travelers (around 65% of the total foreign
tourists) and leisure travelers. The following figures show that business as well as the leisure
travelers (both domestic and international) formed major clientele for hotels in 2004. Over the
last two years, the hotel industry has seen higher growth rates due to greater number of tourist
arrivals, higher occupancy rate (being around 75% in FY'06) and significant increase in average
room rate (ARR).

Accommodation
Hotels,
Residential
Public houses
Motels
Resorts
Sanatorium

Bars & Clubs

Nightclubs
Public houses
Restaurants

Travel and Tourism

Travel Agents
Airline Cabin Staff
Travel technology

Service and Support

Accountancy
Occupational Health and Spa

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CONTRIBUTION TO INDIAN ECONOMY

The Indian Guest Cencerned Management is going great guns presently, with high operating
margins and \ increase in the number of travelers visiting India - both inbound and outbound.
Thus, the only direction left for the sector points upwards. However, what needs to be focused on
is the fact that opportunities are not missed, which presently includes the large gaps in rooms
supply as compared to demand. India has approximately 100,000 rooms only in totality, which is
lesser than that in Las Vegas, besides contributing to an insignificant portion of the GDP - just
5.4 per cent, In comparison to nations like China, Thailand and Malaysia where the hospitality
share ranges between 12 and 15 per cent. Within the nation, major contribution as destinations
will be from the growing tier I and II cities with a special emphasis on business hotels across
categories as well as the prime leisure destinations like Goa, Rajasthan, etc, which will remain on
the growth path, creating the aura for India as a leisure destination. Accordingly, the needs of the
traveler will be nothing less than perfection. With an increase in choices available, they will be
less forgiving of service deficiencies. Guests will require higher levels of service in the fullservice segments, which will warrant greater training requirements for hotel staff. The limited
service hotels will require a complete shift in the perception of customer service.

Future-wise
The driving force behind these will be global brand standards and therefore they will have
standard specifications creating a degree of uniformity and standardization in certain limited and
mid-market hotel segments. Differentiations in product type will evolve more at the higher end
of the market with: boutique hotels
resorts
convention centers
The need to differentiate design will play an important role. Various brands and operators will
play a larger role in driving design standards, getting involved at early project planning stages.
As hotel segments cater to specific demand segments, design typologies will be more customized
to suit travelers lifestyle. Equal importance will also be given to green-building concepts in
terms of development and operations, which will go beyond cost-saving, placating the demands

12

from both investors and customers... In addition, 'green-conscious' business and corporate groups
will patronize hotels and brands that support green concepts.
Besides all this, the reliance on technology will move beyond Wi-Fi and internet requirements to
tools to support sales and marketing as well as yield management. Even basic interiors will be
upgraded with the use of technology like self check-in and information kiosks. This will also
revamp sales and marketing as international brands will leverage their central reservation
systems and will initiate networks with third party reservation agencies. In addition, systems will
become more sophisticated and targeted, customizing sales and marketing efforts for each
targeted traveler. F&B, an area of immense importance within a hotel will also evolve, especially
for the select-service hotel categories. However when discussing service, which is the main play
of this industry, it has to be understood that the growth phase is still on and the market is
currently undersupplied in terms of trained hotel staff to cater to the large supply pipeline.

The driving force

If the country is able to sustain its economic growth especially in the service sector, it will have a
direct influence on the hotel industry. This is directly related to the incoming foreign
investments, not just in the hotels but the economy as a whole. Also equally important is the fact
that India has now discovered the power of marketing and with campaigns like Incredible India,
there are also the various large scales regional and global events like the upcoming
Commonwealth Games, Asian Games and the recent Indian Premiere League that builds interest
about the nation... Apart from these external factors there are other factors where the industry can
be given a great boost. For instance if land prices became more realistic, the process of getting
approvals and licenses to build and operate hotels are streamlined, together with strong
infrastructure development and investment and more tax/levy incentives being provided to build
hotels, it would prove very fruitful for the industry

POLICIES & INITIATIVES

Tourism being a concurrent subject under the Indian constitution, both the central and state
governments regulates the hotel industry. The regulations include statutory and regulatory
sanctions (or approvals and licenses) from the Central and State departments or agencies.
This includes license to operate a restaurant, a hotel license (issued by municipal authorities),
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license from police (issued by local police) and a bar license (issued by excise department).
Tourism Policy
In order to develop tourism in India in a systematic manner, position it as a major engine of
economic growth and to harness its direct and multiplier effects for employment and
poverty eradication in an environmentally sustainable manner, the National Tourism Policy
was formulated in the year 2002. Broadly, the Policy attempts to:
Position tourism as a major engine of economic growth
Harness the direct and multiplier effects of tourism for employment generation,
economic development and providing impetus to rural tourism
Focus on domestic tourism as a major driver of tourism growth
Position India as a global brand to take advantage of the burgeoning global travel trade
and the vast untapped potential of India as a destination
Acknowledges the critical role of private sector with government working as a pro-active
facilitator and catalyst
Create and develop integrated tourism circuits based on Indias unique civilization,
heritage, and culture in partnership with States, private sector and other agencies
Ensure that the tourist to India gets physically invigorated, mentally rejuvenated,
culturally enriched, spiritually elevated and feel India from within.
The Governments major policy initiatives include:
Liberalization in aviation sector
Pricing policy for aviation turbine fuel which influences internal air fares
Rationalization in tax rates in the hospitality sector
Tourist friendly visa regime
Immigration services
Procedural changes in making available land for construction of hotels
Allowing setting up of Guest Houses
The Indian Ministry of Tourism has identified 31 villages across the country to be developed
as tourism hubs. The states in which these villages have been identified include Himachal
Pradesh, Gujarat, Maharashtra, Bihar, Karnataka, Madhya Pradesh, Andhra Pradesh, Kerala,
Tamil Nadu, Orissa, Assam, Sikkim, Rajasthan and West Bengal.
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Governments Open Skies Policy

The Governments Open Skies policy, permission for domestic airlines to commence
international flights, start-up of various low-cost carriers, and fleet expansion by domestic
players has created a huge incentive for domestic travelers to explore far-off destinations
within and outside India. The booming aviation business is bringing an ever-increasing
number of passengers to India, and pulling Indians out of their homes and into hotels. The
numbers, according to the Ministry of Tourism, speak for themselves:
The number of domestic and international passengers has increased fifteen-fold to 73.34
million in 2005/06 since 1970.
Domestic air passenger traffic grew by 16.8 per cent in 2005/06 compared to 2004/05.
International passenger traffic observed a growth of 16.9 per cent in the same period.
Private airlines accounted for 77.0 per cent of the total domestic traffic.
Foreign Trade Policy
The Foreign Trade Policy announced in April, 2006, offered following incentives to the
Guest Cencerned Management:
Hotels and Restaurants are allowed to import duty free equipment and other items including
liquor, against their foreign exchange earnings under the Served from India Scheme. As in
previous years, this entitlement is 5per cent of previous years foreign exchange earnings for
hotels of one-star and above (including managed hotels and heritage hotels) approved by the
Department of Tourism and other service providers in the tourism sector registered with it.
The stand-alone restaurants will be entitled to duty credit equivalent to 10per cent of the
foreign exchange earned by them in the preceding financial year (instead of the earlier 20per
cent).
Service exports in Indian Rupees, which are otherwise considered as having been paid for in
free foreign exchange by RBI, will now qualify for benefits under the Served from India
Scheme. Also, foreign exchange earned through International Credit Cards and other
instruments as permitted by RBI for rendering of service by the service providers shall be
considered for the purposes of computation of entitlement under the Scheme.
Benefits of the Scheme earned by one service provider of a Group company can now be
15

utilised by other service providers of the same Group Company including managed hotels.
The measure aims at supporting the Group service companies not earning foreign exchange
in getting access to the international quality products at competitive price and providing
services of international standards. This new initiative allows transfer of both the script and
the imported input to the Group Service Company. The earlier provision allowed transfer of
imported material only.
FDI in Hotel and Tourism Sector
100 per cent FDI is permissible in the sector on the automatic route. The term hotels
include restaurants, beach resorts, and other tourist complexes providing accommodation and/or
catering and food facilities to tourists. Tourism related industry include travel
agencies, tour operating agencies and tourist transport operating agencies, units providing
facilities for cultural, adventure and wild life experience to tourists, surface, air and water
transport facilities to tourists, leisure, entertainment, amusement, sports, and health units for
tourists and Convention/Seminar units and organizations.
For foreign technology agreements, automatic approval is granted if:
up to 3 per cent of the capital cost of the project is proposed to be paid for technical and
consultancy services including fees for architects, design, supervision, etc.
up to 3 per cent of net turnover is payable for franchising and marketing/publicity
support fee, and up to 10 per cent of gross operating profit is payable for management
fee, including incentive fee.
Other Government Initiatives
Government has undertaken following initiatives to attract both inbound and outbound
tourists:
Incredible India - Under this program the Government promotes India through
various integrated marketing programs.
Atethie devo bhava (guests are equal to god) - Under this program the Government
create awareness among Indian people who come in contact with the tourist.
Various Infrastructure building initiatives
Encourage religious tourism for instance promote various places in India as Buddhist
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abodes.
Other projects are the Rs. 5,400 million National Highways Development Project, the 5,846 km
Golden Quadrilateral and the 7,300 km north-south and east-west corridors.
Sagarmala project which intends to create a network of seaports, which will change the
way people discover and experience real India.

SWOT ANALYSIS
STRENGTHS

1. Natural and cultural diversity: India has a rich cultural heritage. The "unity in diversity" tag
attracts most tourists. The coastlines, sunny beaches, backwaters of Kerala, snow capped
Himalayas and the quiescent lakes are incredible.
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.
Moreover, foreign hospitality players are heading towards Indian markets.
WEAKNESSES

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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.
2. Increasing competition: Several international majors like the Four Seasons, Shangri-La and
Amman 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

TRENDS IN HOSPITALITY SECTOR

Trends that will shape the future of hospitality sector are:
1. Low Cost Carriers
2. Budget Hotels
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3. Service Apartments
4. Technology
5. Loyalty Travel
1. Low cost carriers: Travelers in general are more price sensitive to airfare than they are to
hotel room rates. Often a low airfare will stimulate demand for travel even if hotel prices are
increasing. LCCs are a good option for business travelers, as they have advantages like low
costs, more options and connectivity.
2. Budget hotels: More than 50 per cent of occupancy of a majority of hotels comes from the
business travel segment. The average room rate (ARR) realized from business travelers is
normally higher than from leisure travelers.
Heightened demand and the healthy occupancy rates have resulted in an increase in the number
of budget hotels. Some of the new players entering into this category of hotels include Hometel,
Kamfotel, Courtyard by Marriott, Country Inns & Suites, Ibis and Fairfield Inn.
3. Service apartments: The concept of service apartments, though a recent phenomenon in
India, is an established global concept. Villas in Spain, flats in the UK and apartment complexes
in the US have all created a viable market for those who want more than just a room in a hotel.
Service apartments are the latest trend in accommodation, offering the comfort and convenience
of a home without the hassles of having to maintain or look after it. Ideally suited for medium-tolong staying guests, service apartments are a natural choice for corporate employees or
expatriates relocating to a particular city, non-resident Indians visiting the country for long spells
and foreigners visiting the city for long durations.
4. Technology: Travel and technology have become inseparable. Technology is making its own
advances with high-tech video conferencing facilities, web cameras and virtual reality mode of
conferencing. On-line bookings, e-ticketing, Wi-Fi Internet connectivity, easy access to
information, etc. are just a few areas where technology has completely changed the way we
travel.
5. Loyalty travel: Today, airline-credit card company tie-ups have brought a whole range of
benefits to the travelers. These include insurance cover, upgrades, free tickets, access to
executive lounges, and a host of other Goodies.

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CHALLENGES FOR GUEST CONCERNED MANAGEMENT

1. Shortage of skilled employees: One of the greatest challenges plaguing the Guest Cencerned
Management is the unavailability of quality workforce in different skill levels. The Guest
Cencerned Management has failed to retain good professionals.
2. Retaining quality workforce: Retention of the workforce through training and development
in the hotel industry is a problem and attrition levels are too high. One of the reasons for this is
unattractive wage packages. Though there is boom in the service sector, most of the hotel
management graduates are joining other sectors like retail and aviation.
3. Shortage of rooms: The hotel industry is facing heavy shortage of rooms. It is estimated that
the current requirement is of 1, 50,000 rooms. Though the new investment plan would add
53,000 rooms by 2011, the shortage will still persist.
4. Intense competition and image of India: The industry is witnessing heightened competition
with the arrival of new players, new products and new systems. The competition from
neighboring countries and negative perceptions about Indian tourism product constrains the
growth of tourism. The image of India as a country overrun by poverty, political instability,
safety concerns and diseases also harms the tourism industry.
5. Customer expectations: As India is emerging as a destination on the global travel map,
expectations of customers are rising. The companies have to focus on customer loyalty and
repeat purchases.
6. Manual back-end: Though most reputed chains have IT enabled systems for property
management, reservations, etc., almost all the data which actually make the company work are
filled in manual log books or are simply not tracked.
7. Human resource development: Some of the services required in the tourism and hotel
industries are highly personalized, and no amount of automation can substitute for personal
service providers. India is focusing more on white collar jobs than blue collar jobs. The shortage
of blue collar employees will pose various threats to the industry.

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RECOMMENDATIONS
Recommendations to the government
The government could constitute a steering committee to review the demand and supply of the
human resources in the Guest Cencerned Management and prepare plans for developing
qualitative human resources which are required for the present day global industry. The
committee should constitute with the members from all concerned areas like:

State and central tourism development commissioners

Representatives from all areas of Guest Cencerned Management
Members / president / secretary of the hotel management associations
Members / president / secretary of the travel and tourism associations
Representative from hotel employees associations
One member representative from international hotel chain

The committee should review the present situation and suggest the steps to be taken to reduce the
gap between the demand and supply of human resources in the industry.
The committee should concentrate on the following issues mainly:
Create a policy on industry institute interaction
Establish an apex body t coordinate all the management institutes in the country
For conducting common entrance test for all Govt. university / AICTE / private
institutes in the country
Curriculum development from time to time as industry requirement
Fees structure for different courses in different institutes
Appoint a committee to identify the requirements of qualified manpower for
International Hotels and also identify the ways to develop.

Recommendations to the Guest Cencerned Management:

Tie ups with institutes: It is the duty of the Industry t makes necessary tie-up /
arrangement for their required human resources with one or two hospitality institutes in
the country.
Continuous training: There is a need of continuous training to all categories of
employees in the organization. when they have a tie up with the institutes , the institutes
will offer in house training to different category of employees from time to time to
update their skills
.

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 Sponsoring: It is the duty of the industry to sponsor some amount / equipment to the
institute for their betterment. If possible the sponsor a chair for continuous funding and
research for that institute.
Research: Every institute must spend some amount for the research which is essential
for further development and understand the present situation. The industry should
involve in the researchers by providing timely information and data which is ultimately
useful for them only.

FUTURE OF HOSPITALITY SECTOR

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
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 Meridian 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 Guest Cencerned Management is getting consolidated and has many more
opportunities to grow further.

HOTEL INDUSTRY OVERVIEW

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A hotel is an establishment that provides paid lodging, usually on a short term basis. Hotels often
provide a number of additional guest services such as a restaurant, a swimming pool or childcare.
Some hotels have conference services and meeting rooms and encourage groups to hold
conventions and meetings at their location. 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 marketing 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 hotel industry can be further categorized into three segments:

Hotels
restaurants
Contract caterers.
HOTELS

23

The hotels in India can be broadly classified into the following segments:

Star rated hotels: They form 30% of the industry size. 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. They are built over an area of up to 18000 sq. meters
The first 2 types are usually located in business areas of metro cities and cater to foreign tourists,
business travelers, top government officials and political brass, offering luxury at a high price.
Youll find the next 2 types in tier II cities and tourist destinations, preferred by mid-level
24

executives and leisure tourists.The last 2 types are found in smaller cities and around tourist
spots, preferred by domestic tourists. These are characterized by lesser capital expenditure and
affordability and include hotels running in palaces, castles, forts, hunting lodges etc.
The heritage hotels are further classified as:

Budget hotels: Theyre usually preferred by domestic travelers seeking economical

accommodation. These are reasonably priced, offer limited luxury, seasonal discounts and decent
services. Some new global entrants include UKs Dawnay Day and Whitbread Premier Travel
Inn, Shangri-la, Amman resorts, Golden Tulip budget hotels, Fairfield inn, Country inns and
suites, Courtyard by Marriott, Hometel, Ibis and Kamfotel among others. Budget hotels are
preferred by business travelers contributing to greater ARR (average room rate) than leisure
travelers. Increased demand and healthy occupancy has fueled the growth of budget hotels in a
short time.

Facility hotels:-

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Unclassified hotels: Theyre motels spread across the country. They form 19% of the industry
size. Low price is their only USP.
B. RESTAURANTS
These typically include fast food chains, ethnic restaurants, fine dining and coffee bars. The
major players include Barista, Mc Donalds, Ruby Tuesday, Bercos, etc.
CONTRACT CATERING
This includes any catering business unit that is formally not a part of the hotel industry but is
closely allied to it. Some of the major players in this category include Sodexho, Compass Group,
etc.

LEADING COMPANIES IN HOTELS

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1) EIH: - EIH, the flagship company of The Oberoi Group, provides hospitality and related
services. EIH is engaged in the ownership and operation of hotels and other related
services. The company primarily operates in India, where it is headquartered in Kolkata.
The company recorded revenues of INR11, 938 million (approximately $260.5 million)
in the fiscal year ended March 2009. Its net profit was INR1, 699.5 million
(approximately $37.1 million) in fiscal 2009.

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2) ITC limited: - ITC-WELCOM GROUP has pioneered the concept of "BRANDED

ACCOMMODATION" in the Guest Cencerned Management. Branding led to the
segmentation of room which was termed as branded Executive club, The Towers and ITC
One. In 2007, ITC WELCOMGROUP tied up with STARWOOD with STARWOOD to
launch its premium brand, The LUXURY COLLECTION. The company has more than
75 hotels in India with about 5500 rooms and is developing 27 more properties that will
add about 3000 rooms.

Indian Hotel Company limited: - The Indian Hotels Company (IHCL), a subsidiary of Tata
Group, is engaged in hoteliering and air catering business. IHCL and its subsidiaries are
collectively known as Taj Hotels Resorts and Palaces. Taj Hotels Resorts and Palaces comprises
of 59 hotels at 40 locations across India with an additional 17 international hotels in the
Maldives, Mauritius, Malaysia, UK, US, Bhutan, Sri Lanka, Africa, the Middle East and
Australia. The company primarily operates in India. It is headquartered in Mumbai, India.
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Taj Hotels Resorts and Palaces is grouped into luxury, leisure and business categories. The Taj
luxury hotels offer suites and rooms, gourmet specialty restaurants and bars, business facilities,
fitness centers, spas, and banquet and meeting facilities. It has restaurants and bars that serve a
range of cuisines from across the globe.
The Taj leisure hotels include beach resorts, palaces, garden retreats, and historic and pilgrim
centers. It offers rooms by the sea, restaurants, water sports facilities, tennis courts, freshwater
swimming pools, spas, and travel assistance. The Taj business hotels are spread across India, Sri
Lanka, Africa, and the Middle East. It offers rooms, telecommunication facilities such as wireless
internet connectivity, specialty restaurants and bars, business centers, and conference facilities
and banquet areas. It also offers swimming pools, coffee shops, fitness centers, and travel
assistance.
IHCL also operates Taj Air, a luxury private jet operation with Falcon 2000 aircrafts designed by
Dassault Aviation, France; and Taj Yachts, two 3-bedroom luxury yachts. The company also
operates Taj Sats Air Catering, an airline catering service in South Asia, as a joint venture with \
Singapore Airport Terminal Services, a subsidiary of Singapore Airlines. IHCL also operates Taj
Wellington Mews Luxury Residences, which is a complex of 80 luxurious serviced apartments in
South Mumbai. Additionally, the company also operates the Institute of Hotel Management,
Aurangabad, which offers a three year diploma, designed with the help of international faculty
and has affiliations with several American and European programmers.

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Market Value Forecast

In 2013, the Indian hotels and motels industry is forecast to have a value of $11.2billion, an
increase of 96.5% since 2008. The compound annual growth rate of the industry in the
period 2008-2013 is predicted to be 14.5%.

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CONCLUSION
A focus on quality, behavior-based evaluation, market choice and market response has
predominantly shaped the country's hotel & Guest Cencerned Management. Increased
competition and increase in demand has consolidated the hospitality segment, whilst opening up
a plethora of opportunities. Fierce competition has led to innovative ideas by hotel majors,
thereby delivering impressive hospitality products and services. This has, in turn, also prompted
them to generate new lines of revenue with creative approaches, be it by reducing transaction
costs, increasing productivity or promoting traditional Indian values. Combining unparalleled
growth prospects and unlimited business potential, this industry is certainly on the foyer towards
being a key player in the nation's changing face.

BIBLIOGRAPHY
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 www.tajhotels.com
www.itcwelcomgroup.in
www.oberoihotels.com
www.fhrai.com
Indian Guest Cencerned Management : Emerging Issues, Opportunities
&Challenges- Gowri Shankar K
Hospitality Marketing by Neil Wearne.
Service Sector Management by Romeo Masceranhas.
www.indianhotels.com
Economic Times and Business Standard.

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