Sustainable Competitive Advantage in the Hotel

Industry and Impact of Innovations on Occupancy

rate – A Managerial Perspective.

Thesis Submitted to the Padmashree Dr. D. Y .Patil University,

Department of Business Management
In partial fulfillment of the requirements for the award of the Degree of

DOCTOR OF PHILOSOPHY
in
BUSINESS MANAGEMENT

Submitted by
Krishna K. Shetty
Enrollment No. DYPPHD07- 066100026

Research Guide
Dr. R. GOPAL
DIRECTOR, DEAN & HEAD OF DEPARTMENT

PADMASHREE DR. D.Y. PATIL UNIVERSITY,

DEPARTMENT OF BUSINESS MANAGEMENT,
Sector 4, Plot No. 10,
CBD Belapur, Navi Mumbai – 400 614

June 2010

1
Sustainable Competitive Advantage
in the Hotel Industry and Impact of
Innovations on Occupancy rate
– A Managerial Perspective.

2
 DECLARATION

I hereby declare that the thesis entitled “Sustainable Competitive

Advantage in the Hotel Industry and Impact of Innovations on Occupancy

rate – A Managerial Perspective.” submitted for the Award of Doctor of

Philosophy in Business Management at the Padmashree Dr. D.Y. Patil

University Department of Business Management is my original work and

the thesis has not formed the basis for the award of any degree, associate

ship, fellowship or any other similar titles.

Place:

Date:

Signature of Guide Signature of Head of Dept. Signature of student

3
 CERTIFICATE

This is to certify that the thesis entitled “Sustainable Competitive

Advantage in the Hotel Industry and Impact of Innovations on Occupancy

rate – A Managerial Perspective.” submitted by Mr. Krishna K. Shetty is a

bonafide research work for the award of the Doctor of Philosophy in

Business Management at the Padmashree Dr. D. Y. Patil University

Department of Business Management in partial fulfillment of the

requirements for the award of the Degree of Doctor of Philosophy in

Business Management and that the thesis has not formed the basis for the

award previously of any degree, diploma, associate ship, fellowship or any

other similar title of any University or Institution.

Also certified that the thesis represents an independent work on the part of

the candidate.

Place:

Date:

Signature of the
Head of the department Signature of the Guide

4
 ACKNOWLEDGEMENT

In the first place, I am indebted to the Padmashree Dr. D.Y. Patil University

Department of Business Management, which has accepted me for

Doctorate program and provided me with an excellent opportunity to carry

out the present research project. I am highly grateful to Dr. R. Gopal, my

guide, the Director, Dean and Head of the Department of Business

Management, who has been a source of constant support, inspiration and

encouragement. Without his valuable guidance and mentoring this

research would not have been possible. I am grateful to my family and

friends for being supportive throughout this period of four years when I

have been pursuing my Ph.D.

Place:

Date: Signature of the student

5
 CONTENTS

CHAPTER -TITLE PAGE

NO. NO.
Preliminary Cover Page 1
Title 2
Declaration 3
Certificate 4
Acknowledgement 5
List of Tables 8
List of Figures 9
List of Abbreviations 10
Executive Summary 11 - 14
Chapter -1 Introduction 15 - 22
Chapter -2 Review of the Literature 23 – 39
2.1 Literature Review 23
2.2 Research Gap 38
Chapter -3 Objective of Research 40 – 45
3.1 Research Problem 40
3.2 Statement of Research Objectives 41
3.3 Hypotheses 42
3.4 Importance of Research 45
Chapter -4 Research Methodology 46 – 49
Chapter -5 Hospitality and Hotel Industry – An overview 50 – 78
5.1 Introduction 50
5.2 History of Hotels and Motels 53
5.3 Hotels in Modern Times 56
5.4 Motels and its features 59
5.5 Advent of Hotel Chains 63
5.6 Origin of Food Service Industry 64
5.7 Types of Hotels 64
5.8 Hotel Organization 69
Chapter -6 Hotel Industry – The Global Scenario 79 – 91
Chapter -7 Hotel Industry in India and Thailand 92 – 150
7.1 Hotel Industry in India 92
7.2 Hotel Industry in Thailand 134
Chapter -8 Sustainable Competitive Advantage and Innovations in 151 – 201
the Hotel Industry

6
Chapter -9 Data Analysis and Major Findings 202 - 235
9.1 Data Analysis 202
9.2 Major Findings 227
Chapter - Recommendations and Suggestions 236 – 241
10
Chapter - Conclusion 242 – 245
11
Appendices 246 – 314
Appendix I – Bibliography 246
Appendix II - Questionnaire used for survey 251
Appendix III- SPSS Outputs 261

7
 LIST OF TABLES

Sr. Table No. Table Name Page

No. No.

1. Table 4.1 Overall Sampling 48

3. Table 6.1 Worldwide hotel ranking 2007 82

4. Table 6.2 Top 20 hotel brands worldwide 82

5. Table 7.1. The supply demand gap in premium hotels segment (Avg.10 major 102

cities)

6. Table 7.2. Thailand tourism growth rate. 139

7. Table 7.3. Thailand tourism receipts 140

8. Table 7.4 Thailand hotels grading points 147

8
 LIST OF FIGURES

Sr. Figure No. Figure Name Page

No. No.

1. Figure 5.1. Large Independent Hotel Structure 71

2. Figure 5.14. Small Hotel Structure 77

3. Figure 6.1. Worldwide Real GDP Growth – 2003 to 2007 79

4. Figure 6.2 Rev PAR Change by Region May YTD 80

5. Figure 6.3 Most key global cites are also seeing substantial rate growth 80

6. Figure 6.4 European Supply & Demand Monthly Change 81

7. Figure 6.5 U.S. Supply & Demand Monthly Change 81

8. Figure 6.6 The growth rate of the hotel supply at corporate chains 83

worldwide from 2001 to 2006

9. Figure 6.7 Hotel Occupancy Rates – Major World Cities. 86

10. Figure 7.1 Sectoral Growth Rates at Factor Cost by Industry – India (03-09) 93

11. Figure 7.2 Domestic tourist visits to India 111

12. Figure 7.3 FTA in India over the past four years 112

13. Figure 7.4 Passengers carried by domestic airlines 112

14. Figure 7.5 Growth of Room Supply – India (1998/99-2013/14) 119

15. Figure 7.6 Thailand tourist arrivals 2007 -09 139

16. Figure 8.1 A Model of Competitive advantage 169

9
 List of Abbreviations

GDP = Gross Domestic Product

WTTC = World Travel and Tourism Council

TSA = Tourism Satellite Accounting

UNWTO = UN World Tourism Organisation

SCA = Sustainable Competitive Advantage

F & B = Food and Beverages

RevPAR =Revenue Per Available Room

IRCTC = Indian Railway Catering and Tourism Corporation

ITDC = Indian Tourism Development Corporation

FDI = Foreign Direct Investment

RBI = Reserve Bank of India

FTA = Foreign Tourist Arrivals

FEE = Foreign Exchange Earnings

10
 EXECUTIVE SUMMARY

India's tourism and hospitality industry has emerged as one of the key

industries of the service sector driving the country's economy. The Hotel

and Restaurant Industry forms a major chunk of the hospitality sector. The

share of contribution of activities of trade, hotel and restaurant

business rose from 8-9 per cent to 14-15 per cent over a period of five

decades till 2010. By 2010, India will see an estimated 10 million foreign

visitors and thereby a demand for approximately 100,000 rooms. And with

the continuing surge in tourist inflow, this sector is likely to offer

tremendous opportunity for investors. Sources estimate, demand is going

to exceed supply by at least 100% over the next 2 years. With demand-

supply disparity, 'Hotel India' room rates are most likely to rise 25%

annually and occupancy to rise by 80%, over the next two years. The hotel

industry has to be prepared for this tremendous potential and have to take

the necessary steps to meet and maintain this surge in demand.

In light of the importance of the Hotel Industry to the economy, it becomes

extremely important to study the drivers for success in this sector. Thus a

study of factors of sustainable competitive advantage in the hotel industry

become most relevant.

Innovation is a word that has been talked about in most sectors of the

economy especially in sectors like pharmaceutical and biotechnology.

However, is this factor as important in the services sector, more

11
specifically, the hotel industry, or is it being given more importance than is

due in because of its relative importance in other sectors. Is innovation a

part of the factors of sustainable competitive advantage in the hotel

industry and if so what is its effect on the occupancy rates in the hotels? It

is considered fit to study all these factors from the perspective of the

management of the hotels as these are the people who are aware of the real

pulse of this important industry.

The objectives of this study were to study the various factors for

sustainable competitive advantage in the hotel industry with specific

reference to innovations. To study the impact of implementing sustainable

competitive advantage with specific reference to innovations on the

Occupancy Rate of the hotels. To study the perspective of the management

in regard to the factors of sustainable competitive advantage across

various categories of hotels, destinations, geographical areas and

according to the designation of the managers themselves.

This study has sought to identify the factors for success and sustainable

competitive advantage in the hotel industry which is a very important

component of our economy. An endeavor has been made to study the

impact of these factors on the occupancy rates of hotels especially with

reference to innovations in various categories. The managers of the hotels

are the ones who are in the best position of judging all these questions

since they are the important link between the hotel ownership/management

and the end customer. The management of hotels have to be aware of the

12
various factors for sustainable competitive advantage as they have a

strong positive and direct impact on the occupancy of hotels. The research

seeks to study and analyze these aspects from the perspective of the

management of the hotels and come up with recommendations.

The study was conducted to cover all these criteria from the managerial

perspective and attitude as regards the factors for sustainable competitive

advantage in the hotel industry. A comparative study of these criteria in

relation to the grade of the hotel, the level of the managers concerned, the

reason for travel and geographical area of the hotel was conducted. Certain

key cities were selected from India which were considered to be

representative of the pulse of the whole country. For the purpose of

comparison with another Asian country, Thailand was chosen and similarly

two key cities from that country were chosen for the purpose of research.

Questionnaires were filled in from managerial personnel from the chosen

sample cities from both countries.

The data was classified and tabulated as per various geographical

locations and classes of hotels 5 Star, 4 Star and 3 Star. Classification was

done question wise and using other criteria. Various statistical tools were

used in the analysis of the collected data.

The findings were arrived at from the analysis of data and the comparative

derivations from the available secondary data. The factors of sustainable

competitive advantage in the hotel industry have irrefutably been

determined to be the Facilities and Amenities provided in the hotel, the

13
technology used in various departments of the hotel, the product offerings

of the hotel, the food an beverages served at the hotel, the service quality

of the hotel, the ambience of the hotel, the other add-on facilities and

services provided by the hotel and the innovations implemented by the

hotel within all these factor. It has also been strongly determined that in the

hotel industry innovations are not a stand alone factor but can only be a

part of these other factors for sustainable competitive advantage. It was

found that there is a significant difference in certain criteria when

compared from the point of view of country of the hotel and destination.

One important finding was also that the occupancy rate of the hotels

directly affects the perspective and attitude of the hotel as regards factors

of sustainable competitive advantage.

The research is expected to help the hotel industry and the management of

hotels in getting pointers for improvement in overall performance and for

training managerial staff, hence resulting in a contribution to the welfare of

the economy.

14
 CHAPTER 1

INTRODUCTION
India at present has one of the 10 fastest growing economies in the world.

India’s GDP growth in the industrial and service sectors has been

accelerating over the last five years, attaining double-digit growth in 2010,

at 10.0 and 11.1 percent, respectively (Ministry of Finance, 2009). The

optimism in service sector growth contributed more than two thirds of the

overall growth in GDP between 2002-03 and 2006-07 (Ministry of Finance,

2007). India’s gross national product (at factor cost) rose from Rs. 20.7

trillion in 2001-02 to Rs. 32.5 trillion in 2005-06 at current prices, a rise of

almost 60 percent in five years (Ministry of Finance, 2007). Post 1991

Globalization, Liberalization and Privatization, Service Sector share of

contribution to India’s GDP has been steadily raising from a meager 38.67

per cent in 1985-86 to about 53% in 2006-07.

The services sector consists of a major component of the total GDP of our

country. From out of this the Hotel and Restaurant Industry forms a major

chunk. The share of contribution of activities of trade, hotel and

restaurant business rose from 8-9 per cent to 14-15 per cent over a period

of five decades till 2010. Trade along with hotel and restaurant

business rose fourteen-fold over the period while transport along with

storage and communication rose eighteen-fold.

15
India's tourism and hospitality industry has emerged as one of the key

sectors driving the country's economy. India's tourism is thriving, owing to

a huge surge in both business and leisure travel by foreign and domestic

tourists. According to the latest Tourism Satellite Accounting (TSA)

research released by the World Travel and Tourism Council (WTTC) and its

strategic partner Accenture, India's travel and tourism industry is

generated approximately US$ 100 billion in 2008, growing at 7.3 per cent

and is expected to be rising to US$ 275.5 billion by 2018 over the next ten

years.

The rapid growth of India's tourism industry has been instrumental in

South Asia being the preferred tourist destination as noted by the UN

World Tourism Organisation (UNWTO). Foreign tourist arrival rose to 3.46

million to an estimated 5 million in 2007. Domestic tourists too have grown

from 366.23 million in 2004 to 462 million in 2006. Consequently, foreign

exchange earnings from tourism in India rose from US$ 3 billion in 2002 to

an estimated 11.96 billion in 2007. In fact, according to the World Travel

and Trade Council, Indian tourism demand will continue to grow at a rapid

pace. It estimates the demand to grow at an average of 8.8 per cent

between 2004 and 2013, making India the world's third fastest growing

tourist market.

Inbound Tourists: India's share of international tourist arrivals has steadily

increased from 0.46 per cent in 2004 to 0.55 per cent in 2007. The flow of

16
foreign tourist arrivals has been recording phenomenal growth rates. The

number of arrivals has increased from 3.9 million in 2005 to 4.4 million in

2006 and 4.95 million in 2007, recording a growth rate of 13.5 per cent in

2006 (over 2005) and 11.9 per cent in 2007 (over 2006). Alongside, there has

been a concomitant rise in the foreign exchange earnings. Total earnings

from foreign tourists has shown an annual growth rate of 19.2 per in 2006

and 33.8 per cent in 2007 to garner US$ 7.49 billion in 2005, US$ 8.93 in

2006 and US$ 11.96 billion in 2007. India's share in world arrivals currently

stands at 0.5 per cent, its share in revenue generated from tourism

worldwide is 1.11 per cent.

Medical Tourism : India is fast becoming a favourite with tourists world

over, as it offers huge scope for various theme-based travel like Medical

Tourism, Adventure tourism, Heritage tourism, Wellness tourism,

Pilgrimage tourism, Golf tourism, Eco-tourism, Wildlife tourism among

others. India's reputation as a major medical tourist destination is fast

becoming popular amongst foreign tourists to the country. India is

aggressively promoting the concept of medical tourism and capitalising on

its low cost and highly trained doctors. Moreover, the country also has

some of the best hospitals and treatment centres that are equipped with

infrastructure and technology, which are at par with those in the US, UK

and Europe at a fraction of the costs. In fact, Indian hospitals are fast

becoming the first choice for foreign patients owing to easy access to visa

facilities, coupled with the best emerging medical infrastructure, which will

17
help India earn to an extent of US$ 1.86 billion in foreign exchange by 2012.

Currently, India's earnings through medical tourism annually is an

estimated US$ 821.40 million.

Hospitality : The boom in India's tourism industry and the surge in tourist

inflow to the country has percolated to other associated sectors like

aviation, medical tourism, and the hotel industry. The country's hospitality

sector has witnessed an increase in the occupancy ratios and average

room rates. While occupancy ratio is around 75-80 per cent, the average

increase in room rates has been hovering around 22-25 per cent. By 2010,

India will see an estimated 10 million foreign visitors and thereby a demand

for approximately 100,000 rooms. And with the continuing surge in tourist

inflow, this sector is likely to offer tremendous opportunity for investors.

For example, while the estimated number of required hotel rooms is around

240,000, the current availability is just 90,000 rooms - leaving a shortfall of

150,000 rooms to be provided. India's hospitality sector is expected to see

an estimated US$ 11.41 billion in the next two years, and around 40

international hotel brands by 2011, according to a report by Ma Foi

Management Consultants. Along with these large scale expansion plans,

international hotel asset management companies are also likely to enter

India. Several global hotel chains see immense investment opportunities in

the sector with global chains like Hilton, Accor, Marriott International,

Berggruen Hotels, Cabana Hotels, Premier Travel Inn (PTI), InterContinental

18
Hotels group and Hampshire amongst others have announced major

investment plans in India with others likely to follow suit.

International Recognition: India's booming tourism sector has not only

witnessed international investments but also achieved international

accolades with its increasing appeal as the leading global tourist

destination. The government has been instrumental in making tourism a

priority sector its efforts have borne fruits with a series of international

recognition and awards.

 India has been ranked No 1 in long-term travel growth by World

Travel and Trade Council in its global report for 2008.

 India has been elected to head the UN World Tourism Organisation

(UNWTO), the highest policy making world tourism body represented

by 150 countries.

 The world's leading travel and tourism journal, "Conde Nast

Traveller", ranked India as the ‘numero uno’ travel destination in the

world.

 India was adjudged Asia's leading destination at the regional World

Travel Awards (WTA).

 India bagged the World's leading Destination Marketing Award for

the Incredible India campaign.

Over the last decade and half the mad rush to India for business

opportunities has intensified and elevated room rates and occupancy

19
levels in India. Even budget hotels are charging USD 250 per day. The

successful growth story of 'Hotel Industry in India' seconds only to China

in Asia Pacific. According to the tourism ministry, 4.4 million tourists

visited India last year and at current trend, demand will soar to 10 million in

2010 – to accommodate 350 million domestic travelers. 'Hotels in India' has

a shortage of 150,000 rooms fuelling hotel room rates across India. With

tremendous pull of opportunity, India is a destination for hotel chains

looking for growth. The World Travel and Tourism Council, India, data says,

India ranks 18th in business travel and will be among the top 5 in this

decade. Sources estimate, demand is going to exceed supply by at least

100% over the next 2 years. Five-star hotels in metro cities allot same

room, more than once a day to different guests, receiving almost 24-hour

rates from both guests against 6-8 hours usage. With demand-supply

disparity, 'Hotel India' room rates are most likely to rise 25% annually and

occupancy to rise by 80%, over the next two years. 'Hotel Industry in India'

is eroding its competitiveness as a cost effective destination. However, the

rating on the 'Indian Hotels' is bullish. 'India Hotel Industry' is adding about

60,000 quality rooms, currently in different stages of planning and

development and should be ready by 2012. MNC Hotel Industry giants are

flocking India and forging Joint Ventures to earn their share of pie in the

race. Government has approved 300 hotel projects, nearly half of which are

in the luxury range. Therefore, with opportunities galore the future

'Scenario of Indian Hotel Industry' looks rosy.

20
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.

However, on the other hand it is also to be noted that hotels in most big

cities around the world are emptier than they were last year, according to

STR Global, a research firm. The Indian hotel industry posted dull numbers

during the quarter and year ended March'09. The first half of the financial

year 2008-09 was affected with financial crises whereas the second half

was affected due to the terrorist attack in Mumbai. The occupancies of

various places during the year has posted sharp decline. According to

industry sources, the aggregate supply of cities like Delhi, Bangalore,

Chennai, Hyderabad, Kolkata and Goa increased by 3 per cent to 18,447

rooms per day, but aggregate demand slid down by 12 per cent at 11,352

rooms per day.

During the year, the occupancy rate in Delhi decreased to 62 per cent from

73 per cent in FY'08, Bangalore decreased to 59 per cent from 70 per cent,

Chennai dipped to 65 per cent from 71 per cent and Hyderabad declined to

59 per cent from 69 per cent. The hard time for the Indian hotel industry is

expected to continue in the current financial year also. With the cut in

corporate travel, both domestic and international travel could result in the

above the conditions.

21
In light of the importance of the Hotel Industry to the economy, it becomes

extremely important to study the drivers for success in this sector. Thus a

study of factors of sustainable competitive advantage in the hotel industry

becomes most relevant. Innovation is a word that has been emphasized in

most sectors of the economy especially in sectors like pharmaceutical and

biotechnology. However, is this factor as important in the services sector,

more specifically, the hotel industry, or is it a word that is being given more

importance than is due because of its relative importance in other sectors.

Is innovation a part of the factors of sustainable competitive advantage in

the hotel industry and if so what is its effect on the occupancy rates in the

hotels? It was considered fit to study all these factors from the perspective

of the management of the hotels as these are the people who are aware of

the real pulse of this important industry.

22
 CHAPTER 2

REVIEW OF LITERATURE

2.1 Literature Review - The first traces of a theory purporting to explain

what is now called as sustainable competititve advantage was proposed by

Alderson (1965), he proposes three bases for differential advantage:

technological, legal, and geographical; four strategies for achieving

differential advantage: segmentation, selective appeals, and differentiation.

Hall (1980), said successful companies will achieve either the lowest cost

or most differentiated position. Henderson (1983), continues the discussion

of those unique advantage(s) of one firm over competitors; those who can

adapt best or fastest gain an advantage over. Ghemawat (1986), discusses

those advantages that tend to be sustainable: size in the targeted market,

superior access to resources or customers, and restrictions on

competitors’ options. Hamel and Prahalad (1989), A firm should not search

for an SCA, it should learn how to create new advantages to achieve global

leadership. Oliver (1997), proposes a model of firm heterogeneity which

suggests that both resource capital and institutional capital are

indispensable to SCA.

The idea of a Sustainable Competitive Advantage surfaced in 1984, when

Day suggested types of strategies that may help to "sustain the

competitive advantage". The actual term "Sustainable Competitive

Advantage " emerged in 1985, when Porter discussed the basic types of

23
competitive strategies that a firm can possess (low-cost or differentiation)

in order to achieve a long-run Sustainable Competitive Advantage.

Interestingly, no formal conceptual definition was presented by Porter in

his discussion. Day and Wensley (1988) admit that there exists "no

common meaning for ‘competitive advantage’ in practice or in the

marketing strategy literature". Barney (1991) has probably come the closest

to a formal definition by offering the following: "A firm is said to have a

sustained competitive advantage when it is implementing a value creating

strategy not simultaneously being implemented by any current or potential

competitors and when these other firms are unable to duplicate the

benefits of this strategy".

Although lacking a formal definition, Coyne (1986) contributed to the

construct by proposing that in order to possess an Sustainable

Competitive Advantage, consumers must perceive some difference

between a firm’s product offering and the competitors’ offering. This

difference must be due to some resource capability that the firm possesses

and competitors do not possess. Also, this difference must be some

product/delivery attribute that is a positive key buying criterion for the

market.

Recognizing the importance of an effective strategy to firms, Day and

Wensley (1988) focused on the elements involved in competitive

advantage. Specifically, they identified two categorical sources of

competitive advantage: superior skills, which are "the distinctive

24
capabilities of personnel that set them apart from the personnel of

competing firms", and superior resources, which are "the more tangible

requirements for advantage that enable a firm to exercise its capabilities".

Treacy and Wiersema (1995) point to successful companies such as Home

Depot and Nordstrom who have embraced the idea of customer intimacy in

order to deliver a highly customized end product to customers.

Barney (1991) contributed to the discussion by exploring the link between a

firm’s resources and Sustainable Competitive Advantage. He stated that

not all firm resources hold the potential of Sustainable Competitive

Advantage; instead, they must possess four attributes: rareness, value,

inability to be imitated, and inability to be substituted. Similarly, Peteraf’s

(1993) resource-based view of the firm designates four conditions that

underlie Sustainable Competitive Advantage, including superior resources,

ex-poste limits to competition imperfect mobility, and ex-ante limits to

competition. Dierick and Cool (1989) discuss inimitable resources such as

non-tradable assets which are immobile and thus bound to the firm.

Other researchers have contributed to the Sustainable Competitive

Advantage construct by more carefully delineating the specific resources

and skills that aid in the development of an Sustainable Competitive

Advantage. For example, Hunt and Morgan (1995) propose that "potential

resources can be most usefully categorized as financial, physical, legal,

human, organizational, informational, and relational". They go on to state

25
that a comparative advantage in resources can translate into a position of

competitive advantage in the marketplace, but only if the criteria proposed

by Barney (1991) are satisfied and the offering has some perceived value in

the marketplace. Prahalad and Hamel (1990) suggest that firms should

combine their resources and skills into core competencies, loosely defined

as that which a firm does distinctively well in relation to competitors.

competitive advantage s are realized only when the firm combines

assortments of resources in such a way that they achieve a unique

competency or capability that is valued in the marketplace (Morgan and

Hunt 1996).

Bharadwaj, Varadarajan, and Fahy (1993) discuss the specific

combinations of skills and resources that are unique to service industries.

They propose that the greater the complexity and co specialization of

assets needed to market a service, the greater the importance of innovation

as a source of competitive advantage will become. They also propose that

brand equity becomes an important source of competitive advantage in

service industries. Srivastava et. al. (1998) delineate market-based assets

into two types: relational and intellectual. Relational market-based assets

are those that reflect bonds between a firm and its customers and/or

channel members. They are rare, unique, valuable, and difficult to imitate,

market-based assets provide an excellent potential source of Sustainable

Competitive Advantage for a firm.

26
Day and Wensley’s (1988) greatest contribution to the Sustainable

Competitive Advantage construct is their framework for assessing a firm’s

competitive situation as the first step in achieving an Sustainable

Competitive Advantage. Unlike past attempts of performance outcome

measures (such as profitability and market share), they suggest using

perspectives of both the customer and the competitor to assess the firm’s

performance. Measures of customer input such as satisfaction and loyalty

balance the competitor focus and help to complete the assessment of

Sustainable Competitive Advantage of a firm. Similarly, Day and Nedungadi

(1994) propose that firms use different types of information to assess

whether a competitive advantage has been obtained according to the type

of orientation they have; a competitor-oriented firm emphasizes relative

resources or cost positions, whereas a customer-oriented firm emphasizes

segment differences and differentiation advantages. Bharadwaj,

Varadarajan, and Fahy (1993) also stress the importance of customers in

determining the sources of competitive advantage; they state that a firm’s

skills and resources can be considered sources only if they offer benefits

desired by customers.

This outward focus on customers links the Sustainable Competitive

Advantage construct to concepts such as branding, market orientation,

organizational learning, innovation, customer value, relationship

marketing, and business networks. These linkages are discussed below in

greater detail.

27
The marketing literature provides different conceptualizations of the term

"market orientation," yet they share similar components. Kohli and

Jaworski (1990) see market orientation as the implementation of the

marketing concept by activities such as generating information (analyzing

changing customer needs and wants), disseminating information and

actually responding to customers’ needs. Other definitions of market

orientation revolve around competitor-centered versus customer-centered

firms. Day (1994), for example, views market orientation as a balance

between being customer-centered and being competitor-centered, and that

information technology can be used to help the firm to learn to act on

available information faster than the competition.

Narver and Slater (1990) share a similar perspective of market orientation.

They view market orientation as an organizational culture that contains

three behavioral components: 1) a customer orientation (understanding the

target market), 2) competitor orientation (understanding the strengths,

weaknesses, capabilities, and strategies of key competitors), and 3)

interfunctional coordination, which means using resources of all

departments in a firm in order to create value for target customers. An

example of this latter component is provided by Ghoshal and Westney

(1991), who find that a corporate culture of willingness to share information

with all departments (interfunctional coordination) facilitates the learning

process. Fiol and Lyles (1985) agree that a corporate culture in which all

departments are flexible and are willing to accept change increases the

28
probability that learning will occur. And the ability to learn is essential in a

market-oriented firm. Market orientation, then, presumes an outward focus

on customers and competitors. For example, through a customer

orientation, firms can gain knowledge and customer insights in order to

generate superior innovations (Varadarajan and Jayachandran 1999). Also,

through interfunctional coordination, teams may be formed and

empowered to respond to specific customer requests and solve

complicated problems that span across functional areas (Tansik 1990).

Because a market orientation employs intangible resources such as

organizational and informational resources, it can serve as a source of

Sustainable Competitive Advantage (Hunt and Morgan 1996). Wodruff

(1997) also sees the next major source of competitive advantage coming

from a more outward orientation, specifically toward customers. He

suggests a customer value hierarchy in which firms should strive to match

their core competencies with customers’ desired value from the product or

service. Slater (1997) aids Woodruff’s call by suggesting a new theory of

the firm that is customer-value based. Under this theory, the reason that

the firm exists is to satisfy the customer; the focus on providing customers

with value forces firms to learn about their customers, rather than simply

from their customers. With respect to performance differences, this theory

suggests that those firms that provide superior customer value will be

rewarded with superior performance as well as an Sustainable Competitive

Advantage.

29
According to Jarillo (1988) the establishment of trust and perceived goal

congruence are two factors that assist in the development of organizational

networks. Similar to Frazier, Spekman, and O’Neal’s (1988) view of

opportunistic behavior, Jarillo sees the presence of trust as an indicator

that the relationship is one of value; therefore, opportunistic behavior is

less likely.

Porter (1985) also discusses the formation of "coalitions" that allow the

sharing of activities in order to support a firm’s competitive advantage.

However, Porter’s "value chain" approach focuses on activities within a

single firm. A new model is needed which adapts his approach in order to

understand the value-added processes comprised of dyadic and network

interfirm activities which foster each firm’s Sustainable Competitive

Advantage.

Ney, Edward (1995) says that hotels are realizing they must provide value-

added services to attract and please customers. Many hotels are making

innovations in food-and-beverage service. Hospitality finds success for its

hotels in concept lounges. Achrol’s (1997) call for a paradigm shift to

network relationships, the importance of understanding how networks

operate as well as the advantages hotels can gain from network

relationships cannot be ignored. Strategy researchers have been presented

with a great opportunity to fill the gaps in our understanding of how

networks contribute to a firm’s Sustainable Competitive Advantage. Robert

A Nozar.(2001) doubts about the severity of an economic slowdown and a

30
call for more innovations to attract hotel developers and guests. Operators

can expect energy costs, payroll costs and the cost of technology

upgrades to be the biggest drains on budgets.

Cathy Enz, Judy Siguaw- 2003, bring out the importance of innovative ideas

and practice in the hotel industry. The paper tags ‘implemented and

successful innovative ideas’ as ‘best practices’. To what extent will the

current industry best practices stand the test of time? What appears to be

necessary for a best practice to be sustained is becoming completely

integrated into the organizations ongoing activities. The lack of time to

think plan and develop best practices, and insufficient nurturing of

innovations with needed resources and top management support were

identified as barriers to development of best practices. The study reveals

that the high attrition rate in the industry is deleterious to the consolidation

of these best practices. Jeff Higley.(2003) says that new look of luxury

properties isn't all about the appearance of them - it's more about the feel.

Guests' needs and wants have become more complex and owners and

operators of luxury hotels and resorts are constantly are re-evaluating what

services and amenities they need to offer to satisfy the increasingly hard-

to-find repeat guest. Unlike 20 years ago, guests want to experience

different activities. Guests expect spa treatments, water sports, outdoor

adventures and cultural lessons to be among their experiences at a luxury

hotel resort

31
Anshul Kaushesh (20040, discusses various issues directing onward

aspects of innovations in hotel marketing that lead to the creation of

wealth, a specific tool for entrepreneurs through which they try to create

value, and its role in the marketplace. The focus of the innovation process

needs to redefine from research and development to business strategies

that affect the commercialization of new ideas. Clayton M. Christensen

(2005) points out that outstanding businesses can do everything right and

still lose their market leadership, or worse, disappear completely. The

study presents a set of rules for capitalizing on the phenomenon of

disruptive innovation. He explains the impact of disruptive technologies

and changes and how to manage their effect on the existing business is

one of the notable and useful for the present study. Micheal Ottenbacher

and Juergen Gnoth (2005) bring out nine factors that drive successful

innovations in the hospitality service industry with the 184 German

hospitality manager’s perceptions. The study was carried out to determine

the key success factors for New Service Development in the hospitality

industry. The authors concluded critical work that, the correct market

selection and a suitable response to its needs are critical for success.

Rayka Presbury,(2005) identifies the key factors that impede service quality

delivery in the context of luxury hotels (four- and five-star properties) The

study revealed a number of impediments to developing and maintaining

distinguishable, superior service. The limitations of the study was primarily

related to the scope of the research in terms of the number of hotel

32
properties participating. The study incorporates the views of managers

only. The focus of this study was on the hotel sector, and the findings

cannot be accepted as being necessarily relevant and applicable to

services across the tourism/hospitality industry as a whole. Douglas

Rushkoff (2005), presented that in an environment that seems to be

transforming itself with every new technology, marketing tactic or

investment strategy, businesses rush to embrace change by trading in

their competencies altogether in the name of innovation. He points out that

one needs to be continuously on the lookout for new ideas to keep up the

sustainable competitive advantage.

Rayka Presbury, Anneke Fitzgerald, Ross Chapman (2005), state that the

problem of sustaining competitive advantage can be addressed, in large

part, if hotels adopt rigorous recruitment procedures that select people

with the appropriate attitudes and skills. This should be supported by an

organizational commitment to helping employees appreciate their roles in

the hotel sector and, more broadly, in tourism. The study suggests that

leaders in luxury hotels should take responsibility for overcoming the

impediments to service quality budgetary constraints, inappropriate staff

attitudes, lack of mentoring, and the high expectations of quests. If they do

not do so, the sustainability of their hotels in the current competitive

environment placed at risk. Clayton M. Christensen (2005), This research

work advices that cost cutting, downsizing and economizing are not the

way to success, but ongoing innovation is. The only sustainable

33
competitive advantage comes from out-innovating the competition. V. B.

Angadi, (2006), points out that one of the main roles of the entrepreneur is

that of an innovator even thought this is one of the often neglected aspects

of entrepreneurship. Ramamirtham Gopal (2007), in his paper helps one

understand the types of innovation that take place in the industry and the

impact of innovation on the value of business. He brings out the difference

between product innovation and process innovation. He also talks about

Competitor centered and Customer centered innovation. The paper

effectively brings out the importance of innovation for maintaining the

Sustainable Competitive Advantage and how it ultimately results in an

increase in margin or an increase in volume.

Kamal Manaktola (2007), seeks to explore the factors which influence the

consumer attitude and behaviour towards green practices in the lodging

industry in India and also to explore the consumers' intentions to pay for

these practices. The consumers using hotel services are conscious about

environmentally friendly practices in India. Indian hotels have the

competitive advantage over similar products if they follow green practices.

The study attempts to bring out facts regarding customer buying behaviour

towards green practices in the Indian hotel industry.

Heather Gunter (2007), in his paper explores that the more innovation and

technology in hotel design is helping to fuel the purchasing business.

Stephanie Ricca, (2007), worked on the Wyndham brand sharpens focus,

found that the brand launched a three-pronged strategy that includes

34
development plans, revamped customer service, and a new marketing plan

targeted to Generation X consumers. Glenn Withiam (2007), reflects the

humble innovations in the hotel industry constantly look for ways to use

technology to provide better service to guests. Though hotels have moved

far beyond such humble innovations, one factor remains constant: guests'

reaction to technology. He also points out the fact that not all guests are

comfortable with technological changes.

Stacey Mieyal Higgins (2007), in his work has shown it is no secret that the

world of hotel brands is increasingly competitive, and a comfortable bed

just does not stand out anymore. It is the right thing to do to keep up with

product innovations, but it is not defensible; it is very easy to knock that

off. You win the day with distinguishing a way of making the guest feel

recognized and special. A key finding in the program development was the

level of employees' engagement or permission to perform varied services

based on the hotel management's approach.

Sonia Bharwani (2007) reveals sustaining competitive advantage through

innovative strategy. Firms pursuing differentiation strategy emphasize

‘innovation’ and strive to offer something new or unique to customers in

terms of their products and services. Innovative organizations are problem

solvers, actively focusing on existing customer or market problems on the

one hand, and market problems on the other, existing practices and

procedures on the one hand, and the generating ideas aimed at improving

and solving these problems through the development or adoption of new

35
products, services and procedures on the other. Adegoke Oke (2007), the

study was to identify the types of innovations predominant in the service

sector. This study investigated the relationships between innovation types,

the degree of innovativeness, innovation performance and innovation

management practices. The relationship between product and service

innovativeness and innovation management practices, however, reveals

that formal practices tend to biased toward the development of radical

innovations.

Mort Aronson (2008), explored in his paper that innovation is a necessary

factor for success with hotel franchising as well as the overall franchising

community. Those franchise systems that demonstrate complacency with

their current success flirt with the danger of not just remaining constant

with their income stream but significantly regressing with hotel occupancy

and income because of the volatile nature of the hotel industry and the

intensity of competition. Franchisors have been the mainstream of

innovation within their hotel systems with new technology, the inventory

control, new marketing techniques and more.

Jonathan Barsky, Lenny Nash (2008), focused on Satisfaction Trends:

Timeshares lead industry in customer satisfaction Timeshares offer the

opportunity to "buy the hotel" and explore different locations through

exchange agreements. This innovative concept has flourished in detail with

continues to expand. The timeshare industry clearly is doing a lot of things

right, including satisfying its customers. Wann-yih Wu,(2008), This study

36
draws on the Grey relational analysis to select the best-performing hotels

in Taiwan. The data contains the performance of 56 international tourist

hotels in 2002 and industry data from 1992 to 2005. This investigation

reveals the various competitive advantages and strategies in these top

hotels, such as their appropriate site, higher price, and higher occupancy

rate.

Paul J Heney (2008), has tried to differentiate the modern day hotels from

traditional hotel companies, with innovations in the spas, restaurants, and

rooms.

Shyh-Hwang Lee (2009) worked a Dynamic-Capabilities Approach. In his

work assessment on traditional corporate resource-based perspective of

the past dictated that competitive advantage rested on a variety of

mainstream elements related to basic core values like quality, cost, and

timeliness. Nowadays, innovation has become an important additional

factor in the challenge to create and sustain competitive advantage in a

rapidly changing business environment. Ed Watkins (2009) says that the

path back to prosperity for hotels and hotel companies is clear but

treacherous and can be managed only by concentrating on the key factor

for the road to recovery, i.e. innovations. He says that we have to cut costs

as much as we can and focus on managing distribution and maintaining

rate discipline

Jason Q Freed (2009) offers hoteliers and information technology experts

learning experiences on how to install, operate and benefit from new

37
technologies. He worked on the subject Conferences, Trade shows,

Attendance, Information technology in Hotels, & motels.

2.2 Research Gap

Even though much has been talked about regarding sustainable

competitive advantage and innovations in the past few years hardly any

research has been found to have been done in this respect in the hotel

industry. Do these criteria for competitive advantage differ in respect of the

grade of the hotel concerned? Hardly any comparative studies have been

done across geographical locations as regards the factors for sustainable

competitive advantage. Similarly no study was found to have made a

comparative analysis between the reasons for travel and whether they

affect the factors for comparative advantage in the hotel industry.

The opinions of the managerial personnel who are the main cog in the

machinery of the hotel industry and who probably have the best bird’s eye

view of this important factor have been totally ignored and most studies

have been conducted from point of view of the customers. It was found

necessary that some research be done as to what it is that the managers at

various levels feel are the important factors for competitive advantage in

the hotel industry. And does the perspective of these managers differ in

relation to the position they occupy in the ladder of hierarchy. Innovations

as a parameter for success is irrefutably important in some industries like

the pharmaceutical industry. But does this also holds good in case of the

service sector or more specifically in case of the hotel industry, or is the

38
importance of innovations being overplayed in this sector. There is a

dearth of studies on the impact of innovations in the hotel industry, which

is generally touted to be very important criteria for success in the hotel

industry. What is the effect of innovations on the occupancy rates in the

hotel industry? Since there is no quantitative measure for gauging the

impact of innovations on the occupancy rate, can the perspective of the

managers be used as a gauge to judge the actually importance of

innovations in this sector. Is there any difference in the attitude of various

categories of hotels towards innovations as a criteria for competitive

advantage in the hotel industry?

A need was felt to conduct a research which covers all these criteria and

makes a study regarding the managerial perspective and attitude as criteria

for sustainable competitive advantage in the hotel industry and what are

the factors that affect their perspective. And also make a comparative

study of these criteria in relation to the grade of the hotel, the level of the

managers concerned, the reason for travel and geographical area of the

hotel.

39
 CHAPTER 3

OBJECTIVES OF RESEARCH

3.1 Research Problem

As business environment is becoming more and more complex,

accompanied by increased competition, rapid advances in technology and

most critically, rising churn, be it customer or employees, there is an

unprecedented rise in business failures today in the service sector. The

hotel industry is a category in the services sector which contributes

substantially to the GDP of the country. It is now widely accepted that to

keep afloat in this scenario hotels have to constantly resort to

technological and other innovations to keep one step ahead of the

competition and to guarantee a reasonable return on investment. What

then, are the drivers for competitive advantage in the hotel industry? What

is the contribution of these innovative practices to achieve sustainable

competitive advantage in the hotel industry? What are the factors for

Sustainable Competitive Advantage? What is their relation with innovative

practices and the impact on the markets share as seen by the occupancy

rate. The managers of the hotels are the ones who are in the best position

of judging all these questions since they are the important link between the

hotel ownership/management and the end customer – most often having a

birds eye view of the whole industry scenario. The research seeks to study

40
and analyze these aspects from the perspective of the management of the

hotels and come up with recommendations.

3.2 Statement of Research Objectives

The research objectives are:

1. To study the various factors for sustainable competitive advantage

in the hotel industry with specific reference to innovations.

2. To identify tools which can be used to measure sustainable

competitive advantage in the hotel industry.

3. To study the impact of implementing sustainable competitive

advantage with specific reference to innovations on the market share

(Occupancy Rate)

4. To study the perspective of the management in regard to the factors

of sustainable competitive advantage across various categories of

hotels.

5. To study the perspective of the management in regard to factors of

sustainable competitive advantage in hotels across geographical

areas.

6. To study the perspective of the various levels of management in

regard to factors of sustainable competitive advantage in the hotel

industry.

41
3.3 Hypotheses

Hypothesis 1.

H1o - There is no significant difference in the opinion of the managers of

the hotels in general that innovations, product offerings, service quality,

technology, ambience, food and beverages, facilities and amenities and

other add on facilities are the factors for sustainable competitive advantage

in the hotel industry.

H11 – There is a significant difference in the opinion of the managers of the

hotels in general that innovations, product offerings, service quality,

technology, ambience, food and beverages, facilities and amenities and

other add on facilities are the regards factors for sustainable competitive

advantage in the hotel industries.

Hypothesis 2.

H2o – There is no significant difference in the opinion of the managers of

the hotels in general whether the factors for sustainable competitive

advantage in the hotel industry have an impact on the occupancy rate.

H21 - There is a significant difference in the opinion of the managers of the

hotels in general whether the factors for sustainable competitive advantage

in the hotel industry have an impact on the occupancy rate.

42
Hypothesis 3

H3o – There is no significant difference amongst the opinion of the

managers as to whether innovation is the most important factor for

sustainable competitive advantage in the hotel industry.

H31 - There is a significant difference amongst the opinion of the managers

as to whether innovation is the most important factor for sustainable

competitive advantage in the hotel industry.

Hypothesis 4

H4o – There is no significant difference amongst the opinion of the

managers as to whether innovations per se are an important factor for

sustainable competitive advantage or are merely a part of the other factors

of sustainable competitive advantage in the hotel industry.

H41 - There is a significant difference amongst the opinion of the managers

as to whether innovations per se are an important factor for sustainable

competitive advantage or are merely a part of the other factors of

sustainable competitive advantage in the hotel industry.

Hypothesis 5.

H5o – There is no significant difference amongst the opinion of the

managers as to whether innovations as a factor for sustainable competitive

advantage are prominent in the hotel industry.

43
H51 - There is a significant difference amongst the opinion of the managers

as to whether innovations as a factor for sustainable competitive

advantage are prominent in the hotel industry.

Hypothesis 6.

H6o – There is no significant difference in the opinion of the managers as

to whether innovation performance per se as a factor for sustainable

competitive advantage has a significant and positive impact on the

occupancy in the hotel industry.

H61 – There is a significant difference in the opinion of the managers as to

whether innovation performance per se as a factor for sustainable

competitive advantage has a significant and positive impact on the

occupancy in the hotel industry.

Hypothesis 7.

H7o – There is no significant difference in the attitude of the managers of

India and Thailand hotels for developing innovations as a factor for

sustainable competitive advantage in their respective hotels.

H71 - There is a significant difference in the attitude of the managers of

India and Thailand hotels for developing innovations as a factor for

sustainable competitive advantage in their respective hotels.

44
Hypothesis 8.

H8o – There is no significant association between the perspective of the

managers regarding innovations as a factor for sustainable competitive

advantage and the grade of hotels, age and designation of manager,

country and occupancy rate.

H81 - There is a significant association between the perspective of the

managers regarding innovations as a factor for sustainable competitive

advantage and the grade of hotels, age and designation of manager,

country and occupancy rate.

3.4 Importance of the Research

This research has sought to identify the factors for success and

sustainable competitive advantage in the hotel industry which is a very

important component of our economy. An endeavor has been made to

study the impact of these factors on the occupancy rates of hotels

especially with reference to innovations in various categories. The

research is expected to help the hotel industry and the management of

hotels in getting pointers for improvement in overall performance hence

resulting in an indirect contribution to the welfare of the economy.

45
 CHAPTER 4

RESEARCH METHODOLOGY
Secondary data was collected from various Journals, Books, Research

Papers, Theses, Internet, Annual Reports of Various Hotels and Data

procured from the records of the Ministry of Tourism. A detailed literature

review was conducted from all the available material.

After the identification of gaps and finalization of research objectives a

questionnaire was prepared and a study was conducted on a pilot scale

and managers of few hotels were interviewed to get an initial opinion as to

factors to be taken into consideration for competitive advantage in the

hotel industry. Later the information garnered from the pilot scale study

and the findings from the literature review were used to prepare a final

questionnaire to be used for the purpose of the research study. Data was

collected through structured interview of managerial personnel of hotels

using the questionnaire.

Sampling Design - Three major cities from India were chosen from India

for the purpose of survey. Mumbai and Pune were the chosen commercial

hubs (business being the main reason of travel to these destinations) and

Goa as a beach-tourist destination (leisure being the main reason for travel

to this destination), as per purposive and convenience sampling. Mumbai

was chosen because it is considered to be the commercial pulse of the

countries business activities and is mostly considered representative of

46
the countries commercial tourism. Pune was chosen as a representative of

the second tier commercial hubs of the countries which do have presence

of star grade hotels and the business traveler tourists. And Goa was

chosen as a representative of leisure tourist and beach destination of the

country. For the purpose of comparative study from another Asian

Country, Thailand was chosen as Thailand is considered closest to India in

terms of budget wise for international travelers and considerations such as

culture, beaches and business. Bangkok and Pattaya were chosen as the

cities to represent commercial hubs which in turn represent the

destinations of choice in Thailand and were considered ideal for

comparison with Mumbai-Pune and Goa respectively. The cities chosen

were chose not only as per convenience sampling but also because these

cities are considered to be representative of the pulse of the tourism

industry in their respective countries. According to collected list of hotels

from Mumbai, Pune, Goa the whole population was surveyed and from

Bangkok and Pattaya 33% of the hotels were chosen at random as per

convenience.

Data Acquisition - Data was collected from the five cities chosen in the

sample from the various categories of hotels in India and Thailand. The

total number of hotels surveyed was 274. The managerial personnel

designated by the hotel for the purpose of survey was interviewed. The

primary data collection was done mainly using the structured interviews

and questionnaire method. Opinions of the respondents were recorded

47
using mainly five point Likert scales and simple two alternatives method.

Eg: Opinion of the respondents was recorded regarding the various factors

for sustainable competitive advantage with five point scale using Strongly

Disagree / Agree / Uncertain / Disagree / Strongly Disagree. A few open

ended questions were also included in order to understand the types of

innovations implemented in the various hotels. The final figure of hotels

from which data was collected is represented in the table and chart below.

Table 4.1 – Overall Sampling

Population Sample Sample Sample Sample

Hotels /City Total 5-star* 4-star 3-Star Total

Mumbai 113 38 20 55 113

Goa 73 23 8 42 73

Pune 35 8 15 12 35

Bangkok 90 8 9 13 30

Pattaya 69 1 5 17 23

78 57 139 274

*For the purpose of convenience 5 Star Deluxe and 5 Star Hotels were held to be in the same

category.

Sample Size Justification - The standard error of the estimate is 0.226.

Therefore the error in our mean estimate of perspective is 34.70 +/- 0.45 i.e.

between 34.25 to 35.15. Thus the error is 0.45 / 34.7 x 100 = 1.3% error

which is acceptable error in the estimate. Thereby showing that the sample

is more than sufficient to estimate the perspective of the managers.

According to above results i.e. Mean = 34.7 Standard Deviation = 3.765, The

48
sample required for 95% confidence and 10% error is 160, Whereas we

have taken a sample of 274 for the purpose of research.

Data Analysis - The data was classified and tabulated as per various

geographical locations, Mumbai, Goa, Pune, Bangkok and Pattaya and

classes of hotels 5 Star, 4 Star and 3 Star. Classification was done question

wise and using other criteria. Various statistical tools were used in the

analysis. Regression analysis, Pearson’s Chi-square Test, ANOVA and T-

Test analysis were used for the purpose of analyzing the collected data.

Presentation of Findings Recommendations and Conclusion - The findings

were arrived at from the analysis of data and the comparative derivations

from the available secondary data. Suitable recommendations were

suggested and conclusion drawn.

Limitations of the Research - The primary research is confined only to

five-star(including five-star-deluxe), four-star and three-star hotels, due to

time and money constraints and due to lack of systematic data available in

budget hotels.

 The survey was done from the point of view of the opinions of the

various levels of management in the hotels only. There is scope for

further research from point of view of the hotel customers.

49
 CHAPTER 5

HOSPITALITY AND HOTEL INDUSTRY - AN OVERVIEW.

5.1 Introduction - Human mind has an innate bent towards travel. Over

the centuries, travel has developed for business, health, social, and

cultural reasons. We take a trip to visit our relatives and friends.

Businesspeople travel to see what is going on in their home office or to

find out what customers in other cities or countries think of their products.

Some travel to other countries to see the specialities or famous things

about that region or to learn more about culture there.

Tourism is the act of travel away from home, mostly for the purpose of

recreation or leisure. Tourism development provides the services to

support this kind of travel. Tourists, according to the World Tourism

Organisation, are people who “travel to stay in places outside their usual

environment for not more than one consecutive year for leisure, business

and other purposes not related to the exercise of an activity remunerated

from within the place visited’ This means that tourism invites visits to

places other than one’s domicile for pleasure and recreation from where

one does not receive a salary.

The United Nations in 1994 classified tourism in three categories:

1. Domestic tourism involving residents of the given country travelling

within that country only.

50
2. Inbound tourism involving foreigners (non-residents), travelling into a

given country.

3. Outbound tourism involving residents travelling to another country.

The tourism industry gets its inspiration from the motivation of humankind

to travel. In earlier times humans travel to survive and later, to trade with

each other. People later travelled mostly for trading, military campaigns,

religious reasons and in some pockets, for sports. The purpose of travel

has changed dramatically in modern times. Some of the popular reasons

for travel and tourism are given below :

Sightseeing is a strong reason for travel. With disposable income people

seek to connect with other nations to understand cultures. From this need,

two popular types of tourism emerge – Cultural Tourism and Heritage

Tourism. Cultural tourism is concerned with a country’s or region’s culture,

especially its arts. It generally focuses on traditional communities who

have diverse customs, art and distinct social practices which distinguish

them from other cultures. Heritage tourism is a branch of cultural tourism

that showcases the cultural heritage of the past. Heritage tourism involves

visiting historical sites like monuments, forts, battlegrounds, etc. with the

overall purpose of appreciating the past.

Leisure is a strong motivation in a highly stressed work life. People just

want to put up their feet and relax. There are numerous resorts for such

purposes at sea sides, hills, ski resorts, spas, etc. At resorts people can

get away from mundane chores and let the tourism infrastructure take care

51
of the rest. A major attraction in leisure travel is the weather. Some like

cold weather found in the mountains while others find the warmth of sea

beaches attractive. Sport has become a huge industry where travel is

common for sportspersons and their fan following. Adventure tourism is a

type of niche tourism involving exploration or travel to remote,

inaccessible and possibly hostile areas where the traveller can experience

the unexpected. Special interest groups are those who travel in pursuit of

their hobby. This is an ever-increasing source of tourism. Climbers can

fulfil their ambition of climbing the Mount Everest, ornithologists their

interest in rare birds. Wild life has become a popular interest and people go

to safari parks where animals are preserved from extinction. Shopping is a

major attraction for anyone visiting new places. People gather mementos

of their visits by buying cuckoo clocks in Switzerland or the Masai spear in

Kenya. Shopping has taken a new dimension with modern electronic

domestic and commercial wares. With innovative Shopping Festivals

people worldwide can get the best bargains from mobiles to cars. Business

as a purpose for travel has from ancient times been a strong motivator. We

know of trade between the earliest civilisations to distribute goods not

available locally. With countries breaking down trade barriers, companies

can go global in terms of possession of business in other countries or

through franchise. Governmental travel has become important to foster

better understanding and trade between nations. Political delegations pave

the way for trade delegations. To maintain diplomatic relations countries

52
need to have constant travel to keep in touch and to help each other in the

progress of mankind. Education as a reason for travel is a multi-million

dollar industry where universities have made it possible for anyone around

the world, with certain minimum qualification, to enter their educations

system. Reunions are a major reason for travel. With people working in

other countries due to global opportunities of employment, the return

home for family reunions is a strong motivation. Similarly children, who

have left home for international work, education and assignments, touch

base with their loved ones at holidays and religious festivals. Another type

of reunion is the alma maters of schools, colleges and higher universities.

Pilgrimage is a long journey or search of great moral significance in

religion and spirituality. Sometimes it is a journey to a place or shrine of

importance to a person’s beliefs and faith.

The hospitality industry is an important component of the tourism industry.

The hospitality industry is an inclusive term for Hotels and food

establishments. It is a part of a broader service industry where people

create the service experience with specific skills to generate revenue. The

service industry places the customer as the central focus as against the

machines in the Industrial age.

5.2 History of Hotels and Motels

INNS OF EARLY TIMES - The hotel industry grew with travel, as people

needed places for shelter and food along the routes they travelled, whether

53
by land, water or air. The Hotel Industry is, therefore, one of the oldest

trade endeavours in the world. The first Inns go back to 3000 BC which

were established for the people on the move spurred by the urge to travel.

The earliest Inns were private homes of husband and wife teams who

provided large halls, for travellers to roll out their own beds and sleep on

the floor. These conditions prevailed for several hundred years and by 320

B.C. at the time of the Roman Empire, inns became commonplace, because

of the need of the Romans for political, administrative and military travel

The Romans introduced inns to Britain, along roads and in main towns for

officials on state business.

Religious travel grew, strongly after the crucifixion of Christ. As

Christianity spread in Europe so did religious travel. In the first century AD,

one of the important providers of lodging places was the church for

pilgrims. The Roman Catholic Church maintained hospices, monasteries

and hostels for pilgrims during the middle ages that offered free doles of

bread and ale. Occasionally an abbey had a hospice at a market place. In

effect, the church operated the first ‘hotel chain’ for religious travel. Private

inns also grew along pilgrimage routes. The quality of inns kept improving

over the years as travel became more frequent due to conquests, religious

travel and commerce as empires expanded.

Between the 16th and 17th centuries, inns developed into coaching inns in

main towns because of the advent of coach travel.

54
From antiquity to the Middle Ages - The history of hotels is intimately

connected to that of civilizations. Facilities offering guests hospitality have

been in evidence since early biblical times. The Greeks developed thermal

baths in villages designed for rest and recuperation. Later, the Romans

built mansions to provide accommodation for travellers on government

business. The Romans were the first to develop thermal baths in England,

Switzerland and the Middle East. Later still, caravanserais appeared,

providing a resting place for caravans along Middle Eastern routes. In the

Middle Ages, monasteries and abbeys were the first establishments to offer

refuge to travelers on a regular basis. Religious orders built inns, hospices

and hospitals to cater for those on the move. Inns multiplied, but they did

not yet offer meals. Staging posts were established for governmental

transports and as rest stops. They provided shelter and allowed horses to

be changed more easily. Numerous refuges then sprang up for pilgrims

and crusaders on their way to the Holy Land. Travelling then became

progressively more hazardous. At the same time, inns gradually appeared

in most of Europe. Around 1200, staging posts for travellers and stations

for couriers were set up in China and Mongolia. In Europe, or more

precisely in Belgium, l' Auberge Cour Saint Georges opened in Gant, while

the Angel Inn was built at Grantham in Lincolnshire, England.

The start of the hotel industry - In France, at the beginning of the fifteenth

century, the law required that hotels keep a register. English law also

introduced rules for inns at that time. During this epoch, more than 600

55
inns were registered in England. The first guide books for travelers were

published in France during this period. An embryonic hotel industry began

to develop in Europe. Distinctive signs were hung outside establishments

renowned for their refined cuisine. In Paris in the time of Louis XIV, the

Place Vendome offered the first example of a multiple-use architectural

complex, where the classical façades accommodated boutiques, offices,

apartments and also hotels.

In the nineteenth century -The industrial revolution, which started in the

1760s, facilitated the construction of hotels everywhere, in mainland

Europe, in England and in America.

5.3 HOTELS IN MODERN TIMES - The advent of the industrial

revolution in England brought ideas and progress in the business of inn

keeping. The development of railways and steam ships made travelling

more permanent. Travel also changed from social or government travel to

business travel. There was a need for quick and clean service. The lead in

Hotel keeping was taken by the emerging nations of Europe, especially

Switzerland. It was in Europe that the birth of an organised hotel industry

took place in the shape of chalets and small Hotels, which provided a

variety of services and were mainly patronized by the aristocrats of the

day. Hotels in Europe, as we know today, began in the Napoleonic wars,

providing accommodation for officers on leave. They were generally run by

French refugees. Into the 19th century Hotels became distinctive with

56
ornate fronts, polished wood, brass and mirrors. Rail travel in Britain

produced bigger Hotels like The Pancreas, Victoria, Charing Cross and the

Great Eastern in England reflecting Victorian architecture.

With the discovery of the new continent America, inns soon proliferated

into America. Samuel. Cole is credited with the opening the first inn in 1634

A.D., -in Boston, called Cole’s Ordinary. Inns such as this provided beer

and rum and plentiful cheap food. Taverns and Inns modelled themselves

in the European style. While eateries were established, the Hotels came

much later.

The real growth of the modern hotel industry took place in the USA,

beginning with the opening of City Hotel. In New York in 1794 A.D., New

York then was a busy seaport with population of 30,000 people. This was

the first building especially erected for a hotel. and had 73 guest rooms.

This eventually led to great competition between different cities and

resulted in frenzied hotel building activities. The Exchange Coffee House in

Boston came first followed by the second City Hotel in Baltimore, then the

Mansion House in Philadelphia and the Adeiphi Hotel in New York. At best

these were ordinary lodgings for the middle class. In 1829, The Tremont

House in Boston had the distinction of being the first luxury hotel. in

America. It was the first to offer private rooms with locks, a wash basin,

pitcher and soap. It had a French restaurant and uniformed service

personnel. This signalled the development of luxury Hotels in the USA

during the 1800s. The Grand Pacific in Chicago, The Palmer House and

57
Sherman House in St. Louis and the Paxton in Omaha were such luxury

pre-runners in luxury hotel- development.

In 1874, William Chapman Ralston established a super luxury property

called the Palace Hotel in California during the Gold Rush. It was built on

the lines of a European palace with domed glass roof, marble floors, own

water supply, fire sprinkler system and air-conditioning. It had 800 plush

rooms spread over seven floors.

In 1908, Ellsworth M. Statler saw the need for providing accommodation for

a new segment — the business traveller. He created the Statler Hotel in

Buffalo, New York, built specifically for the commercial sector. It involved

big investments, big profits and trained professionals to manage the

business. The Statler Hotel provided private baths and full-length mirrors in

each room. His engineering, architecture and service ideas became the

standard for future commercial Hotels. The Statler went into chain

operations and can be credited to be the first hotel chain. In 1927, the

Stevens Hotel, a 3000 room hotel (later renamed the Conrad Hilton) became

the largest hotel in the world.

The depression in 1930 had a disastrous effect art the hotel industry. 85%

of the Hotels went bankrupt. It was felt that the industry would never

recover. One hoteLier who kept afloat was Conrad Hilton who made the

Mobley, Cisco, Texas a profitable venture. The outbreak of World War H

brought a tremendous upsurge. This prosperity continued through the war

58
years into the fifties when two new concepts emerged: a) Motels and b)

International chain operations.

5.4 MOTELS AND ITS FEATURES - The first motels called tourist

cabins were established in Western United States during the early 1900,

when people began to travel by automobile and could not travel the long

distances between towns in one day. People were now mobile for long

distances because of the car. Initially Motor Inns served fishermen, hunters

besides vacationers in remote areas in the early 1900s. The great increase

in automobile travel in the 1940s and 1950s led to the development of

motels (short form of Motor and Hotel) situated at busy interchanges and

on highways. Motels provide free parking facilities from which the guests

can reach their rooms directly. Some motels have garaging facilities,

restaurants and swimming pools. Over the years motels became chain

operations and in 1970, we saw the budget motel with rates half that of

regular motels. Budget motels have small rooms and provide fewer

services. A modern motel will have the standard features; Rooms,

Services, Recreation, Food and Check-in.

The twentieth century: the age of prosperity - The early years of the

twentieth century were rich in new hotels which rapidly became

prestigious. The prosperous nineteen-twenties saw a veritable boom in the

hotel industry. Numerous hotels were established in this decade. After the

war, the fifties saw the second boom in the hotel industry. These years

59
were also notable for the construction of the first casino hotels. This was

also the time when the airline companies began to develop their own

hotels.

Hotels for business people - The 1970’s saw the beginning of the

construction of hotels for business people. This movement was supported

by several factors. First of all, there was the will of the airline companies to

extend their efforts in the domain of hotels. Then there was the sudden

prosperity, due to black gold, of Middle Eastern countries which attracted

business people from the entire world. This engendered an important

business travel trend - not limited to this region alone - which initiated the

development of hotels primarily designed for business people. Hotel

chains, attentive to their customers' wishes, started to offer an increasingly

varied range of services. Their rooms became more spacious and the

cuisine more refined. Gradually, too, various first class hotels (among them

former palaces and city centre hotels) which had fallen into disrepair began

systematic renovation programs. The end of the seventies, when China

opened its doors to foreign tourists, also saw the first congresses of

international hotel experts.

The third hotel industry boom - The third boom in the hotel industry began

in 1980, marked by more inventive marketing and the development of

hotels increasingly adapted to a particular type of clientele. This trend

prompted the construction of hotels near airports, hotels for conferences,

60
health hotels, ski holiday hotels, holiday villages and marina hotels. The

first administrative hotel management systems, offering hotels greater

independence from human resources, then appeared on the market. The

hotel industry was becoming more and more competitive. Business

travelers and retired people became important target customers. In the

eighties, too, the Far East began to prepare itself to welcome both business

people and the tourists who were beginning to discover the countries of

the rising sun, such as China, South Korea, Thailand and Japan. The

international chains prepared expansion plans for Europe, the Middle and

Far East which were mainly aimed at congress participants and business

people.

The nineties: technology starts to make an impact - The early nineties were

characterized by a recession in the hotel business, without doubt caused

by reductions in multinationals' travel budgets and the growing crisis in the

Gulf. It forced hoteliers to become more creative in finding ways of

attracting guests (special programmes, offers for "frequent travelers", high

performance reservation systems) and thus emerge from the crisis with the

minimum damage.

For the first time, the environment and energy conservation played an

important role in the marketing activities of numerous chains and even

helped to win the loyalty of numerous clients while safeguarding assets at

the same time. Reservation systems became more efficient and offered the

61
hotelier a new dimension in the creation of customer loyalty, the database.

The records of each guest's individual history have helped create

individualized marketing programs and have enabled hotels to satisfy a

guest's personal needs from the moment of his arrival. Since 1992, the

most important international chains have been vying with each other in

ever greater imaginative feats related to the vital process of renovating

their establishments worldwide. Technology has started to take its rightful

place in hotel administration (simplification of check-in and check-out

procedures, global reservation systems, marketing management etc.). At

International Technology Forums, speakers unanimously, underlined the

impact of technology on hotel rooms.

Hotel chains have been searching for alliances and some of them. For

example: Holyday Inn, Intercontinental, and Crown Plaza have merged to

form Six continents hotels Chain. The main expansion zones for the hotel

industry in 1994 remained Asia (particularly China and India), the Middle

East (above all, the United Arab Emirates and Egypt) and Latin America.

Extravaganza - In 1995 construction began in Dubai of one of the most

ambitious and prestigious tourist complexes in the region, the Jumeirah

Beach Hotels. These comprise several establishments capable of satisfying

the needs of average tourists, business people and those who can afford

real luxury. The talk now is of six- and seven-star hotels, a surprising

designation which is nevertheless perfectly justified by the luxury of the

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bedrooms and the facilities they offer, the impeccable service, the high

degree of modern technology, as well as the beauty of the surroundings

and the high-quality environment.

5.5 ADVENT OF HOTEL CHAINS - While the growth of motels was

restricted to the North American continent, international chain operations

spread into all continents. Individual entrepreneurs were crushed in the

race of this multidimensional, multinational industry. International chains

provided the expertise, technology, and marketing thrust that individual

Hotels could not. In 1925, Howard Johnson created the first restaurant

chain of 400 restaurants through franchise — the leasing of a branded

name. He soon entered into Hotels making the Howard Johnson hotel chain

a worldwide name. Another famous hotelier, Willard Marriott, started as a

restaurateur with A&W fast food restaurant chain and entered into the hotel

industry in 1940s expanding it into the famous Marriot Hotels Chain.

Individual owners could not compete with large hotel chains and therefore

merged with chains such as Sheraton, Hilton, Hyatt, Holiday Inn, Ramada

Inn etc. The international chains provided the following relationships to

individual owners:

Partnership (sharing equity and profits), Franchise (providing name and

association against a fee) and Management Contract (providing

professional managers, technicians, operational manuals, systems, etc on

the basis of management fees and a share of profits as incentive payment).

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5.6 Origin of the Food Service Industry - Food and beverage is an

intrinsic part of travel. Early inns provided wholesome food and local

brews as part of their services to travellers. It was only later that food and

beverage became specialized services when independent restaurants and

pubs opened to serve the local and travelling public. Independent

restaurants make up a huge part of food service business and employment.

An early type of restaurant was the Coffee House, which appeared in

England in the mid-1600s. The term restaurant, as we know today, began in

1765 in Paris, France. The credit of the first restaurant in the US goes to

Delmonicos, established in New York City in 1827. Then, as even now, the

vast majority of American eating places offered simpler, less expensive

food.

Types of Lodgings

Lodging is an inclusive term that defines the different types of

accommodations available to a traveller. Lodgings may vary in each

country but due to globalisation most lodgings today are standardized with

international services. So a hotel in Budapest wilt be similar to one in

Birmingham. Inns were commonplace by the turn of the millennium and

that later they were called Hotels.

5.7 TYPES OF HOTELS - British Law defines a “Hotel” or “Inn” as “a

place where a bonafide traveller can receive food and shelter, provided he

is in a position to pay for it and it is in a fit condition to be received”

64
Therefore, a Hotel must provide food (and beverages) and lodging to

travellers, on payment and has, in turn, the right to refuse admission if the

traveller is drunk, disorderly, unkempt or is not in a position to pay for the

services.

By this definition, a hotel must provide rooms and meals. The provision of

beverages is subject to local customs and practices. Earlier inns and

Hotels insisted on advance payment before guests were allocated the

room. The credit card has made the issue of financial credibility easier.

With the evolution of Hotels and its proliferation around the world, it is

impossible to categorise them under one term. Here is a list of Hotels

usually used in the tourism circuit, each with a specific purpose and

clientele:

Airport Hotels, as the name suggests, are located in the precincts of an

airport, usually situated a distance away from the city. They cater mostly to

transient airline passengers who may be catching another flight to

complete their journey. Such guests generally need only a room to sleep

before the next flight. Transient airline crews too find the airport hotel

convenient between flights.

Bed and Breakfast establishments are usually small family businesses. A

family may have an extra set of rooms in their home that they Let out to

tourists. The family of the establishment takes the responsibility of

providing comfortable rooms much in the home style with their dining

rooms serving as the breakfast venue.

65
Boutique Hotels is a term originating in North America to describe intimate,

luxurious and even quirky hotel environments. They differentiate

themselves from other branded ones by providing personalized facilities

and services. A boutique hotel is also known as “design hotel” or “lifestyle

hotel”.

Business Hotels specialize in providing business related facilities and

amenities for the business and corporate traveller. Such facilities will

include business centres that provide meeting rooms, secretarial services

and modern telecommunication facilities including the internet.

Casino Hotels serve only one purpose — to serve guests who want to

gamble. Dramatic features of casino Hotels are gaming halls, with all

possible gambling games including banks of slot machines, Blackjack

tables, RouLettes tables, etc. Conference Hotels have conference centres

attached to their main hotel to cash in on a Lucrative conference business.

These Hotels are geared for group check-ins and introduce efficient

registration and meal venues to cope with volume conference participants.

Convention Hotels are specially designed for such purposes. They would

have a Large plenary hall to seat 2000 people or more, breakout meeting

rooms for smaller groups, administrative offices providing alt the

secretarial, office automation facilities, ample registration lobbies and large

dining halls.

Deluxe Hotels would normally have a minimum five-star rating. These

Hotels are rated as deluxe as they would have decor and appointments of

66
luxury. They would have every conceivable comfort built into the guest

experience. Destination Hotel is a lodging whose inherent Location and

amenities attract visitors regardless of the route needed to reach it. Hence

Hotels beside the Pyramids, Taj Mahal, etc. come under this category.

These Hotels give spectacular views of the object of interest. Hotels at

remote places such as near volcanoes or in the heart of a jungle are self-

contained to meet all the needs of the guests.

Downtown Hotels are located at the centre of the city in busy commercial

and shopping districts. Everyone likes to stay downtown within easy reach

of government and private offices, shopping malts and entertainment

centres. However, since the price of land is expensive, the rates of the

Hotels are high to enable the investor to get his return on investment.

Family Hotels are found mostly at resorts geared specifically for families.

Rooms will be interconnected with perhaps a kitchenette and basic

cooking facilities. There would be common entertainment Lounges

equipped with television, indoor games and children play area. Many would

have outdoor children parks, jogging paths and independent barbeque

areas

Group Hotels are geared for volume traffic at any given time. They are

usually for mass transit tour groups that come in charters on economy

budgets. Their lobbies are large to welcome tour groups; have separate

registration counters; Lobby staff that are equipped to handle volume

67
baggage. They may not have all the frills in the rooms of a business hotel

because they are not needed.

Inns have their history from the Roman Empire when they built their

famous system of highways two millennia ago. It is a place to get food,

drink and lodging.

Motels are located on principle highways and road junctions. It is a lodging

facility with 15- 100 rooms for the automobile traveller. Rooms are simple

and clean with hot and cold shower or bath facilities. Guests have an

overnight stay at the most.

Palace Hotels are original palaces converted into Hotels. The beds in which

the guests sleep are the ones where actual royalty once slept. Of course,

these palaces have been equipped with modern conveniences such as

television, mini-fridges, air- conditioning and telephone connections

though intruding into the original uniqueness of the property.

Residential Hotels are those that are equipped for longer stay. Guests may

Lease this accommodation for anything up to a year. These Hotels are

convenient for Long tenure business executives who do not want the

hassle of running a home. These are ideal in university campus locations

who have families.

Resorts are located in natural and man-made sites. Resort Hotels will be

found at hill stations, seaside resorts, ski resorts, canyons, waterfalls, etc.

Many of these resorts are highly seasonal depending upon climates and

holidays to get their clientele. Resort properties have to make most of

68
those times and charge well. They would give heavy off-season discounts

to the budget conscious. Suburban Hotels are located on the outskirts of a

city where Land is cheaper than downtown Locations. Suburban Hotels will

be sprawling constructions with ample parking spaces. They attract

clientele that are cost-conscious, though not necessarily budget travellers.

OTHER LODGINGS

In addition to the traditional Hotels are other lodging options to a traveler,

some of which are unique to a country, these are: Bed-sit, Boarding House,

Caravans, Camps, Chalets, Condominium, Floating Hotel, Furnished

Apartments, Government Houses, Hospices, Hostels, Ice Hotels, Log

Cabins, Matels, Rotel, Sanatoria, Sports Hostel, Time-Share Hotel, Tree

House and Youth Hostel.

5.8 Hotel Organisation - A hotel is structured organizationally to meet

the following objectives: (1) To maximize revenue through efficient room

occupancy; (2) To maximize food and beverage revenue with excellent

meals; (3) To earn from other minor departments using the synergy of

activities; and (4) to give safe quality service. A hotel is, therefore,

structured to meet these objectives. The Hotel organisation structure is a

framework which assigns responsibilities and establishes channels of

communication to make decisions and set operational accountabilities. The

structure serves many purposes: a) to establish the relationship of people

from various departments with each other; (b) to establish effective

69
communication; and (c) to reflect the Levels of authority in the organisation

hierarchy. Organisation structure is different from the physical structure of

the building. The organisation structure is represented graphically in what

is called, an organisation chart. An organisation chart is a schematic

depiction of relationships between various job positions in an organisation.

The organisation structure of a hotel is based on its size and range of

services it offers. The number of services depends on their economic

viability and the market segment the hotel targets. To make it simple, we

can categorise properties into large and small properties.

LARGE INDEPENDENT HOTEL STRUCTURE

Large hotel operations require more people to operate it compared to

smaller ones. The amount of specializations also increases and therefore

requires an elaborate organisation structure. The organisation chart is a

representative one and is modified according to the policies of the

enterprise.

The departments shown may be further classified into revenue and non-

revenue (staff) divisions/departments. A division is a collection of

departments with a common objective. A department is an independent

activity with its own unique objectives though contributing to the hotels

goals. These can be explained as under at each in detail (See Figure 5.1):

70
 Figure 5.1. Large Independent Hotel Structure General Manager Chief Security Officer

Accommodations Food & Chef de Financial Sales & Human

Director Beverage Marketing Resources

Health Club

Manager
Chief Engineer Chief Steward Marketing

Sales Manager Recruitment

Executive Front-Office Banquet Sous Chef Manager

Income
Training
Housekeeper Manager

Restaurant Manager
PurchaseManager
Compensation
Lobby
Laundry Assistant Room Service & Benefits
Receiving
Manager housekeeper
Manager Manager

Bars Manager
Food &

Guest Beverage
Banquet
Relations
Manager
Source : Self Analysis after discussions with senior hotel managers 71
REVENUE DIVISIONS/DEPARTMENTS

A hotel has two major revenue producing divisions: (1) Accommodations

which is responsible for the sale of rooms, driven by the Front-Office

department supported by departments such as Housekeeping, Laundry,

Telecommunications, Health Club and Engineering, who make rooms

saleable; and (2) Food and Beverage which is responsible for the sale of

food and beverage through food outlets like restaurants, room service,

bars and banquets, supported by the kitchen and stewarding departments.

In addition, there are “minor revenue departments” that earn by using the

synergy of major revenue departments. Lets us examine each in brief:

ACCOMMODATIONS -

Front Office - The front office is the heart of the hotel that makes room

reservations, registers guests into the hotel, provides them with

information during their stay and maintains their master bills. It is the most

frequented and visible department than any other in the hotel and,

therefore, sets the lead in the guest experience. Their prime responsibility

is to sell rooms, process room reservations, register guests, coordinate

guest services, provide information and ensure the collection of room

revenues and meet budgets. The front office is supported by Lobby

services which include the concierge, belt desk, guest relations and

transportation. To fulfil these basic responsibilities the front office is

broken into different sections each with distinct roles. These sections are:
Reservations: The principal role of reservations is to book rooms in

advance.

Reception: The reception registers guests and assigns rooms to them.

Telecommunications: This department is responsible for all

communications within and external to the hotel. Guest Relations Desk:

The guest relations executive ensures that all the guests, especially the

VIPs, are kept comfortable during their stay. Front Office Cashier: Though a

member of the accounts department, he is a crucial team member of the

front office. The cashier maintains the guest’s accounts during his or her

stay, monitors credit limits and settles bills as per instructions. Uniformed

Service: Uniformed services’ is the collective term for lobby services.

Lobby Manager: The lobby manager coordinates all guest services from a

central point. Concierge: Provides personalized services and information in

large hotels to the guests, during their stay and also offers mail and

messaging services. Bell Desk: The desk coordinates the movement of the

volume of baggage during a single day is very errands for the guest and

the management within the hotel precincts. Doorman: He is person who

welcomes guests at the hotel portal. Valet: He is responsible to provide car

parking services.

Transportation is that section that manages a fleet of hotel transport to

serve several objectives. It is headed by a transport supervisor.

Housekeeping - This department is responsible for the cleanliness,

maintenance and the aesthetic standard of the hotel.

Laundry: This is a critical department that launders the volume of bed

Linen, restaurant linen, staff uniforms and guest garments.

Engineering - This department is responsible for the supply of air-

conditioning (or heating), lighting, mechanical, electrical, carpentry,

electronic and civiL works of the hotel.

Health Club and Recreation This department is considered a minor revenue

department but with a huge impact on a guest profile that is getting

increasingly health and physical-fitness conscious.

Food and Beverage - Restaurants. A restaurant may be a Licensed part of a

hotel operation, whereby the sales of the restaurant contributes to the

sales performance of the hotel, or a franchised operation within the hotel

premises, whereby the hotel leases space and has no share in the profits of

the restaurant operations.

Room Service - Room Service is a food service operation. It provides food

and beverage to guest-rooms.

Bars - The bar dispenses wines, liquor, spirits, juices, aerated waters,

cigars and cigarettes.

Banquets - The banquets department is a major revenue area within food

and beverages. They cater to various occasions in dedicated function

rooms within the hotel premises as well as outdoor sites away from the

hotel. The service is known as outdoor catering.

Sales Coordinator: Is responsible to formalize alt sales generated by the

sales executives through proper reports and documentation. S/he provides

the link between the hotel and sales personnel who are always on the move

in the market.

Kitchens - A kitchen is the place where food is prepared. While kitchens in

large hotels have independent sections to deal with various aspects of

food preparation due to the sheer volume of activity, smaller kitchens

would club sections or have multi-skilled cooks to carry out several roles.

Kitchen Stewarding - The department is primarily concerned with the

storage, maintenance, cleanliness and issue of cutlery, crockery,

holloware, chinaware and glassware to the restaurants and kitchens. It is

responsible for the cleanliness of kitchens and the washing of pots and

pans.

NON REVENUE DEPARTMENTS (STAFF FUNCTIONS)

Staff departments are those that support the revenue departments in their

efforts. These departments are:

Finance and Accounts - The Finance and Accounts department is

responsible for two major activities: 1) The finance section is responsible

for raising funds and multiplying profits through innovative investments

and funding so as to ensure that the hotel meets its capital and operational

funds. 2) The accounts section monitors the revenues and expenditures of

the hotel. they ensure that cash flows are available for daily operations by
controlling the bank accounts and making cash available through the

General Cashier.

Human Resources - The Human Resources department is key to any hotel

operation as they are concerned with the very important resource—people.

Sales and Marketing The marketing department creates the groundwork to

get customers to want to select the property for their stay and converts

that decision into a sale by actually booking a room and staying in it. The

marketing activity involves advertisement in various media such as

television, newspapers, trade magazines, etc. The department also

organises promotions to attract guests in different seasons and festivities.

Minor Revenue Departments - Minor revenue departments are those that

produce revenue mostly based on the products of other departments of the

hotel. These departments are the:

Delicatessen sells in-house butchery products

Patisserie sells bakery products such as cakes, pastries, tarts and hot

items like patties, scones, bread sticks, etc. Beauty Salon provides

hairdressing service and beauty care. Flower Shop is the retail outlet of the

flowers and ferns from the gardens of the hotel. Health Food Counter is

usually found at the Health Club. It capitalizes on a new trend among a

health conscious public to stay fit.

Small Hotel Structure - Smaller hotels would have the same functions

represented but done by fewer people with multiple skills. The organisation
 structure (Fig. 5.2) shows how a structure is pruned to fit limited payroll

budgets.

Figure 5.2. Small Hotel Structure.

General Manager

Dining Room
Front Office Supervisor Accountant Engineer Supervisor
Supervisor

Receptionists Chef-de-Partie Purchase F&B A/C Plumber

Clerk Cost Heating

Bell Boys Cooks Waiters

Source : Self Analysis after discussions with senior hotel managers

In small hotels, the General. Manager takes on the role of human resources

manager and sales manager in addition to the responsibilities of the

operations. The Front Office Supervisor overseas the front desk operations

as well as lobby activities. The Dining Room Supervisor oversees the

kitchen and dining room operations. The receptionist does the reservation,

reception, information, telephone and cashier functions. It is significant

that small operations have possibly only a dining room (or coffee shop) to

serve all the meats. The Accountant takes over the income and payable

responsibilities in addition to producing the statutory requirements such

as Profit and Loss statements and Balance Sheets. He is assisted by the

Purchase Clerk who doubles the receiving and store functions. Though this

is strictly not ideal in terms of food and beverage control, the operations is

small enough for direct supervision and control of the Accountant. The

Food and beverage Cost Clerk will do all the costing functions. It is

possible that the dining room has a dispensing bar to provide drinks

eliminating the need for a formal bar. The engineering supervisor is multi-

skilled to troubleshoot engineering problems. However, any operation

requires specialists like air-conditioning and heating mechanics and

plumbers. Most other services would be outsourced, such as laundry,

horticulture, civil works, etc.

Conclusion - Lodging facilities are not anymore corresponding only to the

truly definition: "A lodging accommodation for travellers". Nowadays,

architects, designers, developers, engineers, managers, more and more are

conscious that taste of guests could be different, according to their wishes

or needs. Hotel specialists permanently analyse new trends, define better

criteria, present modern standards in order to improve quality of life in

hotels. In the third millennium, the permanent competitive hospitality

market of suppliers is definitely more and more able, combining "savoir

faire" and the good use of technology to offer their guests an "A la carte"

environment.
 CHAPTER 6

HOTEL INDUSTRY – THE GLOBAL SCENERIO

Tourism and hospitality is one of the growth industries of the world with

more and more jobs on offer. Over recent decades the world economy has

undergone considerable transformation. Influenced by advances in

technology and the spread of global capitalism, the shrinkage of

geographical and cultural distances has allowed companies to widen

substantially their geographical markets and sources of supply. This in

turn has served as the catalytic focus for the creation of new business

opportunities, yet at the same time creating an enormously more complex

marketing environment for businesses to operate in. The Global Hotel

Industry Scenario may be studied in two phases – Before 2008 and the

Global Economic Crisis and Post 2008.

Prior to 2008 –

Figure 6.1 - Worldwide Real GDP Growth – 2003 to 2007

4.0% 5.3% 4.9% 5.4% 4.9%

2003 2004 2005 2006 2007F

Source: International Monetary Fund World Economic Outlook Database,
2007
Figure 6.2 - Rev PAR Change by Region May YTD

15.1%
8.6% 6.5%
5.2% 5.6%

EA
as
C

e
.S

p
PA

ic
U

ro

M
er
A

Eu
m
A

OCC ADR
Source: HotelBenchmark; Smith Travel Research/The Bench

Figure 6.3 - Most key global cites are also seeing substantial rate growth

Rev PAR Change by Market May YTD

Abu Dhabi 32.7%

Singapore 24.5%
Sao Paulo 18.1%
Dubai 16.3%
Tokyo 15.7%
Buenos Aires 15.6%
Sydney 15.3%
London 12.8%
New York 12.4%
San Francisco 9.1%
Berlin 7.6%
Hong Kong 7.1%
Paris 5.8%
Toronto 5.8%
Washington, DC 5.5%
Beijing 4.2%
Tel Aviv 3.5%
Rome -2.4%
Rio de Janeiro -5.4%

OCC ADR
Source: HotelBenchmark; Smith Travel Research

In Europe, demand grew at a slightly lower rate in the first quarter while
supply growth remained flat
Figure 6.4 - European Supply & Demand Monthly Change

10

-5

-10
2002 2003 2004 2005 2006 2007

Supply % change Demand % change

Source: Smith Travel Research/The Bench

U.S. demand growth has slowed while supply is on the increase

Figure 6.5. - U.S. Supply & Demand Monthly Change

10

-5

-10
2002 2003 2004 2005 2006 2007

Supply % change Demand % change

Source: Smith Travel Research

With 150,000 new rooms opened by hoteliers in the year 2006, the world

supply of corporate chains posts heretofore unattained growth. On January

1, 2007 the worldwide supply of the top 200 groups reached 43,000 hotels

and 5.5 million rooms. The turnover in the hotel industry worldwide posts
double-digit growth (+12.4%) and it has never been so high (230 billion

euros).

Table 6.1. Worldwide hotel ranking 2007 – final results Top 10 hotel groups
worldwide in 01/01/2007(in rooms)

Source: MKG Consulting Database – Copyright 06/07

Table 6.2 Top 20 hotel brands worldwide on 01/01/2007(in rooms)

Source: MKG Consulting Database – Copyright 06/07

In its Worldwide Hotel Activity Report, on January 1, 2007 MKG Consulting

counts 43,000 corporate operated hotels worldwide and 5.5 million rooms.

Growth in the year is established at 2.7% for nearly 150,000 rooms. This is

the highest growth ever recorded.

Figure 6.6. The growth rate of the hotel supply at corporate chains
worldwide from 2001 to 2006

Source: MKG Consulting Database – Copyright 06/07

Economic growth worldwide pursues its strong trend. The tourism sector

fully benefits from this dynamic. With the return to growth in international

travel, demand for hotel products is intensifying. The global depression

that marked the beginning of this decade is abating.

The perspectives for growth are good on all the continents. North America

remains the favored continent in the corporate hotel chain industry. Nearly

6 in 10 rooms (56.9%) in the world are located there, for nearly 3.2 million

rooms. The United States have the most advanced development cycle of

chains. They amount to nearly 70% of the country’s global supply. After a

period of declining volumes of openings, the outlook for a drop in building

costs should nonetheless result in wider operating margins to increase

hotel projects.
In contrast with chains in the United States, hotel brands in Europe (less

than 25% for the entire continent) still have a considerable amount of room

for development. And all the more so since it is the number-one tourist

destination worldwide.

In 2006, Asia posts the most growth in the corporate hotel chain supply in

terms of both growth rate (+10.5%) and volume (around 60,000 additional

rooms). The penetration rate of chains in the zone is just 15%, and the race

to Asia, already well on its way, shall continue. China and India are the

priority targets. These countries present many vast agglomerations with

large pools of customers. Finally, all lights are green, stimulating the

investor’s appetites and rumors about acquisitions regarding groups in the

Top 10 worldwide are multiplying.

The Scenario after 2008 – In the last 18 months, the hotel industry has

moved from an environment where there was a frenetic desire by both

owners and operators to sign up new management agreements to one

where new signings are comparatively rare. Attention is switching to how

to make the agreement provisions work to maximize operating

performance and hotel saleability.

According to data compiled by STR Global, occupancy levels in the Asia

Pacific region for the month of July 2009 dropped 6.3% year-on-year to

61.7%, ADR declined 15.9% to US$113.20, and RevPAR fell 21.2% to

US$69.83.
Among the key markets, Beijing, China, reported the only occupancy

increase, jumping 12.4% to 54.3%. Brisbane, Australia, was virtually flat in

occupancy for the month, dropping 0.7% to 83.4%. Bangkok, Thailand,

experienced the largest drop in occupancy, decreasing 25.6% to 52.7%. and

Hong Kong, China (-15.3% to 69.5%) also reported occupancy decreases of

more than 15%.

Tokyo, Japan, posted the largest ADR increase in U.S. dollars, jumping

14.5% to US$216.08. Two other markets reported ADR increases for the

month: Bali, Indonesia (+10.6% to US$138.21) and Osaka, Japan (+3.5% to

US$112.61). Three markets experienced ADR decreases of more than 30%:

Mumbai, India (-35.4% to US$166.68); New Delhi, India (-33.2% to

US$152.37); and Beijing (-30.5 to US$87.62). Tokyo reported the largest

RevPAR increase, up 8.5% to US$154.63, followed by Bali with a 4.9%

increase to US$112.74.

Four markets posted RevPAR decreases of 30% or more: Mumbai (-39.6%

to US$92.03); New Delhi (-38.7% to US$92.92); Bangkok (-35.9% to

US$46.07); and Sydney, Australia (-30% to US$98.80).

The current environment is very challenging. Hotels in most big cities

around the world are emptier than they were last year, according to STR

Global, a research firm. London has weathered the global downturn better

than most cities. Almost 79% of its hotel rooms were taken by paying
customers in the seven months to July, the highest occupancy rate of the

87 cities in the survey, and little changed from the same period last year.

Figure 6.7. Hotel Occupancy Rates – Major World Cities.

Source: STR Global

With the turmoil in the banking sector and the economic downturn around

the world, the global lodging industry in 2009 suffered its most severe

demand and rate contraction since the Great Depression. Almost no aspect

of the industry has escaped unscathed. Data from market participants

indicate that hotel transaction volume has decreased dramatically over the

past two years. In addition, declines in values and prices per room in the

US and globally have been significant. Global hotel sales volume was just

under US$12 billion for 2009, a 63% decline from the previous year. Beyond

2010, improvement is expected to commence, and a consensus around that

improvement is becoming increasingly consistent, with most analysts

indicating that RevPAR may reach 2007 levels by 2013. Aside from the

global economic downturn, which affected tourism in 2009, the H1N1

pandemic in April also had a detrimental impact on the industry. Business

travel remained equally constrained by drastic cost-cutting measures

geared toward improving the bottom line, while incentive travel also

diminished as a result of corporations and sales teams not meeting their

quotas.

Despite the recent trepidation and the still-bumpy road ahead, the

prospects for tourism appear favorable in the mid- to long-term.

Demographics in emerging markets point to a relatively large young

population base that is still years away from reaching its peak earning

capacity, while a growing middle class and increased access to credit —

disrupted by the global crisis — suggest enhanced levels of disposable

income.

While it is widely believed that the economy bottomed out in the third

quarter of 2009 and that the economic crisis may begin to moderate in the

latter half of 2010, the global hospitality industry is expected to experience

the effects of the recession for many years as distressed assets change

hands and the investment climate normalizes.

Following significant performance declines in 2008, the luxury hotel sector

experienced a record drop in performance in 2009, driven by dramatic

travel spending cuts among corporations (particularly in the finance

sector) and individual consumers, affecting business, group and leisure

segments. While all industry segments have been highly affected by the

reduction in the number of trips, the luxury segment has been further

affected by the so-called trade-down effect, whereby travelers seek more

economical lodging alternatives, further exacerbating the trend away from

luxury. Occupancy rates for luxury hotels worldwide fell to 57% in the year

through July 2009 from 71% in the same period a year earlier, a bigger drop

than for other types of accommodation, according to Smith Travel

Research. The average daily room rates at the most luxurious hotels

around the world dropped 16% to US$245.13. Luxury demand dropped

most significantly in Europe and the BRIC countries — Brazil, Russia, India

and China — and was more pronounced during weekdays (dominated by

corporate travel) than weekends. Data through September suggest that

occupancy declines can be largely attributed to a considerable loss in

high-end group demand (down 15%), which represents significant portion

of demand in large destination resorts and urban hotels. Rate declines

were more pronounced among transient business travelers (down 16%),

which has resulted in a narrowing of the gap between transient and group

rates that is likely to result in further group rate declines into 2010.

With the challenges that lie ahead, hoteliers will likely focus on rebuilding

their occupancy first, which may require placing even greater downward

pressure on average daily rates. As the economy rebounds, and demand

picks up, however, hoteliers will have opportunities to focus on rebuilding

their bottom lines. Although the lodging industry, like the economy, is

anticipated to recover slowly, it is hoped that the middle of 2010 will mark

the start of a new lodging cycle.

With the weakest economic fundamentals since the Great Depression, 2009

marked one of the poorest years for lodging fundamentals. According to

Smith Travel Research, occupancy, ADR and RevPar declined 8.7%, 8.8%

and 16.7%, respectively, in 2009 and are anticipated to continue their

downward trend through 2010. However, as the economy begins to show

signs of recovery and supply growth decelerates, RevPar decline in 2010 is

expected to be less substantial than in 2009. Smith Travel Research

forecasts that occupancy, ADR and RevPar will decline 0.6%, 3.4% and

4.0%, respectively, in 2010, compared with the year before. Initial forecasts

project positive growth for the US economy in 2010.

Occupancies in the hotel industry have actually already been correcting

themselves for the past one to two years. However, rate correction has

started only recently, but will become a growing trend owing not only to the

economic situation, but also to the new branded supply entering the

market. Current hotel operators need to realise that once the consumers

have several options, they will settle for the best value proposition and be

quick to switch loyalty from hotels that they believe are overcharging them.

Perhaps the silver lining lies in the limited supply growth expected in the

lodging industry in 2010. Statistics have shown that the number of lodging
projects under construction and in the planning phase continued to decline

throughout 2009.

According to Lodging Econometrics, there were 3,890 projects (485,664

rooms) in the hotel construction pipeline as of third quarter 2009,

representing a decrease of 34.0% compared with the same period the

previous year. New project announcements, which are estimated at 275

projects (34,468 rooms), also appear to be at historic lows as a result of

fundamental performance and financing conditions, while project

cancellations and postponements (438 projects/54,299 rooms) appear to be

at the upper end of the range of historical levels.

Tourism is anticipated to experience more robust growth in the next ten

years than that observed in the past decade. The global tourism downturn,

which began in the fall of 2008 and posted more than 12 consecutive

months of declining demand, showed the first signs of bottoming out in

late Q4 2009. Global demand was significantly affected in

2009, but the rate of decline slowed substantially in the second half,

leading to an estimated compression of tourism of only 5%, to 876 million

tourists globally for the year, according to the World Trade Organization.

Europe, representing more than half of all tourism traffic, experienced the

steepest decline, while Africa appears to have been the only region to post

positive results (+4%), given its smaller tourism base. The African

continent is anticipated to see further expansion of its tourism sector with

South Africa hosting the FIFA World Cup in June and July of 2010.
Sentiment on the tourism outlook among industry experts improved

significantly in late 2009 and further supports the WTO’s estimate of a

moderate tourism recovery of approximately 1% to 3% for 2010.

 CHAPTER 7

HOTEL INDUSTRY IN INDIA AND THAILAND

7.1 HOTEL INDUSTRY IN INDIA - India the country of over a billion

people is also home to some of the most fascinating temples, forts, and

monuments anywhere in the world. It is considered as an exotic place to

travel from the point of view of tourists and is a described as a dream

destination for the leisure traveler. Tourism in India has received a major

boost in the past decade since the Indian Government realized the great

potential of tourism of India. India has the right tourism potential and

attractions to captivate all types of tourists whether it is adventurous tour,

cultural exploration, pilgrimages, visit to the beautiful beaches or to the

scenic mountain resorts, or business travellers India has it all.

It is boom time for India's Tourism and Hospitality sector. A 5,000 year

history, culture, religion and alternative medicine fascinate both budget

and luxury travelers alike. Driven by a surge in business traveler arrivals

and a soaring interest in India as a tourist destination the recent years have

been extremely busy for India as a tourist destination. Tourism in India is

the third largest foreign exchange earner, accounting for 2.5 per cent of

GDP.

The tourism industry in India contributed 6.1% to the GDP in 2008/09

compared to 6.8% in 2007/08. According to estimates of the World Travel

and Tourism Council (WTTC), GDP growth for Travel & Tourism economy is

expected to average 7.6% per annum over the next ten years. Despite the

global economic recession, foreign tourist arrivals (FTA) to India show a

continuing growth trend and increased to 5.37 million in 2008 from 4.98

million in 2007. However, the FTA growth rate declined from 14.7% in

2007/08 to only 5.7% in 2008/09, the lowest recorded since 2001/02 when

the 9/11 terror strikes occurred. The decline in growth rate reflects the

significant impact of the economic recession on the international travel

industry.

Figure 7.1: Sectoral Growth Rates at Factor Cost by Industry – India

(2003/04-2008/09)

Source : India Tourism Statistics 2008

However, according to the India Tourism Statistics 2008 published by the

Ministry of Tourism, the future outlook remains positive. The report

showing year-to-date numbers for FTA shows that in the first quarter of

2009, the FTA declined

significantly to 13.8% as compared to that in 2008, but in the second

quarter the

situation improved markedly (a decline of only 1.8%) with the FTA close to

that of last year's. Considering that the second quarter was the traditionally

weaker period in terms of season, we can attribute this improvement to the

growing positive business sentiments in India. Over the last six years, FTA

into India has recorded a growth of 125.6% from 2.38 million in 2002 to 5.37

million in 2008. Even at this visitation level, India accounts for less than 1%

of the global tourism market. Although the total share of world tourist

arrivals to India might be less, it has been steadily increasing. India

attracted 0.58% of the world tourists in 2008 as compared to 0.34% in 2002.

In the same period, India moved from 54th rank in world tourist arrivals in

2002 to 41st in 2008, this being the highest ever attained by the country. In

2008, the domestic market in India recorded 562.9 million travellers as

compared t o only 5.37 million international travellers. This highlights the

potential of domestic tourism in the country, which is 104 times that of

international arrivals in 2008.

India’s GDP growth in the industrial and service sectors has been

accelerating over the last five years, attaining double-digit growth in 2010,

at 10.0 and 11.1 percent, respectively (Ministry of Finance, 2009).

Post 1991 Globalization, Liberalization and Privatization (GLP), Service

Sector share of contribution to India’s GDP has been steadily raising from

a meager 38.67 per cent in 1985-86 to about 53% in 2006-07. The services

sector consists of a major component of the total GDP of our country.

From out of this the Hotel and Restaurant Industry forms a major chunk.

The share of contribution of activities of trade, hotel and restaurant

business rose from 8-9 per cent to 14-15 per cent over a period of five

decades till 2010. Trade along with hotel and restaurant business rose

fourteen-fold over the period.

India's tourism and hospitality industry has emerged as one of the key

sectors driving the country's economy. According to the latest Tourism

Satellite Accounting (TSA) research released by the World Travel and

Tourism Council (WTTC) and its strategic partner Accenture, India's travel

and tourism industry is expected to generate approximately US$ 100 billion

in 2008, growing at 7.3 per cent and rising to US$ 275.5 billion by 2018 over

the next ten years.

Inbound Tourists: India's share of international tourist arrivals has steadily

increased from 0.46 per cent in 2004 to 0.55 per cent in 2007. Consequently,

foreign exchange earnings grew at a much faster rate at 28.9 per cent in

2008, against 20 per cent during the corresponding period in 2007. The flow

of foreign tourist arrivals has been recording phenomenal growth rates.

India's share in world arrivals currently stands at 0.5 per cent, its share in

revenue generated from tourism worldwide is 1.11 per cent.

Hospitality : The boom in India's tourism industry and the surge in tourist

inflow to the country has percolated to other associated sectors like

aviation, medical tourism, and the hotel industry. The country's hospitality

sector has witnessed an increase in the occupancy ratios and average

room rates. While occupancy ratio is around 75-80 per cent, the average

increase in room rates has been hovering around 22-25 per cent. By 2010,

India will see an estimated 10 million foreign visitors and thereby a demand

for approximately 100,000 rooms.

And with the continuing surge in tourist inflow, this sector is likely to offer

tremendous opportunity for investors. For example, while the estimated

number of required hotel rooms is around 240,000, the current availability

is just 90,000 rooms - leaving a shortfall of 150,000 rooms to be provided.

India's hospitality sector is expected to see an estimated US$ 11.41 billion

in the next two years, and around 40 international hotel brands by 2011,

according to a report by Ma Foi Management Consultants. Several global

hotel chains see immense investment opportunities in the sector with

global chains like Hilton, Accor, Marriott International, Berggruen Hotels,

Cabana Hotels, Premier Travel Inn (PTI), InterContinental Hotels group and

Hampshire amongst others have announced major investment plans in

India with others likely to follow suit.

International Recognition: India's booming tourism sector has not only

witnessed international investments but also achieved international

accolades with its increasing appeal as the leading global tourist

destination. The government has been instrumental in making tourism a

priority sector its efforts have borne fruits with a series of international

recognition and awards.

 India has been ranked No 1 in long-term travel growth by World

Travel and Trade Council in its global report for 2008.

 The world's leading travel and tourism journal, "Conde Nast

Traveller", ranked India as the numero uno travel destination in the

world.

 India was adjudged Asia's leading destination at the regional World

Travel Awards (WTA).

 India bagged the World's leading Destination Marketing Award for

the Incredible India campaign.

Structure of the Industry:

Hotels in India are broadly classified into 7 categories (five star deluxe,

five-star, four star, three star, two star, one-star and heritage hotels) by the

Ministry of Tourism, Government of India, based on the general features

and facilities offered. The ratings are reviewed every five years. The

Government of India, Department of Tourism (H&R Cell) follows the

following system for gradation of hotels, i.e. for the purpose of Hotel

Classification

Mark sheet for quality - Criteria Max Marks Score

Exterior & Grounds 8 - Exteriors, Approach 2/ Landscaping 2/Exterior

lighting 2/ Parking 2

Guest Rooms 10 - Furniture 2/ Furnishings 2/ Décor 2/ Roomfacilities &

amenities 2/ Linen 2

Bathrooms 8 - Facilities 2/ Fittings 2/ Linen 2/ Toiletries 2

Public Areas 8 - Furniture 2/ Furnishings 2/ Décor 2/Restrooms 2

Food & Beverage 8 - Choice of cuisine, menu 3/ décor 2/ foodquality 3

Kitchens 8 - Equipment 3/ State of repair 2/ food storage3

Cleanliness 8 - Overall impression

Hygiene 8 - Pot & Dish Washing 2/ drinking water 2/ stafffacilities 1/ pest

control 2/ garbage disposal1

Safety & Security 8 - Fire fighting equipment 2/ signage 2/awareness of

procedures 2/ public area and room security 2

Communications 6 - Phone service 2/ e-mail access 2/ internetaccess 1/ PC

and other equipment 1

Guest Services 5 - Overall impression

Eco-friendly practices 5 - Waste management, recycling, no plastics1/Water

conservation, Harvesting 1/pollution control-air, water, sound, light 2/

Alternative
energy usage 1/

Facilities for Physically challenged persons 5 - At least a room for

physically challenged persons 1/ public toilet in lobby1/telephone in public

places 1/ ramps etc 1/facilities for aurally or visually handicapped 1

Staff quality 5 - Overall impression

TOTAL 100

Qualifying Score

5Star D-90 %, 5Star-80 %, 4Star-75 %, 3Star-65 %, 2Star-55 %, 1Star-50 %

Key Consumer Segments:

The market for the hotel industry can be divided into the following key

consumer segments based on purpose of visit:

The Business Traveler: The Business Traveler is a businessman or a

corporate executive travelling for business purposes. This segment

includes corporates, both domestic and foreign, who open offices in the

hotel premises during start-ups, corporate executives who make extended

stay either for long duration projects or while waiting for permanent

accommodation (primarily expatriates) and convention arrivals.

The Leisure Traveler: The Leisure Traveler could either be a foreigner or a

domestic traveler whose primary purpose of visit is holiday and site

seeing. Among non-business foreign tourists the primary motivation for

visiting India is largely cultural attraction followed by conferences and

conventions, tourist attractions like beaches, wild life, hill resorts etc.

Usually, leisure travelers are part of a package run by a tour operator.

Airline Cabin Crew: Airline Cabin Crew forms another important segment

because of the repetitive and guaranteed nature of the business that they

provide. Usually, these are a part of an annual contract whereby, in return

for a fixed rate, a certain number of rooms are provided on demand for

cabin crews.

DEMAND & SUPPLY SCENARIO - Over the last decade and half the mad

rush to India for business opportunities has intensified and elevated room

rates and occupancy levels in India. Even budget hotels are charging USD

250 per day. The successful growth story of 'Hotel Industry in India'

seconds only to China in Asia Pacific.

'Hotels in India' have supply of 110,000 rooms. According to the tourism

ministry, 4.4 million tourists visited India last year and at current trend,

demand will soar to 10 million in 2010 – to accommodate 350 million

domestic travelers. 'Hotels in India' has a shortage of 150,000 rooms

fueling hotel room rates across India. With tremendous pull of opportunity,

India is a destination for hotel chains looking for growth. The World Travel

and Tourism Council, India, data says, India ranks 18th in business travel

and will be among the top 5 in this decade. Sources estimate, demand is

going to exceed supply by at least 100% over the next 2 years. Five-star

hotels in metro cities allot same room, more than once a day to different

guests, receiving almost 24-hour rates from both guests against 6-8 hours

usage. With demand-supply disparity, 'Hotel India' room rates are most

likely to rise 25% annually and occupancy to rise by 80%, over the next two
years. 'Hotel Industry in India' is eroding its competitiveness as a cost

effective destination. However, the rating on the 'Indian Hotels' is bullish.

'India Hotel Industry' is adding about 60,000 quality rooms, currently in

different stages of planning and development and should be ready by 2012.

MNC Hotel Industry giants are flocking India and forging Joint Ventures to

earn their share of pie in the race. Government has approved 300 hotel

projects, nearly half of which are in the luxury range. Sources said, the

manpower requirements of the hotel industry will increase from 7 million in

2002 to 15 million by 2010.

With the USD 23 billion software services sector pushing the Indian

economy skywards, more and more IT professionals are flocking to Indian

metro cities. 'Hotel Industry in India' is set to grow at 15% a year. This

figure will skyrocket in 2010, when Delhi hosts the Commonwealth Games.

Already, more than 50 international budget hotel chains are moving into

India to stake their turf. Therefore, with opportunities galore the future

'Scenario of Indian Hotel Industry' looks rosy.

There is a mismatch between demand and supply, leading to higher

occupancies and average room rates. During 2004-5, revenue per available

room in hotels across India increased by 29 per cent over the 2001-02

levels. This seems to be is just the beginning, judging by opinions from

analysts and industry executives. Industry experts predict that demand will

outpace supply in the short to medium term, and ARRs are expected to

increase by 13 to 14 per cent annually over the next few years. Due to the
spurt in tourist inflows, occupancy rates are expected to reach 83 per cent

by 2008-09, up from 72 per cent.

The overall growth outlook appears to be very buoyant. Growth in demand

in 2005 – 2010 was phenomenal year on year. Much of this growth will be

driven by the BPO explosion, telecom, IT and energy. The hotel sector has

also got a fillip from the entry of low cost airlines and the open skies policy

— which has led to a dramatic increase in commercial flights into and out

of India. All these developments have contributed to a phenomenal growth

in commercial travel. It is estimated that a majority of the tourists are

business travelers. Unlike leisure travel which is seasonal, the business

travelers ensure year-round occupancy. Indeed, the dollar-paying business

travelers are the most sought after customers since they seek few

discounts, entertain freely and make extensive use of the hotel's facilities

like restaurants, business centres, travel desk, car rentals etc. since they

are pressed for time. The increased thrust on meetings, conventions and

exhibitions helps hotels improve their earnings. Historically, India has been

a six or seven city market, including the four metros of Delhi, Chennai,

Kolkotta, Mumbai and tourist hotspots like Jaipur , Goa and Agra. However,

the rise in economic activity across the country has led to an increase in

demand in several other smaller cities including Ahmedabad, Pune,

Cochin, Bangalore and Hyderabad.

Table 7.1. Supply Demand gap in the premium hotels (Avg. 10 major cities)

Year 99-2000,200-01, 01-02, 02-03, 03-04, 04-05, 05-06, 06-07, 07-08

0 -099-2---

Room availability 16,378 17,656 18,976 22,247 23,010 24,246 24,620 25,773 27,703

Room demand 10,138 10,671 9,448 13,001 15,472 17,518 19,130 20,797 22,822

Surplus/ Shortage 6,240 6,985 9,528 9,246 7,538 6,728 5,490 4,976 4,881

Increase-room supply NA 1,278 1,320 3,271 763 1,236 374 1,153 1,930

Occupancy rate (%) 62 60 50 58 67 72 78 81 82

Av. Room Rate (Rs) NA 4,220 4,180 4,094 3,835 4,046 4,332 5,250 5,936

Note: The data pertains to the cities of Mumbai, Delhi, Chennai, Kolkata, Bangalore, Hyderabad, Pune, Goa,

Jaipur and Agra

Source – Good times report. www.ibef.org/download/for_goodtimes.pdf

Although India has over 1,800 properties comprising more than 84,000

rooms, the hospitality industry is highly fragmented with a large

unorganised sector accounting for over 60 per cent of the market. The

majors in the organised segment are the Taj, Oberoi, ITC Hotels, Leela and

Asian Hotels, among others. Indian Hotels and its subsidiaries, collectively

known as Taj Hotels, Resorts and Palaces, comprises 71 hotels with over

8,000 rooms and is the largest hotel chain in south Asia. East India Hotels

has about 30 properties worldwide with about 5,000 rooms, and is focusing

its Oberoi brand in the luxury segment. Besides, the company also has a

marketing and management agreement with the Hilton group for eight of its

hotel properties. ITC has 66 hotels under four brands across 50

destinations in India with a total of about 5,000 rooms. The Leela group of

hotels operates in the luxury segment and owns three properties in

Mumbai, Bangalore and Goa with over 800 rooms. The Leela group has tied

up with Germany based Kempinski for the business segment and with
Singapore based GHM group for the leisure segment. The demand and

supply gap differs from city to city. The hotel industry is on an expansion

spree. Several companies are scouting for properties in cities like

Bangalore and Chennai and in the states of Kerala and Goa, apart from

expanding overseas.

Supply scenario - According to estimates by HVS International, around

10,856 hotel rooms in Delhi, 9,318 rooms in Mumbai, 7,794 rooms in

Bangalore and 7,408 rooms in Hyderabad are expected to be added by

2011.

As per the Travel and Tourism Competitiveness Report 2009 by the World

Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd

overall, moving up three places on the list of the world's attractive

destinations. It is ranked the 14th best tourist destination for its natural

resources and 24th for its cultural resources, with many World Heritage

sites, both natural and cultural, rich fauna, and strong creative industries in

the country. India also bagged 37th rank for its air transport network. The

India travel and tourism industry ranked 5th in the long-term (10-year)

growth and is expected to be the second largest employer in the world by

2019.

Contribution to the economy

Combining unparalleled growth prospects and unlimited business

potential, the industry is certainly on the foyer towards being a key player
in the nation's changing face. Furthermore, banking on the government’s

initiative of upgrading and expanding the country’s infrastructure like

airports, national highways etc, the tourism and hospitality industry is

bound to get a bounce in its growth.

The hotel and tourism industry’s contribution to the Indian economy by

way of foreign direct investments (FDI) inflows were pegged at US$ 2.1

billion from April 2000 to March 2010, according to the Department of

Industrial Policy and Promotion (DIPP).

According to the Travel & Tourism Competitiveness Report 2009 brought

out by the World Economic Forum, the contribution of travel and tourism to

gross domestic product (GDP) is expected to be at US$ 187.3 billion by

2019. The report also states that real GDP growth for travel and tourism

economy is expected to achieve an average of 7.7 per cent per annum over

the next 10 years. Export earnings from international visitors and tourism

goods are expected to generate US$ 51.4 billion (nominal terms) by 2019.

Furthermore, the sector which accounted for 6.4 per cent of total

employment in 2009 is estimated to rise to 7.2 per cent of total employment

by 2019.

According to industry data, India is expected to double the number of

branded hotel rooms from 100,000 now in just three years. Leading the

pack are global hotel chains, which will add over 300 hotel properties (an
estimated 55,000 rooms) in the country by 2013, as per data compiled by

companies.

Government Initiative - According to the Consolidated FDI Policy, released

by DIPP, Ministry of Commerce and Industry, Government of India, the

government has allowed 100 per cent foreign investment under the

automatic route in the hotel and tourism related industry. The terms hotel

includes restaurants, beach resorts and other tourism complexes providing

accommodation and /or catering and food facilities to tourists. The term

tourism related industry includes:

The Government of India has announced a scheme of granting Tourist Visa

on Arrival (T-VoA) for the citizens of Finland, Japan, Luxembourg, New

Zealand and Singapore. The scheme is valid for citizens of the above

mentioned countries planning to visit India on single entry strictly for the

purpose of tourism and for a short period of upto a maximum of 30 days

Medical Tourism : India's reputation as a major medical tourist destination

is fast becoming popular amongst foreign tourists to the country. India is

aggressively promoting the concept of medical tourism and capitalising on

its low cost and highly trained doctors. Moreover, the country also has

some of the best hospitals and treatment centres that are equipped with

infrastructure and technology, which are at par with those in the US, UK

and Europe at a fraction of the costs. Currently, India's earnings through

medical tourism annually is an estimated US$ 821.40 million. The market

size of medical tourism in India is worth US$ 2.4 billion and is growing at 27

per cent annually. The country received 1.1 million medical tourists in 2009,

registering a growth of 17 per cent. According to a report by RNCOS,

medical tourism will grow at a CAGR of over 27 per cent in the period 2009–

12 to generate revenues worth US$ 2.4 billion by 2012. The number of

medical tourists is anticipated to grow at a CAGR of over 19 per cent to

reach 1.1 million by 2012. India’s share in the global medical tourism

industry will climb to around 2.4 per cent by the end of 2012.

Major players in the Indian Hotel Industry

Hotel Chains - They comprise major players including Indian Hotels

Company Limited (the Taj Group) and associate companies, EIH Limited

(the Oberoi Group), ITC Hotels Limited (the ITC Welcome Group), Indian

Tourism Development Corporation (ITDC) and Hotel Corporation of India

(HCI) (the latter two being under the Public Sector). Most of these chains

had an established presence in one or more metro cities prior to the

tourism boom of the 1980s. Subsequent to the tourism boom, these chains

aggressively expanded their presence in other locations. The private

players among the hotel chains are industry leaders and have well-

established brand identities across the different industry segments.

Small Chains - They are companies that have come up after the tourism

boom of the 1980s and 1990s. Due to lack of prior experience in the hotel

industry, these players have preferred to opt for operating/management

arrangements with international players of repute. Some of the companies

in this category are Hotel Leela Venture (with Kempinski), Asian Hotels

(Hyatt International Corporation), Bharat Hotels (formerly with Holiday Inn

and Hilton and now with Intercontinental). As late entrants, most of these

hotel companies have fewer properties, compared with the big chains.

However most of these players have initiated expansion plans during the

late 1990s.

Public Sector Chains - ITDC and HCI, boast of some of the best locations in

major cities but are relative underperformers, as compared with their

private sector counterparts.

International Hotel Chains - They are also looking at India as a major

growth destination. These chains are establishing themselves in the Indian

market by entering into joint ventures with Indian partners or by entering

into management contracts or franchisee arrangements. Some of the

players who have already entered or plan to enter the Indian market include

Marriott, Starwood, Berggruen Hotels, Emaar MGF. Most of these chains

have ambitious expansion plans especially with a strong focus on the

budget segment and tier II cities.

Localized Hotel Companies - They are mainly comprise early entrants who

have an established localized presence and who preferred not to expand

during the tourism boom but focus on building and catering to a loyal

customer base.
OPPORTUNITIES & CHALLENGES

Opportunities in the Sector - Considering India’s size and unparalleled

diversity - natural, geographic, cultural and artistic, there is vast room for

growth in tourism industry. As travelers surge into India, the demand for

rooms, across segments, has skyrocketed. Hotels in the luxury and

business traveler segment are recording nearly 100 per cent occupancy,

spiraling tariffs, and a strain on capacity and manpower. Anticipating this

demand, around 10,856 hotel rooms in Delhi, 9,318 rooms in Mumbai, 7,794

rooms in Bangalore and 7,408 rooms in Hyderabad are expected to be

added by 2011, according to estimates by HVS International. The expected

growth of the industry in future has provided its players with an

opportunity to invest in new technologies such as CRM tools and latest

security systems, and to venture into niche tourism segments like Medical,

Religious, Cruise, Casinos, MICE etc. India can also develop infrastructure

to host international conferences and trade shows, thus increasing its

share of tourist traffic from such activities

Health tourism - India is gradually gathering popularity as a health tourist

destination. At its current pace of growth, healthcare tourism alone can

rake over USD 1.7 billion additional revenues by 2012. Medical tourism is

now a USD 299 million industry, as about 100,000 patients come each year.

The country needs to exploit the cost advantage it can offer to a health

tourist, the study said. The biggest driver for healthcare tourism is the

disparity in costs. A heart surgery in the US costs USD 30,000 as compared

to USD 6,000 in India. A bone marrow transplant in the US costs USD

250,000 and USD 26,000 in India. With yoga, meditation, ayurveda,

allopathy, and other systems of medicine, India offers a unique basket of

services to an individual that is difficult to match by other countries.

Clinical outcomes in India are at par with the world's best centres since

India has internationally qualified and experienced specialists.

Challenges - India’s poor domestic tourism infrastructure is leading to a

threat of losing foreign tourists to other competing countries. India is

highly prone to prevailing socio-economic and political conditions. Like

terrorist strikes, riots, epidemics, political uncertainty, slowdown in

reforms etc. The growth in the Indian tourism sector is accompanied by the

imminent destruction of local ecology and an increase in pollution, which,

in the long run, is going to negatively impact the tourism industry of India.

While in general the global hotel industry has suffered owing to the

meltdown, the Indian hotels industry has had to cope with significant

contraction because of events like the 26/11 terrorist attacks and the

spread of the H1N1 virus, which only added to the impact of the downturn.

Being a cash-rich business, hotels normally exhibit high profitability and

are able to maintain a comfortable liquidity position during an industry up-

cycle. However, in a down-cycle as volumes contract, the capital-intensive

nature of the business with its high fixed operating costs weighs heavily on

profitability.
The global hotels industry has experienced RevPAR growth for periods of

five to eight years followed by one to two years of decline in RevPAR.

Globally, demand has rarely kept declining for sustained periods. The long-

term fundamentals of the hotels industry are interplay between hotel

demand and supply, with the global economic scenario as the backdrop.

Contraction in volumes: Following more than a decade of increasing

domestic tourist visitors and three years of continued increase in FTAs,

foreign tourist volumes contracted sharply in calendar 2009. In H2, 2008-09,

there was a sharp deterioration in the profitability, cash flows, and the

capital structure of the Indian Hotels Industry.

Figure 7.2 : Domestic tourist visits to India

Source: Ministry of Tourism, Government of India

Note: Years in the chart refer to Calendar years

Foreign Tourist: Arrivals As per the press release by Press Information

Bureau dated 4th March, 2010, the monthly estimates for February 2010,
compiled by the Ministry of Tourism on two important indicators of tourism

sector, foreign tourist arrivals (FTAs) and foreign exchange earnings

(FEEs) were as follows: FTAs during the period January-February 2010

were 1,092,000 with a growth rate of 12.7 per cent, as compared to the FTAs

of 968,000 during January-February 2009.

Figure 7.3: FTA in India over the past four years

Source: Ministry of Tourism, Government of India

Figure 7.4:- Passengers carried by domestic airlines

Source: Ministry of Civil Aviation, Government of India

Fall in ARRs and Occupancies erode profitability: In an industry that has

heavy upfront capital costs, any decline in RevPAR is likely to have an

exponentially negative impact on profitability. Under conditions of

controlled costs, any increase in RevPAR should at minimum match

inflation, for sustained profitability.

Short-term outlook remains weak: Overall, considering the present market

conditions, ICRA expects 2009-10 to remain challenging for the Indian

hotels industry. Although H2, 2009-10 is likely to post an improvement over

the corresponding previous, partly because of the low base effect (H2,

2008-09 had been weak), increase in ARR in the current season (H2, 2009-

10 is the annual peak season for the industry) are likely to be muted as

hotels attempt to revive occupancies. Further, as part of the proposed

supply comes on-stream in various markets over the next year, the revival

in the industry is likely to be subdued. The narrowing of the demand-

supply gap would also prevent industry wide ARRs from shooting up as

had happened in 2007-08. However, over the longer run this is likely to

bring in a greater alignment between tariffs and the value provided.

Long-term outlook remains positive; significant room additions anticipated

across regions: Despite the current trends in the industry, ICRA continues

to have a positive view on the long-term fundamentals of the Indian hotels

industry.

The long-term performance of the Indian hotels industry is linked to

macroeconomic factors related to the general health of the economy and to

micro market-specific, supply-demand gaps. ICRA expects demand in the

long term to be driven by increasing travel volumes (low-cost airlines play

an important role in boosting domestic travel); globalisation of trade and

increase in tourist travel (India and Malaysia are set to emerge as key

tourist destinations); and rising affluence and improving lifestyles of the

travelling population (which drive demand for branded rooms and quality

F&B).

Notwithstanding the long-term favourable outlook, the Indian hotels

industry would remain exposed to exogenous shocks like terrorist attacks

or health concerns, as evident from the aftermath of the 26/11 attack in

India. Another point of concern is the lack of services and supporting

infrastructure in India that would warrant the high prices Indian deluxe

hotels currently command. These high prices, which are often comparable

with those of premium international hotels, have led to the diversion of a

significant number of MICE and leisure travellers to neighbouring value-for-

money destinations like Thailand and Malaysia.

While the current global crisis is significantly impacting the economy and

the demand for hotel rooms, the vast gap between the demand for and the

supply of rooms in India persists. While the hotel industry in developed

markets appear to have reached a point of saturation as far as demand and

supply is concerned, the Indian hotels industry continues to evolve. The

country currently has an estimated inventory of 125,000 branded rooms,

which is well short of the requirement of almost twice the number in the

next five years. In the short-to-medium term, the Indian hotels industry is

likely to face several challenges ranging from the aftermath of this current
down-cycle to more inherent problems like availability of low priced credit,

government clearances, a plethora of taxes and economically viable land to

build inventory. In the longer term, the growth potential is significant as

evident from the continued global interest in the Indian hospitality industry.

The industry has announced a pipeline inventory of over 90,000 new rooms

(across categories) to be launched in the next five years, a significant

number of which is coming from international hotel majors.

The Indian hospitality industry covers various price segments (unbranded

to 5 Star Deluxe) but continues to be dominated by a few premium segment

players. The room inventory is skewed towards the 5 Star and 5 Star

Deluxe segments. Indian Hotels Company Limited (IHCL) with more than

12,000 rooms is the largest and most diversified hospitality company in

India with a presence spanning a wide price spectrum, ranging from super

luxury to economy. IHCL is followed by the hotel divisions of ITC and EIH

Limited who have around 1,500-3,000 rooms. Apart from these hotels, the

industry has numerous participants with portfolio sizes ranging from one

to 10 hotels.

FUTURE OUTLOOK - The Indian Hospitality sector is expected to show a

healthy growth in the medium term. Strong economic growth, increased

FDI, greater emphasis on tourism development, favorable Government

policies, impending 2010 Commonwealth games, 2011 Cricket World Cup

and other international events, will be the major drivers for the growth.

There exists a lot of scope for growth in tourism sector. According to the
Ministry of Tourism, the contribution of tourism to India’s GDP is only 5.9

per cent as compared to the worldwide average of 11 per cent.

By 2020, the Government of India expects travel and tourism to contribute

Rs 8,500 billion to GDP, almost four times the value in 2005. With

successive Governments committed to reform, a strong manufacturing

sector and a private sector that already has a critical mass that is needed

to drive growth, it is unlikely that the strong growth in GDP is likely to be

reversed. The rising middle class is also becoming increasingly affluent,

mobile, Internet savvy and more sophisticated in terms of what is

demanded in terms of tourism products and services, and more

importantly the price they are willing to pay for it.

Entry of international brands through joint ventures and tie-ups is likely to

enhance the service levels and will narrow demand-supply gap of rooms.

But ICRA expects the shortage in rooms to remain for next five years

leading to higher occupancy levels and increase in Average Room Rates

(ARR). Currently, according to industry estimates, there are only 1,05,000

hotel rooms in India while in China the figure is much higher at 7,65,000

rooms.

The annual growth rate of hotel rooms in India is only 6 per cent, compared

to 22 per cent in China, 18 per cent in Thailand and 15 per cent in Malaysia.

Economic growth in tier II and tier III cities have put these on the hospitality
industry map. ARR are likely to harden in these cities in next 2-3 years due

to shortage of room. Niche areas like health tourism and spiritual tourism

are emerging as lucrative business opportunity for the industry. The overall

buoyancy in the market is attracting increased interest from investors and

higher inflow of capital in the industry is expected. The growth for hotels is

also likely to come from proliferation of Special Economic Zones.

Major impediments to the growth are sensitivity to business cycles and

adverse political and social events (including terrorist attacks), high rate of

tax, high land price, bureaucracy, and poor infrastructure. For instance, the

effective rate of taxation on tourism in India is 21 per cent as compared to 7

per cent in Thailand, 4 per cent in Malaysia and 1 per cent in Hong Kong.

Furthermore, owing to high land prices, there are more five star hotels than

budget hotels, making India a high cost deluxe destination. Additionally,

India still does not have facility of modernised e-visa. The existing visa

process is cumbersome and comparatively more expensive than other

destinations. Yields are expected to be low in coming years on account of

continuing price-cutting and discounts.

The Government is planning to grant infrastructure status to all budget

hotels and convention centres set up in Delhi and National Capital Region

till 2010 Commonwealth Games. This will enable them to enjoy a 10 year
tax holiday as in case of other infrastructure projects such as roads, ports

and power.

Until recently, global hotel chains preferred the franchisee or management

agreement route in India rather than invest their monies. That is changing

now. The Grand Hyatt was among the first hotels in which the foreign

partner invested in the equity of the company. The current good-times in

the hotel business may be part of a larger business cycle, which occurs

periodically in corporate history. But one spinoff is certain; it has heralded

the coming-of-age of Indian hotel chains.

HVS Global Hospitality Services a leading consulting firm has released the

2009 edition of “Hotels in India – Trends and Opportunities”. The report

presents market performance across 11 major cities in India and highlights

important trends in the Indian hospitality industry. According to the report,

in 2008/09 the industry saw an overall decline in occupancy and revenue

per available room (RevPAR) in most cities in India. This was expected in

view of the global economic contraction. However, the report states that

despite a contracting global economy, India recorded 562.9 million

domestic travellers in 2008, as compared to only 5.37 million international

travellers: domestic travellers being 104 times that of international ones.

The report gives an account of the new supply entering the market in 11

major cities across the country. It states that in a period of 11 years, from

1998/99 to 2008/09, the supply of rooms increased by 109%. The supply is

 further expected to increase by 94% by 2013/14 from that in 2008/09;

therefore, reflecting a faster growth in the coming years.

Figure 7.5 : Growth of Room Supply – India (1998/99-2013/14)

According to HVS, the addition of new supply across the country in each of

the hotel categories, particularly in the three and four-star ones, will ensure

that hotels charging high rates have a product that can support their rate.

Current hotel operators will need to realise that once the consumers have

several options, they will settle for the best value proposition and be quick

to switch loyalty from hotels that they believe are overcharging them.

The "Indian Tourism Industry Forecast (2007-2011)" report provides an

objective analysis of the present scenario and future prospects of the

Indian tourism industry. This report focuses on different parameters of

tourism industry including: inbound tourism, outbound tourism,

expenditure by inbound tourists, and medical tourism in India. It also helps

clients to analyze the opportunities and factors critical to the success of

tourism industry in India.

 In India, inbound tourist expenditure per head is third highest in the

world and even more than global average tourist spending.

 India has been promoting its healthcare tourism by providing the

visitors with private healthcare facilities. It is expected that the

number of tourists visiting India for the purpose of medical treatment

will reach one Million by 2012, representing a CAGR of 28.09% from

2007.

 Disposable income in past (during 2001-2006) grew at a CAGR of

10.11%, thereby driving domestic as well as outbound tourism.

 Room rent accounts for more than 50% of revenue earned by Indian

hotel industry.

 Indian outbound tourist flow is expected to increase at a CAGR of

12.79% over the five-year period spanning 2007-2011.

 Tourist influx to India is expected to increase at a CAGR of 22.65%

between 2007 and 2011.

 India's share in global tourism is expected to reach 1.5% by 2010.

 India has been promoting its healthcare tourism by providing the

visitors with private healthcare facilities. It is expected that the total

market for medical tourism will reach US$ 2 Billion by 2012,

representing a CAGR of 60.69%.

  Personal disposable income during 2002-2007 grew at a CAGR of

14.16%, thereby driving domestic as well as outbound tourism.

 Indian outbound tourist flow is expected to increase at a CAGR of

13.30% over the five-year period spanning from 2008 to 2012.

 Indias share in the global tourism is expected to reach 1.5% by 2010.

 The growth in Indias tourism market is expected to serve as a boon,

driving the growth of several associated industries, including hotel

industry, medical tourism

The report & Indian Tourism Industry Analysis & by RNCOS provides an

insight into the Indian tourism market. It evaluates the past, present and

future scenario of the Indian tourism market and discusses the key factors

which are making India a potential tourism destination. With focuses on

different parameters of tourism industry, including inbound tourism,

outbound tourism, expenditure by inbound tourists, medical tourism, and

hotel industry, the report gives a thorough analysis on the tourism industry

in India.

According to the report, India represents one of the most potential tourism

markets in the world. It has expanded rapidly over the past few years and

underpinned by the government support, rising income level and various

international sports events, the Indian tourism industry will continue to

grow at the fastest pace in the coming years. However, the industry may

have to cope up with several challenges which will limit its growth.
The travel and hospitality industry continues to be the sector, which has largely

profited from the fast growing economy of India. Though FY09 had been tough

year with tourist inflow declining by 4% YoY 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 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. Further, new segments like budget hotels, service apartments

and management contracts are witnessing increasing interest.

Key Points

Supply Supply is catching pace. Metros will witness an

oversupply situation after four to five years.

Demand Largely depends on business travelers but

tourist traffic is also on the rise. Demand

normally spurts in the peak season between

November and March.

Barriers to entry High capital costs, poor infrastructure facilities

and scarcity of land especially in the metros.

Bargaining power of suppliers Limited due to higher competition, especially in

the metros.

Bargaining power of customers Higher in metro cities due to increasing room

 supply.

Competition Intense in metro cities, slowly picking up in

secondary cities. Competition has picked up

due to the entry of foreign hotel chains.

Financial Year '09

The hospitality industry witnessed a mixed year in 2008. The sector began

the year 2008 on a strong note. Rising tourist inflow, higher occupancy and

room rates continued to benefit the hotel players. In the first four months of

the year, the tourist arrivals were higher by 11.7% YoY. Prospects were

looking good, until the sector faced a double blow. The worst financial

crisis in many decades, high oil prices and a slew of militant attacks hit the

hotel industry.

During 1HFY09, though lower corporate spending, fluctuating dollar and

opening of credit crisis had impacted occupancy rates in some cities like

Bangalore, Pune, Hyderabad and Chennai, the room rates however,

remained high. However, with the terror strike (26/11) during the onset of

the peak season, things got murkier. As per Crisil, the available room

(RevPAR) for premium segment hotels fell by 31.4% YoY in March 2009. The

Average room rates (ARR) also declined by 19% YoY to Rs 10,398 in March

2009 whereas occupancy levels for the said period declined YoY from 78%
 to 66%. This led to cash flow pressures and delay/ cancellation of projects

by new developers.

The hotel industry is expected to have a tough FY10. As per WTTC, the

travel GDP is expected to decline by 3.5%. The hotel players may witness a

RevPAR fall of 10% to 15% during the year.

CRISIL Research expects the profitability of premium hotels to be impacted

due to a sharp decline in occupancy rates and room rates. It expects

demand to decline by 15.5% YoY in 2009-10. This is going to affect the

profitability of the sector. The hotel companies are already facing cash flow

pressure, thereby affecting their expansion plans. The balance sheets of the

hotel companies are under stress on account of acquisitions of land banks

and rising debt levels.

While the government is promoting year 2009 as Visit India, concrete

measures on problems faced by the sector need to be solved urgently to

get the industry back on track

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.

As per the World Travel & Tourism Council, the tourism industry in India

is likely to generate US$ 121.4 billion of economic activity by 2015 and

Hospitality sector has the potential to earn US$ 24 billion in foreign

exchange by 2015.

Additionally, India is also likely to become a major hub for medical

tourism, with revenues from the industry estimated to grow from

US$ 333 million in 2007 to US$ 2.2 billion by 2012, says a study by the

Confederation of Indian Industry (CII) and McKinsey.

The booming tourism industry has had a cascading effect on the

hospitality sector with an increase in the occupancy ratios and average room

rates. While occupancy ratio is around 80-85 per cent – up nearly 10 percent

from three years back, the average increase in room rates over the last one

year has hovered around 22-25%.

Indian Cities Surveyed - It would be pertinent at the end to briefly study the

three cities from India which were chosen for the purpose of this study,

Mumbai, Pune and Goa.

Ancient yet modern, fabulously rich yet achingly poor, Mumbai is India in

microcosm. Once a sultry tropical archipelago of seven islands, and the

Raj's brightest jewel, Mumbai was the dowry of Portuguese Princess

Infanta Catherine de Braganza who married Charles II of England in 1661.

Today it's a teeming metropolis, commercial hub of an old civilization

seeking to find its place in the New World Order.

Mumbai, formerly called Bombay, is the capital of the Indian state of

Maharashtra. Mumbai lies on the west coast of India and has a deep natural

harbour. Mumbai is the commercial and entertainment centre of India,

generating 5% of India's GDP, and accounting for 25% of industrial output,

40% of maritime trade, and 70% of capital transactions to India's economy.

Mumbai is home to important financial institutions such as the Reserve

Bank of India, the Bombay Stock Exchange, the National Stock Exchange

of India and the corporate headquarters of numerous Indian companies

and multinational corporations. The city also houses India's Hindi film and

television industry, known as Bollywood.

With a golden history of hundreds of years, Mumbai never fails to

mesmerize its visitors amidst the heritage monuments. The Island City is

dotted with several beaches and natural harbor. On the tourism map of

India, Mumbai has always entertained the maximum traffic from overseas.

Being the city of Bollywood, Mumbai allures thousands of aspirant actors

and artists from all over the country.

Tourists can experience its dazzling nightlife in bars, lounges, pubs,

discotheques and beaches. Tourists can uncover the spiritual side of the

magnificent city in its places of worship. Parks, gardens, museums,

shopping malls, amusement parks, beaches and lakes define the charisma

of this economic hub. Another popular thing to do in Mumbai is do a slum

tour after the popularity of the movie Slumdog Millionaire. In an effort to

understand the world, such tours are being organized by reputable tour

companies. The Elephanta Caves with carvings dedicated to Shiva are a

definite stop as well.

Mumbai, the heart of India’s commerce and finance, continues to impress

with confident increases in average room rates, dislodging Bangalore from

the number one position. The financial year 2008/09 was an unforgettable

one for the Indian tourism industry with the Mumbai terror attacks and the

global economic downturn affecting the industry's performance. The hotel

industry, too, observed an overall decline in occupancy and revenue per

available room (RevPAR) in most cities in India. Mumbai reported the

largest RevPAR decline of 20.1% for 2008/09 amongst the major cities in

India. This was due to the Mumbai terror attacks, which catapulted across

the international firmament as the electronic media beamed live images of

the Taj going up in flames; even earning the dubious distinction of being

'India's 9/11'. The event raised concerns in the minds of international

travellers regarding India's worthiness as a safe and secure travel

destination. The Mumbai market has been able to retain the average rates

but saw a sharp decline in occupancy. However experts expect a strong

recovery in the city demand after the decline witnessed in November and

December 2008. The city has a supply growth pipeline of 168% (13,386
rooms). Of this, 73%(the highest in metro locations) to actually get built.

Mumbai continues to offer fantastic opportunities for new hotel

development as demand certainly continues to be strong. With all the

various redevelopment/rehabilitation schemes of mill lands and the master

development of Mumbai's international airport, there to be good

opportunities for hotels to come up during the next decade or so. The

Chhatrapati Shivaji International Airport at Mumbai is also undergoing

redevelopment simultaneously.

Pune , also known as Poona, is the eighth largest city and eighth largest

metropolis in India, and the second largest in the state of Maharashtra,

after Mumbai. Pune is known to have existed as a town since 937 AD.

Chhatrapati Shivaji Maharaj, the founder of the Maratha Empire, lived in

Pune as a young boy, and later oversaw significant growth and

development of the town during his reign. Today, Pune is known for its

educational facilities, having more than a hundred educational institutions

and nine universities. Pune has well-established manufacturing, glass,

sugar and forging industries since the 1950-60s. Pune has a growing

industrial hinterland, with many information technology and automotive

companies setting up factories in Pune district. Pune is known for various

cultural activities like classical music, spirituality, drama, sports, and

literature. These activities and job opportunities attract migrants and

students from all over India and abroad, which makes for a city of many

communities and cultures.

Pune is well known as the 'Queen of Deccan' due to its scenic beauty and

rich natural resources. Besides, it is famous for its religious and historical

places. Pune city is known on the world map beacuase of its educational,

research and development institutions. Pune is the most industrialized

district in western Maharashtra and a famous IT hub in the country. Pune is

also famous for tourist visitors for its Historical and Religious places and

Scenic spots and Parks.

Pune has been included in our study owing to the growing interest of

investors in this market, its proximity to Mumbai, development of quality

industrial and IT areas and also the mammoth construction of hotels. Pune

has traditionally been an industrial city with only a handful of branded

hotels operating an inventory of approximately 400 rooms. The hotel room

count in Pune doubled with the addition of 400 more rooms opening in

2007/08 alone and approximately 5,500 more rooms opening in the next few

years. Pune saw a growth in room supply of 12.8% in 2008/09, but a decline

in the city performance owing to a drop in demand primarily from the

IT/ITeS sectors. At this stage, there are close to 30 projects in this market, a

few of which are expected to get delayed. Despite these developments,

there would be opportunities in certain micro markets provided the

product positioning is appropriate for the site. The Pune market is

expected to have the maximum development (531% supply growth over

existing supply) over five years. Pune may reflect that 8,054 rooms are
under development, however it is estimated that only 52% of this proposed

supply will actually get developed by 2013/14.

Goa with Panjim as its capital, Konkani, Marathi and English as its most

spoken languages, in this secular state, the population follows Hinduism,

Christianity and Islam. Goa boasts of some of the finest churches and

temples in the world. One of the most traveled tourism destinations in India

- Goa has a range of spots to offer, exquisite churches, ancient temples,

adventurous forts, wildlife preserves, scenic beaches and even get away

lakes. At any time of the year Goa, is fun and laid back. It experiences

lovely and relaxing climate. This coastal state has a magic of its own

during the rains. The warm tropical showers turn the countryside into the

picturesque greenery; the sea waves seem to welcome one and all and the

tourists cannot ask for better package than Goa in the rains. The beaches

are intertwined with several waterways and the two rivers, namely Mandovi

and Zuari. The Goan coastline is heaven on Earth for swimmers, anglers,

water sports buffs and sunbathers. Cruises in Goa are unforgettable

experience for lifetime of tourists coming to India. Along with beautiful

beaches, Goa has remarkable lakes too. Boating is one activity every

tourist visiting this artificial lake in Goa must indulge in.

Most of the northern beaches offer adventure gelled with a very active

nightlife. The southern beaches are paradise for the tourists seeking

tranquility amidst the silvery sand and the palm groves. Shopping which is
a must for a holiday is true fun at Goa with several shops making loads of

stuff easily available for the tourists. The items may vary from Carpets to

Papier Mache, Textiles and Silk to Wood Carvings. Some of the restored

Goan houses have the best of lifestyle and fashion shops.

Goa has its fair share of festivals. On one hand the Goans celebrate the

Carnival and Shigmo as festivals of joy, on the other, Shivaratri is one of

austerity and penance. The celebration of the Carnival and the Shigmo

comprises of various types of theatrical performances. Goa being the

coastal state has remarkable seafood to offer. Goan cuisine has always

been admired, with its gamut of Portuguese-Goan dishes. Goa has

traditionally been a strong leisure and meetings, incentives, conferences

and exhibitions destination. Showing a growth of nearly 34.4% in

valuations in 2007/08, hotels in Goa have the fourth most expensive

valuations in the country. Goa continues to be India's preferred beach

destination. The state is likely to see an increase of 78% (2,178 rooms) with

a low probability factor of 31% for the next few years. Goa remains an

excellent investment opportunity for hotel development due to its growing

potential as a leisure destination. Unfortunately, due to the political

instability in the state, Goa has now become one of the worst

administrations to get approvals and licenses for opening new hotels; and

that is hurting the state as its economy is highly reliant on tourism.

The Road Ahead - The Indian hospitality sector is certainly the most apt

replication of the belief 'Atithi devo bhava'- touch of tenderness, a helping

hand and a welcoming visage. According to the World Travel and Tourism

Council (WTTC), the growth in the hospitality industry is pegged at 15 per

cent every year, with 200,000 rooms needed, the hotel segment of India is

on the brink of an astounding growth.According to the Tourism Satellite

Accounting (TSA) research, released by WTTC and its strategic partner

Oxford Economics in March 2009: The demand for travel and tourism in

India is expected to grow by 8.2 per cent between 2010 and 2019 and will

place India at the third position in the world.India's travel and tourism

sector is expected to be the second largest employer in the world,

employing 40,037,000 persons by 2019.

7.2 HOTEL INDUSTRY IN THAILAND

Thailand is an independent country that lies in the heart of Southeast Asia.

The country is a kingdom, a constitutional monarchy with King Bhumibol

Adulyadej, the ninth king of the House of Chakri, who has reigned since

1946, making him the world's longest-serving current head of state and the

longest-reigning monarch in Thai history. The king is officially titled Head

of State, the Head of the Armed Forces, an Upholder of the Buddhist

religion, and the Defender of all Faiths.

Thailand is the world's 50th largest country in terms of total area, and the

21st most-populous country, with approximately 64 million people. The

country's official language is Thai. Its primary religion is Buddhism, which

is practiced by around 95% of all Thais.

Thailand experienced rapid economic growth between 1985 and 1995 and

is a newly industrialized country with tourism, due to well-known tourist

destinations such as Pattaya, Bangkok, Phuket, Chiang Mai and Ko Sam,

and exports contributing significantly to the economy. Thailand is the most

popular tourist destination in Southeast Asia, and for a reason. One can

find almost anything here: thick jungle as green as can be, crystal blue

beaches that feel more like a warm bath than a swim in the ocean and food

that can curl your nose hairs while tap dancing across your taste buds.

Exotic, yet safe; cheap, yet equipped with every modern amenity you need,

there is something for every interest and every price bracket, from beach

front backpacker bungalows to some of the best luxury hotels in the world.

Thai temples known as wats, resplendent with gold and easily identifiable

thanks to their ornate, multicolored, pointy roofs.

Some traditional arts popular in Thailand include traditional Thai dancing

and music, based on religious rituals and court entertainment. Famously

brutal Thai boxing (muay Thai), derived from the military training of Thai

warriors, is undoubtedly the country's best known indigenous sport.

Thailand's a big enough country that you can find a place to practice

almost any outdoor sport. Some of these are: Rock climbing - the cliffs of

Rai Leh in Krabi are arguably among the best in the world, Snorkeling -

Phuket and its surrounding islands, Phi Phi, Koh Tao, and Some areas in

the Similans have some wonderful snorkeling over coral reefs, Scuba

diving - easily accessible Ko Tao and Ang Thong National Marine Park
(near Ko Samui) draws the crowds, but also possible in Koh Chang,

Pattaya and Krabi, and the Similan Islands are worth the journey. One of

the newest hot spots for diving is Ko Lipe - Small island in the middle of

Tarutao National Park amazingly unspoilt, great reefs and beaches

absolutely stunning, a must see. See also Diving in Thailand, Trekking -

very popular up north around Chiang Mai and Chiang Rai, Surfing -

possible in Khao Lak, Phuket and Koh Samui, Liveboard Diving.

Other activities which are very popular with tourists are:

Dinner Cruise - dinner cruises have become one of Thailand's must visit

spot for any visitors to Thailand..

Spas - Although spas weren't introduced here until the early 1990s,

Thailand has quickly become the second-highest ranking spa destination

in the world. There are a phenomenal variety of spa types, and spas can be

found at almost every destination in the country.

Medical tourism - Many travellers go to Thailand to undergo medical

treatments at a fraction of the cost charged in their home countries. Private

hospitals in Thailand are accredited by the government according to

standards that meet or exceed those in North America, and many of the

doctors in Thailand hold international accreditation and relevant licenses.

Popular treatments, ranging from cosmetic, organ transplants and

orthopedic treatments to dental and cardiac surgeries, are available at a

price much lower than the US or Europe.

Shopping and Business – Thailand is a shopper's paradise and many

visitors to Bangkok in particular end up spending much of their time in the

countless markets and malls. A Thai speciality are the night markets found

in almost every town. Here a variety of vendors from designers to

handicraft sellers have stalls selling goods which cannot normally be

found in malls and day markets. Not to be left out is what is often touted as

the world's biggest weekend bazaar with products ranging from clothes to

antiques.

Thailand suffered from the SARS threat in 2003 and had the first decline in

growth seen in the recent past. The recovery in 2004 was very strong and

has seen additional real growth beyond recovery. The only major risk is an

extension of the political problems in the Southern regions. Phuket has

also been slow to recover from the tsunami but much of this trade has

shifted to other parts of Thailand.

It is a testament to the strength of Thailand's tourism industry, the huge

attraction and strong brand image that the country enjoys, that it has been

rebuilt so quickly, with vibrancy that seemed all but impossible nearly two

years ago amid the wreckage of the tsunami. There is no question that 2005

was a miserable year. Miserable in terms of the human tragedy in the

fallout of one of the worst natural disasters there has ever been and

miserable for the industry in the setback that followed.

Thailand’s hotel operators collectively held their breath since the

demonstrations and violence, waiting to see whether any change of

government that was going to cut into their businesses on the eve of the

busiest time of the year. Immediately after the coup, some hoteliers

reported losses of millions of baht as tourists cancelled bookings and

guests already in the country cut short their stay. As the weeks went by

and it became clear that Thailand was well on the way to a smooth

transition, relief became palpable. Most hotels reported anecdotally that,

traditionally the busiest months of the year, were almost back to business

as usual.

Thai hotels have time and again proved their resilience, regardless of the

doomsayers who say there are too many rooms for the industry to sustain.

The sector had already shown strong recovery from the dark days after the

tsunami and coups and that continued through this year. Many in the

affected areas had started the year with occupancy rates as low as 15%.

However, after the beginning of 2010 the overall occupancy rate for the

industry rose to around 65% and continues to hover around that level. The

aftermath of the political unrest is still being felt

Bad publicity highlighting regional threats, such as health scares and

terrorism, may also deter some visitors, although it must be stressed that

Thailand is not alone in facing these difficulties.

On the other hand, Thailand tourism, as it demonstrated so clearly last

year, is highly resilient and will enjoy many opportunities if it is prepared to

grasp them. With sustained levels of support for the industry from the

government, we can do more to service the rapidly growing intra-regional

market. Phuket has also been slow to recover from the tsunami but much

of this trade has shifted to other parts of Thailand.

Table 7.2. Thailand tourism growth rate.

Source: Tourism Authority of Thailand

Receipts declined in 2003 but are forecast to increase rapidly alongside

increased arrival numbers through the forecast period.

 Table 7.3. Thailand tourism receipts

Source: Tourism Authority of Thailand

International arrivals to Thailand from 1998 to 2009 show a significant rise from

1998 onwards. There are significant dips with the SARS epidemic, and after the

Tsunami of end 2004. From end 2008 political events in Thailand have influenced

tourist arrivals. While total number of arrivals in 2009 was only mildly down on the

year before, the tourist industry surely had expected more revenue. Probably a

potential additional number of 1 million visitors elected not to come to Thailand.

Thailand has suffered from political instability, a closure of Suvarnabhumi Airport

(26 november 2008, by the Yellow Shirts protesters). A Red Shirt mob invaded the

East Asia Summit in Pattaya on 11 April 2009, leading to a cancellation of the

summit, with world leaders scurried away to safety. This was followed by violent

riots the next day (during Songkhran) and the declaration of a state of emergency

by prime minister Abhisit Vejjajiva. The protesters withdrew and the state of

emergency was lifted on 24 April.

Flu cases emerged in March and April of 2009 in Mexico, with the official first
announcement of the new H1N1 flu on 23 April. On 12 May, it was made public by

Health Minister Witthaya Kaewparadai that two Thais who returned from Mexico

had been infected with swine and subsequently recovered. Fortunately while

infections became epidemic, the resulting health risk of H1N1 infection proved to

be less serious than expected by some.

Despite the serious disturbances in April 2009, tourism arrivals for the whole year

were only mildly affected, with a significant upturn (+28%) in the last quarter of

2009, when compared to the last quarter of 2010. The first quarter of 2010 was

likely also good, but serious demonstrations by the Red Shirts happened from

April 2010 onwards, with serious repercussions for arrivals in the second quarter

of 2010.

In the recent past, both SARS in early 2003, and the Tsunami of december

2004, had significant effects on the number of international arrivals. Bird flu

also emerged at the beginning of 2004 in Thailand and probably with the

Tsunami, caused a decreased number of visitors in the 2004-2005 period.

The chart otherwise shows the number of arrivals steadily increasing to

more than 14 million in 2008. This may seem a lot, but quite a few countries

in Europe (and also China) receive many more visitors.

Thailand's tourism industry makes up about 6.5 percent of the country's

GDP. When seeing the number of tourists, and the number of tourist

destinations and hotels, one would actually expect a more substantial

portion of GDP. But Thailand's tourism industry, while very visible, brings
in much less money than other service industries, and certainly less than

its manufacturing industry. Nevertheless, international visitors spent more

than 547 billion baht (something like 16 billion U.S. Dollars) in 2008. The

average length of stay per tourist in 2007 was 9 days.

In 2008, 52.37 % of international tourists were East Asian, with Malaysia

and Japan providing the most visitors. Close to two million Malaysians

visited Thailand. Europeans provided close to 4 million visitors in 2008,

about 27.22 % of the total. The number of visitors from the Americas, South

Asia and Africa, is much smaller. However, close to 700,000 Australians

visited Thailand, which is actually an enormous number, when taking the

total population of Australia into account.

Arrivals from 2007 to 2009 per quarter : The number of tourist arrivals in

the first quarter and second quarter of 2009 were 3,64 million and 2,96

million respectively. These figures were lower than during the first 2

quarters of 2007 or 2008. In the third quarter of 2009 we see that the

number of visitors is similar to the number of visitors in both 2007 and

2008, suggesting that the worst was over. In the 4th quarter of 2009, saw

higher arrivals than in 2007 and 2008. See the yellow line crossing over in

the graph below. In view of the political disturbances from April 2010, a

serious downturn is expected for the second quarter of 2010. What

happens afterwards will greatly depend on a resolution of the political

situation in Thailand.
 Figure 7.10 – Thailand tourist arrivals 2007 -09

Source: Tourism Authority of Thailand

Tourist arrivals in Thailand continued to decline in 2009, leaving the

industry on track for an extremely poor performance on a full-year basis.

Figures released by the Office of Tourism Development (OTD) show that

tourist arrivals fell by 11.8% year-on-year (y-o-y) in the first three quarters

of the year to 9.89mn, down from 11.2mn in the same period in 2008.

Encouragingly however, the rate of decline had fallen since H109, when

arrivals slumped by 16.2% y-o-y. In Q309 arrivals fell by only 1.2% y-o-y, to

3.29mn.

Thailand’s Spa Sector Potential Amid the general industry decline,

Thailand’s spa sector received some good news in December 2009 when it

was voted the region’s spa capital of the year at the AsiaSpa Awards,

indicative of the swift development of the country’s spa industry. The first

spa in the country was opened in 1992 and the number of spas has risen to

585, employing 11,240 people. The industry generated US$263mn in 2007.

The spa industry benefits from Thailand’s worldwide reputation as a centre

for massages and beauty treatments, with many spas now attached to

resorts that specifically offer spa-based holiday packages, which provide

another incentive for tourists to visit Thailand rather than other countries in

the region. Although the spa industry is likely to stagnate during the

downturn, we expect the industry to be one of the sectors leading the

recovery.

The Thai government launched a campaign to woo back tourists after

recent rioting there; its world-renowned hospitality industry is facing

another threat; stiffer competition from neighboring countries working to

increase their visitors. The Thai travel business has a history of bouncing

back from crises. It did after the 2003 outbreak of Severe Acute Respiratory

Syndrome, or SARS, the 2004 tsunami that hit Phuket and nearby beach

areas and a 2008 protest that shut Thailand's main international airport for

days. The government is planning to make more than five billion baht ($150

million) available to tourism-industry businesses in low-interest loans with

two-year grace periods. It also intends to waive visa fees for some

countries and lower the landing fees for airlines. This time, however, the

rebound could be weaker and take longer.

LEVELS OF THE THAILAND HOTEL STANDARD AND SYMBOL - The hotel

standard is divided into 5 levels and arranged in ascending order with one

star ( ) denoting the lowest standard and five stars ( ) denoting the

highest standard.
STAR RATING LEVEL - The "Hotel stardard" defines the qualities and

SYMBOL characteristics of a hotel and sets it apart .

One star ( ) Standard of one star level

Two star ( ) Standard of two star level

Three star ( ) Standard of three star level

Four star ( ) Standard of four star level

Five star ( ) Standard of five star level

Source: Tourism Authority of Thailand

Hotels have contributed significantly the growth and development of the

Thai tourism industry and will continue to play a vital role. The Thai tourism

industry had long recognised the importance of setting a consistent

standard for hotels and resorts in Thailand. Hence in order to increase

Thailand's competitive potential on the international stage, the Thai hotel

industry deemed it an important step to raise overall standards by adopting

internationally-recognised practices, such as the introduction of a 'precise,

accurate and reliable' hotel standard and certification process that would

enable Thai hotels to compete with world-class hotel properties on an

equal footing.

In March 2004, the Thai hotel industry introduced the country's first

ever hotel standard certification programme a comprehensive and

credible "hotel standard" that defines the qualities and characteristics

of a particular hotel or resort property and sets it apart from properties

in other levels, and is also universally-recognised and internationally-

accepted. Participation in the Thai Hotel Standard certification

programme is voluntary. As of September 2005, there are a total of 116

participating hotel and resort properties.

MAJOR FACTORS IN CONSIDERING THE HOTEL STANDARD - The Thai

hotel standard covers three aspects: The standard of construction and

facilities, The standard of maintenance and the standard of services

The major factors taken into consideration in the assessment and

certification of an individual hotel and resort property are:

Physical aspects such as location and surroundings, Construction aspect

ie. the physical structure of the hotel, systems in place, security system,

etc., Facilities for hotel guests taking into consideration guests who are

resident at the hotel (in-house guests) as well as guests who frequent the

hotel and use the services provided For example, the quantity of the

facilities, décor, equipment, etc., Quality of Service and the ability to

maintain quality includes such criteria as personality, the quality of

services, cleanliness, hygiene, etc. and The maintenance of the hotel of the

abovementioned facilities. Scores for each of the abovementioned

standards are allocated as follows.

 Table 7.2.3 Thailand hotels grading points

Level Criteria Five star Four star Three star Two star One star

(1) The standard of construction 359 284 163 72 53

and facilities

(2)The standard of maintenance 305 270 225 205 180

(3) The standard of services 374 320 301 169 150

Total 1,052 896 699 451 383

Source: Tourism Authority of Thailand

Applicants are required to pass all three standards by scoring higher than

the lowest score for each standard for the level for which they have

applied.

The Foundation of Standard and Human Resources Development in

Service and Tourism Industry", a non-profit organization and juristic

person representing the private and public sector, was established to

oversee the administration of and certification process for the Thai Hotel

Standards.

Successful implementation of the certification programme increases

international confidence in Thailand as a world-class travel and holiday

destination, enhances the overall image of the Thai tourism industry and

reinforces Thailand's positioning as 'Tourism Capital of Asia'.

As a growing number of hotel and resort operators recognise the

importance of having set standards for the industry, it is expected that the

programme will attract increased participation from Thai hotels and

resorts.

Since the two cities from Thailand chosen for the purpose of this study are

Bangkok and Pattaya, this chapter concludes with a note on these two

cities :

Bangkok is also known as "Krungthep" meaning 'the City of Angels'.

Bangkok is famous for its temples, the Grand Palace as well as some of

Asia's largest shopping centers and Asia's largest outdoor week-end

market . Bangkok is highly appreciated for its wide choice of restaurants,

from authentic street-side eateries to a number of fine dining

establishments, In addition to probably the best nightlife in Asia. The wide

choice of accommodation, from high end international hotels to

guesthouses meets the demands of all travelers. In terms of relaxation –

Bangkok has seen a huge development of Spas and wellness centers as

well as medical facilities of Western standards.

There are many attractions in Bangkok, which are worth a visit. The

following are some of the interesting ones are the Sanam Luang,

Democracy Monument, Princess Mother Memorial Park, King Rama IX

Royal Park, Dusit Zoo, Samphran Elephant Ground & Zoo, Safari World,
Crocodile Farm, Snake Farm, Rose Garden and the Damnoen Saduak

Floating Market.

Pattaya is 147 kms southeast of Bangkok, and faces the Thai Gulf. It is

Asia's premier beach resort, and caters with equal appeal to families,

couples and single visitors. Pattaya's relaxing tropical ambience is

synonymous with every ingredient for memorable holidays. Pattaya hotels

ranges from luxuriously appointed backside hotels with superb convention

facilities to simple guesthouses and beach resorts.

Pattaya is a paradise for everyone, as it has a variety of attractions suitable

for all types of visitors. This is the place where you can fill your day, from

dusk to dawn, with endless activities, or you may choose to do nothing at

all and relax. This exotic beach resort welcomes approximately 5 million

visitors a year.

Pattaya currently integrates the delights of a beach resort, city-like dining,

shopping and night entertainment facilities with more than 300 assorted

hotels, thousands of shops, restaurants and bars. In addition, there are an

array of sports and recreational activities including beaches, golf courses,

tennis courts, go-kart, gyms for working out, weight lifting and Thai-boxing

gear.

Pattaya offers a broad range of things to do. During the day, one may enjoy

riding elephants or driving humble automatic mini-bikes, monstrous

motorcycles, or even monster multicolored convertible Jeeps. Others go

for shooting firearms, scuba diving and surfing, deep-sea fishing, speed

boats, scooters, water-skiing, parasailing, or aerial sports such as gliding

ultra-lights and flying motor-propelled gliders. On the other hand, at night,

there are restaurants, bars, theaters, cabaret shows, night clubs, bowling

halls, billiard & snooker clubs, discos, sauna & massage parlors, not to cite

its absolutely incredible shopping which is available non-stop both day-

and-night.
 CHAPTER 8

SUSTAINABLE COMPETITIVE ADVANTAGE AND

INNOVATIONS IN THE HOTEL INDUSTRY.

Competitive advantage is a position a firm occupies against its

competitors. A competitive advantage is an advantage over competitors

gained by offering consumers greater value, either by means of lower

prices or by providing greater benefits and service that justifies higher

prices. A competitive advantage is the thing that differentiates a business

from its competitors. It is what separates the business from everyone

else. And, it's usually the reason one is in business. It answers the

question "Why should I buy from you?" or "How are you better than my

current supplier?"

A firm possesses a Sustainable Competitive Advantage when it has

value-creating products, processes and services for their customers that

cannot be duplicated or imitated by its competitors. Competitive

advantage occurs when an organization acquires or develops an attribute

or combination of attributes that allows it to outperform its competitors.

The term competitive advantage is the ability gained through attributes and

resources to perform at a higher level than others in the same industry or

market. The study of such advantage has attracted profound research

interest due to contemporary issues regarding superior performance levels

of firms in the present competitive market conditions. An organization is

said to have a competitive advantage when it is implementing a value

creating strategy not simultaneously being implemented by any current or

potential player. Successfully implemented strategies will lift a firm to

superior performance by facilitating the firm with competitive advantage to

outperform current or potential players. To gain competitive advantage a

business strategy of a firm manipulates the various resources over which it

has direct control and these resources have the ability to generate

competitive advantage. Superior performance outcomes and superiority in

production resources reflects competitive advantage. Competitive

advantage as the ability to stay ahead of present or potential competition,

thus superior performance reached through competitive advantage will

ensure market leadership. Also it provides the understanding that

resources held by a firm and the business strategy will have a profound

impact on generating competitive advantage. Business strategy is the tool

that manipulates the resources and creates competitive advantage. Hence,

viable business strategy may not be adequate unless it possess control

over unique resources that has the ability to create such a unique

advantage. Competitive advantage is a key determinant of superior

performance and it will ensure survival and prominent placing in the

market. Superior performance being the ultimate desired goal of a firm,

competitive advantage becomes the foundation highlighting the significant

importance to develop same.

In the event competitive advantage is gained by a firm wouldn’t it be

necessary to sustain such value creating advantage for desired periods of

time in order to gain maximized superior outcomes? Sustainable

competitive advantage is a journey not a destination.

The idea of a Sustainable Competitive Advantage surfaced in 1984, when

Day suggested types of strategies that may help to "sustain the

competitive advantage". The actual term "Sustainable Competitive

Advantage " emerged in 1985, when Porter discussed the basic types of

competitive strategies that a firm can possess in order to achieve a long-

run Sustainable Competitive Advantage. Interestingly, no formal

conceptual definition was presented by Porter in his discussion. There

exists "no common meaning for ‘competitive advantage’ in practice or in

the marketing strategy literature". Barney has probably come the closest to

a formal definition by offering the following: "A firm is said to have a

sustained competitive advantage when it is implementing a value creating

strategy not simultaneously being implemented by any current or potential

competitors and when these other firms are unable to duplicate the

benefits of this strategy".

In order to possess an Sustainable Competitive Advantage, consumers

must perceive some difference between a firm’s product offering and the

competitors’ offering. This difference must be due to some resource

capability that the firm possesses and competitors do not possess. Also,

this difference must be some product/delivery attribute that is a positive

key buying criterion for the market. The key is being able to predict the

actions of others in the industry over time; by matching the firm’s

resources to the gaps and voids that exist in the industry, a competitive

advantage can be created. This advantage is sustained if competitors

either can not or will not take action to close the gap.

In order to offer a formal conceptual definition of the term, it may be helpful

to consider the meaning and implications of all three terms. Webster’s

Dictionary defines the term "advantage" as the superiority of position or

condition, or a benefit resulting from some course of action. "Competitive"

is defined in Webster’s as relating to, characterized by, or based on

competition (rivalry). Finally, Webster’s shows the term "sustain" to mean

to keep up or prolong.

The next step in crafting a formal conceptual definition of Sustainable

Competitive Advantage is to consider these dictionary definitions in a

business-specific context. Based on the definition of "competitive"

presented above, Sustainable Competitive Advantage should be viewed by

a firm from an external perspective. Competition is based on rivalry

between two or more parties; thus, the focus of Sustainable Competitive

Advantage should be how long a firm can keep competitors at bay. A firm

who approaches the achievement of Sustainable Competitive Advantage

from an internal perspective is missing the point. A particular strategy

based on firm resources irrespective of what competitors are doing

certainly could be sustained. However, it is the external focus – the focus

on competitors – that allows a firm to recognize and/or create unique

resources. This uniqueness is what gives a firm the advantage. The

advantage (or superiority) is sustained (or prolonged) as long as the

unique strategy provides added value to customers, and as long as

competitors cannot find a way to duplicate it.

Therefore, the following formal conceptual definition is offered:

Sustainable Competitive Advantage is the prolonged benefit of

implementing some unique value-creating strategy not simultaneously

being implemented by any current or potential competitors along with the

inability to duplicate the benefits of this strategy.

There are many obstacles to further theory development for the

Sustainable Competitive Advantage construct. First, researchers lack a

solid operational definition for Sustainable Competitive Advantage. Without

this, we cannot measure it, nor can we begin to empirically understand its

antecedents and consequences. Current theory also has no agreed upon

method of assessing whether an Sustainable Competitive Advantage has

been achieved by a firm. For example, should performance indicators such

as market share or profitability be used to determine if an Sustainable

Competitive Advantage has been achieved? If such performance indictors

are used, how can they be empirically linked as the result of an Sustainable

Competitive Advantage rather than other factors? These are just a few

measurement issues that need to be addressed if we want to successfully

develop further theory related to Sustainable Competitive Advantage.

The first step would be to create an operational definition of Sustainable

Competitive Advantage, possibly one based on the conceptual definition

offered here. Perhaps a formative scale could be developed to assess

whether a particular firm resource is a source of Sustainable Competitive

Advantage. Scaled questions such as "Does it add value?," "Do current

competitors possess it?," "How difficult is it to duplicate?," and "Can it be

sustained over time?" could be summated to arrive at some numerical

value. The higher the numerical value, the more likely the resource is an

Sustainable Competitive Advantage.

We are also faced with the task of further understanding how a network

environment can enhance the core competencies of a firm which lead to an

Sustainable Competitive Advantage.

SOURCES OF SUSTAINABLE COMPETITIVE ADVANTAGE - Two

categorical sources of competitive advantage are: superior skills, which

are "the distinctive capabilities of personnel that set them apart from the

personnel of competing firms", and superior resources, which are "the

more tangible requirements for advantage that enable a firm to exercise its

capabilities". In the present environment, one might question whether

personnel could truly be considered a sustainable competitive feature of a

firm. But if these personnel truly understand customers’ needs and are

able to foster business-intimate relationships with them, then they most

certainly qualify as an Sustainable Competitive Advantage.

Not all firm resources hold the potential of Sustainable Competitive

Advantage; instead, they must possess four attributes: rareness, value,

inability to be imitated, and inability to be substituted. The resource-based

view of the firm designates four conditions that underlie Sustainable

Competitive Advantage, including superior resources, ex-poste limits to

competition (including imperfect imitability and imperfect substitutability),

imperfect mobility, and ex-ante limits to competition. Inimitable resources

such as non-tradable assets which are immobile and thus bound to the

firm.

"Potential resources can be most usefully categorized as financial,

physical, legal, human, organizational, informational, and relational". A

comparative advantage in resources can translate into a position of

competitive advantage in the marketplace, but only if the offering has some

perceived value in the marketplace. Firms should combine their resources

and skills into core competencies, loosely defined as that which a firm

does distinctively well in relation to competitors. Competitive advantages

are realized only when the firm combines assortments of resources in such

a way that they achieve a unique competency or capability that is valued in

the marketplace.

There are the specific combinations of skills and resources that are unique

to service industries. For example, the greater the complexity and co-

specialization of assets needed to market a service, the greater the

importance of innovation as a source of competitive advantage will

become. Brand equity becomes an important source of competitive

advantage in service industries as the level of service offered becomes

more intangible and when consumers have a great need to overcome

perceptions of risk.

Intangible resources may indeed be better suited than tangible ones to

achieve Sustainable Competitive Advantage. Given that the achievement of

Sustainable Competitive Advantage is based on an external focus, it is

interesting to note that those intangible assets that are external to the firm

may contribute the most to value generation and subsequently Sustainable

Competitive Advantage. Market-based assets can be delineated into two

types: relational and intellectual. Relational market-based assets are those

that reflect bonds between a firm and its customers and/or channel

members. Examples of such assets would be brand equity or a business-

intimate relationship that allows a firm to work with a customer to produce

a highly customized product. An example of an intellectual market-based

asset would be the detailed knowledge that firm employees possess

concerning their customers’ needs, tastes, and preferences. Both types are

intangible and employ an outward focus on firm customers and/or channel

members. To the extent that they are rare, unique, valuable, and difficult to

imitate, market-based assets provide an excellent potential source of

Sustainable Competitive Advantage for a firm. Therefore, no matter what

type of business, firms may succeed in establishing a Sustainable

Competitive Advantage by combining skills and resources in unique and

enduring ways. By combining resources in this manner, firms can focus on

collectively learning how to coordinate all employees’ efforts in order to

facilitate growth of specific core competencies.

Firms use different types of information to assess whether a competitive

advantage has been obtained according to the type of orientation they

have; a competitor-oriented firm emphasizes relative resources or cost

positions, whereas a customer-oriented firm emphasizes segment

differences and differentiation advantages. The importance of customers in

determining the sources of competitive advantage has also to be taken into

consideration; a firm’s skills and resources can be considered sources

only if they offer benefits desired by customers.

Competitive Advantage is a company's unique skills and resources

working to implement strategies that competitors cannot implement as

effectively. Understanding the competitive advantage is critical. It is the

reason one in business. It is what one does best that draws customers to

buy their product/service instead of the competitor's. Extremely successful

companies deliberately make choices to be unique and different in

activities that they are really, really good at and they focus all of their

energy in these areas.

Of course once the company has identified its competitive advantage(s), it

is not enough just to have an advantage over the competitors. For the

business to be great, it needs to weather competitive and environmental

storms. It has to be able to combat today's fierce market forces and

uncertainty. In other words, the competitive advantage needs to be

sustainable and able to endure the test of time for the company to be great.

Why? Because most advantages can be duplicated within a period of time.

But, how does the company know when they have developed a sustainable

competitive advantage? There are three criteria that can help evaluate if the

company is on the right track and keep it there:

 Customers must see a consistent difference between your

product/service and those of your competitor's. This difference

needs to be obvious to your customers and it must influence their

purchasing decision.

 Your competitive advantage must be difficult to imitate. Avoid falling

into the incompetence trap.

 The above two items combined must be activities that can be

constantly improved, nurtured, and work at to maintain that edge

over your competition.

However this process of maintaining a competitive advantage is not a one

time thing but a continuous process. Over the entire history of business

analysis, the conventional wisdom has been that if you have an idea for a

business and the idea is good and you implement the idea correctly, the

business will succeed. If the idea is bad or you fail to implement it

correctly, the business will fail.

In reality, no matter how good a business idea is, no matter how well the

idea is implemented, as soon as one opens the doors for business, the

business has to change – not just minor adjustments and small shifts in

marketing or product design but radical change. Customers never thought

of, will want the product or service, and customers counted on will want

the product in an entirely different form or, perhaps, not want the product

at all.

In short, those people who succeed in business are not so much

visionaries who devise products and services no one else has ever thought

of and that millions of people suddenly desire. Rather, they are flexible,

information-alert individuals who understand what their customers tell

them and who can quickly respond by shaping their business to profitably

provide that exact product and service.

This process means that business and business thinking flow in cycles.

Every cycle begins with an idea or assumption based on an initial level of

understanding. The idea or assumption is put into practice. Then, the

business environment, primarily in the form of the customer, responds.

After that, based on the response, a new idea or assumption is created.

This cycle repeats and repeats as any business grows and develops.

The chief skill is not being right in the initial idea or assumption. No one is

ever completely right with their first assumptions. The skill is in the ability

to gather information from the response and then incorporate that

information into the next idea or assumption which will necessarily be

closer to what the customer needs and wants.

It is the knowledge of the process through which that stream of innovative

business models flows and the ability to translate that knowledge into

effective action that is the only sustainable competitive advantage.

Monopolies, patents and other market protections and advantages all

eventually end. The slower the introduction of technology, the longer

competitive advantages last. But in a time of rapid technological innovation

such as our own, it quickly becomes clear that the only truly Sustainable

Competitive Advantage is the ability to implement the iterative process of

building a business.

The basics of Competitive Advantage dictate that for a Firm to create and

subsequently enjoy Competitive Advantage it needs to have an “Ability to

outperform its rivals”, an ability which comes from Core Competencies

built around resources and capabilities which in turn are Valuable, Rare,

Costly to Imitate and Non Substitutable. For a firm to enjoy Sustainable

Competitive Advantage it needs to have an “Ability to continuously

outperform its rivals” i.e. it needs to continuously create/ acquire/ upgrade

its kitty of resources and capabilities. Firms have to continuously change

and adapt to their environments and, Firms need to continuously create

and acquire new sources of CA to remain competitive.

Competition in today’s business environment is becoming increasingly

intense. While a company may be a market leader today, the status quo

might change overnight. Having competitive advantage alone is not

sufficient. The key determinant for prolonged growth is sustainability – the

ability to maintain a competitive advantage. Time is also of the essence.

While others are merely finding their orientation to stay abreast with the

latest innovations, the winning company is already moving up to the next

level. Threats of competition arise from a multitude of sources, defying

geography, sectors, and converging technologies among others.

Organizations can seek consolation in the fact that most competitors are

also struggling to survive in this turbulent business environment.

The potential of an organization's sustainable competitive advantage

depends on the rareness and imitability of its resources and capabilities.

The less imitable a competitive advantage is, the more cost disadvantage is

faced by the competitor in imitating these competencies. Thus, core

competence is an important source of sustained competitive advantage for

corporate success and greater is its economic return. The potential of an

organization's sustainable competitive advantage depends on the rareness

and imitability of its resources and capabilities. The less imitable a

competitive advantage is, the more cost disadvantage is faced by the

competitor in imitating these competencies. Thus, core competence is an

important source of sustained competitive advantage for corporate

success and greater is its economic return. Core competence is a bundle

of skills and technologies that enable a company to provide a particular

benefit to customers. Core competencies are not product specific; they

contribute to the competitiveness of a range of products or services. They

are the roots of competitiveness and individual products and services are

the fruit. A core competence is a tapestry woven from the threads of

distinct skills and technologies. A skill must meet three tests to be

considered as a core competence, i.e., customer value, competitor

differentiation, and extendibility.

Competitive advantage is at the heart of firm's performance. It is concerned

with the interplay between the types of competitive advantage, i.e., cost,

and differentiation, and the scope of the firm's activities. The value chain

plays an important role in order to diagnose and enhance the competitive

advantage. A sustainable competitive advantage creates some barriers that

make imitation difficult. Without a sustainable competitive advantage,

above average performance is usually a sign of harvesting.

The secret of a sustainable competitive advantage lies in performing every

step in the value chain in an appropriate way. A competitive advantage

essentially has to be one that not only merely represents better

performance than that of its competitors, but also delivers genuine value to

the customer, thus ensuring a dominant position in the market. The internal

resources and capabilities of an organization play a very important role in

building competitive advantage. The organizations that want to build

competitive advantages, which cannot be eroded (no matter how much

change is there in the environment) must make linkages between the

advantage and the capabilities underlying it as impenetrable and as

confusing as possible. Also the most important part of the competitive

advantage stems from a capability that is impossible to replicate.

Sustainable competitive advantage is the focal point of corporate strategy.

It allows the maintenance and improvement of a enterprise's competitive

position in the market. It is an advantage that enables business to survive

against its competition over a long period of time.

Distinctive capabilities are the basis of competitive advantage. According

to the new resource-based view of the company, sustainable competitive

advantage is achieved by continuously developing existing and creating

new resources and capabilities in response to rapidly changing market

conditions. The opportunity for a company to sustain competitive

advantage is determined by capabilities of two kinds – distinctive

capabilities and reproducible capabilities - and their unique combination a

company to create to achieve synergy. Distinctive capabilities are the

characteristics of a company which cannot be replicated by competitors, or

can only be replicated with great difficulty, therse are the basis of

sustainable competitive advantage. Distinctive capabilities can be of many

kinds: patents, exclusive licenses, strong brands, effective leadership,

teamwork, or tacit knowledge. Reproducible capabilities are those that can

be bought or created by competitors and thus by themselves cannot be a

source of competitive advantage.

The strength of organizational culture is one of the most fundamental

competitive advantages. If a company can build and preserve an

innovation-adept culture, a culture of commitment, one where employees

passionately pursue the organization's cause and mission, the company

will be better positioned for success.

Sustainable competitive advantage is the prolonged benefit of

implementing some unique value-creating strategy based on unique

combination of internal organizational resources and capabilities that

cannot be replicated by competitors. Sustainable competitive advantage

allows the maintenance and improvement of the enterprise's competitive

position in the market. It is an advantage that enables business to survive

against its competition over a long period of time. Managers should be

committed to creating economic value to their stakeholders, and the best

means to create that value is to focus on sustainable competitive

advantage as the key.

The Four Criteria of Sustainable Competitive Advantage : 1. Unique, 2.

Difficult to replicate, 3. Sustainable, 4. Superior to the competition

Core competencies are the most significant value creating skills within a

corporation and key areas of expertise which are distinctive to a company

and critical to the company's long term growth.

A company's core competencies are the things that it can do better than its

competitors in the critical, central areas of a company where the most

value is added to its products or services. These areas of expertise may be

in any area from product development to employee dedication.

A competence which is central to a business's operations but which is not

exceptional in some way should not be considered as a core competence,

as it will not generate a differentiated advantage over rival businesses. It

follows from the concept of Core Competencies that resources that are

standardized or easily available will not enable a business to achieve a

competitive advantage over rivals.

Competition is at the core of the success or failure of firms. Competition

determines the appropriateness of a firm’s activities that can contribute to

its performance, such as innovations, a cohesive culture, or good

implementation. Competitive strategy is the search for a favorable

competitive position in an industry, the fundamental arena in which

competition occurs. Competitive strategy aims to establish a profitable and

sustainable position against the forces that determine industry

competition.

Analysis of competitive advantage is the subject of numerous theories of

strategy, including the five forces model pioneered by Michael Porter of the
Harvard Business School. Porter identified two basic types of competitive

advantage: cost advantage & differentiation advantage

A competitive advantage exists when the firm is able to deliver the same

benefits as competitors but at a lower cost (cost advantage), or deliver

benefits that exceed those of competing products (differentiation

advantage). Thus, a competitive advantage enables the firm to create

superior value for its customers and superior profits for itself.

Cost and differentiation advantages are known as positional advantages

since they describe the firm's position in the industry as a leader in either

cost or differentiation.

A resource-based view emphasizes that a firm utilizes its resources and

capabilities to create a competitive advantage that ultimately results in

superior value creation. The following diagram combines the resource-

based and positioning views to illustrate the concept of competitive

advantage:
Figure 8.1. A Model of Competitive advantage

Resources

Cost Advantage
Distinctive
or Value
Competencies
Differentiation Creation

Advantage

Capabilities

Source :, Michael E Porter, Competitive Advantage: Creating and Sustaining Superior

Performance, 1985, The Free Press

Two central questions underlie the choice of competitive strategy. The first

is the attractiveness of the industries for long-term profitability and the

factors that determine it. Not all industries offer equal opportunities for

sustained profitability, and the inherent profitability of its industry is one

essential ingredient in the determining the profitability of a firm. The

second central question in competitive strategy is the determinants of the

relative competitive position within an industry. In most industries, some

firms are much more profitable than others, regardless of what the average

profitability of the industry may be.

Neither question is sufficient by itself to guide the choice of competitive

strategy. A firm in a very attractive industry may still not earn attractive

profits if it has chosen a poor competitive position. Conversely, a firm in an

excellent competitive position may be in such a poor industry that it is not

very profitable, and further efforts to enhance its position will be of little

benefit. Both questions are dynamic: industry attractiveness and

competitive position change. Industries become more or less attractive

over time, and competitive position reflects an unending battle among

competitors. Even long periods of stability can be abruptly ended by

competitive moves.

Competitive advantage grows fundamentally out of value a firm is able to

create for its buyers that exceeds the firm’s cost of creating it. Value is

what buyers are willing to pay, and superior value stems from offering

lower prices than competitors for equivalent benefits or providing unique

benefits that more than offset a higher price. There are two basic types of

competitive advantage: cost leadership and differentiation.

Competitive advantage in one industry can be strongly enhanced by

interrelationships with business units competing in related industries, if

these interrelationships can actually be achieved. Interrelationships among

business units are the principal means by which a diversified firm creates

value, and thus provide the underpinnings for corporate strategy.

The first fundamental determinant of a firm’s profitability is industry

attractiveness. Competitive strategy must grow out of a sophisticated

understanding of the rules of competition that determine industry

attractiveness. The ultimate aim of competitive strategy is to cope with and,

ideally, to change those rules in the firm’s favor. In any industry, whether it

is domestic or international or produces a product or a service, the rules of

competition are embodied in five competitive forces: the entry of new

competitors, the threat of substitutes, the bargaining power of buyers, the

bargaining power of suppliers, and the rivalry among the existing

competitors.

The collective strength of these five competitive forces determines the

ability of firms in an industry to earn, on average, rates of return on

investment in excess of the cost of capital. The strength of the five forces

varies from industry to industry, and can change as an industry evolves.

The result is that all industries are not alike from the standpoint of inherent

profitability. In industries where the five forces are favorable, such as

pharmaceuticals, soft drinks, and data base publishing, many competitors

earn attractive returns. But in industries where pressure from one or more

of the forces is intense, such as rubber, steel, and video games, few firms

command attractive return s despite the best efforts of management.

Industry profitability is not a function of what the product looks like or

whether it embodies high or low technology, but of industry structure.

Some very mundane industries such as postage meters and grain trading
are extremely profitable, while some more glamorous, high-technology are

not profitable for many participants.

The five forces determine industry profitability because they influence the

prices, costs, and required investment of firms in an industry the elements

of return on investment. Buyer power influences the prices that firms can

charge, for example, as does the threat of substitution. The power of

buyers can also influence cost and investment, because powerful buyers

demand costly service. The bargaining power of suppliers determines the

costs of raw materials and other inputs. The intensity of rivalry influences

prices as well as the costs of competing in areas such as plant, product

development, advertising, and sales force. The threat of entry places a limit

on prices, and shapes the investment required to deter entrants.

The strength of each of the five competitive forces is a function of industry

structure, or the underlying economics and technical characteristics of an

industry.

If the five competitive forces and their structural determinants were solely a

function of intrinsic industry characteristics, then competitive strategy

would rest heavily on picking the right industry and understanding the five

forces better than competitors. But while these are surely important tasks

for ant firm, and are the essence of competitive strategy in some

industries, a firm is usually not a prisoner of its industry’s structure. Firms,

through their strategies, can influence the five forces. If a firm can shape

structure, it can fundamentally change and industry’s attractiveness for

better or for worse. Many successful strategies have shifted the rules of

competition in this way.

In any particular industry, not all of the five forces will be equally important

and the particular structural factors that are important will differ. Every

industry is unique and has it s own unique structure. The five-forces

framework allows a firm to see through the complexity and pinpoint those

factors that are critical to competition in its industry, as well as to identify

those strategic innovations that would most improve the industry’s and its

own – profitability. The five-forces framework does not eliminate the need

for creativity in finding new ways of competing in an industry. Instead, it

directs manager’s creative energies toward those aspects of industry

structure that are most important to long-run profitability. The framework

aims, in the process, to raise the odds of discovering a desirable strategic

innovation.

Positioning determines whether a firm’s profitability is above or below the

industry average. A firm that can position itself well may earn high rates of

return even through industry structure is unfavorable and the average

profitability of the industry is therefore modest.

The fundamental basis of above-average performance in the long run is

sustainable competitive advantage. Though a firm can have a myriad of

strengths and weaknesses vis-à-vis its competitors, there are two basic

types of competitive advantage a firm can possess: low cost or

differentiation. The significance of any strength or weakness a firm

possesses is ultimately a function of its impact on relative cost or

differentiation. Cost advantage and differentiation in turn stem from

industry structure. They result from a firm’s ability to cope with the five

forces better than its rivals.

The two basic types of competitive advantage combined with the scope of

activities for which a firm seeks to achieve them lead to three generic

strategies for achieving above-average performance in an industry: cost

leadership, differentiation, and focus. The focus strategy has two variants,

cost focus and differentiation focus.

Each of the generic strategies involves a fundamentally different route to

competitive advantage, combining a choice about the type of competitive

advantage sought with the scope of the strategic target in which

competitive advantage is to be achieved. The cost leadership and

differentiation strategies seek competitive advantage in a broad range of

industry segments, while focus strategies aim at cost advantage (cost

focus) or differentiation (differentiation focus) in a narrow segment. The

specific actions required to implement each generic strategy vary widely

from industry to industry, as do the feasible generic strategies in a

particular industry. While selecting and implementing a generic strategy is

far from simple, however, they are the logical routes to competitive

advantage that must be probed in any industry.

In a differentiation strategy, a firm seeks to be unique in its industry along

some dimensions that are widely valued by buyers. It selects one or more
attributes that many buyers in an industry perceive as important, and

uniquely positions itself to meet those needs. It is rewarded for its

uniqueness with a premium price.

The means for differentiation are peculiar to each industry. Differentiation

can be based on the product itself, the delivery system by which it is sold,

the marketing approach, and a broad range of other factors.

A firm that can achieve and sustain differentiation with be an above-

average performer in its industry if its price premium exceeds the extra

costs incurred in being unique. A differentiation, therefore, must always

seek ways of differentiating that lead to a price premium greater than the

cost of differentiating.

The logic of the differentiation strategy requires that a firm choose

attributes in which to differentiate itself that are different from its rivals. A

firm must truly be unique at something or be perceived as unique if it is to

expect a premium price.

A generic strategy does not lead to above-average performance unless it is

sustainable vis-à-vis competitors, though actions that improve industry

structure may improve industry wide profitability even if they are imitated.

The sustainability of the three generic strategies demands that a firm’s

competitive advantage resists erosion by competitor behavior or industry

evolution.

The sustainability of a generic strategy requires that a firm possess some

barriers that make imitation of the strategy difficult. Since barriers to

imitation are never insurmountable, however, it is usually necessary for a

firm to offer a moving target to its competitors by investing in for a firm to

offer a moving target to its competitors by investing in order to continually

improve its position.

Competitive advantage cannot be understood by looking at a firm as a

whole. It stems from the many discrete activities a firm performs in

designing, producing, marketing, delivering, and supporting its product.

Each of these activities can contribute to a firm’s relative cost position and

create a basis for differentiation. A cost advantage, for example, may stem

from such disparate sources as a low-cost physical distribution system, a

highly efficient assembly process, or superior sales force utilization.

Differentiation can stem from similarly diverse factors, including the

procurement of high quality raw materials, a responsive order entry

system, or a superior product design.

A systematic way of examining all the activities a firm performs and how

they interact is necessary for analyzing the sources of competitive

advantage. The value chain is a basic tool for doing so. The value chain

disaggregates a firm into its strategically relevant activities in order to

understand the behavior of costs and the existing and potential sources of

differentiation. A firm gains competitive advantage by performing these

strategically important activities more cheaply or better than its

competitors. A firm’s value chain is embedded in a larger stream of

activities.
Every firm is a collection of activities that are performed to design,

produce, market, deliver, and support its product. All these activities can

be represented using a value chain. A firm’s value chain and the way it

performs individual activities are a reflection of its history, its strategy, it

approach to implementing its strategy, and underlying economics of the

activities themselves.

The relevant level for constructing a value chain is a firm’s activities in a

particular industry (the business unit). An industry or sector- wide value

chain is too broad, because it may obscure important sources of

competitive advantage. Though firms in the same industry may have

similar chains the value chains of competitors often differ.

Difference among competitor value chains are a key source of competitive

advantage. A firm’s value chain in an industry may vary somewhat for

different items in its product line, or different buyers, geographic areas, or

distribution channels. The value chains for such subsets of a firm are

closely related, however, and can only be understood in the context of the

business unit chain.

Value activities are therefore the discrete building blocks of competitive

advantage. How each activity is performed combined with its economics

will determine whether a firm is high or low cost relative to competitors.

How each value activity is performed will also determine its contribution to

buyer needs and hence differentiation. Comparing the value chains of

competitors exposes differences that determine competitive advantage.

Identifying value activities requires the isolation of activities that are

technologically and strategically distinct.

There are three activity types that play a different role in competitive

advantage:

 Direct. Activities directly involved in creating value for the buyer,

such as assembly, parts machining, sales force operation,

advertising, product design, recruiting, etc.

 Indirect. Activities that make it possible to perform direct activities

on a continuing basis, such as maintenance, research

administration, vendor record keeping, etc.

 Quality Assurance. Activities that ensure the quality of other

activities, such as monitoring, inspecting, testing, reviewing,

checking, adjusting, and reworking. Quality assurance is not

synonymous with quality management, because many value

activities contribute to quality.

Every firm has direct, indirect, and quality assurance value activities.

To diagnose competitive advantage, it is necessary to define a firm’s value

chain for competing in a particular industry. Starting with the generic

chain, individual value activities are identified in the particular firm.

Everything a firm does should be captured in a primary or support activity.

Value activity labels are arbitrary and should be chosen to provide the best

insight into the business. Labeling activities in service industries often

causes confusion because operations, marketing, and after-sale support

are often closely tied. Ordering of activities should broadly follow the

process flow, but ordering is judgmental as well. Often firms perform

parallel activities, whose order should be chosen to enhance the intuitive

clarity of the value chain to managers.

Although value activities are the building blocks of competitive advantage,

the value chain is not a collection of independent activities but a system of

interdependent activities. Value activities are related by linkages within the

value chain. Linkages are relationships between the way one value activity

is performed and the cost or performance of another.

Particulars of competitiveness in the hospitality industry - Tourism is a

sector in which the structure of supply is extremely volatile and the solid

and consistent part is the demand. Tourism exists only because, for

various reasons – pleasure, business etc. – people want to travel and are

willing to spend money; consequently, they create demand for tourism

products and services. Thus, the decision to travel precedes the acts of

consumption.

Travelers are willing to consume a large variety of goods and services

produced and supplied by various industries, among which the most

important are transports, hotel and restaurant services or segments of

activity related to entertainment, culture and sports.

The fact that competition is firstly between destinations becomes obvious,

since this is what visitors choose in the first place. Only after this choice
another form of competition occurs, that between the suppliers of products

and services at the respective destination. We can therefore speak about a

duality of competition forms, with the following implications:

- The competitiveness of destinations is an essential topic, and it can

depend, for instance, on the existence of specific attractions visitors are

willing to pay for;

- The tourism firms that contribute to the formation of the package of

goods and services consumed by visitors on arrival benefit from the

uniqueness of the destination;

- At a certain destination, firms (e.g., hotels) can be competitive on the

basis of specific advantages that differentiate them from the rivals and give

them an advantage.

Another duality of tourism markets – which includes the hospitality

industry – is structural.

Numerous destinations are dominated by small firms that offer hotel and

restaurant services and leisure activities etc., forming the SME segment.

On the other hand, tourism is a very dynamic sector in the world economy

and one of the most internationalized, which lead to the formation of large

companies operating on a global level. This development was possible

especially because of important innovations, such as charter flights, the

forming of hotel chains – some originating in family businesses, rent-a-car

services, debit and credit cards that easily allow for international money

transfers etc. At the same time, the innovations of the kind mentioned
allowed for a high degree of standardization of services, so that the

segment of the large international companies can offer clients quality

services at affordable prices.

Standardization does not mean, however, the elimination of the services

supplied by small firms, since a lot of tourists prefer the life experiences

they offer.

Referring strictly to the hotel services sector, in most cases a strong brand

competition is manifest. However, along with the basic monopolistic

competition, other types of market structures can exist on various

segments, for instance oligopolies. Therefore, a specific analysis of the

relevant markets is necessary, as they should be defined both form the

point of view of the product as well as geographically, because on certain

sub-markets the situation can be different form free competition, and anti-

competitive behavior could be noticed.

The relation competitiveness – strategy in the hospitality industry

Changes in the political and economic environment in the last century had

strong effects on the way companies operate. Turning from a production

economy to a market economy and globalization have confronted

companies with new realities based on competition in which they needed

new tools to succeed.

The key to attracting and making clients loyal is offering an unforgettable

experience and not just accommodation; hotel chains innovate to create a

unique environment, from hotel rooms to lobbies and the restaurant. Thus,
changes in the design of Marriott restaurants and in the menus – so as to

reflect the particularities of different regions – have lead to up to 50%

increases in sales recorded in rapport to the number of rooms occupied.

Along with innovation, technology is an important strategic asset that

allows hotel chains to improve their performance and competitiveness. On

a global scale, the role of technology in strengthening the competitive

advantage of a hotel is recognized, hence its contribution to the hotel’s

success .

Since the hospitality industry, as any other branch of services, is capital

intensive, human resources can represent a source of competitive

advantage for a company. Failite Ireland, in the research conducted among

3, 4 and 5 star hotels in Dublin to analyze successful practices in hotels

underline the fact that the industry depends on the know-how of personnel,

of the knowledge and understanding of the clients’ requirements that

would make the client feel at home.

Another source of competitive advantage can be found in the management

of the acquisition-delivery chain. As Harold Sirkin notes for the Boston

Consulting Group: the acquisition-delivery chain can enhance the

performance of a company by developing advantages in specific

sequences: quality, trust, flexibility, agility and cost efficiency. The

achievement of improvements by observing this order will ensure long

term benefits that will offer a sound foundation for future improvement
initiatives and a better positioning of the chain to successfully deal with

future challenges.

Another strategy recently adopted by some hotels is integrated in the

current trends that aim at making tourism a sustainable activity. Thus

hotels are encouraged to adopt new methods for protecting the

environment in their daily operations and to help the local community.

Factors that influence competitive advantage from the point of view of

differentiation in the hospitality industry

The hospitality industry is increasingly confronted with the intensification

of competitiveness at a global level, the rapid advance of technology and

higher expectations form clients. Among the most important factors of

influence highlighted by research are the ones described in the following:

1. Service Quality - The various service concepts that hospitality

businesses adopt are not simply amorphous marketing ideas. A hotel or

restaurant, including its services, is carefully designed to appeal to a

limited segment of the market, and the way service is delivered is tailored

to match, the expectations of the segment that it targets. Research has

shown that most people believe buying an intangible service like a vacation

or even a meal in a restaurant is more risky than buying a manufactured

product. With a manufactured product, buyers have a better idea of what

they’re getting for their money, while with intangible products there may he

some surprises. It is that clement of uncertainty that poses the biggest

challenge to service businesses. That is why ii is so important for

managers and employees to provide consistent services that meet an

operation’s standards. Successful hospitality companies focus a good deal

of management attention on establishing quality standards for services,

communicating these standards to employees through training programs,

and measuring performance. Providing consistent services is extremely

complex where customer contact is involved, especially when some of the

lowest-paid employees make the most contacts. Everyone understands

that customers want superior service and that better service leads to

competitive advantage. But understanding it is one thing, doing it is

another. Hence a conscious effort has to be made in this direction.

2. Product Offerings - Gone are the days when one had to stand in long

queues to get tickets booked and make unlimited calls for searching and

booking a hotel for their travel. Today with the expanse of the internet in

every household, the travel and hospitality industry has also spread its

reach and is providing faster and better services to the customers. Just a

few clicks and you have your ticket, hotel, sight-seeing tours booked within

minutes. These sites are playing an increasingly important role when

customers are considering where to stay. Special packages and schemes

are being offered to customers globally for almost all the destinations

across the world. With new trends and expectations of the customers,

competition within the industry has also increased. Hence it has become

very important for the hotels to look at the products offered by them, the

rooms, the suites, the offers and the type of packages and schemes offered
in respect to them. Product segmentation has become more popular.

Luxury and first class hotels have created more amenities and products for

their customers. Also specialized extended stay and suite hotels have

become more popular. Hotels with indoor water parks are one of the

newest trends. Timeshares is another segment that many hotel companies

are involved with recently. The development, sale, and management of

timeshares have become particularly popular with the large chains.This

could be the main competitive edge the hotel could have since, after the

brand name or reputation of the hotel, it is what would bring the customer

to the hotel in the first place. Thereby, making all other factors secondary.

3. Ambience - Ambience has become a pivotal concern for tourism and

hospitality managers worldwide. In an effort to improve the ambience,

different groups of professionals are involved, in particular hospitality

managers and outside experts, e.g. designers and architects. Ambience of

an hotel decide how a guest ‘feels’ during his stay at the hotel. Guest love

to stay at hotels where the ambience has a ‘different touch’. Ambience of

the hotel is a important factor for gaining a competitive edge in the hotel

industry.

4. Facilities and Amenities – Hotels are patronized and graded by the way

of the facilities and amenities that they provide. Few of the common and

uncommon facilities and amenities are as follows: Swimming pool – and a

shallow area for children, Free Continental Breakfast, Free Local Calls,

Electronic Door Lock, Early morning wakeup, Remote Control Satellite

colour televisions,, Smoke Detectors, Smoking / Non Smoking Rooms,

Luxury cotton linen and towels, Full size and exquisite bathrooms with

power showers, Guest Services, Safe-deposit boxes or lockers, Mini-bar,

All Major Credit Cards accepted, Currency facilities, Internet ‘café’ with

complete and wireless internet access, Tour and Travel Desk Advisory,

Daily Laundry, dry-cleaning and valet services, Massage therapies, Jacuzzi,

Tennis courts – with flood lights for night time play, Fitness Room – state

of the art exercise equipment, Putting green -for playing golf, Jogging trail

– to work up a sweat while the guest takes in the breathtaking scenery,

Beauty salon – to ensure the guest goes home looking at his best, Spa-

offering the best treatments, Doctor on call, Excursions via concierge,

Rooms with private balconies, terraces or patios, Individually controlled

air-conditioning, International direct dial telephone, Vanity Desk and

complimentary luxury bathroom amenities including bathrobes, slippers

and hairdryers, Down pillows and duvet, Bedrooms featuring king or queen

size beds, Airport and border transfer services, 24 hour Duty Manager,

Express Check-out, Subtropical garden, Snack bar, Free parking, 24hour

Laundry, Express lifts, Fitness and Wellness Center, Aquarium Pool,

Lounge Bar, Hotel Boutique, WiFi – High Speed Internet Access, Porter

Service and Private Dining and Spa Menus. These facilities and amenities

and their qualities are an important factor of sustainable competitive

advantage in the hotel industry.

5. Technology - Technology is another important factor for competitive

advantage in the hotel industry. Some examples of early technology use in

the hotel industry are, satellite channel, international direct dial, online

booking, in-house entertainment, and WiFi. Advanced technology provides

a competitive edge in the hospitality market for attracting conventions and

sophisticated business travelers to a property. Hospitality patrons demand

state-of-the-art technology. They expect fast, uninterrupted Internet

connectivity. They expect seamless traditional and wireless functionality.

They expect convenience. Resorts and conference centers have

transitioned from static structures to interactive hubs of technology.

Technology adds value and generates revenue in the hospitality industry.

The state of technology in the hotel can be a very important factor for

competitive advantage in the hotel. This holds especially true for graded

hotels.

6. Food and Beverages - It is said that the way to a mans heart is through

his stomach. This is also true in case of hotel guests. The quality, variety,

cost and innovativeness of the food and beverage service of hotels holds a

very important place in deciding the competitiveness of the hotel. There is

a tremendous amount of options to choose from. Hotel guests rate a hotel

according to the hygiene, taste and quality of the food served there. The

choice in beverages also is important as also the pricing. The presentation

of the food and variety on offer also adds to the satisfaction of the guests.
In recent years, the industry has witnessed a few notable trends, including:

Increasing emphasis on in-house development of retail-style restaurant

concepts, A new focus on f & b in the select service segment (Hyatt Place,

Aloft, Indigo, Courtyard), An explosion of partnerships with celebrity chefs;

and The addition of f & b service in hotel public spaces.

To support the focus on food and beverage development, many hotels are

expanding expertise in this area by increasing the number of corporate

staff members or adding senior level positions where none existed before.

This buttressing of corporate F & B talent has occurred not only at some of

the world's biggest hotel companies such as Starwood and Marriott, but

also at many smaller hotels. Hotel food & beverage has been recognized as

an important contributor to a hotel's positioning within its market. As such,

a guest's experience with food & beverage plays a critical role in his or her

overall hotel experience, and has been credited as an important driver for

rooms revenue as well as overall asset value. This explains why, in recent

years, corporate food and beverage departments are either hiring or

remaining intact while other departments have faced downsizing.

7. Innovations - Some examples of early innovations in the hotel industry

are, in-room music, in-room coffee maker, auto check-in, check-out, food

festivals, shopping arcades, information desks, lighting control, specialty

restaurants, online booking, health spas, conferencing facilities, laptop and

phone recharge outlets, swipe card entry instead of key, etc. Some of the
newer innovations are TVs in bathroom mirrors, In room workout kits,

underwater hotels, swipe card entry creating ‘for guests only area’, i-pad

order menu in restaurant for reducing wait time for guests, Floatels and

Ecotels, etc.

For eg. The website of Choice Hotels International has mentioned the

following facts and claim to have a remarkable history of innovations in

the hotel industry. They state to have consistently used their expertise to

develop ways to innovate methods, systems, service and brands.

1940 -First to inspect member properties for standards.

1941 -First to provide travel directories.

1952 - First to mandate wall-to-wall carpet.

1954 - First to offer 24-hour desk service, telephones in rooms and

swimming pools.

1963 - First to guarantee reservations.

The Quality referral system offered the industry's first prepaid telephone

reservations.

1970 - First to offer toll-free reservations. We introduced the innovative 24-

hour, 800-number reservation system.

1981 - Opened a new property every other day.

First to segment in the lodging industry with the introduction of two new

lodging products - Quality Royale and Comfort Inn. First company to

successfully franchise in the economy and mid-priced categories.

1983 - First to develop a global marketing/reservations system. Developed

a marketing and reservation system that linked reservations centers in US,

Canada, Mexico, UK, Belgium, Holland, Italy, Germany and Japan with

airline reservations systems and travel agents to create one global

marketing network.

1984 - First to offer non-smoking rooms in every hotel.

1988 - Developed Sleep Inn, a major industry breakthrough. It was the first

hotel engineered from the ground up to reduce labor costs.

1990 - The company name became Choice Hotels International to better

reflect our growing number of brands and locations.

1993 - First to offer formal, written impact-protection policy.

First to offer "senior-friendly" rooms. Rodeway Inn began offering "senior"

rooms with brighter lighting, grab bars in showers, lever handles on doors

and large buttons on phones and alarm clocks.

1995 - First to provide "real-time" access to reservation system via web.

Launched the company's Internet site. More than 72,000 pages were

accessed during that month and 40,000 hits were recorded in first two

weeks alone.

1996 - Became a publicly traded company.

Launched MainStay Suites, the first mid-market, extended-stay lodging

product developed and franchised by a major chain.

Introduced the Automated Travel Management (ATM®) system, the first

commission system that expedites travel agent payments, provides

tracking and instant answers for inquiries.

Developed the industry's first geographically based system to identify

points of interest near its hotels. Known as geo-coding, this allows

reservations agents to easily choose the closest Choice hotel to a specific

destination.

1997 - Introduced the industry's first Internet site devoted to travel

agents.

Launched the first training and certification program in hotel franchising

for hotel employees.

1999 - First in the hospitality industry to launch a company owned, online

procurement system - ChoiceBuys.com. It enables franchisees to order

goods directly from endorsed vendors.

2000 - On October 19, Choice Hotels became the first to offer wireless

reservations via handheld computers.

2001 - In wake of the September 11 terrorist attacks on the U.S., Choice

Hotels launches, "Thanks for Traveling," an industry-wide campaign to

help America get back on the road.

The Quality Inn Larson celebrates its 60th anniversary in the Choice Hotels
family and becomes the first Quality Inn to display the brand's new image.

Choice Hotels implements "last room availability" synchronizing the

hotels' room inventory with Choice Hotels central reservations system.

2002 - New prototypes for Econo Lodge brand hotels, a first-ever "Inn &

Suites" option for the brand as well as a non-traditional use of color,

space and materials that sets a new standard in economy lodging.

Launched www.choicesportstravel.com, a website designed exclusively to

accommodate the lodging needs of sports travelers.

2003 - Launched Best Choice E-Rate Guarantee that guarantees

consumers the best on-line rates via choicehotels.com.

2004 - A Multi-Cultural Franchising Seminar was held at the company's

Silver Spring headquarters to educate potential franchisees on the steps

required to become a successful hotel owner.

The World's Greatest Sales Blitz, an initiative designed to thank the travel

agent community for its continuous support of the lodging industry took

place around the world in November.

Choice Hotels de Mexico, a newly formed subsidiary of the company was

launched in Mexico and began a direct franchising effort to introduce the

Choice Hotels brands to hotel owners and developers in the country.

The Women's Business Alliance was officially launched at Choice Hotels

50th Annual Convention.

2005 - Cambria Suites, an upscale, select-service all-suites hotel brand

designed to maximize return on investment for developers was launched.

"Click to Chat," a communications tool designed to give visitors to

choicehotels.com the ability to engage in online conversations directly

with Choice Hotels customer service representatives was introduced.

Innovations are a very important part of the competitive strategy of any

hotel. Innovations have to be made in all other factors of competitive

advantage. Innovations, at least for a short term can be a very prominent

differentiator. Thereby providing a competitive edge to the hotels who

innovate.

8. Other Add on facilities or services provided by the Hotel. – Are the extra

touch of facility or service that a hotel may provide for its guest. Eg: Crown

Plaza Hotel hired a sleep doctor for advice on relaxation, and tossed in a

sleep kit for guests. Some examples of add on services offered by some

hotels are: Free form swimming pool – with temperature control, Handicap

Rooms, Newspaper of choice delivered upon request, Secretarial Services,

Multilingual staff, Personal butlers upon request, Hammocks – strung

between the palm trees, for a nap in the cooling breeze, Cycle shop – with

scooters, motor bikes and mountain bikes for hire, Boutique with authentic

artefacts and treasures, Maids to assist with unpacking and ironing upon

arrival, Diving and snorkeling, Kayaks to explore the shoreline in beach

resorts, private beach –reserved exclusively for our guests, Baby-sitting,

Saltwater Infinity Pool. A recent trend is hotels re-imaging their lobbies to

destination places. For example part of the lobby may be used for a

breakfast area in the morning and a bar at night. This may include sliding

walls, decorative lighting, and music. These other additional or add-on

facilities may provide the much needed competitive edge in an industry

where most players are striving to outdo each other and almost all provide

the same facilities and services.

Importance Of Bright Ideas : The intellectuals, thinkers, academics,

CEOs, and business pundits all agree on the importance of good ideas to

future business survival – and that of the individual and society. But

generating new ideas does not automatically result in innovations and

success. It is only the beginning of the journey. The real challenge for an

organization is to convert these ideas into acceptable products or services

for customers. This can happen only when organizations design and

implement a structured approach to managing innovations.

However there is no doubt that to compete effectively, you must innovate –

and that too, on an ongoing basis. Not just once, but consistently, in all

your products, services and business functions. Very simply, innovation is

what is going to enable businesses to pave their way in the world. Without

it many of our firms will go out of business, and those that remain will

become second-rate and subservient to international leaders in decision-

making and profit-taking. Without innovation there won’t be the new

businesses and jobs that are necessary in a dynamic economy.

But, profitable innovation doesn’t just ‘happen.’ It must be managed,

measured and executed on- and a few companies do that well.

Innovations are equally important in the services sector, more so in the

restaurant business. In order to survive the cut throat competition in the

catering industry on has to foster ongoing innovation. The restaurant

business requires entrepreneurs to continuously come up with new dishes,

new ways to present or serve existing dishes, new services schemes to

satisfy customers, new ways of enhancing their ambience and new

processes to economize operations. Without innovation, restaurants face

the threat of becoming ‘obsolete’- leading to sickness – and ultimately

driving them out of business or forcing them to hand the business over to

more efficient and innovative entrepreneurs.

Systemic Innovation - Innovation used to be a linear trajectory from new

knowledge to new product. Now innovation is neither singular nor linear,

but systemic. It arises from complex interactions between many

individuals, organizations and environmental factors. Firms which are

successful in realizing the full returns from their technologies and

innovations are able to match their technological developments with

complementary expertise in other areas of their business, such as

manufacturing, distribution, human resources, marketing, and customer

relationships

Radical Innovation - Long-term corporate success is now linked to the

ability to innovate. Although corporate investment in improvements to

existing products and processes does bring growth, it is new game

changing breakthroughs that will launch company into new markets,

enable rapid growth, and create high return on investment. Radical

innovation, concerned with exploration of new technology, is

fundamentally different from incremental innovation that is concerned with

exploitation of existing technology. Radical innovation is a product,

process, or service with either unprecedented performance features or

familiar features that offer potential for significant improvements in

performance and cost. It creates such a dramatic change in processes,

products, or services that they transform existing markets or industries, or

create new ones.

Some examples of innovations in the hotel industry are as follows:

REX Room Expeditor - REX is the first application to revolutionize the

housekeeping room assignment process and effectively change how room

attendants work. They no longer receive a board with rooms to clean,

instead, they are presented an iPod Touch which lists (in their native

language) -- the most important room to clean based on hotel defined

criteria like room rush, VIP status, room type, etc.

DS Assistant - Positioned at strategic locations such as the hotel lobby or

the spa entrance, these electronic posters constitute the ideal medium for

spas to present their offer effectively and boost their sales in a simple way.

An interface fully integrates Digital Signage into Reservation Assistant Spa

& Activity Software. Through this interface Reservation Assistant selects

available spa treatments and offers them on all screens in the hotel and

spa area via Digital Signage.

iMEDIA - iMEDIA is an extension of the ETVi solution, enabling the ability

to view internet content in true digital, HD, live streaming, full screen

format on a hotel guest room TV screen. It is an innovation that for the first

time ever allows hotels to create new revenue streams, address cost

management, differentiate from other hotels and enhance a customized

guest experience.

High Definition Event Conferencing - PSAV's High Definition Event

Conferencing (HD EVC) program gives guests the ability to integrate crisp,

real-time, two-way sound and video communication into their meetings and

event experience. With businesses looking to save money on meeting

travel, multiple properties with video conferencing capabilities can capture

otherwise lost revenue. PSAV's HD EVC ensures continued communication

regardless of geography.

Libra OnDemand - Libra OnDemand is the FIRST hospitality specific CRM

system on the Force.com platform, offering a comprehensive suite of

applications: Customer Relationship Management, Loyalty Management,

Event Management, Analytics, Email Marketing and Customer Portal. What

makes us so special? Libra OnDemand is a Software-as-a-Service (SaaS)

application that is easy to use, requires zero upfront investment.

OPERA Resort Dashboard - MICROS OPERA Resort Dashboard is an

intuitive, fully-integrated activities scheduler allowing appointments to be

booked quickly and efficiently, improving customer service. The system

automatically finds available times, organizes multiple services, and

identifies availability of qualified staff members. The interfaced solution for

facilities and activities on property allows guests to book hotel

reservations, spa, leisure ventures, and golf tee times in real-time creating

one single itinerary.

Link Balancer Appliance - Elfiq Networks is a technology leader in the field

of bandwidth management and business continuity; producing ISP link

balancing appliances enabling hospitality properties deliver a superior

guest experience. Through the use of multiple concurrent ISP links such as

DSL, T1, fiber, cable modem, wireless and more, the overall available

bandwidth for both guests and employees can be multiplied easily and

securely. When an ISP carrier is not operating normally, other links are

available to offer a failover strategy to maintain connectivity.

ICE - Intelity, is a hospitality software solution company focused on the

self-service marketplace. ICE is a customizable, branded interface that

allows hotel guests to arrange all services instantly via an in-room touch

screen, laptop or mobile device. The virtual concierge and back-end

monitoring system organizes, tracks and measures all hotel activity at the

touch of a screen along with language preferences for effective use to all

international consumers.

PowerWave - On June Intercontinental Hotels launched guestLINK at select

Holiday Inn, Holiday Inn Express and Hotel Indigo locations. The
guestLINK PowerWave console allows hotel guests to plug in their laptop,

DVD, mp3 player, iPod, iPhone, personal gaming station, camcorder or

digital camera, and have instant connectivity to the flat-panel HDTV via a

single HDMI cable.

MediaHub HD - TeleAdapt's MediaHub HD lets hotel guests enjoy their

personal media in the room like never before. In addition to standard

audio/video TV connectivity like Composite A/V, S-Video, VGA, and HDMI

ports, MediaHub HD is the only panel with a Stereo Bluetooth pairing point,

converting the in-room into a wireless speaker. Compatible with most

models of iPod, Phone, Blackberry, and other MP3-playing smartphones,

guests can fill the room with the sound of their own music with the

freedom to control their tunes from anywhere in the room.

Vitrum The Glass Collection – Vitrum, the Glass Collection by VDA is a new

generation of glass Devices for Room Management System, complying

Access Controls, Temperature Panels and Light Control Panels for an

exclusive approach of the Building Automation in the Hotels. Turn on, Turn

off, Control lighting and temperature. Today's design, is simple, is light, is

ergonomic and with Tactile technology.

FloodGate - - FloodGate is the first low cost hospitality product to deliver

encrypted free-to-guest HDTV programming to the guest room over coax or

IP without the use of a set-top box in each room.

Energy Harvesting Wireless Sensors - Room renovations during normal

operation "between guests" enabling 40% energy savings and ROIs of less
than 2 years made possible by new energy harvesting based wireless

sensors that require no cables and no batteries.

AirWatch – AirWatch is a web-based mobile device and WLAN

management software designed to track, monitor and manage all mobile

devices deployed across today's hotel property. AirWatch provides an

integrated, real-time view of your property's wireless network and all

connected devices.

Pure Allergy Friendly - The PURE process reduces or eliminate irritants in a

room, The industry's interest in indoor air quality is timely. For the past

several years, the number of Americans with allergies and asthma has

been growing at an accelerated rate. In America as many as one in four

hotel guests are looking for non-allergenic rooms.

There is practical value in understanding the patterns in and the

differences between evolutionary incremental innovation projects and

revolutionary radical innovation projects. This understanding can help one

apply right management practices to different types of innovation projects

and make the course of radical innovation shorter, less sporadic, less

expensive, and less uncertain.

High level of uncertainty is a hallmark a radical innovation projects,

especially at early stages. The criteria used to evaluate a radical idea and

concept should differ from those applied to evaluating incremental

innovations.
Creating a Culture for Innovation

The first step is to understand where the greatest deficiencies lie, and

which levers will deliver the most impact. For many organizations, the most

critical levers to assess initially include structure and metrics, though

establishing innovation processes and providing employees with new skill

sets are also critical drivers of culture. The act of visibly sponsoring

specific initiatives focused on creating new organizational capabilities that

promote innovation serves to send a message and establish new symbols

and stories that reinforce a culture of innovation.

 CHAPTER 9

DATA ANALYSIS & MAJOR FINDINGS

9.1 DATA ANALYSIS

1. Tools for sustainable competitive advantage in the hotel industry:

The data clearly show that all levels of management of all the categories of

hotels agree that the important tools for sustainable competitive advantage

are Innovations, Product Offerings, Service Quality, Technology,

Ambience, Food and Beverages, Facilities and Amenities, and

Miscellaneous Add-on Services Offered. However, the relative importance

given to Innovations (59.9%) was comparatively lesser than that given to

the other factors for competitive advantage which were as follows, Product

Offerings (77%), Service Quality (77.4%), Technology (80.7%), Ambience

(91.2%), Food & Beverages (93.8%), Facilities & Amenities (90.5%), and as

far as factors other than these were concerned most respondents were not

sure (68.2%) (See tables 9.1.1 to 9.1.8).

Hypothesis 1.

H1o - There is no significant difference in the opinion of the managers of

the hotels in general that innovations, product offerings, service quality,

technology, ambience, food and beverages, facilities and amenities and

other add on facilities are the factors for sustainable competitive advantage

in the hotel industry.

H11 – There is a significant difference in the opinion of the managers of the

hotels in general that innovations, product offerings, service quality,

technology, ambience, food and beverages, facilities and amenities and

other add on facilities are the regards factors for sustainable competitive

advantage in the hotel industries.

Here, there is no significant difference in the opinion of the managers. Ho

is accepted. The totals suggest that the managers agreed that these are the

factors for sustainable competitive advantage in the hotel industry.

2. Factors for sustainability – Comparison according to Grade of Hotel:

There is no significant difference in the managers opinion as compared by

the different grades of hotels as to the factors for sustainable competitive

advantage except in the case of innovations, where the Five Star Hotel

managers believe significantly more than the Four Star and Three Star

Hotel managers that innovation are an important factor for sustainable

competitive advantage in the hotel industry. (See tables 9.2.1a to 9.2.8b).

Sub Hypotheses 1.1.

H1.1o – There is no significant difference amongst the opinion of the

managers of various grades of hotels as to innovation being an important

factor for sustainable competitive advantage in the hotel industry.

H1.11 - There is a significant difference amongst the opinion of the

managers of various grades of hotels as to innovation being an important

factor for sustainable competitive advantage in the hotel industry.

Here there is a significant difference in the opinion of the managers of the

various grades of hotels as is seen by p value = .000 (< .05). The Five Star

Hotel managers believe more than the Four Star and Three Star Hotel

managers that innovation is are an important factor for sustainable

competitive advantage in the hotel industry. Therefore, Ho is rejected. (See

tables 9.2.1a and 9.2.1b).

3. Factors for sustainability – Comparison according to Designation of

Manager.

There is no significant difference in the opinion of the managers as

compared by their designation as to the factors of sustainable competitive

advantage as everywhere p value is more than .05. The totals suggest that

the managers of all levels of all the hotels feel that these are the factors for

sustainable competitive advantage in the hotel industry. (See tables 9.3.1

to 9.3.8b).

4. Factors for sustainability – Comparison according to Country.

There was no significant difference as to the impact of the factors of

sustainable competitive advantage between India and Thailand. The totals

suggest that most of the managers agreed that these are the factors for

competitive advantage in the hotel industry according to the managers of

the hotels in both countries. (See tables 9.4.1a to 9.4.8b).

5. Factors for sustainability – Comparison according to Reason for travel

to Destination.
There is a significant association between purpose of travel and the

importance food and beverages as a factor for competitive advantage.

Hotels where the customers are more for business purposes give more

importance to food and beverages for competitive advantage. Other than

that there is no significant difference in all the other factors for sustainable

competitive advantage. (See tables 9.5.1a and 9.5.8b).

Sub Hypothesis 1.2.

H1.2o – There is no significant difference amongst the opinion of the

managers of business and tourist Destination hotels as food and

beverages being an important factor for sustainable competitive advantage

in the hotel industry.

H1.21 - There is a significant difference amongst the opinion of the

managers of business and tourist Destination hotels as to food and

beverages being an important factor for sustainable competitive advantage

in the hotel industry.

Here there is a significant difference in the opinion of the managers of the

two destinations as is seen by p value = .017 ( < .05). Therefore, Ho is

rejected. (See tables 9.5.6a and 9.5.6b).

There is a significant association between purpose of travel and the

importance food and beverages as a factor for competitive advantage.

Hotels where the customers are more for business purposes give more

importance to food and beverages for competitive advantage.

6. Effect of Factors of Sustainable Competitive Advantage on Occupancy

Rate.

In order of importance they were rated as below from most important to

least important as: Technology, Ambience, Facilities and Amenties, Food

and Beverages, Other Add on Services Offered, Service Quality, Product

Offerings and Innovations. Most of the managers rated these factors

between Agree and Strongly Agree, except in the case of Innovations

where the managers were between Agree and Uncertain (see Table- 9.6).

Hypothesis 2.

H2o – There is no significant difference in the opinion of the managers of

the hotels in general whether the factors for sustainable competitive

advantage in the hotel industry have an impact on the occupancy rate.

H21 - There is a significant difference in the opinion of the managers of the

hotels in general whether the factors for sustainable competitive advantage

in the hotel industry have an impact on the occupancy rate.

Here there is no significant difference in the opinion of the managers of

various hotels in general. The mean values suggest that most of the

managers rated these factors between Agree and Strongly Agree, except in

the case of Innovations where the managers were between Agree and

Uncertain (see Table- 9.6).

7. Effect of Factors of Sustainable Competitive Advantage on Occupancy

Rate – Comparison by Designation of Mangers.

However by designations there is significant difference as to the effect of

Ambience, F&B, Facilities and Amenities and Other Factors on the

occupancy rate of the hotels. The relative importance of the impact of the

tools for sustainable competitive advantage in the opinion of the Lower

Level Management differs from the opinion of the Middle and Top Level

Management. The Lower Level Management essentially feel that the tools

which have the maximum impact on the occupancy rate are Ambience

(F=3.068, P=.048), Food and Beverages (F= 4.329, P=.014), Facilities and

Amenities and Miscellaneous Add-on Services Offered. Whereas, the

Middle and Top Level Management opine that Technology is most

important. There is no significant difference as far as Innovations, Product

Offerings, Service Quality and Technology are concerned as to their effect

on the occupancy rate. (See ANOVA table No.9.7.1 and 9.7.2)

8. Effect of Factors of Sustainable Competitive Advantage on Occupancy

Rate – Comparison by Grade of Hotel.

The different grades of hotels do not differ in their opinion regarding tools

for sustainable competitive advantage in the hotel industry and their

impact on the occupancy rate (chi square=7.543, P=0.479). (See tables

9.8.1a to 9.8.8b).

9. Effect of Factors of Sustainable Competitive Advantage on Occupancy

Rate – Comparison by Country. (See tables 9.9.1 to 9.9.2).

Most of the managers are agreeing that the factors of sustainable

competitive advantage have a direct effect on the occupancy rate since

most of the mean values are around 4 and above, except in the case of

Innovations where the mean is 3.92 indicating that the managers are not

sure as to the direct effect of innovations as a factor having a direct effect

on the occupancy rate. However, there is no significant difference in the

opinion of the managers of Thailand and India (all the P-values are > 0.05).

(See tables 9.9.1 and 9.9.2).

10. Effect of Factors of Sustainable Competitive Advantage on Occupancy

Rate – Comparison by Reason of travel to Destination.

The managers of the hotels as compared by business and tourist

destinations both feel that the factors of sustainable competitive advantage

have a direct effect on the occupancy rate. They agree to a great extent

except in the case of innovations where they are not sure. However there is

no difference between the two categories. (See tables 9.10.1 and 9.10.2).

11. Is Innovation an important factor for Sustainable Competitive

Advantage? – Comparison by Grade of Hotel.

The managers of all grades of hotels were of the unanimous opinion that

innovations per se are not important as a tool of sustainable competitive

advantage but innovations are important to be implemented in all

categories of tools of sustainable competitive advantage. (See tables

9.11.1a to 9.11.1b).
Hypothesis 3.

H3o – There is no significant difference amongst the opinion of the

managers of various grades of hotels as to whether innovation is the most

important factor for sustainable competitive advantage in the hotel

industry.

H31 - There is a significant difference amongst the opinion of the managers

of various grades of hotels as to whether innovation is the most important

factor for sustainable competitive advantage in the hotel industry.

Here there is no significant difference in the opinion of managers different

grades of hotels as is seen by p value = .411 (not < .05). Therefore, Ho is

accepted. (See tables 9.11.1a to 9.11.1b).

12. Is Innovation an important factor for Sustainable Competitive

Advantage? – Comparison by Country.

There is no significant difference in the opinion of the managers as

compared by country whether innovation is a most important factor for

sustainable competitive advantage as is seen by p value = .176 (not < .05).

(See tables 9.12.1a to 9.12.1b).

13. Is Innovation an important factor for Sustainable Competitive

Advantage? – Comparison by Reason of Travel to Destination.

There is no significant difference in the opinion of the managers as

compared by destination whether innovation is a most important factor for

sustainable competitive advantage. (See tables 9.13.1a to 9.13.1b).

14. Whether Innovations are implemented in isolation or is a part of all other

tools of Sustainable Competitive Advantage. – Comparison by Grade of

Hotel.

The managers of all hotels agree that innovations per se are not important

as a factor for sustainable competitive advantage but are to be

implemented as a part of all the other factors for sustainable competitive

advantage. However, there is no significant difference as per grade of the

hotels concerned amongst the opinion of the managers. (See tables 9.14.1a

to 9.14.1b).

Hypothesis 4.

H4o – There is no significant difference amongst the opinion of the

managers of various grades of hotels as to whether innovations per se are

an important factor for sustainable competitive advantage or are merely a

part of the other factors of sustainable competitive advantage in the hotel

industry.

H41 - There is a significant difference amongst the opinion of the managers

of various grades of hotels as to whether innovations per se are an

important factor for sustainable competitive advantage or are merely a part

of the other factors of sustainable competitive advantage in the hotel

industry.

Here there is no significant difference in the opinion of managers of

various grades of hotels as is seen by p value = .069 (not < .05). Therefore,

Ho is accepted. (See tables 9.14.1a to 9.14.1b).

15. Whether Innovations are implemented in isolation or a part of all other

tools of Sustainable Competitive Advantage. – Comparison by Country.

The managers of the hotels of both countries agree that innovations per se

are not important as a factor for sustainable competitive advantage but are

to be implemented as a part of all the other factors for sustainable

competitive advantage. However, there is no significant difference amongst

the opinion of the managers of India and Thailand as is seen by p value =

.156 (not < .05).. (See tables 9.15.1a to 9.15.1b).

16. Whether Innovations are implemented in isolation or a part of all other

tools of Sustainable Competitive Advantage. – Reason of travel to

Destination.

The managers of all hotels agree that innovations per se are not important

as a factor for sustainable competitive advantage but are to be

implemented as a part of all the other factors for sustainable competitive

advantage. However, there is no significant difference amongst the opinion

of the managers as per business and tourist destination hotels. (See tables

9.16.1a to 9.16.1b).

17. Managers opinion whether innovations are prominent in the hotel

Sector in the other factors for Sustainable Competitive Advantage. –

Comparison by Grade of Hotel.

There is no significant difference between the opinion of the managers of

different grades of hotels as to whether innovations are predominant in the

other factors of sustainable competitive advantage in the hotel industry.

(See tables 9.17.1a to 9.17.7b).

Hypothesis 5.

H5o – There is no significant difference amongst the opinion of the

managers of various grades of hotels as to whether innovations as a factor

for sustainable competitive advantage are prominent in the hotel industry.

H51 - There is a significant difference amongst the opinion of the managers

of various grades of hotels as to whether innovations as a factor for

sustainable competitive advantage are prominent in the hotel industry.

Here there is no significant difference in the opinion of managers of

various grades of hotels as is seen by p values of all the factors of

competitive advantage compared individually none being less than .05.

Therefore, Ho is accepted. (See tables 9.17.1a to 9.17.1b).

18. Managers opinion whether innovations are prominent in the hotel

Sector in the other factors for Sustainable Competitive Advantage –

Comparison by Country.

There is no significant difference between the opinions of the managers of

India and Thailand hotels as to whether innovations are predominant in the

other factors of sustainable competitive advantage in the hotel industry.

(See tables 9.18.1a to 9.18.7b).

19. Managers opinion whether innovations are prominent in the hotel

Sector in the other factors for Sustainable Competitive Advantage. –

Comparison by Reason of travel to Destination.

There is no significant difference between the opinion of the managers of

hotels of Business and Tourist destinations as to whether innovations are

predominant in the other factors of sustainable competitive advantage in

the hotel industry. (See tables 9.19.1a to 9.19.7b).

20. Do you think innovation performance in the other factors for

competitive advantage significantly and positively increases occupancy

rates? - Comparison by Country

There is no significant difference between the opinions of the managers of

India and Thailand hotels as to whether innovations performance

significantly increases the occupancy rate in the hotel industry. (See tables

9.20.1a to 9.20.1b).

Hypothesis 6.

H6o – There is no significant difference in the opinion of the managers of

India and Thailand hotels as to whether innovation performance per se as a

factor for sustainable competitive advantage has a significant and positive

impact on the occupancy in the hotel industry.

H61 – There is a significant difference in the opinion of the managers of

India and Thailand hotels as to whether innovation performance per se as a

factor for sustainable competitive advantage has a significant and positive

impact on the occupancy in the hotel industry.

Here there is no significant difference in the opinion of the managers of the

two countries as is seen by p value = .445 (not < .05). Therefore, Ho is

accepted. (See tables 9.20.1a and 9.20.1b).

21. Do you think innovation performance in the other factors for

competitive advantage significantly and positively increases occupancy

rates? - Comparison by Reason of Travel to Destination.

There is no significant difference between the opinions of the managers of

hotels of business and tourist destinations as to whether innovations

performance significantly increases the occupancy rate in the hotel

industry. (See tables 9.21.1a to 9.21.1b).

22. Attitude of Hotels towards developing Innovations – Comparison by

Country.

All of them have good attitude as scores of all are above 4. However,

Thailand is better in case of Ambience and Facilities and Amenities. India is

better in case of Service and Others Factors. No significant difference was

seen in Product Offerings, Technology and Food and Beverage. (See tables

9.21.1a to 9.21.1b).

Hypothesis 7.

H7o – There is no significant difference in the attitude of the managers of

India and Thailand hotels for developing innovations as a factor for

sustainable competitive advantage in their respective hotels.

H71 - There is a significant difference in the attitude of the managers of

India and Thailand hotels for developing innovations as a factor for

sustainable competitive advantage in their respective hotels.

The analysis of each of the criteria was as follows;

H7.1ao – There is no significant difference in the attitude of the managers

of India and Thailand hotels for developing product innovations as a factor

for sustainable competitive advantage in their respective hotels.

H7.1a1 - There is a significant difference in the attitude of the managers of

India and Thailand hotels for developing product innovations as a factor for

sustainable competitive advantage in their respective hotels.

Here there is no significant difference in the opinion of the managers of the

two countries as is seen by p value = .087 (not < .05). Therefore, Ho is

accepted. (See tables 9.21.1a and 9.21.1b).

Sub Hypothesis 7.1b.

H7.1b o – There is no significant difference in the attitude of the managers

of India and Thailand hotels for developing service innovations as a factor

for sustainable competitive advantage in their respective hotels.

H7.1b 1 - There is a significant difference in the attitude of the managers of

India and Thailand hotels for developing service innovations as a factor for

sustainable competitive advantage in their respective hotels.

Here there is no significant difference in the opinion of the managers of the

two countries as is seen by p value = .039 (not < .05). Therefore, Ho is

accepted. (See tables 9.21.1a and 9.21.1b).

Sub Hypothesis 7.1c.

H7.1c o – There is no significant difference in the attitude of the managers

of India and Thailand hotels for developing ambience innovations as a

factor for sustainable competitive advantage in their respective hotels.

H7.1c 1 - There is a significant difference in the attitude of the managers of

India and Thailand hotels for developing ambience innovations as a factor

for sustainable competitive advantage in their respective hotels.

Here there is a significant difference in the opinion of the managers of the

two countries as is seen by p value = .000 (< .05). Therefore, Ho is rejected.

(See tables 9.21.1a and 9.21.1b).

Sub Hypothesis 7.1d.

H7.1d o – There is no significant difference in the attitude of the managers

of India and Thailand hotels for developing technology innovations as a

factor for sustainable competitive advantage in their respective hotels.

H7.1d 1 - There is a significant difference in the attitude of the managers of

India and Thailand hotels for developing technology innovations as a factor

for sustainable competitive advantage in their respective hotels.

Here there is no significant difference in the opinion of the managers of the

two countries as is seen by p value = .098 (not < .05). Therefore, Ho is

accepted. (See tables 9.21.1a and 9.21.1b).

Sub Hypothesis 7.1e.

H7.1e o – There is no significant difference in the attitude of the managers

of India and Thailand hotels for developing facilities and amenities

innovations as a factor for sustainable competitive advantage in their

respective hotels.

H7.1e 1 - There is a significant difference in the attitude of the managers of

India and Thailand hotels for developing facilities and amenities

innovations as a factor for sustainable competitive advantage in their

respective hotels.

Here there is a significant difference in the opinion of the managers of the

two countries as is seen by p value = .043 (< .05). Therefore, Ho is rejected.

(See tables 9.21.1a and 9.21.1b).

Sub Hypothesis 7.1f.

H7.1f o – There is no significant difference in the attitude of the managers

of India and Thailand hotels for developing food and beverages

innovations as a factor for sustainable competitive advantage in their

respective hotels.

H7.1f 1 - There is a significant difference in the attitude of the managers of

India and Thailand hotels for developing food and beverages innovations

as a factor for sustainable competitive advantage in their respective hotels.

Here there is no significant difference in the opinion of the managers of the

two countries as is seen by p value = .246 (not < .05). Therefore, Ho is

accepted. (See tables 9.21.1a and 9.21.1b).

Sub Hypothesis 7.1g.

H7.1g o – There is no significant difference in the attitude of the managers

of India and Thailand hotels for developing any other factor innovations as

a factor for sustainable competitive advantage in their respective hotels.

H7.1g 1 - There is a significant difference in the attitude of the managers of

India and Thailand hotels for developing any other factor innovations as a

factor for sustainable competitive advantage in their respective hotels.

Here there is a significant difference in the opinion of the managers of the

two countries as is seen by p value = .040 (< .05). Therefore, Ho is rejected.

(See tables 9.21.1a and 9.21.1b).

23. Attitude of Hotels towards developing Innovations – Comparison by

Designation of Manager.

No significant difference was seen as per the designation of the managers

was concerned in the attitude towards developing innovations in the

factors of sustainable competitive advantage. (See tables 9.23.1a to

9.23.1b).

24. Attitude of Hotels towards developing Innovations – Comparison by

Reason of Travel to Destination.

No significant difference was seen in the attitude of the managers of hotels

of business and tourist destinations towards developing innovations in the

factors of sustainable competitive advantage. The findings also show as

seen by the mean values that the attitude of the hotels towards developing

innovations in their hotel is poor. (See tables 9.24.1a to 9.24.1b).

25. Attitude towards developing Innovations - Comparison as per grade of

Hotels

There was no significant difference in the opinion as per grades of hotels in

Product Offerings, Ambience, Facilities & Amenities and Other Factors. The

attitude of five star hotels was found to be substantially higher towards

developing Technological Innovations and slightly higher in developing

Service Innovations. Whereas, the attitude of three and four star hotels was

better in developing Food & Beverage Innovations. (See tables 9.25.1a and

9.25.1b).

Sub Hypothesis 7.3a.

H7.3a o – There is no significant difference in the attitude of the managers

of various grades of hotels for developing product innovations as a factor

for sustainable competitive advantage in their respective hotels.

H7.3a 1 - There is a significant difference in the attitude of the managers of

various grades of hotels for developing product innovations as a factor for

sustainable competitive advantage in their respective hotels.

Here there is no significant difference in the opinion of the managers of

various grades of hotels as is seen by p value = .093 (not < .05). Therefore,

Ho is accepted. (See tables 9.25.1a and 9.25.1b).

Sub Hypothesis 7.3b.

H7.3b o – There is no significant difference in the attitude of the managers

of various grades of hotels for developing service innovations as a factor

for sustainable competitive advantage in their respective hotels.

H7.3b 1 - There is a significant difference in the attitude of the managers of

various grades of hotels for developing service innovations as a factor for

sustainable competitive advantage in their respective hotels.

Here there is a significant difference in the opinion of the managers of

various grades of hotels as is seen by p value = .023 (< .05). Therefore, Ho

is rejected. (See tables 9.25.2a and 9.25.2b).

Sub Hypothesis 7.3c.

H7.3c o – There is no significant difference in the attitude of the managers

of various grades of hotels for developing ambience innovations as a

factor for sustainable competitive advantage in their respective hotels.

H7.3c 1 - There is a significant difference in the attitude of the managers of

various grades of hotels for developing ambience innovations as a factor

for sustainable competitive advantage in their respective hotels.

Here there is no significant difference in the opinion of the managers of

various grades of hotels as is seen by p value = .257 (not < .05). Therefore,

Ho is accepted. (See tables 9.25.3a and 9.25.3b).

Sub Hypothesis 7.3d.

H7.3d o – There is no significant difference in the attitude of the managers

of various grades of hotels for developing technology innovations as a

factor for sustainable competitive advantage in their respective hotels.

H7.3d 1 - There is a significant difference in the attitude of the managers of

various grades of hotels for developing technology innovations as a factor

for sustainable competitive advantage in their respective hotels.

Here there is a significant difference in the opinion of the managers of

various grades of hotels as is seen by p value = .029 (< .05). Therefore, Ho

is rejected. (See tables 9.25.4a and 9.25.4b).

Sub Hypothesis 7.3e.

H7.3e o – There is no significant difference in the attitude of the managers

of various grades of hotels for developing facilities and amenities

innovations as a factor for sustainable competitive advantage in their

respective hotels.

H7.3e 1 - There is a significant difference in the attitude of the managers of

various grades of hotels for developing facilities and amenities innovations

as a factor for sustainable competitive advantage in their respective hotels.

Here there is no significant difference in the opinion of the managers of

various grades of hotels as is seen by p value = .132 (not < .05). Therefore,

Ho is accepted. (See tables 9.25.5a and 9.25.5b).

Sub Hypothesis 7.3f.

H7.3f o – There is no significant difference in the attitude of the managers

of various grades of hotels for developing food and beverages innovations

as a factor for sustainable competitive advantage in their respective hotels.

H7.3f 1 - There is a significant difference in the attitude of the managers of

business and tourist Destination hotels for developing food and beverages

innovations as a factor for sustainable competitive advantage in their

respective hotels.

Here there is a significant difference in the opinion of the managers of

various grades of hotels as is seen by p value = .004 (< .05). Therefore, Ho

is rejected. (See tables 9.25.6a and 9.25.6b).

Sub Hypothesis 7.3g.

H7.3g o – There is no significant difference in the attitude of the managers

of various grades of hotels for developing any other factor innovations as a

factor for sustainable competitive advantage in their respective hotels.

H7.3g 1 - There is a significant difference in the attitude of the managers of

various grades of hotels for developing any other factor innovations as a

factor for sustainable competitive advantage in their respective hotels.

Here there is no significant difference in the opinion of the managers of

various grades of hotels as is seen by p value = .316 (not < .05). Therefore,

Ho is accepted. (See tables 9.25.7a and 9.25.7b).

26. Regression Analysis of perspective of managers.

The relationship between the perspective of the management of the hotels

as related to parameters of factors like age of manager, level of manager,

grade of hotels, country, destination and occupancy rate was studied.

There is only one factor which significantly affects the level of perspective

of the managers i.e. occupancy rate in the hotel. None of the other

parameters affect the perspective.

The hotels where occupancy rate is higher have better perspective about

innovations and the hotels where occupancy rate is lower have poor

perspective about innovations.

All other factors did not have any significant contribution to the level of

perspective of the managers towards innovations as a tool for sustainable

competitive advantage in the hotel industry. (See tables 9.26.1a and

9.26.1g).

Hypothesis 8.

H8o – There is no significant association between the perspective of the

managers regarding innovations as a factor for sustainable competitive

advantage and the grade of hotels, age and designation of manager,

country and occupancy rate.

H81 - There is a significant association between the perspective of the

managers regarding innovations as a factor for sustainable competitive

advantage and the grade of hotels, age and designation of manager,

country and occupancy rate.

y = a + bx
Perspective = 32.934 + 0.024 x (Occupancy Rate 2008-09)
The association was analyzed and the findings were as follows for each

parameter used for comparison.

Hypothesis 8.1

H8.1o – There is no association between the perspective of the managers

regarding innovations as a factor for sustainable competitive advantage

and the grade of hotels.

H8.11 - There is an association between the perspective of the managers

regarding innovations as a factor for sustainable competitive advantage

and the grade of hotels.

Here there is no association in the opinion of the managers of various

grades of hotels as is seen by p value = .172 (not <.05). Therefore, Ho is

accepted. (See tables 9.26.1a and 9.26.1g).

Sub Hypothesis 8.2.

H8.2o – There is association in the perspective of the managers regarding

innovations as a factor for sustainable competitive advantage depending

upon the age of the manager.

H8.21 - There is a association in the perspective of the managers regarding

innovations as a factor for sustainable competitive advantage depending

upon the age of the manager.

Here there is no association in the opinion of the managers and age of the

managers as is seen by p value = .215 (not <.05). Therefore, Ho is accepted.

(See tables 9.26.1a and 9.26.1g).

Sub Hypothesis 8.3.

H8.3o – There is no association in the perspective of the managers

regarding innovations as a factor for sustainable competitive advantage

depending upon the designation of the manager.

H8.31 - There is a association in the perspective of the managers regarding

innovations as a factor for sustainable competitive advantage depending

upon the designation of the manager.

Here there is no association in the opinion of the managers designation of

the manager as is seen by p value = .471 (not <.05). Therefore, Ho is

accepted. (See tables 9.26.1a and 9.26.1g).

Sub Hypothesis 8.4.

H8.4o – There is no association in the perspective of the managers

regarding innovations as a factor for sustainable competitive advantage

depending upon the country.

H8.41 - There is a association in the perspective of the managers regarding

innovations as a factor for sustainable competitive advantage depending

upon the country.

Here there is no association in the opinion of the managers country as is

seen by p value = .565 (not <.05). Therefore, Ho is accepted. (See tables

9.26.1a and 9.26.1g).

Sub Hypothesis 8.5.

H8.5o – There is no association in the perspective of the managers

regarding innovations as a factor for sustainable competitive advantage

depending upon the destination.

H8.51 - There is a association in the perspective of the managers regarding

innovations as a factor for sustainable competitive advantage depending

upon the destination.

Here there is no association in the opinion of the managers and destination

as is seen by p value = .806 (not <.05). Therefore, Ho is accepted. (See

tables 9.26.1a and 9.26.1g).

Sub Hypothesis 8.6.

H8.6o – There is no association in the perspective of the managers

regarding innovations as a factor for sustainable competitive advantage

depending upon the occupancy rate.

H8.61 - There is a association in the perspective of the managers regarding

innovations as a factor for sustainable competitive advantage depending

upon the occupancy rate.

Here there is an association in the opinion of the manager and occupancy

rate as is seen by p value = .046 (<.05). Therefore, Ho is rejected. (See

tables 9.26.1a and 9.26.1g).

27. Sample Size Justification.

The standard error of the estimate is 0.226. Therefore the error in our mean

estimate of perspective is 34.70 +/- 0.45 i.e. between 34.25 to 35.15. Thus
the error is 0.45 / 34.7 x 100 = 1.3% error which is acceptable error in the

estimate. Thereby showing that the sample is more than sufficient to

estimate the perspective of the managers. According to above results i.e.

Mean = 34.7 Standard Deviation = 3.765, The sample required for 95%

confidence and 10% error is 160, Whereas we have taken a sample of 274

for the purpose of research.

9.2 MAJOR FINDINGS

1. Tools for sustainable competitive advantage in the hotel industry:

The research has clearly shown that in the opinion of all levels of

management of all the categories of hotels, the important tools for

sustainable competitive advantage are Innovations, Product Offerings,

Service Quality, Technology, Ambience, Food and Beverages, Facilities

and Amenities, and Other Add-on Facilities Offered by the hotels. However,

the relative importance given to Innovations was comparatively much

lesser than that given to the other factors for competitive advantage. In

terms of the maximum managers agreeing as to the tools for sustainable

competitive advantage the order of importance from most important to

least important was as follows: 1. Food & Beverage, 2. Ambience, 3.

Facilities & Amenities, 4. Technology, 5. Service Quality, 6. Product

Offerings, 7. Other Add-on Facilities Offered and 8. Innovations.

2. Factors for competitive advantage in the hotel industry – Comparison

according to Grade of Hotel, Designation of Manger, Country and

Destination:

The research showed that there was no significant difference in the

managers opinion as compared by the different grades of hotels as to the

factors for sustainable competitive advantage except in the case of

innovations, where the Five Star Hotel managers believed significantly

more than the Four Star and Three Star Hotel managers that innovations

are an important factor for sustainable competitive advantage in the hotel

industry.

There was found to be no significant difference in the opinion of the

managers as compared by their designation as to the factors of sustainable

competitive advantage. The managers of all levels of all the hotels agreed

that the factors for sustainable competitive advantage in the hotel industry

are Innovations, Product Offerings, Service Quality, Technology,

Ambience, Food and Beverages, Facilities and Amenities, and Other Add-

on Facilities Offered by the hotels.

There was found to be no significant difference as to the impact of the

factors of sustainable competitive advantage between India and Thailand.

The managers of both countries agreed that Innovations, Product

Offerings, Service Quality, Technology, Ambience, Food and Beverages,

Facilities and Amenities, and Other Add-on Facilities Offered by the hotels

are the factors for competitive advantage in the hotel industry.

The research showed that there was a significant association between

purpose of travel and some of the factors of sustainable competitive

advantage. The importance of food and beverages as a factor for

competitive advantage was found to be much more in hotels which were

destinations for business rather than hotels which were more tourist

destinations. Other than that there is no significant difference in all the

other factors for sustainable competitive advantage.

3. Effect of Factors of Sustainable Competitive Advantage on Occupancy

Rate.

The research has revealed that, in terms of having maximum impact on the

occupancy rate the factors for sustainable competitive advantage could be

rated as follows from most important to least important as: Technology,

Ambience, Facilities and Amenities, Food and Beverages, Other Add on

Services Offered, Service Quality, Product Offerings and Innovations. Most

of the managers varied between strongly agreeing and agreeing that these

factors have a significant effect the occupancy rate of a hotel, except in the

case of Innovations where the managers were found to be uncertain as to

whether it would have an effect on the occupancy rate.

4. Effect of Factors of Sustainable Competitive Advantage on Occupancy

Rate – Comparison by Designation of Mangers, Grade of Hotel, Country

and
The research showed that however, the opinions of the managers as

compared by their designations differed significantly. There is significant

difference as to the effect of Ambience, F&B, Facilities and Amenities and

Other Factors on the occupancy rate of the hotels. The relative importance

of the impact of the tools for sustainable competitive advantage in the

opinion of the Lower Level Management differs from the opinion of the

Middle and Top Level Management. The Lower Level Management

essentially felt that the tools which have the maximum impact on the

occupancy rate are Ambience, Food and Beverages, Facilities and

Amenities and Miscellaneous Add-on Services Offered. Whereas, the

Middle and Top Level Management opined that Technology is most

important. There is was found to be significant difference as far as

Innovations, Product Offerings, Service Quality and Technology are

concerned as to their effect on the occupancy rate.

The managers of different grades of hotels did not differ in their opinion

regarding the impact of the different tools for sustainable competitive

advantage on the occupancy rate in the hotel industry.

The managers of the hotels as compared by business and tourist

destinations both felt that the factors of sustainable competitive advantage

have a direct effect on the occupancy rate. They agreed to a great extent

except in the case of innovations where they were not sure. However there

was found to be no significant difference between the two categories.

5. Is Innovation an important factor for Sustainable Competitive

Advantage? – Comparison by Grade of Hotel, Country and Destination.

The managers of all grades of hotels were of the unanimous opinion that

innovations per se are not important as a tool of sustainable competitive

advantage but innovations are important to be implemented in all

categories of tools of sustainable competitive advantage.

There is was found to be significant difference in the opinion of the

managers as compared by country as well as destination whether

innovation is a most important factor for sustainable competitive

advantage

6. Whether Innovations as a tool for sustainable competitive advantage in

the hotel industry are implemented in isolation or are merely a part of all

other tools of Sustainable Competitive Advantage. – Comparison by

Grade of Hotel, Country and Destination.

The research proved that the managers of all grades of hotels agreed that

innovations per se are not important as a factor for sustainable competitive

advantage, but are to be implemented as a part of all the other factors for

sustainable competitive advantage. However, there is no significant

difference as per grade of the hotels concerned amongst the opinion of the

managers.

The managers of the hotels of both India and Thailand agreed that

innovations per se are not important as a factor for sustainable competitive

advantage but are to be implemented as a part of all the other factors for

sustainable competitive advantage. However, there was found to be no

significant difference amongst the opinion of the managers of the two

countries.

The managers of hotels which are predominantly business and tourism

destinations both agreed that innovations per se are not important as a

factor for sustainable competitive advantage but are to be implemented as

a part of all the other factors for sustainable competitive advantage.

However, there was found to be significant difference amongst the opinion

of the managers as per business and tourist destinations.

7. Managers opinion whether innovations are predominant in the hotel

Sector in the other factors for Sustainable Competitive Advantage. –

Comparison by Grade of Hotel, Country, and Destination.

The managers were not sure whether innovations are predominant. The

opinions were scattered from agreeing to not being sure and also

disagreeing. There was found to be no significant difference between the

opinions of the managers of different grades of hotels as to whether

innovations are predominant in the other factors of sustainable competitive

advantage in the hotel industry.

There was found to be no significant difference between the opinions of the

managers of India and Thailand hotels as to whether innovations are

predominant in the other factors of sustainable competitive advantage in

the hotel industry.

There was found to be no significant difference between the opinion of the

managers of hotels of Business and Tourist destinations as to whether

innovations are predominant in the other factors of sustainable competitive

advantage in the hotel industry.

8. Do you think innovation performance in the other factors of competitive

advantage significantly and positively increases occupancy rates? -

Comparison by Country and Destination.

The managers unanimously agreed that innovation performance in the

factors for sustainable competitive advantage has a significant effect on

occupancy rates. There was found to be no significant difference between

the opinions of the managers of India and Thailand hotels as to whether

innovations performance in the other factors for competitive advantage

significantly increases the occupancy rate in the hotel industry.

There was found to be no significant difference between the opinions of the

managers of hotels of business and tourist destinations as to whether

innovations performance in other factors of competitive advantage

significantly increases the occupancy rate in the hotel industry.

9. Attitude of Hotels towards developing Innovations – Comparison by

Country, Designation of Manager, Destination and Grade of Hotels

The research showed that there was a significant difference in the attitude

of the management towards developing innovations as compared by

country. The management of Thailand hotels had a better attitude in case

of Ambience and Facilities and Amenities. Management of hotels in India

had better attitude in case of Service and Others Factors. No significant

difference was seen in Product Offerings, Technology and Food and

Beverage.

No significant difference was seen as per the designation of the managers

was concerned in the attitude towards developing innovations in the

factors of sustainable competitive advantage.

Similarly, no significant difference was seen in the attitude of the managers

of hotels of business and tourist destinations towards developing

innovations in the factors of sustainable competitive advantage. The

findings also show that the attitude of the hotels towards developing

innovations in their hotel is poor.

Significant difference was found as per the attitude in developing

innovations in some of the factors of sustainable competitive advantage.

The attitude of five star hotels was found to be substantially higher

towards developing Technological Innovations and slightly higher in

developing Service Innovations. Whereas, the attitude of three and four

star hotels was better in developing Food & Beverage Innovations. There

was no significant difference in the opinion as per grades of hotels in

Product Offerings, Ambience, Facilities & Amenities and Other Factors.

10. Analysis of perspective of managers and the association of their

perspective with their age, designation, grade of the hotel, country,

destination and the occupancy rates of the hotel.

The research studied the relationship between the perspective of the

management of the hotels as related to parameters of factors like age of

manager, level of manager, grade of hotels, country, destination and

occupancy rate of the hotel concerned. There was only one factor which

was found to significantly affect the level of perspective of the managers

i.e. occupancy rate in the hotel.

In the hotels where occupancy rate was higher, the management had better

perspective about innovations and in the hotels where occupancy rate was

lower, the management have poor perspective about innovations.

None of the other parameters were found to affect the perspective of the

managers towards innovations. The other factors did not have any

significant contribution to the level of perspective of the managers towards

innovations as a tool for sustainable competitive advantage in the hotel

industry.
 CHAPTER 10

RECOMMENDATIONS AND SUGGESTIONS

India's tourism and hospitality industry has emerged as one of the key

sectors driving the country's economy. India's tourism is thriving, owing to

a huge surge in both business and leisure travel by foreign and domestic

tourists. India’s travel and tourism industry generated approximately US$

100 billion in 2008, growing at 7.3 per cent and is expected to be rising to

US$ 275.5 billion by 2018 over the next ten years according to the Tourism

Satellite Accounting Research released by World Travel and Tourism

Council, 2008. The tourism industry in India contributed 6.1% to the GDP in

2008/09.

The boom in India's tourism industry and the surge in tourist inflow to the

country has percolated to other associated sectors like aviation, medical

tourism, and the hotel industry. The country's hospitality sector has

witnessed an increase in the occupancy ratios and average room rates.

While occupancy ratio is around 75-80 per cent, the average increase in

room rates has been hovering around 22-25 per cent. By 2010, India will

see an estimated 10 million foreign visitors and thereby a demand for

approximately 100,000 rooms. And with the continuing surge in tourist

inflow, this sector is likely to offer tremendous opportunity for investors.

For example, while the estimated number of required hotel rooms is around

240,000, the current availability is just 90,000 rooms - leaving a shortfall of

150,000 rooms to be provided. India's hospitality sector is expected to see

an estimated US$ 11.41 billion in the next two years, and around 40

international hotel brands by 2011, according to a report by Ma Foi

Management Consultants. Along with these large scale expansion plans,

international hotel asset management companies are also likely to enter

India. Several global hotel chains see immense investment opportunities in

the sector with global chains like Hilton, Accor, Marriott International,

Berggruen Hotels, Cabana Hotels, Premier Travel Inn (PTI), InterContinental

Hotels group and Hampshire amongst others have announced major

investment plans in India with others likely to follow suit.

The hotel industry being a vital part of the tourism industry, and therefore

the economy, has to be prepared for this tremendous potential and have to

take the necessary steps to meet and maintain this surge in demand. The

competition is not only from within the country but it is also very important

to ‘deliver’ upon these factors of competitive advantage so as to make

India a preferred Asian tourist destination.

It is usually easy to single out the managers in a hotel or restaurant.

Managers have titles. But what exactly do managers do? This question

cannot he answered precisely or easily. Managers in different businesses

do different things, and the entire field of management is changing rapidly

as the world moves from a manufacturing-based to a service-based

economy. Peter Drucker, says a manager has two broad goals. The first is

“creation of a true whole that is larger than the sum of its parts, a
productive entity that turns out more than the sum of the resources put

into it.” The Four Seasons hotel company in its statement of operating

philosophy, compares a manager to a conductor of an orchestra who is

able to pull together the music played by each musician into a beautiful

symphony. Managers are told that their role is to “keep all of the various

pieces playing in proper tempo and harmony so the performance is

pleasing to the customer.” Unlike conductors, who have a composer’s

score in front of them and only have to interpret It. Hotel managers must do

more. They must write their own score, and in that sense hotel managers

are composers as well as conductors.

The second broad goal of a hotel manager is to “harmonize in every

decision and action the requirements of immediate and long-range future.”

In other words, a hotel manager must consider not only the needs of today

but also the needs of next year and beyond. He not only has to prepare for

crossing distant bridges—he has to build them long before he gets there.

However along with this a manager also has to do supervisory work in

order to ensure that all decisions taken are implemented properly

The management of hotels have to be aware of the various factors for

sustainable competitive advantage as they have a strong positive and

direct impact on the occupancy of hotels. Innovations in these areas are

essential to garner a competitive advantage. However it has been observed

during the research that the understanding of the importance of

innovations, especially, and also the other factors of sustainable

competitive advantage is limited. Very few hotel managers are consciously

aware as to the important role innovation could play in maintaining a

sustainable competitive advantage in the industry. In many parts of the

world, hospitality has become a mature industry. That is to say, it has

passed the stage of rapid growth and innovation. There are not many new

inventions that affect the way we eat and sleep away from home. The hotel

industry components do not have separate cells or departments for

conscious innovations as would be the case in other sectors, say for e.g.:

the pharmaceutical industry. In the absence of this it is important that the

management of hotels at all levels be made aware as to the importance of

these factors of sustainable competitive advantage, so that they can take

conscious steps of making improvements in this direction.

The research has made it clear as to how these factors can affect the

occupancy rates as per grades of hotels and the occupancy rates and how

the perspective of the mangers differ according to these factors as well as

their designation. The important findings of the research may be used by

the management of the hotels whence giving training to their managerial

staff as also while taking policy decisions by the top level management.

The study has revealed as to how important each of these individual

factors are and how they are correlated to the perspective and attitude of

the management and these factors can be kept in mind while taking

important policy decisions as far as the management of the hotels is

concerned. However, sustainability of these factors is an issue as most of

the steps taken by the hotels are easily copieable. And some effort can be

done in finding out a way to help in sustainability of the factors for

competitive advantage. The hotels need to make a conscious effort in

making innovations in the areas of product offerings, technology,

ambience, service quality, food and beverages, facilities and amenities. The

first step is to understand where the greatest deficiencies lie, and which

levers will deliver the most impact. For many organizations, the most

critical levers to assess initially include structure and metrics, though

establishing innovation processes and providing employees with new skill

sets which are critical drivers of culture. The act of visibly sponsoring

specific initiatives focused on creating new organizational capabilities that

promote innovation serves to send a message and establish new symbols

and stories that reinforce a culture of innovation.

The various grades of hotels need to consider each of these factors to

uphold or enhance their gradability. However, at the individual level there is

realization amongst the lesser grade hotels that the factors in which efforts

can be made at the individual level as far as the hotels are concerned is in

the area of the Additional services and facilities which the individual hotel

can offer and their improving their Service Quality. These hotels also have

a scope to make improvements ambience and product offerings to some

extent, to give them the competitive edge. However, five star hotels need to

more on the area of Innovations in Technology and Food and Beverages.

The research has also shown that occupancy rate of the hotel affects the

perspective and attitude of the managers, and factors like grade of the

hotel, the level of the manager himself, the type of tourist or destination the

hotel caters to decide the relative importance of the individual tool for

competitive advantage in the concerned hotel. The managers would do well

to use all these criteria into account and do some introspection before

taking important decisions.

Scope for further research - There is tremendous scope for further

research to come up with a system for measuring the impact of these

factors of competitive advantage on the occupancy of hotels, as in the

opinion of the management, the impact they have is substantial. There is

also scope to conduct research from the financial point of view as to the

amount of funds and resources allocated to developing each of these

factors of competitive advantage and their Return on Investment. Further

research can be done to look into the matter of sustainable competitive

advantage from the point of view of the customers of the hotel as the

present study has been restricted only to the management perspective.

 CHAPTER 11

CONCLUSION
The hotel industry as has been seen is one of the vital components of the

countries economy and an important factor which determines as to how

the country is looked upon in the global scenario.

The managers of the hotels are the most important cog in the machinery of

the hotel industry and many a times the success or failure of the hotel

could depend upon the perspective and attitude of the managers.

The competition, as far as the hotel industry is concerned, is not only

within the country but also international because the inbound tourists have

a choice as to the Asian country they wish to visit or have as a preferred

destination. Thailand, Singapore, Hong Kong and Malaysia are also the hot

favorite destinations for tourists worldwide. In this scenario the hotels

would do well to know and improve upon the factors for having a

competitive edge in the tourism industry.

The factors of sustainable competitive advantage having being determined,

the managers of hotels play a very important role in affecting the attitude of

the hotels in developing these factors and seeing to it that they are

implemented effectively. More often than not these managers are the very

important link between the end customers and the hotel owners or the

hotel management. It is the attitude and perspective of these managers

which can play a vital role in the success and failure of the hotel.
The factors of sustainable competitive advantage in the hotel industry have

irrefutably been determined to be the Facilities and Amenities provided in

the hotel, the technology used in various departments of the hotel, the

product offerings of the hotel, the food an beverages served at the hotel,

the service quality of the hotel, the ambience of the hotel, the other add-on

facilities and services provided by the hotel and the innovations

implemented by the hotel within all these factor. It has also been strongly

determined that in the hotel industry innovations are not a stand alone

factor but can only be a part of these other factors for sustainable

competitive advantage. However, it is important to consciously make an

effort to inculcate a culture of innovation amongst the other factors for

sustainable competitive advantage since it was also strongly felt that

innovations are important and have a direct impact on the occupancy rate

of the hotel.

There are factors which affect the attitude and perspective of the

managers, such as the occupancy rate of the hotel, and there are factors

which affect the importance of the individual tool for competitive advantage

such as the grade of the hotel and the type of tourists the hotel caters too

and all these insights are useful in determining the general policy the hotel

adopts in implementing the tools of sustainable competitive advantage.

Tourism in India has received a major boost in the past decade since the

Indian Government realized the great potential of tourism of India during

vacations. Tourism of India has grown by leaps and bounds with a great

influx of tourists from throughout the world.

India has the right tourism potential and attractions to captivate all types of

tourists whether it is adventurous tour, cultural exploration, pilgrimages,

visit to the beautiful beaches or to the scenic mountain resorts as also

business travelers.

However, foreign tourists are appalled at the state of Indian catering

services, roads, guides services, hotels, motels, and transportation

services and above all, the degrading environment of the Indian

subcontinent. We would have to provide international standard star

amenities to the tourists. If we do not follow this norm, we would lose

tourists to the Mauritius, Singapore, Thailand, Hongkong, and Japan. These

countries offer entertainment, good quality rooms, and transportation,

liquor, as well as food, at the most competitive prices. They follow

international tourism norms in terms of catering, hospitality, and hygiene. If

we do not follow any norms and this leads to aversion on the part of the

tourists from India.

It is fortunate to note that hotel management and tourism have become

serious subjects as well as vocations. The government as well as the

private institutions has launched many courses in tourism as well as hotel

management. The professionals in tourism and travel are required by tour

operators as well as airlines. Hotel professionals are also in great demand.

This would boost the hotel industry as well as the economy.

The services of hotels would have to be operated on professional grounds

according to international standards. The managers of the hotels play an

important part in this regard and this study has been aimed at providing

some insights which might prove useful for the hotel industry in general.

The Government of India is also doing its best. The participation of the

private firms has also increased. However, a lot needs to be done in this

crucial area. We can earn a lot through tourism as well as hotel industries.

Our outlook and approach would have to be professionalized if we want to

achieve concrete results in this fastest growing industry.

 APPENDIX I

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 APPENDIX II

QUESTIONNAIRE USED FOR SURVEY

Sustainable Competitive Advantage in the Hotel Industry thru Innovations

and its impact on the Occupancy Rate

Questionnaire

(The following information is for the purpose of research only. Confidentiality of the information shall be

maintained at all levels.)

Q.1 1) Sample No ……………………. City : a) Mumbai b) Pune C) Goa d) Bangkok e) Pattaya

2) Hotel Name: ……………………… (………………………………..)

……………….………………………… a) 5 Star Deluxe, b) 5 Star, c) 4 Star, d) 3 Star,

3) Hotel Rating: ………………… e) Budget Hotel (………………………………..)

Q.2 1) Name of the Respondent ………………………………………………………………………………………………

2) Designation a) TLM b) MLM c) LML (……………………………….).

3) Residential Address: …………………………………………………………………………………………..

4) Age Completed Years: (……………………………….).

a) Less than 20 b) 20 – 25 c) 26 – 30 d) 31 – 35 e) 36 – 40

f) 41 – 45 g) 46 – 50 g) Above 50

5) Sex a) Male b) Female (……………………………….).

6) Educational Qualification ……………………………………………………………………………………………..

Q.3 What are your Season periods? a) Lean Season, ………………………………………………………..

1)………………………………………… b) Shoulder Season …………………………………………………….

2)…………………………………………. c) Peak Season ……………………………………………………………

3)…………………………………………. (1 to 12 represent January to December)

Q.4 a) What is the total area acquired by

hotel campus? A) In sq. mtr ………………………… (……………………………..)

b) How many Rooms available in your B) Number of rooms ………………… (……………………………..)

hotel?

Q.5 Please give details about the rooms Category Number

of Rooms
categories available in your hotel. 1
2
3
4
5
6
7
Total

Name of Investigator .................................................................. Visit Date .............

Q.6 Explain the Demographics of the

Guests during the last years (in (Fill up by using recorded document of hotel)
National Foreign Total
percentage)
…………………. ................... .................
1) By Sex ..............................
…………………. ................... .................
a) Male ...............................
…………………. ................... .................
b)Female ...........................
…………………. ................... .................
2) By Age ...........................
…………………. ................... .................
a) Less Than 6 years ............
…………………. ................... .................
b) 6 to 14 ...........................
…………………. ................... .................
c) 15 to 24 ..........................
…………………. ................... .................
d) 25 to 35..........................
…………………. ................... .................
e) 36 to 50 ........................
…………………. ................... .................
f) 50 to 60
…………………. ................... .................
g) Above 60 years
…………………. ................... .................
3) By Occupation
…………………. ................... .................
a) Service
…………………. ................... .................
b) Business
…………………. ................... .................

Q.7 Tell me the average occupancy rates of your hotel

Financial Year Average Occupancy Rates
Peak Season Shoulder Season Lean Season Total
2006-07
2007- 08
2008-09
Projection for
2009-2010
Note: Category of Occupancy Rate in Percentage.
A - 80 to 100 B - 60 to 80 C – 40 to 60 D – 20 to 40 E – Less than 20
Q.8 Do you think the following are tools for Sustainable Competitive Advantage in the Hotel Industry?

Tools 1. Yes 2. No 3. Can’t Say

A Innovations
B Product Offerings
C Service Quality
D Technology
E Ambience
F Food & Beverages
G Facilities & Amenities
H Any Other (Specify)
..................................

Q.9 Please state your opinion whether the following tools for S C A have a direct effect on the occupancy
rate?

Tools 1. Strongly 2. Agree 3. Uncertain 4. Disagree 5. Strongly

Agree Disagree
A Innovations
B Product Offerings
C Service Quality
D Technology
E Ambience
F Food & Beverages
G Facilities & Amenities
H Any Other (Specify)
..................................

Q.10 Please state your opinion about Innovation is an important factor for Sustainable Competitive
Advantage in the Hotel Industry.
1. Strongly 2. Agree 3. Uncertain 4. Disagree 5. Strongly
Agree Disagree
Q.11 Please state your opinion about Innovation is not implemented in isolation but is part of
implementing all other tools for Sustainable Competitive Advantage

1. Strongly 2. Agree 3. Uncertain 4. Disagree 5. Strongly

Agree Disagree

Q.12 Are the innovations in the following categories predominant in the hotel sector?

Tools 1. Yes 2. No 3. Can’t Say

A Product Innovations
B Service Innovations
C Ambience
D Technology
E Facilities & Amenities
F Food & Beverages
G Any Other (Specify)
..................................

Q.13 Which of the following categories of innovations are implemented in your organization?

Tools 1. Yes 2. No 3. Can’t Say

A Product Innovations
B Service Innovations
C Ambience
D Technology
E Facilities & Amenities
F Food & Beverages
G Any Other (Specify)
..................................
Q.14 Do you think innovation performance in the other factors of competitive advantage significantly and

positively increases occupancy rates?

1. Strongly 2. Agree 3. Uncertain 4. Disagree 5. Strongly

Agree Disagree

Q.15 What is the attitude of your hotel towards developing innovations in various categories?

Tools Rating
A Product Innovations
B Service Innovations
C Ambience
D Technology
E Facilities & Amenities
F Food & Beverages
G Any Other (Specify)
..................................
1. Aggressively work towards more and more innovative practices

2. Only work on improving existing offerings (Incremental innovations)

3. Me-too attitude - (Follow practices adopted by others with respect to innovations).

4. Rarely consciously have policy for adopting innovative practices.

Please list out whether innovative practices have been adopted by your hotel in the last
Q.16 three years w.r.t the following CODE
YES- 1 NO - 2 Can’t Say
A Product Offerings
1 Schemes / Packages
2 Timeshare
3 Discounts
B Service Quality
1 Staff Quality
2 Cleanliness & Hygiene
3 Guest Services
4 Safety & Security
5 Pickup & drop / Transportation
6 Local Tours & Guide
7 Room Service / Bell Boy
 8 Currency Exchange
9 Reception
10 Restaurant
11 Valet Parking
12 Housekeeping
13 In-house Doctor.
14 Telephone.
Q.16 CONT. YES NO Can’t Say CODE
15 Maintenance
C o Technology
1 Internet Booking
2 Internet & Wifi facilities in Hotel
3 Swipe card entry
4 Bill pay Options.
Entertainment Facilities ( TV, Music System, Games,
5 Etc.)
6 Dischotheque Facilities.
D o Ambience
1 Exterior & Grounds
2 Reception Area
3 Lobby
4 Rooms
5 Bathrooms
6 Lounge Area / Gardens.
7 Restaurants
8 24 hr Coffee Shops
9 Spas
10 Shopping Area
11 Swimming Pool
12 Lift
13 Kitchen.
14 Gardens
15 Discotheque
16 Pub
17 Casino
18 Children Play Areas.
19 Parking.
20 Lighting
21 Air Conditioning.
E o Food & Beverages
1 Cusine / Choice of Food
2 Choice of Beverages
 3 Water
4 Food Pricing
5 Food Presentation
6 Theme Food
7 Food Festivals.
8 Packaged Foods.
F o Facilities & Amenities
1 ATM
Q.16 CONT. YES NO Can’t Say CODE
2 Banking Facilities
3 Swimming Pool
4 Spa
5 Beauty Parlour
6 Gymnasium
7 Massage Parlour
8 Discotheque
9 Pub
10 Casino
11 Creche
12 Children Play Area
13 Water Park
14 Amusement Games
15 Sauna / Steam / Jaccuzi
16 TV / Cable / Home theatre
17 Music System in Rooms
18 Lockers
19 Medical Store
G o Any Other

Q.17 Please tell details of proposed innovations if any YES NO Can’t Say CODE
o Product Offerings
A
o Service Quality
B
o Technology
C
o Ambience
D
o Food & Beverages
E
o Facilities & Amenities.
F
Any Other
G
 Who do you consider to be your immediate

competitors?

1 ..........................................................................

2..........................................................................
Q.18

3.........................................................................

4 .......................................................................

Do you consider yourself as better than your

competitor in the following tools for sustainable Can’t Say

Q.19 competitive advantage?

Yes No CODE
o Innovations
A
o Product Offerings
B
o Service Quality
C
o Technology
D
o Ambience
E
o Food & Beverages
F
o Facilities & Amenities.
G
Any Other _______________________________
 Thank you for your kind cooperation in this research study

Name of the Investigators: …………………………………………………… Signature

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

Date: .............................................................

Investigator’s / Researchers Comments / Observations

 APPENDIX III

SPSS OUTPUTS
Table-9.1.1: No. of managers stating that Innovations
are key factor for Sustainable Competitive Advantage.
No. of
Innovations managers Percent
Yes 164 59.9
No 70 25.5
Can't Say 40 14.6
Total 274 100.0

Table-9.1.2: No. of managers stating that Product Offerings

are key factor for Sustainable Competitive Advantage.

Frequency Percent
Valid Yes 211 77.0
No 50 18.2
Can't
13 4.7
Say
Total 274 100.0

Table-9.1.3: No. of managers stating that Service Quality

Is a key factor for Sustainable Competitive Advantage.

Frequency Percent
Valid Yes 212 77.4
No 50 18.2
Can't
12 4.4
Say
Total 274 100.0

Table-9.1.4: No. of managers stating that Technology

Is a key factor for Sustainable Competitive Advantage.

Frequency Percent
Valid Yes 221 80.7
No 42 15.3
Can't
11 4.0
Say
Total 274 100.0

Table-9.1.5. No. of managers stating that Ambience

Is a key factor for Sustainable Competitive Advantage.

Frequency Percent
 Valid Yes 250 91.2
No 15 5.5
Can't
9 3.3
Say
Total 274 100.0

Table-9.1.6. No. of managers stating that Food & beverages

Is a key factor for Sustainable Competitive Advantage.

Frequency Percent
Valid Yes 257 93.8
No 7 2.6
Can't
10 3.6
Say
Total 274 100.0

Table-9.1.7. No. of managers stating that Facilities & Amenities

Is a key factor for Sustainable Competitive Advantage.

Frequency Percent
Valid Yes 248 90.5
No 26 9.5
Total 274 100.0

Table-9.1.8. No. of managers stating that Other Add Factors

Is a key factor for Sustainable Competitive Advantage.

Frequency Percent
Valid Yes 86 31.4
No 1 .4
Can't
187 68.2
Say
Total 274 100.0
Table 9.2.1a Innovations as a factor for competitive advantage –
Comparison as per Grade of Hotel
Grade
3 Star 4 Star 5 Star Total
Suitable Tools Yes Count 71 32 61 164
for % within
Sustainability - 51.1% 56.1% 78.2% 59.9%
Grade
Innovations No Count 54 15 1 70
% within
38.8% 26.3% 1.3% 25.5%
Grade
Can't Say Count 14 10 16 40
% within
10.1% 17.5% 20.5% 14.6%
Grade
Total Count 139 57 78 274
 Table 9.2.1b Chi Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 38.084(a) 4 .000
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.32.
Table 9.2.2a Product Offerings as a factor for competitive advantage –
Comparison as per Grade of Hotel
Grade
3 Star 4 Star 5 Star Total
Product Yes Count 110 40 61 211
Offerings % within
79.1% 70.2% 78.2% 77.0%
Grade
No Count 22 13 15 50
% within
15.8% 22.8% 19.2% 18.2%
Grade
Can't Say Count 7 4 2 13
% within
5.0% 7.0% 2.6% 4.7%
Grade
Total Count 139 57 78 274

Table 9.2.2b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 3.006(a) 4 .557
a 2 cells (22.2%) have expected count less than 5. The minimum expected count is 2.70.

Table 9.2.3a Service Quality as a factor for competitive advantage –

Comparison as per Grade of Hotel
Grade
3 Star 4 Star 5 Star Total
Service Yes Count 105 46 61 212
Quality % within
75.5% 80.7% 78.2% 77.4%
Grade
No Count 27 10 13 50
% within
19.4% 17.5% 16.7% 18.2%
Grade
Can't Say Count 7 1 4 12
% within
5.0% 1.8% 5.1% 4.4%
Grade
Total Count 139 57 78 274

Table 9.2.3b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.510(a) 4 .825
a 2 cells (22.2%) have expected count less than 5. The minimum expected count is 2.50.
 Table 9.2.4a Technology as a factor for competitive advantage –
Comparison as per Grade of Hotel
Grade
3 Star 4 Star 5 Star Total
Technology Yes Count 108 47 66 221
% within
77.7% 82.5% 84.6% 80.7%
Grade
No Count 25 7 10 42
% within
18.0% 12.3% 12.8% 15.3%
Grade
Can't Say Count 6 3 2 11
% within
4.3% 5.3% 2.6% 4.0%
Grade
Total Count 139 57 78 274

Table 9.2.4b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 2.293(a) 4 .682
a 2 cells (22.2%) have expected count less than 5. The minimum expected count is 2.29.
Table 9.2.5a Ambience as a factor for competitive advantage – Comparison
as per Grade of Hotel
Grade
3 Star 4 Star 5 Star Total
Ambience Yes Count 127 54 69 250
% within
91.4% 94.7% 88.5% 91.2%
Grade
No Count 8 3 4 15
% within
5.8% 5.3% 5.1% 5.5%
Grade
Can't Say Count 4 0 5 9
% within
2.9% .0% 6.4% 3.3%
Grade
Total Count 139 57 78 274

Table 9.2.5b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 4.447(a) 4 .349
a 5 cells (55.6%) have expected count less than 5. The minimum expected count is 1.87.

Table 9.2.6a Food & Beverages as a factor for competitive advantage –

Comparison as per Grade of Hotel
Grade
3 Star 4 Star 5 Star Total
Food & Yes Count 130 53 74 257
Beverages % within
93.5% 93.0% 94.9% 93.8%
Grade
No Count 5 1 1 7
% within 3.6% 1.8% 1.3% 2.6%
 Grade
Can't Say Count 4 3 3 10
% within
2.9% 5.3% 3.8% 3.6%
Grade
Total Count 139 57 78 274

Table 9.2.6b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.885(a) 4 .757
a 5 cells (55.6%) have expected count less than 5. The minimum expected count is 1.46.

Table 9.2.7a Facilities & Amenities as a factor for competitive advantage –

Comparison as per Grade of Hotel

Grade
3 Star 4 Star 5 Star Total
Facilities & Yes Count 127 51 70 248
Amenities % within
91.4% 89.5% 89.7% 90.5%
Grade
No Count 12 6 8 26
% within
8.6% 10.5% 10.3% 9.5%
Grade
Total Count 139 57 78 274

Table 9.2.7b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .243(a) 2 .885
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 5.41.

Table 9.2.8a Other Factors as a factor for competitive advantage –

Comparison as per Grade of Hotel
Grade
3 Star 4 Star 5 Star Total
Any Other Yes Count 46 22 18 86
(Specify) % within
33.1% 38.6% 23.1% 31.4%
Grade
No Count 1 0 0 1
% within
.7% .0% .0% .4%
Grade
Can't Say Count 92 35 60 187
% within
66.2% 61.4% 76.9% 68.2%
Grade
Total Count 139 57 78 274
 Table 9.2.8b Chi Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 5.098(a) 4 .277
a 3 cells (33.3%) have expected count less than 5. The minimum expected count is .21.

Table 9.3.1a Innovations as a factor for competitive advantage –

Comparison as per Designation of Manager
Designation
TLM MLM LML Total
Suitable Tools Yes Count 65 58 41 164
for % within
Sustainability - 59.1% 59.2% 62.1% 59.9%
Designation
Innovations No Count 30 21 19 70
% within
27.3% 21.4% 28.8% 25.5%
Designation
Can't Say Count 15 19 6 40
% within
13.6% 19.4% 9.1% 14.6%
Designation
Total Count 110 98 66 274

Table 9.3.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 4.106(a) 4 .392
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 9.64.

Table 9.3.2a Product Offeings as a factor for competitive advantage –

Comparison as per Designation of Manager
Designation
TLM MLM LML Total
Product Yes Count 80 80 51 211
Offerings % within
72.7% 81.6% 77.3% 77.0%
Designation
No Count 23 14 13 50
% within
20.9% 14.3% 19.7% 18.2%
Designation
Can't Say Count 7 4 2 13
% within
6.4% 4.1% 3.0% 4.7%
Designation
Total Count 110 98 66 274
 Table 9.3.2b Chi Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 2.988(a) 4 .560
a 2 cells (22.2%) have expected count less than 5. The minimum expected count is 3.13.
Table 9.3.3a Service Quality as a factor for competitive advantage –
Comparison as per Designation of Manager
Designation
TLM MLM LML Total
Service Yes Count 88 75 49 212
Quality % within
80.0% 76.5% 74.2% 77.4%
Designation
No Count 17 18 15 50
% within
15.5% 18.4% 22.7% 18.2%
Designation
Can't Say Count 5 5 2 12
% within
4.5% 5.1% 3.0% 4.4%
Designation
Total Count 110 98 66 274

Table 9.3.3b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.786(a) 4 .775
a 3 cells (33.3%) have expected count less than 5. The minimum expected count is 2.89.

Table 9.3.4a Technology as a factor for competitive advantage –

Comparison as per Designation of Manager
Designation
TLM MLM LML Total
Technology Yes Count 91 79 51 221
% within
82.7% 80.6% 77.3% 80.7%
Designation
No Count 17 12 13 42
% within
15.5% 12.2% 19.7% 15.3%
Designation
Can't Say Count 2 7 2 11
% within
1.8% 7.1% 3.0% 4.0%
Designation
Total Count 110 98 66 274

Table 9.3.4b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 5.453(a) 4 .244
a 3 cells (33.3%) have expected count less than 5. The minimum expected count is 2.65.
Table 9.3.5a Ambience as a factor for competitive advantage – Comparison
as per Designation of Manager
Designation
TLM MLM LML Total
Ambience Yes Count 102 87 61 250
% within
92.7% 88.8% 92.4% 91.2%
Designation
No Count 4 8 3 15
% within
3.6% 8.2% 4.5% 5.5%
Designation
Can't Say Count 4 3 2 9
% within
3.6% 3.1% 3.0% 3.3%
Designation
Total Count 110 98 66 274

Table 9.3.5b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 2.248(a) 4 .690
a 4 cells (44.4%) have expected count less than 5. The minimum expected count is 2.17.
Table 9.3.6a Food & Beverages as a factor for competitive advantage –
Comparison as per Designation of Manager
Designation
TLM MLM LML Total
Food & Yes Count 105 90 62 257
Beverages % within
95.5% 91.8% 93.9% 93.8%
Designation
No Count 2 3 2 7
% within
1.8% 3.1% 3.0% 2.6%
Designation
Can't Say Count 3 5 2 10
% within
2.7% 5.1% 3.0% 3.6%
Designation
Total Count 110 98 66 274

Table 9.3.6b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.355(a) 4 .852
a 6 cells (66.7%) have expected count less than 5. The minimum expected count is 1.69.

Table 9.3.7a Facilities & Amenities as a factor for competitive advantage –

Comparison as per Designation of Manager
Designation
TLM MLM LML Total
Facilities & Yes Count 99 90 59 248
Amenities % within
90.0% 91.8% 89.4% 90.5%
Designation
No Count 11 8 7 26
% within
10.0% 8.2% 10.6% 9.5%
Designation
Total Count 110 98 66 274

Table 9.3.7b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .330(a) 2 .848
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 6.26.

Table 9.3.8a Other Factors as a factor for competitive advantage –

Comparison as per Designation of Manager
Designation
TLM MLM LML Total
Any Other Yes Count 38 32 16 86
(Specify) % within
34.5% 32.7% 24.2% 31.4%
Designation
No Count 0 1 0 1
% within
.0% 1.0% .0% .4%
Designation
Can't Say Count 72 65 50 187
% within
65.5% 66.3% 75.8% 68.2%
Designation
Total Count 110 98 66 274

Table 9.3.8b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 3.993(a) 4 .407
a 3 cells (33.3%) have expected count less than 5. The minimum expected count is .24.
Table 9.4.1a Innovations as a factor for competitive advantage –
Comparison as per Country
Country
India Thailand Total
Suitable Tools Yes Count 134 30 164
for % within
Sustainability - 60.6% 56.6% 59.9%
Country
Innovations No Count 54 16 70
% within
24.4% 30.2% 25.5%
Country
 Can't Say Count 33 7 40
% within
14.9% 13.2% 14.6%
Country
Total Count 221 53 274

Table 9.4.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .757(a) 2 .685
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 7.74.

Table 9.4.2a Product Offerings as a factor for competitive advantage –

Comparison as per Country
Country
India Thailand Total
Product Yes Count 169 42 211
Offerings % within
76.5% 79.2% 77.0%
Country
No Count 41 9 50
% within
18.6% 17.0% 18.2%
Country
Can't Say Count 11 2 13
% within
5.0% 3.8% 4.7%
Country
Total Count 221 53 274

Table 9.4.2b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .231(a) 2 .891

a 1 cells (16.7%) have expected count less than 5. The minimum expected count is 2.51.

Table 9.4.3a Service Quality as a factor for competitive advantage –

Comparison as per Country
Country
India Thailand Total
Service Yes Count 170 42 212
Quality % within
76.9% 79.2% 77.4%
Country
No Count 39 11 50
% within
17.6% 20.8% 18.2%
Country
Can't Say Count 12 0 12
 % within
5.4% .0% 4.4%
Country
Total Count 221 53 274

Table 9.4.3b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 3.134(a) 2 .209
a 1 cells (16.7%) have expected count less than 5. The minimum expected count is 2.32.
Table 9.4.4a Technology as a factor for competitive advantage –
Comparison as per Country
Country
India Thailand Total
Technology Yes Count 179 42 221
% within
81.0% 79.2% 80.7%
Country
No Count 33 9 42
% within
14.9% 17.0% 15.3%
Country
Can't Say Count 9 2 11
% within
4.1% 3.8% 4.0%
Country
Total Count 221 53 274

Table 9.4.4b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .143(a) 2 .931
a 1 cells (16.7%) have expected count less than 5. The minimum expected count is 2.13.
Table 9.4.5a Ambience as a factor for competitive advantage – Comparison
as per Country
Country
India Thailand Total
Ambience Yes Count 202 48 250
% within
91.4% 90.6% 91.2%
Country
No Count 11 4 15
% within
5.0% 7.5% 5.5%
Country
Can't Say Count 8 1 9
% within
3.6% 1.9% 3.3%
Country
Total Count 221 53 274

Table 9.4.5b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .910(a) 2 .634
a 2 cells (33.3%) have expected count less than 5. The minimum expected count is 1.74.
 Table 9.4.6a Food & Beverages as a factor for competitive advantage –
Comparison as per Country
Country
India Thailand Total
Food & Yes Count 207 50 257
Beverages % within
93.7% 94.3% 93.8%
Country
No Count 7 0 7
% within
3.2% .0% 2.6%
Country
Can't Say Count 7 3 10
% within
3.2% 5.7% 3.6%
Country
Total Count 221 53 274

Table 9.4.6b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 2.409(a) 2 .300
a 2 cells (33.3%) have expected count less than 5. The minimum expected count is 1.35.
Table 9.4.7a Facilities & Amenities as a factor for competitive advantage –
Comparison as per Country
Country
India Thailand Total
Facilities & Yes Count 203 45 248
Amenities % within
91.9% 84.9% 90.5%
Country
No Count 18 8 26
% within
8.1% 15.1% 9.5%
Country
Total Count 221 53 274

Table 9.4.7b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 2.404(b) 1 .121
a Computed only for a 2x2 table
b 0 cells (.0%) have expected count less than 5. The minimum expected count is 5.03.
Table 9.4.8a Other Factors as a factor for competitive advantage –
Comparison as per Country
Country Total
 India Thailand
Any Other Yes Count 68 18 86
(Specify) % within
30.8% 34.0% 31.4%
Country
No Count 1 0 1
% within
.5% .0% .4%
Country
Can't Say Count 152 35 187
% within
68.8% 66.0% 68.2%
Country
Total Count 221 53 274
Table 9.4.8b Chi Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .426(a) 2 .808
a 2 cells (33.3%) have expected count less than 5. The minimum expected count is .19.

Table 9.5.1a Innovations as a factor for competitive advantage –

Comparison as per Destination
Destination Total
Business Tourist
Suitable Tools Yes Count
for
109 55 164
Sustainability -
Innovations
% within Destination 61.2% 57.3% 59.9%
No Count 44 26 70
% within Destination 24.7% 27.1% 25.5%
Can't Say Count 25 15 40
% within Destination 14.0% 15.6% 14.6%
Total Count 178 96 274

Table 9.5.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .405(a) 2 .817
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 14.01.
Table 9.5.2a Product Offerings as a factor for competitive advantage –
Comparison as per Destination

Destination
Business Tourist Total
Product Yes Count 138 73 211
 Offerings % within
77.5% 76.0% 77.0%
Destination
No Count 31 19 50
% within
17.4% 19.8% 18.2%
Destination
Can't Say Count 9 4 13
% within
5.1% 4.2% 4.7%
Destination
Total Count 178 96 274

Table 9.5.2b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .315(a) 2 .854
a 1 cells (16.7%) have expected count less than 5. The minimum expected count is 4.55.

Table 9.5.3a Service Quality as a factor for competitive advantage –

Comparison as per Destination
Destination
Business Tourist Total
Service Yes Count 137 75 212
Quality % within
77.0% 78.1% 77.4%
Destination
No Count 31 19 50
% within
17.4% 19.8% 18.2%
Destination
Can't Say Count 10 2 12
% within
5.6% 2.1% 4.4%
Destination
Total Count 178 96 274

Table 9.5.3b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.983(a) 2 .371
a 1 cells (16.7%) have expected count less than 5. The minimum expected count is 4.20.

Table 9.5.4a Technology as a factor for competitive advantage –

Comparison as per Destination

Destination
Business Tourist Total
Technology Yes Count 145 76 221
% within
81.5% 79.2% 80.7%
Destination
No Count 27 15 42
 % within
15.2% 15.6% 15.3%
Destination
Can't Say Count 6 5 11
% within
3.4% 5.2% 4.0%
Destination
Total Count 178 96 274

Table 9.5.4b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .574(a) 2 .751
a 1 cells (16.7%) have expected count less than 5. The minimum expected count is 3.85.
Table 9.5.5a Ambience as a factor for competitive advantage –
Comparison as per Destination
Destination
Business Tourist Total
Ambience Yes Count 162 88 250
% within
91.0% 91.7% 91.2%
Destination
No Count 9 6 15
% within
5.1% 6.3% 5.5%
Destination
Can't Say Count 7 2 9
% within
3.9% 2.1% 3.3%
Destination
Total Count 178 96 274

Table 9.5.5b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .815(a) 2 .665
a 1 cells (16.7%) have expected count less than 5. The minimum expected count is 3.15.

Table 9.5.6a Food & Beverages as a factor for competitive advantage –

Comparison as per Destination
Destination
Business Tourist Total
Food & Yes Count 169 88 257
Beverages % within
94.9% 91.7% 93.8%
Destination
No Count 6 1 7
% within
3.4% 1.0% 2.6%
Destination
Can't Say Count 3 7 10
% within
1.7% 7.3% 3.6%
Destination
Total Count 178 96 274

Table 9.5.6b Chi Square Tests

 Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 6.766(a) 2 .034
a 3 cells (50.0%) have expected count less than 5. The minimum expected count is 2.45.

Table 9.5.7a Facilities & Amenities as a factor for competitive advantage

– Comparison as per Destination
Destination
Business Tourist Total
Facilities & Yes Count 158 90 248
Amenities % within
88.8% 93.8% 90.5%
Destination
No Count 20 6 26
% within
11.2% 6.3% 9.5%
Destination
Total Count 178 96 274

Table 9.5.7b Chi Square Tests

Asymp. Sig. Exact Sig. Exact Sig.
Value df (2-sided) (2-sided) (1-sided)
Pearson Chi-Square 1.805(b) 1 .179 .202 .128
a Computed only for a 2x2 table
b 0 cells (.0%) have expected count less than 5. The minimum expected count is 9.11.

Table 9.5.8a Other Factors as a factor for competitive advantage –

Comparison as per Destination
Destination
Business Tourist Total
Any Other Yes Count 54 32 86
(Specify) % within
30.3% 33.3% 31.4%
Destination
No Count 1 0 1
% within
.6% .0% .4%
Destination
Can't Say Count 123 64 187
% within
69.1% 66.7% 68.2%
Destination
Total Count 178 96 274

Table 9.5.8b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .772(a) 2 .680
a 2 cells (33.3%) have expected count less than 5. The minimum expected count is .35.
 Table- 9.6 : Mean importance for effect of different factors of
sustainable advantage on Occupancy Rate
N Mean Std. Deviation
Whether these have direct effect on
274 3.93 1.003
occupancy rate – Innovations
Product Offerings 274 4.07 1.010
Service Quality 274 4.07 1.021
Technology 274 4.21 .644
Ambience 274 4.19 .713
Food & Beverages 274 4.17 .693
Facilities & Amenities 274 4.18 .705
Any Other (Specify) 274 4.15 .706

Table- 9.7.1. One Way ANOVA for effect of factors of sustainable

competitive advantage on occupancy rate – Mean and SD of comparison by
designation of Managers.
Designatio
n N Mean Std. Deviation Std. Error
Whether these have direct effect TLM
110 3.95 1.140 .109
on occupancy rate - Innovations
MLM 98 3.94 .929 .094
LML 66 3.91 .872 .107
Total 274 3.93 1.003 .061
Product Offerings TLM 110 4.07 1.002 .096
MLM 98 4.15 .967 .098
LML 66 3.95 1.087 .134
Total 274 4.07 1.010 .061
Service Quality TLM 110 4.11 .989 .094
MLM 98 4.01 1.079 .109
LML 66 4.11 .994 .122
Total 274 4.07 1.021 .062
Technology TLM 110 4.18 .638 .061
MLM 98 4.21 .646 .065
LML 66 4.24 .658 .081
 Total 274 4.21 .644 .039
Ambience TLM 110 4.21 .692 .066
MLM 98 4.07 .750 .076
LML 66 4.35 .668 .082
Total 274 4.19 .713 .043
Food & Beverages TLM 110 4.19 .684 .065
MLM 98 4.03 .695 .070
LML 66 4.35 .668 .082
Total 274 4.17 .693 .042
Facilities & Amenities TLM 110 4.20 .688 .066
MLM 98 4.04 .731 .074
LML 66 4.33 .664 .082
Total 274 4.18 .705 .043
Any Other (Specify) TLM 110 4.16 .698 .067
MLM 98 4.02 .718 .072
LML 66 4.30 .679 .084
Total 274 4.15 .706 .043

Table- 9.7.2. One way ANOVA for effect of factors of sustainable

competitive advantage on occupancy rate – F-values and significance
comparison by Designation of Managers
Sum of
Squares df Mean Square F Sig.
Whether these have Between Groups .058 2 .029 .028 .972
direct effect on Within Groups 274.760 271 1.014
occupancy rate -
Innovations Total 274.818 273
Product Offerings Between Groups 1.554 2 .777 .760 .469
Within Groups 276.986 271 1.022
Total 278.540 273
Service Quality Between Groups .602 2 .301 .287 .751
Within Groups 283.938 271 1.048
Total 284.540 273
Technology Between Groups .157 2 .079 .189 .828
Within Groups 112.985 271 .417
Total 113.142 273
Ambience Between Groups 3.072 2 1.536 3.068 .048*
Within Groups 135.676 271 .501
Total 138.748 273
Food & Beverages Between Groups 4.054 2 2.027 4.329 .014*
Within Groups 126.884 271 .468
Total 130.938 273
Facilities & Amenities Between Groups 3.488 2 1.744 3.578 .029*
 Within Groups 132.103 271 .487
Total 135.591 273
Any Other Between Groups 3.207 2 1.604 3.269 .040*
Within Groups 132.953 271 .491
Total 136.161 273
Note: * Significant at .05 level

Table- 9.8.1a. Agreement about effect of Innovations on occupancy

rate – Comparison by Grade of Hotels.

Grade of hotel
3 Star 4 Star 5 Star Total
Whether these Strongly Agree Count 43 10 22 75
have direct effect % within Grade 30.9% 17.5% 28.2% 27.4%
on occupancy
rate - Agree Count 70 36 39 145
Innovations % within Grade 50.4% 63.2% 50.0% 52.9%
Uncertain Count 12 7 11 30
% within Grade 8.6% 12.3% 14.1% 10.9%
Disagree Count 6 2 1 9
% within Grade 4.3% 3.5% 1.3% 3.3%
Strongly Count 8 2 5 15
Disagree % within Grade 5.8% 3.5% 6.4% 5.5%
Total Count 139 57 78 274

Table 9.8.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 7.543(a) 8 .479

a 5 cells (33.3%) have expected count less than 5. The minimum expected count is 1.87.
 Table- 9.8.2a. Agreement about effect of Product Offerings on
occupancy rate – Comparison by Grade of Hotels.

Grade
3 Star 4 Star 5 Star Total
Product Strongly Count 42 23 30 95
Offerings Agree % within
30.2% 40.4% 38.5% 34.7%
Grade
Agree Count 78 24 39 141
% within
56.1% 42.1% 50.0% 51.5%
Grade
Uncertain Count 6 7 6 19
% within
4.3% 12.3% 7.7% 6.9%
Grade
Disagree Count 1 0 0 1
% within
.7% .0% .0% .4%
Grade
Strongly Count 12 3 3 18
Disagree % within
8.6% 5.3% 3.8% 6.6%
Grade
Total Count 139 57 78 274

Table 9.8.2b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 9.925(a) 8 .270

a 5 cells (33.3%) have expected count less than 5. The minimum expected count is .21.

Table- 9.8.3a. Agreement about effect of Service Quality on

occupancy rate – Comparison by Grade of Hotels.

Grade
3 Star 4 Star 5 Star Total
Service Strongly Count 53 14 29 96
Quality Agree % within
38.1% 24.6% 37.2% 35.0%
Grade
Agree Count 72 30 38 140
% within
51.8% 52.6% 48.7% 51.1%
Grade
Uncertain Count 8 6 5 19
% within
5.8% 10.5% 6.4% 6.9%
Grade
Strongly Count 6 7 6 19
Disagree % within
4.3% 12.3% 7.7% 6.9%
Grade
Total Count 139 57 78 274
 Table 9.8.3b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 7.551(a) 6 .273

a 2 cells (16.7%) have expected count less than 5. The minimum expected count is 3.95.

Table- 9.8.4a. Agreement about effect of Technology on occupancy

rate – Comparison by Grade of Hotels.

Grade
3 Star 4 Star 5 Star Total
Technology Strongly Count 51 18 22 91
Agree % within
36.7% 31.6% 28.2% 33.2%
Grade
Agree Count 71 30 48 149
% within
51.1% 52.6% 61.5% 54.4%
Grade
Uncertain Count 17 9 8 34
% within
12.2% 15.8% 10.3% 12.4%
Grade
Total Count 139 57 78 274

Table 9.8.4b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 3.006(a) 4 .557

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 7.07.
Table- 9.8.5a. Agreement about effect of Ambience on occupancy
rate – Comparison by Grade of Hotels.
 Grade
3 Star 4 Star 5 Star Total
Ambience Strongly Count 46 15 34 95
Agree % within
33.1% 26.3% 43.6% 34.7%
Grade
Agree Count 78 31 34 143
% within
56.1% 54.4% 43.6% 52.2%
Grade
Uncertain Count 12 10 8 30
% within
8.6% 17.5% 10.3% 10.9%
Grade
Disagree Count 3 1 2 6
% within
2.2% 1.8% 2.6% 2.2%
Grade
Total Count 139 57 78 274

Table 9.8.5b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 7.685(a) 6 .262

a 3 cells (25.0%) have expected count less than 5. The minimum expected count is 1.25.

Table- 9.8.6a. Agreement about effect of Food & Beverages on

occupancy rate – Comparison by Grade of Hotels.

Grade
3 Star 4 Star 5 Star Total
Food & Strongly Count 42 14 32 88
Beverages Agree % within
30.2% 24.6% 41.0% 32.1%
Grade
Agree Count 82 32 36 150
% within
59.0% 56.1% 46.2% 54.7%
Grade
Uncertain Count 12 10 9 31
% within
8.6% 17.5% 11.5% 11.3%
Grade
Disagree Count 3 1 1 5
% within
2.2% 1.8% 1.3% 1.8%
Grade
Total Count 139 57 78 274

Table 9.8.6b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 7.681(a) 6 .262
a 3 cells (25.0%) have expected count less than 5. The minimum expected count is 1.04.
 Table- 9.8.7a. Agreement about effect of Facilities & Amenities on
occupancy rate – Comparison by Grade of Hotels.
Grade
3 Star 4 Star 5 Star Total
Facilities & Strongly Count 44 14 32 90
Amenities Agree % within
31.7% 24.6% 41.0% 32.8%
Grade
Agree Count 80 32 36 148
% within
57.6% 56.1% 46.2% 54.0%
Grade
Uncertain Count 12 10 8 30
% within
8.6% 17.5% 10.3% 10.9%
Grade
Disagree Count 3 1 2 6
% within
2.2% 1.8% 2.6% 2.2%
Grade
Total Count 139 57 78 274

Table 9.8.7b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 7.181(a) 6 .304

a 3 cells (25.0%) have expected count less than 5. The minimum expected count is 1.25.

Table- 9.8.8a. Agreement about effect of Other Factors on

occupancy rate – Comparison by Grade of Hotels.

Grade
3 Star 4 Star 5 Star Total
Any Other Strongly Count 40 13 33 86
(Specify) Agree % within
28.8% 22.8% 42.3% 31.4%
Grade
Agree Count 80 32 35 147
% within
57.6% 56.1% 44.9% 53.6%
Grade
Uncertain Count 16 11 9 36
% within
11.5% 19.3% 11.5% 13.1%
Grade
Disagree Count 3 1 1 5
% within
2.2% 1.8% 1.3% 1.8%
Grade
Total Count 139 57 78 274

Table 9.8.8b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
 Pearson Chi-Square 8.474(a) 6 .205

a 3 cells (25.0%) have expected count less than 5. The minimum expected count is 1.04.

Table- 9.9.1. T-Test - Group Statistics of Agreement about effect of factors

of sustainable competitive advantage on occupancy rate – Comparison by
Country.
Std. Error
Country N Mean Std. Deviation Mean
Whether these have direct India
effect on occupancy rate – 221 3.92 1.046 .070
Innovations
Thailand 53 4.00 .809 .111
Product Offerings India 221 4.05 1.003 .067
Thailand 53 4.15 1.045 .144
Service Quality India 221 4.08 .997 .067
Thailand 53 4.04 1.126 .155
Technology India 221 4.24 .639 .043
Thailand 53 4.09 .658 .090
Ambience India 221 4.19 .701 .047
Thailand 53 4.21 .769 .106
Food & Beverages India 221 4.16 .675 .045
Thailand 53 4.21 .769 .106
Facilities & Amenities India 221 4.17 .690 .046
Thailand 53 4.21 .769 .106
Any Other (Specify) India 221 4.14 .692 .047
 Thailand 53 4.15 .770 .106

Table- 9.9.2. T-Test - Independent Samples Test of Agreement about effect

of factors of sustainable competitive advantage on occupancy rate –
Comparison by Country.

t-test for Equality of Means

t df Sig. (2-tailed) Sig. (1-tailed)

Whether these have direct effect on .620 98.330 .537 .268
occupancy rate – Innovations
Product Offerings -.625 272 .533 .266
Service Quality .279 272 .780 .390
Technology 1.434 272 .153 .076
Ambience -.160 272 .873 .436
Food & Beverages -.421 272 .674 .337
Facilities & Amenities -.372 272 .710 .355
Any Other (Specify) -.057 272 .955 .477

Table- 9.10.1. T-Test - Group Statistics of Agreement about effect of factors

of sustainable competitive advantage on occupancy rate – Comparison by
Destination.
 Std. Error
Destination N Mean Std. Deviation Mean
Whether these have direct effect Business
178 3.89 1.000 .075
on occupancy rate - Innovations
Tourist 96 4.01 1.010 .103
Product Offerings Business 178 4.07 .992 .074
Tourist 96 4.07 1.049 .107
Service Quality Business 178 4.03 1.038 .078
Tourist 96 4.16 .988 .101
Technology Business 178 4.18 .656 .049
Tourist 96 4.26 .620 .063
Ambience Business 178 4.23 .711 .053
Tourist 96 4.13 .715 .073
Food & Beverages Business 178 4.21 .686 .051
Tourist 96 4.10 .703 .072
Facilities & Amenities Business 178 4.21 .702 .053
Tourist 96 4.11 .709 .072
Any Other (Specify) Business 178 4.17 .701 .053
Tourist 96 4.10 .718 .073

Table- 9.10.2. T-Test - Independent Samples Test of Agreement about

effect of factors of sustainable competitive advantage on occupancy rate –
Comparison by Destination.
t-test for Equality of Means
t df Sig. (2-tailed) Sig. (1-tailed)
Whether these have direct effect on occupancy
rate - Innovations -.922 272 .357 .178

Product Offerings .001 272 .999 .499

Service Quality -.991 272 .322 .161
Technology -.989 272 .323 .161
Ambience 1.168 272 .244 .122
Food & Beverages 1.183 272 .238 .119
Facilities & Amenities 1.045 272 .297 .148
Any Other (Specify) .719 272 .473 .236

Table- 9.11.1a. - Whether Innovation is the most important factor for

Sustainable Competitive Advantage – Comparison by Grade of Hotel.

Grade Total
 3 Star 4 Star 5 Star
Please state your Strongly Agree Count 51 21 29 101
opinion about % within Grade 36.7% 36.8% 37.2% 36.9%
Innovation is an
important for Agree Count 76 28 42 146
Sustainable % within Grade 54.7% 49.1% 53.8% 53.3%
Competitive
Uncertain Count 12 8 7 27
Advantage in the
Hotel Industry. % within Grade 8.6% 14.0% 9.0% 9.9%
Total Count 139 57 78 274

Table 9.11.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.526(a) 4 .822

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 5.62.

Table- 9.12.1a. - Whether Innovation is the most important factor for

Sustainable Competitive Advantage – Comparison by Country.
Country
India Thailand Total
Please state your Strongly Agree Count 84 17 101
opinion about % within Country 38.0% 32.1% 36.9%
Innovation is an
important factor Agree Count 117 29 146
for Sustainable % within Country 52.9% 54.7% 53.3%
Competitive
Uncertain Count 20 7 27
Advantage in the
Hotel Industry. % within Country 9.0% 13.2% 9.9%
Total Count 221 53 274

Table 9.12.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.184(a) 2 .553
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 5.22.

Table- 9.13.1a. - Whether Innovation is the most important factor for

Sustainable Competitive Advantage – Comparison by Destination.
Destination
Business Tourist Total
Please state your Strongly Agree Count 66 35 101
opinion about % within Destination 37.1% 36.5% 36.9%
Innovation is an
important for Agree Count 93 53 146
 Sustainable % within Destination 52.2% 55.2% 53.3%
Competitive Uncertain Count 19 8 27
Advantage in the
Hotel Industry. % within Destination 10.7% 8.3% 9.9%
Total Count 178 96 274

Table 9.13.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .456(a) 2 .796
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 9.46.
Table- 9.13.2a. - Whether Innovation is a most important factor for
Sustainable Competitive Advantage – Comparison by Designation.
Designation Total

TLM MLM LML

Please state your opinion Strongly Count

about Innovation is an Agree

important factor for

45 35 21 101
Sustainable Competitive

Advantage in the Hotel

Industry.

% within
40.9% 35.7% 31.8% 36.9%
Designation

Agree Count 55 55 36 146

% within
50.0% 56.1% 54.5% 53.3%
Designation

Uncertai Count
10 8 9 27
n

% within
9.1% 8.2% 13.6% 9.9%
Designation

Total Count 110 98 66 274

Table 9.13.2b Chi Square Tests

 Asymp. Sig.

Value df (2-sided)

Pearson Chi-Square 2.677(a) 4 .613

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 6.50.

Table- 9.14.1a Whether Innovations are implemented in isolation or is

a part of all other tools of Sustainable Competitive Advantage. –
Comparison by Grade of Hotel.
Grade
3 Star 4 Star 5 Star Total
Please state your Strongly Agree Count 39 16 13 68
opinion about
% within Grade 28.1% 28.1% 16.7% 24.8%
Innovation is not
implemented in Agree Count 81 35 59 175
isolation but is % within Grade 58.3% 61.4% 75.6% 63.9%
part of
implementing all Uncertain Count 19 6 6 31
other tools for % within Grade
Sustainable
Competitive 13.7% 10.5% 7.7% 11.3%
Advantage
Total Count 139 57 78 274

Table 9.14.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 6.964(a) 4 .138

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 6.45.

Table- 9.15.1a Whether Innovations are implemented in isolation or is a part

of all other tools of Sustainable Competitive Advantage. – Comparison by
Country.
Country
India Thailand Total
Please state your Strongly Agree Count 57 11 68
opinion about
% within Country 25.8% 20.8% 24.8%
Innovation is not
implemented in Agree Count 142 33 175
isolation but is part % within Country 64.3% 62.3% 63.9%
of implementing all
other tools for Uncertain Count 22 9 31
Sustainable % within Country
Competitive 10.0% 17.0% 11.3%
Advantage
Total Count 221 53 274
 Table 9.15.1b Chi Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 2.329(a) 2 .312
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 6.00.

Table- 9.16.1a Whether Innovations are implemented in isolation or is a part

of all other tools of Sustainable Competitive Advantage. – Comparison by
Destination.
Destination
Business Tourist Total
Please state your Strongly Agree Count 43 25 68
opinion about
% within Destination 24.2% 26.0% 24.8%
Innovation is not
implemented in Agree Count 115 60 175
isolation but is part % within Destination 64.6% 62.5% 63.9%
of implementing all
other tools for Uncertain Count 20 11 31
Sustainable % within Destination
Competitive 11.2% 11.5% 11.3%
Advantage
Total Count 178 96 274

Table 9.16.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .135(a) 2 .935
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 10.86.

Table- 9.16.2a Whether Innovations are implemented in isolation or is a part

of all other tools of Sustainable Competitive Advantage. – Comparison by
Designation of Manager.
Designation Total

TLM MLM LML

Please state your Strongly Count

opinion about Agree

31 17 20 68
Innovation is not

implemented in
 isolation but is

part of

implementing all

other tools for

Sustainable

Competitive

Advantage

% within
28.2% 17.3% 30.3% 24.8%
Designation

Agree Count 69 67 39 175

% within
62.7% 68.4% 59.1% 63.9%
Designation

Uncertain Count 10 14 7 31

% within
9.1% 14.3% 10.6% 11.3%
Designation

Total Count 110 98 66 274

Crosstab

Table 9.16.2b Chi Square Tests

Asymp. Sig.

Value df (2-sided)

Pearson Chi-Square 5.349(a) 4 .253

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 7.47.

Table- 9.17.1a Managers opinion whether Product Innovations are

prominent in the hotel Sector – Comparison by Grade of Hotel.
Grade
3 Star 4 Star 5 Star Total
Are these Yes Count 81 33 46 160
Innovations % within Grade 58.3% 57.9% 59.0% 58.4%
prominent in
Hotel Sector - No Count 23 8 15 46
 Product % within Grade 16.5% 14.0% 19.2% 16.8%
Innovations Can't Say Count 35 16 17 68
% within Grade 25.2% 28.1% 21.8% 24.8%
Total Count 139 57 78 274

Table 9.17.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.084(a) 4 .897

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 9.57.

Table- 9.17.2a Managers opinion whether Service Innovations are

prominent in the hotel Sector – Comparison by Grade of Hotel.
Grade
3 Star 4 Star 5 Star Total
Service Yes Count 82 31 47 160
Innovations % within
59.0% 54.4% 60.3% 58.4%
Grade
No Count 33 14 22 69
% within
23.7% 24.6% 28.2% 25.2%
Grade
Can't Say Count 24 12 9 45
% within
17.3% 21.1% 11.5% 16.4%
Grade
Total Count 139 57 78 274

Table 9.17.2b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 2.555(a) 4 .635

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 9.36.

Table- 9.17.3a Managers opinion whether Ambience Innovations are

prominent in the hotel Sector – Comparison by Grade of Hotel.
Grade
3 Star 4 Star 5 Star Total
Ambience Yes Count 84 35 41 160
% within
60.4% 61.4% 52.6% 58.4%
Grade
No Count 32 15 21 68
% within
23.0% 26.3% 26.9% 24.8%
Grade
Can't Say Count 23 7 16 46
% within 16.5% 12.3% 20.5% 16.8%
 Grade
Total Count 139 57 78 274

Table 9.17.3b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 2.352(a) 4 .671

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 9.57.

Table- 9.17.4a Managers opinion whether Technology Innovations are

prominent in the hotel Sector – Comparison by Grade of Hotel.
Grade
3 Star 4 Star 5 Star Total
Technology Yes Count 105 45 56 206
% within
75.5% 78.9% 71.8% 75.2%
Grade
No Count 23 5 18 46
% within
16.5% 8.8% 23.1% 16.8%
Grade
Can't Say Count 11 7 4 22
% within
7.9% 12.3% 5.1% 8.0%
Grade
Total Count 139 57 78 274

Table 9.17.4b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 6.356(a) 4 .174

a 1 cells (11.1%) have expected count less than 5. The minimum expected count is 4.58.

Table- 9.17.5a Managers opinion whether Facilities & Amenities

Innovations are prominent in the hotel Sector – Comparison by Grade of
Hotel.
Grade
3 Star 4 Star 5 Star Total
Facilities & Yes Count 82 31 47 160
Amenities % within
59.0% 54.4% 60.3% 58.4%
Grade
No Count 33 14 22 69
% within
23.7% 24.6% 28.2% 25.2%
Grade
Can't Say Count 24 12 9 45
% within
17.3% 21.1% 11.5% 16.4%
Grade
Total Count 139 57 78 274
 Table 9.17.5b Chi Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 2.555(a) 4 .635

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 9.36.

Table- 9.17.6a Managers opinion whether Food & Beverages Innovations

are prominent in the hotel Sector – Comparison by Grade of Hotel.
Grade
3 Star 4 Star 5 Star Total
Food & Yes Count 75 29 33 137
Beverages % within
54.0% 50.9% 42.3% 50.0%
Grade
No Count 53 25 36 114
% within
38.1% 43.9% 46.2% 41.6%
Grade
Can't Say Count 11 3 9 23
% within
7.9% 5.3% 11.5% 8.4%
Grade
Total Count 139 57 78 274
% within
100.0% 100.0% 100.0% 100.0%
Grade

Table 9.17.6b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 3.851(a) 4 .427

a 1 cells (11.1%) have expected count less than 5. The minimum expected count is 4.78.
Table- 9.17.7a Managers opinion whether Innovations in Other Factors are
prominent in the hotel Sector – Comparison by Grade of Hotel.
Grade
3 Star 4 Star 5 Star Total
Any Other Yes Count 75 29 33 137
(Specify) % within
54.0% 50.9% 42.3% 50.0%
Grade
No Count 54 21 40 115
% within
38.8% 36.8% 51.3% 42.0%
Grade
Can't Say Count 10 7 5 22
% within
7.2% 12.3% 6.4% 8.0%
Grade
Total Count 139 57 78 274

Table 9.17.7b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
 Pearson Chi-Square 5.317(a) 4 .256
a 1 cells (11.1%) have expected count less than 5. The minimum expected count is 4.58.

Table- 9.18.1a Managers opinion whether Product Innovations are

prominent in the hotel Sector – Comparison by Country.
Country
India Thailand Total
Are these Yes Count 133 27 160
Innovations % within
prominent in 60.2% 50.9% 58.4%
Country
Hotel Sector - No Count
Product 36 10 46
Innovations % within
16.3% 18.9% 16.8%
Country
Can't Say Count 52 16 68
% within
23.5% 30.2% 24.8%
Country
Total Count 221 53 274

Table 9.18.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.558(a) 2 .459
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.90.
Table- 9.18.2a Managers opinion whether Service Innovations are
prominent in the hotel Sector – Comparison by Country.
Country
India Thailand Total
Service Yes Count 132 28 160
Innovations % within
59.7% 52.8% 58.4%
Country
No Count 56 13 69
% within
25.3% 24.5% 25.2%
Country
Can't Say Count 33 12 45
% within
14.9% 22.6% 16.4%
Country
Total Count 221 53 274

Table 9.18.2b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.907(a) 2 .385
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.70.
Table- 9.18.3a Managers opinion whether Ambience Innovations are
prominent in the hotel Sector – Comparison by Country.
Country
India Thailand Total
Ambience Yes Count 126 34 160
% within
57.0% 64.2% 58.4%
Country
 No Count 56 12 68
% within
25.3% 22.6% 24.8%
Country
Can't Say Count 39 7 46
% within
17.6% 13.2% 16.8%
Country
Total Count 221 53 274

Table 9.18.3b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.000(a) 2 .606
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.90.

Table- 9.18.4a Managers opinion whether Technology Innovations are

prominent in the hotel Sector – Comparison by Country.
Country
India Thailand Total
Technology Yes Count 166 40 206
% within
75.1% 75.5% 75.2%
Country
No Count 36 10 46
% within
16.3% 18.9% 16.8%
Country
Can't Say Count 19 3 22
% within
8.6% 5.7% 8.0%
Country
Total Count 221 53 274

Table 9.18.4b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .629(a) 2 .730
a 1 cells (16.7%) have expected count less than 5. The minimum expected count is 4.26.

Table- 9.18.5a Managers opinion whether Facilities & Amenities

Innovations are prominent in the hotel Sector – Comparison by Country.
Country
India Thailand Total
Facilities & Yes Count 132 28 160
Amenities % within
59.7% 52.8% 58.4%
Country
No Count 56 13 69
% within
25.3% 24.5% 25.2%
Country
 Can't Say Count 33 12 45
% within
14.9% 22.6% 16.4%
Country
Total Count 221 53 274

Table 9.18.5b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.907(a) 2 .385
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.70.
Table- 9.18.6a Managers opinion whether Food & Beverages Innovations
are prominent in the hotel Sector – Comparison by Country.
Country
India Thailand Total
Food & Yes Count 108 29 137
Beverages % within
48.9% 54.7% 50.0%
Country
No Count 94 20 114
% within
42.5% 37.7% 41.6%
Country
Can't Say Count 19 4 23
% within
8.6% 7.5% 8.4%
Country
Total Count 221 53 274

Table 9.18.6b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .585(a) 2 .746
a 1 cells (16.7%) have expected count less than 5. The minimum expected count is 4.45.

Table- 9.18.7a Managers opinion whether Innovations in Other Factors are

prominent in the hotel Sector – Comparison by Country.
Country
India Thailand Total
Any Other Yes Count 108 29 137
(Specify) % within
48.9% 54.7% 50.0%
Country
No Count 94 21 115
% within
42.5% 39.6% 42.0%
Country
Can't Say Count 19 3 22
% within
8.6% 5.7% 8.0%
Country
Total Count 221 53 274

Table 9.18.7b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
 Pearson Chi-Square .838(a) 2 .658
a 1 cells (16.7%) have expected count less than 5. The minimum expected count is 4.26.

Table- 9.19.1a Managers opinion whether Product Innovations are

prominent in the hotel Sector – Comparison by Destination.
Destination
Business Tourist Total
Are these Yes Count 99 61 160
Innovations % within
prominent in 55.6% 63.5% 58.4%
Destination
Hotel Sector - No Count
Product 32 14 46
Innovations % within
18.0% 14.6% 16.8%
Destination
Can't Say Count 47 21 68
% within
26.4% 21.9% 24.8%
Destination
Total Count 178 96 274

Table 9.19.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.614(a) 2 .446
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 16.12.
Table- 9.19.2a Managers opinion whether Service Innovations are
prominent in the hotel Sector – Comparison by Destination.
Destination
Business Tourist Total
Service Yes Count 101 59 160
Innovations % within
56.7% 61.5% 58.4%
Destination
No Count 48 21 69
% within
27.0% 21.9% 25.2%
Destination
Can't Say Count 29 16 45
% within
16.3% 16.7% 16.4%
Destination
Total Count 178 96 274

Table 9.19.2b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .885(a) 2 .642
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 15.77.

Table- 9.19.3a Managers opinion whether Ambience Innovations are

prominent in the hotel Sector – Comparison by Destination.
 Destination
Business Tourist Total
Ambience Yes Count 101 59 160
% within
56.7% 61.5% 58.4%
Destination
No Count 48 20 68
% within
27.0% 20.8% 24.8%
Destination
Can't Say Count 29 17 46
% within
16.3% 17.7% 16.8%
Destination
Total Count 178 96 274

Table 9.19.3b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.257(a) 2 .533
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 16.12.

Table- 9.19.4a Managers opinion whether Technology Innovations are

prominent in the hotel Sector – Comparison by Destination.
Destination
Business Tourist Total
Technology Yes Count 127 79 206
% within
71.3% 82.3% 75.2%
Destination
No Count 34 12 46
% within
19.1% 12.5% 16.8%
Destination
Can't Say Count 17 5 22
% within
9.6% 5.2% 8.0%
Destination
Total Count 178 96 274

Table 9.19.4b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 4.077(a) 2 .130
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 7.71.
Table- 9.19.5a Managers opinion whether Facilities & Amenities
Innovations are prominent in the hotel Sector – Comparison by Destination.
Destination
Business Tourist Total
Facilities & Yes Count 101 59 160
 Amenities % within
56.7% 61.5% 58.4%
Destination
No Count 48 21 69
% within
27.0% 21.9% 25.2%
Destination
Can't Say Count 29 16 45
% within
16.3% 16.7% 16.4%
Destination
Total Count 178 96 274

Table 9.19.5b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .885(a) 2 .642
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 15.77.

Table- 9.19.6a Managers opinion whether Food & Beverages Innovations

are prominent in the hotel Sector – Comparison by Destination.
Destination
Business Tourist Total
Food & Yes Count 85 52 137
Beverages % within
47.8% 54.2% 50.0%
Destination
No Count 77 37 114
% within
43.3% 38.5% 41.6%
Destination
Can't Say Count 16 7 23
% within
9.0% 7.3% 8.4%
Destination
Total Count 178 96 274

Table 9.19.6b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.061(a) 2 .588
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.06.

Table- 9.19.7a Managers opinion whether Innovations in Other Factors are

prominent in the hotel Sector – Comparison by Destination.
Destination
Business Tourist Total
Any Other Yes Count 85 52 137
(Specify) % within
47.8% 54.2% 50.0%
Destination
No Count 79 36 115
 % within
44.4% 37.5% 42.0%
Destination
Can't Say Count 14 8 22
% within
7.9% 8.3% 8.0%
Destination
Total Count 178 96 274

Table 9.19.7b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 1.234(a) 2 .540
a 0 cells (.0%) have expected count less than 5. The minimum expected count is 7.71.

Table- 9.20.1a - Whether innovation performance significantly and

positively increases occupancy rates - Comparison by Country
Country
India Thailand Total
Do you think Strongly Agree Count 183 43 226
innovation % within Country 82.8% 81.1% 82.5%
performance in the
other factors of Uncertain Count 38 10 48
competitive % within Country
advantage
significantly and
17.2% 18.9% 17.5%
positively
increases
occupancy rates?
Total Count 221 53 274

Table 9.20.1b Chi Square Tests

Asymp. Sig. Exact Sig.
Value df (2-sided) (1-sided)
Pearson Chi-Square .083(b) 1 .773 .455
a Computed only for a 2x2 table
b 0 cells (.0%) have expected count less than 5. The minimum expected count is 9.28.

Table- 9.21.1a - Whether innovation performance significantly and

positively increases occupancy rates - Comparison by Destination
Destination
Business Tourist Total
Do you think Strongly Agree Count 146 80 226
innovation % within Destination 82.0% 83.3% 82.5%
performance in the
other factors for Uncertain Count 32 16 48
competitive % within Destination
advantage
significantly and 18.0% 16.7% 17.5%
positively increases
occupancy rates?
Total Count 178 96 274
 Table 9.21.1b Chi Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square .074(b) 1 .785
a Computed only for a 2x2 table
b 0 cells (.0%) have expected count less than 5. The minimum expected count is 16.82.

Table- 9.22.1a - T-Test - Group Statistics - Attitude of Hotels towards

developing Innovations – Comparison by Country.
Std. Error
Country N Mean Std. Deviation Mean
Attitude of your Hotel towards developing India
Innovations in - Product Innovations 221 4.14 .992 .067
Thailand
53 4.34 .783 .108
Service Innovations India 221 4.79 .582 .039
Thailand 53 4.58 .795 .109
Ambience India 221 4.24 .866 .058
Thailand 53 4.64 .623 .086
Technology India 221 4.67 .678 .046
Thailand 53 4.53 .749 .103
Facilities & Amenities India 221 4.05 .813 .055
Thailand 53 4.26 .738 .101
Food & Beverages India 221 4.55 .670 .045
Thailand 53 4.62 .686 .094
Any Other (Specify) India 221 4.85 .505 .034
Thailand 53 4.68 .701 .096
Table- 9.22.1b - T-Test - Independent Samples Test- Attitude of Hotels
towards developing Innovations – Comparison by Country.

t-test for Equality of Means

Sig. (2- Sig. (1-
t df tailed) tailed)
Attitude of your Hotel towards developing
Innovations in - Product Innovations -1.364 272 .174 .087

Service Innovations 1.784 65.949 .079 .039

Ambience
-3.837 105.899 .000 .000

Technology 1.292 272 .197 .098

Facilities & Amenities -1.717 272 .087 .043
Food & Beverages -.686 272 .493 .246
Any Other (Specify) 1.679 65.504 .098 .049
 Table- 9.23.1a - Attitude of Hotels towards developing Innovations –
Comparison by Designation of Manager.
Country Total
India Thailand
Designation TLM Count 91 19 110
% within Country 41.2% 35.8% 40.1%
MLM Count 73 25 98
% within Country 33.0% 47.2% 35.8%
LML Count 57 9 66
% within Country 25.8% 17.0% 24.1%
Total Count 221 53 274

Table 9.23.1b Chi Square Tests

Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 4.069(a) 2 .131

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 12.77.

Table- 9.24.1a - T-Test - Group Statistics - Attitude of Hotels towards

developing Innovations – Comparison by Destination.
Std. Error
Destination N Mean Std. Deviation Mean
Attitude of your Hotel towards Business
developing Innovations in - 178 1.77 .937 .070
Product Innovations
Tourist 96 1.92 .991 .101
Service Innovations Business 178 1.25 .636 .048
Tourist 96 1.24 .628 .064
Ambience Business 178 1.63 .801 .060
Tourist 96 1.77 .900 .092
Technology Business 178 1.38 .696 .052
Tourist 96 1.33 .691 .071
Facilities & Amenities Business 178 1.88 .786 .059
Tourist 96 1.96 .832 .085
Food & Beverages Business 178 1.45 .672 .050
Tourist 96 1.41 .674 .069
 Any Other (Specify) Business 178 1.17 .526 .039
Tourist 96 1.21 .597 .061

Table- 9.24.1b - T-Test - Independent Samples Test- Attitude of Hotels

towards developing Innovations – Comparison by Destination.
t-test for Equality of Means

t df Sig. (2-tailed) Sig. (1-tailed)

Attitude of your Hotel towards developing
Innovations in - Product Innovations -1.214 272 .226 .113

Service Innovations .165 272 .869 .434

Ambience -1.336 272 .183 .091
Technology .490 272 .625 .312
Facilities & Amenities -.806 272 .421 .210
Food & Beverages .507 272 .613 .306
Any Other (Specify) -.570 272 .569 .284

Table- 9.25.1a - Attitude of Hotels towards developing Product Innovations

– Comparison by Grade of Hotel.
Grade Total

3 Star 4 Star 5 Star

Attitude of your Strongly Count

Hotel towards Agree

developing
67 31 26 124
Innovations in -

Product

Innovations

% within
48.2% 54.4% 33.3% 45.3%
Grade

Agree Count 51 17 37 105

% within
36.7% 29.8% 47.4% 38.3%
Grade

Uncertain Count 5 4 6 15

% within
3.6% 7.0% 7.7% 5.5%
Grade

Disagree Count 16 5 9 30

% within 11.5% 8.8% 11.5% 10.9%

 Grade

Total Count 139 57 78 274

Table 9.25.1b Chi Square Tests

Asymp. Sig.

Value df (2-sided)

Pearson Chi-Square 8.783(a) 6 .186

a 2 cells (16.7%) have expected count less than 5. The minimum expected count is 3.12.

Table- 9.25.2a - Attitude of Hotels towards developing Service Innovations

– Comparison by Grade of Hotel.

Grade Total

3 Star 4 Star 5 Star

Service Strongly Count

116 46 72 234
Innovations Agree

% within
83.5% 80.7% 92.3% 85.4%
Grade

Agree Count 5 6 2 13

% within
3.6% 10.5% 2.6% 4.7%
Grade

Uncertain Count 18 5 3 26

% within
12.9% 8.8% 3.8% 9.5%
Grade

Disagree Count 0 0 1 1
 % within
.0% .0% 1.3% .4%
Grade

Total Count 139 57 78 274

Table 9.25.2b Chi Square Tests

Asymp. Sig.

Value df (2-sided)

Pearson Chi-Square 12.744(a) 6 .047

a 5 cells (41.7%) have expected count less than 5. The minimum expected count is .21.

Table- 9.25.3a - Attitude of Hotels towards developing Ambience

Innovations – Comparison by Grade of Hotel.
Grade Total

3 Star 4 Star 5 Star

Ambience Strongly Count

75 28 34 137
Agree

% within
54.0% 49.1% 43.6% 50.0%
Grade

Agree Count 47 23 35 105

% within
33.8% 40.4% 44.9% 38.3%
Grade

Uncertain Count 6 3 6 15

% within
4.3% 5.3% 7.7% 5.5%
Grade

Disagree Count 11 3 3 17

% within
7.9% 5.3% 3.8% 6.2%
Grade
 Total Count 139 57 78 274

Table 9.25.3b Chi Square Tests

Asymp. Sig.

Value df (2-sided)

Pearson Chi-Square 5.238(a) 6 .514

a 4 cells (33.3%) have expected count less than 5. The minimum expected count is 3.12.

Table- 9.25.4a - Attitude of Hotels towards developing Technology

Innovations – Comparison by Grade of Hotel.
Grade Total

3 Star 4 Star 5 Star

Technology Strongly Count

96 39 67 202
Agree

% within
69.1% 68.4% 85.9% 73.7%
Grade

Agree Count 29 15 8 52

% within
20.9% 26.3% 10.3% 19.0%
Grade

Uncertain Count 9 3 1 13

% within
6.5% 5.3% 1.3% 4.7%
Grade

Disagree Count 5 0 2 7

% within
3.6% .0% 2.6% 2.6%
Grade

Total Count 139 57 78 274

 Table 9.25.4b Chi Square Tests

Asymp. Sig.

Value df (2-sided)

Pearson Chi-Square 12.126(a) 6 .059

a 5 cells (41.7%) have expected count less than 5. The minimum expected count is 1.46.

Table- 9.25.5a - Attitude of Hotels towards developing Facilities and

Amenities Innovations – Comparison by Grade of Hotel.
Grade Total

3 Star 4 Star 5 Star

Facilities & Strongly Count

47 13 26 86
Amenities Agree

% within
33.8% 22.8% 33.3% 31.4%
Grade

Agree Count 65 38 41 144

% within
46.8% 66.7% 52.6% 52.6%
Grade

Uncertain Count 17 3 8 28

% within
12.2% 5.3% 10.3% 10.2%
Grade

Disagree Count 10 3 3 16

% within
7.2% 5.3% 3.8% 5.8%
Grade

Total Count 139 57 78 274

Table 9.25.5b Chi Square Tests

 Asymp. Sig.

Value df (2-sided)

Pearson Chi-Square 7.659(a) 6 .264

a 2 cells (16.7%) have expected count less than 5. The minimum expected count is 3.33.

Table- 9.25.6a - Attitude of Hotels towards developing Food & Beverages

Innovations – Comparison by Grade of Hotel.
Grade Total

3 Star 4 Star 5 Star

Food & Strongly Count

98 41 40 179
Beverages Agree

% within
70.5% 71.9% 51.3% 65.3%
Grade

Agree Count 32 14 29 75

% within
23.0% 24.6% 37.2% 27.4%
Grade

Uncertain Count 5 2 9 16

% within
3.6% 3.5% 11.5% 5.8%
Grade

Disagree Count 4 0 0 4

% within
2.9% .0% .0% 1.5%
Grade

Total Count 139 57 78 274

Table 9.25.6b Chi Square Tests

 Asymp. Sig.

Value df (2-sided)

Pearson Chi-Square 17.123(a) 6 .009

a 5 cells (41.7%) have expected count less than 5. The minimum expected count is .83.

Table- 9.25.7a - Attitude of Hotels towards developing Any Other

Innovations – Comparison by Grade of Hotel.
Grade Total

3 Star 4 Star 5 Star

Any Other Strongly Count

122 52 69 243
(Specify) Agree

% within
87.8% 91.2% 88.5% 88.7%
Grade

Agree Count 8 3 3 14

% within
5.8% 5.3% 3.8% 5.1%
Grade

Uncertain Count 9 1 5 15

% within
6.5% 1.8% 6.4% 5.5%
Grade

Disagree Count 0 1 1 2

% within
.0% 1.8% 1.3% .7%
Grade

Total Count 139 57 78 274

Table 9.25.7b Chi Square Tests

Value df Asymp. Sig.

 (2-sided)

Pearson Chi-Square 4.395(a) 6 .623

a 7 cells (58.3%) have expected count less than 5. The minimum expected count is .42.

Table- 9.26.1a - Regression Analysis of perspective of managers- Mean and

SD of independent and dependent variables
Std Error
Mean Std. Deviation N of Mean
Q9+Q10 Perspective of Managers about 0.226
34.70 3.765 274
Innovations
Age (mid point) 34.863 6.6440 274
Occupancy 2008-09 (mid point) 74.2336 19.05160 274
TLM Dummy .40 .491 274
MLM Dummy .36 .480 274
Thailand Dummy .19 .396 274
Business Dummy .65 .478 274
FiveStar Dummy .28 .452 274
FourStar Dummy .21 .407 274

Table- 9.26.1b- Regression Analysis of perspective of managers-

Correlations of Independent and dependent variables
Q9+Q10
Perspectiv
e of Mgrs Five
abt Age Occupancy TLM MLM Thailan Star Four
Innovation (mid 08-09 (mid Dumm Dumm d Business Dumm Star
s pt) pt) y y Dummy Dummy y Dummy
Pearson Q9+Q10
Correlatio Perspective of
1.000 -.057 .121 .011 -.099 .021 .007 .080 -.120
n Mgrs abt
Innovations
Age (mid point) -.057 1.000 .099 .008 -.053 -.098 -.030 -.063 .038
Occupancy 08-09
.121 .099 1.000 .013 -.062 -.109 -.062 .115 -.105
(mid pt)
TLM Dummy .011 .008 .013 1.000 -.611 -.043 .102 .028 -.016
MLM Dummy -.099 -.053 -.062 -.611 1.000 .117 -.011 -.015 .068
Thailand Dummy .021 -.098 -.109 -.043 .117 1.000 -.086 -.125 .068
Business Dummy .007 -.030 -.062 .102 -.011 -.086 1.000 .056 .131
FiveStar Dummy .080 -.063 .115 .028 -.015 -.125 .056 1.000 -.323
FourStar Dummy -.120 .038 -.105 -.016 .068 .068 .131 -.323 1.000
Sig. (1- Q9+Q10
tailed) Perspective of
. .174 .023 .429 .050 .363 .452 .094 .024
Mgrs abt
Innovations
 Age (mid point) .174 . .052 .444 .189 .053 .313 .149 .267
Occupancy 08-09
.023 .052 . .412 .153 .036 .154 .029 .042
(mid pt)
TLM Dummy .429 .444 .412 . .000 .240 .046 .323 .395
MLM Dummy .050 .189 .153 .000 . .027 .431 .401 .132
Thailand Dummy .363 .053 .036 .240 .027 . .078 .020 .132
Business Dummy .452 .313 .154 .046 .431 .078 . .176 .015
FiveStar Dummy .094 .149 .029 .323 .401 .020 .176 . .000
FourStar Dummy .024 .267 .042 .395 .132 .132 .015 .000 .
N Q9+Q10
Perspective of
274 274 274 274 274 274 274 274 274
Mgrs abt
Innovations
Age (mid point) 274 274 274 274 274 274 274 274 274
Occupancy 08-09
274 274 274 274 274 274 274 274 274
(mid pt)
TLM Dummy 274 274 274 274 274 274 274 274 274
MLM Dummy 274 274 274 274 274 274 274 274 274
Thailand Dummy 274 274 274 274 274 274 274 274 274
Business Dummy 274 274 274 274 274 274 274 274 274
FiveStar Dummy 274 274 274 274 274 274 274 274 274
FourStar Dummy 274 274 274 274 274 274 274 274 274

Table- 9.26.1c - Regression Analysis of perspective of managers- Variables

Entered/Removed (a)
Variables Variables
Model Entered Removed Method
1 Occupancy Stepwise (Criteria: Probability-of-F-
2008-09 (mid . to-enter <= .050, Probability-of-F-to-
point) remove >= .100).
a Dependent Variable: Q9+Q10 Perspective of Managers about Innovations

Table- 9.26.1d - Regression Analysis of perspective of managers- Model

Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate
1 .121(a) .015 .011 3.744
a Predictors: (Constant), Occupancy 2008-09 (mid point)
 Table- 9.26.1e - Regression Analysis of perspective of managers- ANOVA
(b)
Sum of
Model Squares df Mean Square F Sig.
1 Regression 56.347 1 56.347 4.020 .046(a)
Residual 3812.708 272 14.017
Total 3869.055 273
a Predictors: (Constant), Occupancy 2008-09 (mid point)
b Dependent Variable: Q9+Q10 Perspective of Managers about Innovations

Table- 9.26.1f - Regression Analysis of perspective of managers-

Regression Coefficients (a)
Unstandardized Standardized
Model Coefficients Coefficients t Sig.
B Std. Error Beta
1 (Constant) 32.934 .911 36.135 .000
Occupancy 2008-09 (mid
.024 .012 .121 2.005 .046
point)
a Dependent Variable: Q9+Q10 Perspective of Managers about Innovations
y = a + bx
Perspective = 32.934 + 0.024 x (Occupancy Rate 2008-09)

Table- 9.26.1g - Regression Analysis of perspective of managers - Excluded

Variables (b)
Partial Collinearity
Model Beta In t Sig. Correlation Statistics
Tolerance
1 Age (mid point) -.069(a) -1.150 .251 -.070 .990
TLM Dummy .009(a) .154 .877 .009 1.000
MLM Dummy -.092(a) -1.533 .126 -.093 .996
Thailand Dummy .035(a) .575 .565 .035 .988
Business Dummy .015(a) .246 .806 .015 .996
FiveStar Dummy .067(a) 1.103 .271 .067 .987
FourStar Dummy -.109(a) -1.801 .073 -.109 .989
a Predictors in the Model: (Constant), Occupancy 2008-09 (mid point)
b Dependent Variable: Q9+Q10 Perspective of Managers about Innovations.