INDIAS HOTEL INDUSTRY

SERVICE MARKETING

ByAbishek Chavan Vihang Paranjape Bhavesh Patel Monish Belel Sandip Salaskar Sachin Singh Jayesh Nimse

09 39 42 45 46 53 37

Agenda
About Hotel Industry in India. Trends in Indian Hotel Industry Challenges that Indian hotel Industry needs to address. Market segmentation Marketing Strategy Based on challenges.

Hotel Industry in India

Effects of Liberalisation

About Service Industry

Contribution of Tourism

About Hospitality Industry

Trends in Hotel Industry

Consumers Strong Brand Recognition Demand Vs Supply Technology HR related Aspects

The challenges to face

Infrastructure Related Aspects

Cost of Finance and Land The lack of adequate infrastructure development.

Area Food costs

Manpower Fuel/Energy Telephone Balance

Average in India (% sales) 35-40

15-18 20-25 1-2 27-13

Ideal (% sales) 28-30

12.15 15-17 1 42-35

Taxation Comparative Cost structure There is still need to improve

air connectivity

The Competition
The world's leading hotel brands - joining the battle
The country has been flooded by some of the

world's leading hotel brands. New brands such as Amanda, Satinwoods, Banana Tree, Hampton Inns, Scandium By Hilt and Mandarin Oriental are planning to enter the Indian hospitality industry in joint ventures with domestic hotel majors.
Unitech, which is setting up two hotels in

Delhi,has already formed a joint venture with Marriott International to run its three new hotels in India, which are expected to start operations by 2008. The three new hotels will be located in Kolkata, Gurgaon and Noida. We are investing around 700 crore rupees to set up these hotels, says Unitech managing director Sanjay Chandra.
All other majors including Marriott, Hyatt, Hilton, Accor, Four Seasons etc are

briskly reinforcing their presence in India.

Market Segmentation

Market segmentation in Indian

hotel Industry

Guest profile in india

Market Segmentation
Area
Airline crew

%
1.1

Business traveler-Domestic

39.5
8.1 1.9 19.0 9.0

Market segmentation in Indian

Business traveler-Foreign Complimentary rooms Domestic tourists Foreign tourists

hotel Industry

Meeting Participants (<100)

Meeting Participants (>100) Tour Groups-Domestic Tour Groups-Foreign Others

4.8
1.6 5.8 6.3 3.0

Guest profile in india

Market Segmentation

Market segmentation in Indian

hotel Industry

Country
UK US

%
15 15 10.5 9.1 7.2 3.0

Guest profile in india

Others European Countries Germany France Others

Strategic Analysis
Sales Turnover
Sales turnover of some Indian Hotels / Rs(10Million)

Company Name Indian Hotels Co.Ltd. E I H ltd

Sales 590.19 384.09 227.8. 177.49 134.42 106.66 96.58 59.58

Finantial Parameters

India tourism Devp, Corpn. Ltd. ITC hotels Ltd. Hotel Leela Venture Ltd.

Size of Hotels in India

Asian Hotels Ltd. Jaypee Hotels Ltd.

Mahindra Holiday & resort India Ltd.

Marketing Media used in

Indian Hotels (Table 13)

Strategic Analysis
Sales Turnover
Sales
Variables Hotels minus Indian hotels Indian Hotels
Rs(10 Million)

2337.94
49.48 52.29

590.19
25.97 0

Finantial Parameters

Advertising Marketing

Distribution

0.07
1679.46 1800.75 121.16 2146.63

0
400.43 429.94 29.51 528.42

Size of Hotels in India

Operating Income Cost-of-Sales

Marketing Media used in

Selling cost Total Cost

Indian Hotels

Strategic Analysis
Sales Turnover
Composition <50 rooms 223 50150 rooms 162 >150 rooms 32

Financial Parameters

Total responses

Size of Hotels in India

Average total rooms per hotels Average occupancy per hotel Avg rate per hotel (In Rs.)

31

82

234

52.9%

56%

61.7%

Marketing Media used in

Indian Hotels

939

1742

3259

Strategic Analysis
Composition

Sales Turnover

<50 rooms 426 74.7% 58.9 18.5 15.3 44.1 60.3 88.7 54.5 5.2 35.7 23.5

50-150 rooms 236 84.3% 75.9 37.3 19.9 48.3 66.5 91.5 73.9 9.3 49.2 30.1

>150 rooms 37 91.9% 91.9 75.7 29.7 70.3 54.1 100 94.6 24.3 59.5 35.1

Total responses Direct mails

Financial Parameters

Hotel web sites Loyalty card program Merchandising Other internet site

Size of Hotels in India

Outdoor Advertising Print Advertising Promotions

Marketing Media used in

Radio Advertising Telemarketing TV Marketing

Indian Hotels

The Engine of Growth

Tourist boom :The tourism traffic has been growing

between 20-28 % every year for the last four years and this rate of growth is expected to continue for the next few years.
The constant boom and the resultant demand-supply

mismatch has led to sharp increases in the average room rates and thus pushing up revenues of industry players (hotels, tour operators, airlines, shipping lines, etc)
The tourism sector is expected to perform very well in

futureand the industry offers an interesting investment opportunity for long-term investors.
Most of the five-star hotels are seeing more than 80 %

occupancy and some of the lesser-known five-star hotels are overbooked.

Hotel Trident Hilton, Agra

The Future Growth

Hospitality experts believe that the Indian hotel industry will witness higher than usual

growth in the coming peak season. The good times for the Indian hospitality industry are here to stay, with top-end hotels experiencing high room occupancy rates even in the lean season. around 89 per cent and we are looking at over 95 per cent occupancy for the period September to December, says Kapil Chopra, general manager, Trident Hilton, Gurgaon.

The lean season has been exceptionally good for us. Our room occupancy rate has been

There was an increase of 15 % in the number of international tourist arrivals in India and

14 % in the foreign exchange earnings in the first quarter of 2006 as compared to the same period last year.

The non-luxury segment in particular has been perking up with more and more investors

spotting the demand supply imbalance, surge in domestic travel and growth in spending among middle-class Indians.