Final Report on Hotel Industry

A Desk Research Report of Semester IIonIndustry Analysis desk research on Hotel Industry

SUBMITTED BY:

1Rugved HiswankarB-18

2Chaitali LavateB-28

3Siddhesh ShindeB-49

4Nishant ModiB-61

UNDER THE GUIDANCE OFProf. Pallavi Sajanapwar

SUBMITTED TO UNIVERSITY OF PUNEIN PARTIAL FULFILMENT OF THE DEGREE OFMASTER OF BUSINESS ADMINISTRATION

INDIRA INSTITUTE OF MANAGEMENT, PUNE(2013-2015)

INDEX1Chapter31.1Nature of Industry31.2Size of the industry31.3Categorization of Hotels in India31.4Classification on the basis of star category:-41.5Criteria for top 3 and bottom 3 players in the industry:-51.6Introduction:-61.7Players in Indian hotel Industry81.8Facts and Figures of Indian Hospitality industry:81.9Geographical spread101.10Factors contributing to demand111.11Supply demand balance :-111.12Professional trade bodies for hotel industry131.13Digital Services142Chapter162.1Management Ethos and Philosophy162.2Top Management personnel172.3Brief profiles212.4CSR and initiatives towards Environmental Conservation223Chapter243.1Controlling Ministry for the Hospitality Industry.243.2Legal Violations253.3Key national issues affecting industry263.4Key initiatives by the government to promote hotel industry:-274Chapter284.1Profitability chart:-284.2Revenue284.3Key factors contributing to industry:-294.4Ratio analysis :-295Chapter395.1Challenges395.2Impact of Exim policy on hotel industry445.3Technology Trends Revolutionizing The Hospitality Industry456BIBLIOGRAPHY46

ChapterIndustry analysisNature of IndustryThe Indian hospitality industry has emerged as one of the key industries driving the growth of the servicessector and, thereby, the Indian economy. Hotel industry is inextricable linked to the tourism industry and the growth in the Indian tourism industry has fuelled the growth of Indian Hotel Industry.Over the last decade business opportunities in India had intensified and elevated room rates occupancy levels in India. Even budget hotels are charging 15000 Rs. per day. 'Hotel Industry in India' success story is only second to China in Asia Pacific. The World Travel and Tourism Council, says that India ranks 18th in business travel and will be among the top 5 very soon. India's big success stories includes the new model for development and growth; a model that is uniquely made.Size of the industry (1)Indian Hotel Industry has supply of 110,000 rooms. According to the analysis of tourism ministry, 4.4 million tourists visited India year 2009 and has risen to 10 million in 2010 - to accommodate 350 million domestic travelers. The Hotel Industry in India is at the verge of making 150,000 rooms fueling hotel room rates across India by 2015. There is tremendous opportunity for India as a destination for hotel chains looking for growth.Categorization of Hotels in IndiaThe basic division in India according to the location is as follows:1 HeritageHotelsThese types of hotels reflect the old glory and grandeur of India, they are mostly the old havelis and mansions of ancient times which have been turned into Heritage Hotels, these provide tourists with an opportunity to experience royal pleasure in traditional ambiance. They mostly concentrate in the princely states of Rajasthan, Delhi, and Madhya Pradesh2 Luxury HotelsThese Hotels are equipped with world class infrastructural amenities, they offer the tourists with a fine lodging and dining experience. They extend a warm welcome to the customers catering primarily to the upper class executives.3 Budget HotelsThese kinds of Hotels are like home away from home, they accommodate customers from upper middle and middle class. Mostly named as Economy Class Hotel, Business Hotels and Discount Hotels, the Budget Hotels supports the modern infrastructural facilities for a comfortable and pleasant stay.4 ResortsResort hotels in India are mostly found in hill stations and sea side tourist destinations. These are located amidst natural scenic beauty, they are the ideal place to enjoy some valuable time with family and friends or in solitude.Classification on the basis of star category (2):-One Star HotelsHotels in this classification are likely to be small and independently owned, with a family atmosphere. Services may be provided by the owner and family on an informal basis. There may be a limited range of facilities and meals may be fairly simple. Lunch, for example, may not be served. Some bedrooms may not have en suite bath/shower rooms. Maintenance, cleanliness and comfort should, however, always be of an acceptable standard.Two Star HotelsIn this classification hotels will typically be small to medium sized and offer more extensive facilities than at the one star level. Some business hotels come into the two star classification and guests can expect comfortable, well equipped, overnight accommodation, usually with an en-suite bath/shower room. Reception and other staff will aim for a more professional presentation than at the one star level, and offer a wider range of straightforward services, including food and drink.Three Star HotelsAt this level, hotels are usually of a size to support higher staffing levels, and a significantly greater quality and range of facilities than at the lower star classifications. Reception and the other public rooms will be more spacious and the restaurant will normally also cater for non-residents. All bedrooms will have fully en suite bath and shower rooms and offer a good standard of comfort and equipment, such as a hair dryer, direct dial telephone, toiletries in the bathroom. Some room service can be expected, and some provision for business travelers.

Four Star HotelsExpectations at this level include a degree of luxury as well as quality in the furnishings, decor and equipment, in every area of the hotel. Bedrooms will also usually offer more space than at the lower star levels, and well designed, coordinated furnishings and decor. The en-suite bathrooms will have both bath and fixed shower. There will be a high enough ratio of staff to guests to provide services like porterage, 24-hour room service, laundry and dry-cleaning. Five Star HotelsHere you should find spacious and luxurious accommodation throughout the hotel, matching the best international standards. Interior design should impress with its quality and attention to detail, comfort and elegance. Furnishings should be immaculate. Services should be formal, well supervised and flawless in attention to guests' needs, without being intrusive. The restaurant will demonstrate a high level of technical skill, producing dishes to the highest international standards. Staff will be knowledgeable, helpful, well versed in all aspects of customer care, combining efficiency with courtesy.Seven Star HotelsThere is no formal body that awards stars to luxury properties higher than five stars. Some properties have taken to calling themselves six- or seven-star properties, to indicate their uber luxurious status. These properties may offer higher quality rooms as well as a range of amenities and services not traditionally available at hotels. The basic criteria for a saven star hotel is that it is accessible by road, air and sea. Criteria for top 3 and bottom 3 players in the industry:-Top 3 and bottom 3 hotels:-Sr no. Name Profit 2012-13(3) (in crore)

1Oberoi Hotels12.57

2Taj Hotels3.29

3ITC Hotels0.57

4Kamat hotels-5.66

5Sayaji Hotels-20.83

6Hotel Leela-433.46

Introduction:-Oberoi Group Of Hotels :-The Oberoi Group, founded in 1934, operates 30 hotels, a Nile Cruiser and a Motor Vessel in the backwaters of Kerala. The Group has presence in six countries under the luxury 'Oberoi' and five-star 'Trident' brand. The Group is also engaged in flight catering, airport restaurants, travel and tour services, car rentals, project management and corporate air charters.Oberoi Hotels & Resorts is synonymous the world over with providing the right blend of service, luxury and quiet efficiency. Internationally acclaimed for all-round excellence and unparalleled levels of service, Oberoi hotels and resorts have received innumerable awards and accolades.Taj HotelsThe Indian Hotels Company Limited (IHCL) and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces and isrecognised as one of Asia's largest and finest hotel company. Incorporated by the founder of the Tata Group, Mr. Jamsetji N. Tata, the company opened its first property, The TajMahal Palace Hotel, Bombay in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003.Taj Hotels Resorts and Palaces comprises 93 hotels in 55 locations across India with an additional 16 international hotels in the Maldives, Malaysia, Australia, UK, USA, Bhutan, Sri Lanka, Africa and the Middle East.Spanning the length and breadth of the country, gracing important industrial towns and cities, beaches, hill stations, historical and pilgrim centres and wildlife destinations, each Taj hotel offers the luxury of service, the apogee of Indian hospitality, vantage locations, modern amenities and business facilities.ITC HotelsITC Forayed into the Hotels business to support the national priority of developing new avenues of foreign exchange earnings and boosting tourism. Beginning with the Sheraton Chola, Chennai in 1975, ITCs journey in this business has redefined the face of Indian hospitality.Today, ITC Hotels is one of largest hotel chains in the Country with over 90 hotels in more than 70 destinations. Symbolised by its distinctive Namaste logo, ITC Hotels integrated Indias fine tradition of hospitality with globally benchmarked services.With a string of firsts to its credit, ITC Hotels pioneered the concepts of branded accommodation, branded cuisine, environment and guest safety. ITC Hotels is an exemplar in sustainable hospitality with all its premium hotels being LEED Platinum certified.As one of Indias premier corporations, ITC Hotels seeks to fulfill a larger role by enlarging its contribution to the society of which it is a part. The trusteeship role related to social and environmental resources, aligned to the pursuit of economic objectives, is the cornerstone of its Environment, Health & Safety philosophy for which it has won many awards and accolades.Hotel kamatKamat Hotels (India) Limited was incorporated on 21st March, 1986 in the State of Maharashtra by Late Mr. Venkatesh Krishna Kamat and his associates with the main object of setting up and running of hotels and related business. The Company obtained the Certificate of Commencement of Business on 31st March, 1986.Kamat Hotels (India) Ltd. (KHIL),is engaged in the business of hospitality and allied businesses, and its activities may be broadly categorized into (i) operation of hotels owned by the Company, (ii) management of hotels owned by other parties under contract (iii) catering services and (iv) timeshare.KHIL has firmly established four hotel brands viz. The Orchid An Ecotel Hotel in the 5-Star segment and VITS Luxury Business Hotel in the 4-Star segment, Gadh Hotels and Lotus Resorts. The focus of the Company is in positioning its hotels to the business segment in the mid to up-market category. In addition, the Company consciously follows the policy of environment conservation in the operation of its hotels in all aspects viz. design, construction and operations. This environment positioning gives a duel advantage to the Company in terms of marketing & visibility coupled with lower cost of operations.Hotel SayajiAfter the start of first Sayaji hotel in Baroda followed by Indore, Pune and barbeque nation chain of restaurants nationwide, Mr. Dhanani founder of Sayaji hotels, decided on two tenets for Sayaji Change is the rule of Game and Customer First. These values were instituted in every step of Sayajisaga. Sayaji provides and serves the very best facilities in luxury and cuisine to its guests and ,is the only hotel in the world which calls itself Truly Yours.Hotel Leela:-The Leela Palaces, Hotels and Resortsis anIndianluxury hospitality group founded in 1986 byCaptain C. P. Krishnan Nair, who named it after his wife. CurrentlyThe Leela- as it is commonly referred to, is a group of seven luxury palaces and hotels, located inMumbai,Goa,Bangalore,Trivandrum,Gurgaon,UdaipurandNew Delhi. The group has plans to open new hotels in Chennai(2011) and later inCoimbatoreandAgra, Lake Ashtamudi (Kollam,Kerala) andJaipur.Players in Indian hotel IndustryIndian Hotel Industry has been booming business and has also given a boast to tourism business in the country. Radisson Hotels India, Taj Group of Hotels, Park Group of Hotels and ITC Hotels are some of the known hotels in the hotel industry that are famous for unique amenities and superb accommodation arrangements.There are also the ITC Maurya Delhi, ITC Maratha Mumbai, and Fort Radisson of Radisson Group in Kolkata, Radisson Jass Hotel Shimla, The TajWestend, Bangalore, Taj Coromandel, Chennai. The major cities like Bangalore, Hyderabad, Chennai, Gurgaon, Pune Goa and the suburbs of Mumbai are the areas most attractive for the international investment and as expected these are the cities with the largest development pipelines. Combined these cities account for 89 of the 161 projects in the pipeline and 16,734 guestrooms, which is 68% of the rooms in India's total pipeline

Facts and Figures of Indian Hospitality industry(4):1. As per the Travel and Tourism Competitiveness Report 2011 by the World Economic Forum, India is ranked 12th in the Asia Pacific region and 68th overall, 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.2. The Hospitality industry is the third-largest foreign exchange earner, accounting for 6.23% of Indias GDP and 8.78% of Indias total employment, according to a report by the Planning Commission.3. Tourism in India is the largest service industry. The travel and tourism sector currently employs 49 million people, or 1 in every 10 jobs, and this is projected to increase to 58 million.4. Travel and tourism is a USD 32.7 billion business in India, according to industry estimates; in addition, the hospitality sector is sized at USD 23 billion and is expected to grow to US$ 36 billion by 2018.5. It is expected that the hospitality sector will witness an inflow of USD 12.17 billion in investments over the next two years, according to market research company Technopak Advisors.6. According to the Planning Commission, the hospitality sector creates more jobs per million rupees of investment than any other sector of the economy. The World Travel & Tourism Council (WTTC), which says Indias travel and tourism sector is expected to be the second-largest employer in the world, employing 40,37,000 people, directly or indirectly, by 2019.7. The Indian hotel industry is likely to witness a revenue growth of about seven per cent in 2012-13.8. Foreign Tourist Arrivals (FTAs) to India increased from 5.17 million in FY09 to 5.78 million in FY10, thereby resulting in a increase of 11.8% * The share of India in international tourist arrivals in 2010 was 0.61%, which is 0.02% improvement over 2009. India's rank improved to 40th in 2010, from 41st in 2009.9. According to the latest Tourism Satellite Accounting (TSA) research, released by the World Travel and Tourism Council (WTTC), the demand for travel and tourism in India is expected to grow by 8.2 % between 2010 and 2019. This 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. Capital investment in India's travel and tourism sector is expected to grow at 8.8 % between 2010 and 2019. The report forecasts India to get more capital investment in the travel and tourism sector and is projected to become the fifth fastest growing business travel destination from 2010 through 2020.

10. India has been ranked the "best country brand for value-for-money" in the Country Brand Index (CBI) survey conducted by Future Brand, a leading global brand consultancy. India also claimed the second place in CBI's "best country brand for history", as well as appears among the top 5 in the best country brand for authenticity and art & culture, and the fourth best new country for business. India made it to the list of "rising stars" or the countries that are likely to become major tourist destinations in the next five years, led by the United Arab Emirates, China, and Vietnam. Geographical spreadHotel NameIndia Global

Oberoi group of hotelsNew Delhi, Banglore, Kolkata, Mumbai, Gurgaon, Agra, Jaipur, Udaipur, Shimla, Kerala.Dubai, Mauritius, Egypt, Saudi Arabia.

Taj HotelsAgra, Ahmedabad, Aurangabad, banglore, chandigadh, Chennai, Goa, Hyderabad, Jaipur, Lucknow, Mumbai, Nashik, Pune, New Delhi, Surat, Udaipur, Shrinagar, Vishakhapatanam.

Sydney, Maldives, Marrakech London, Colombo, capetown, Dubai, New York, San Francisco, Boston, Lusaka.

ITCAgra, Ahmedabad, Aurangabad, banglore, chandigadh, Chennai, Goa, Hyderabad, Jaipur, Jodhpur, Kozikode, Lucknow, Mumbai, Nashik, Pune, New Delhi, Surat, Udaipur, Shrinagar, Vishakhapatanam.

Kamat HotelsPune, Mumbai, Nashik, Goa, Aurangabad, Nagpur, Jaipur, Bhuvaneshwar.

Sayaji HotelsPune, Indore, Vadodara

The Leela hotelsMumbai, Banglore, Chennai, Gurgaon, New Delhi, Udaipur, Goa

Factors contributing to demand(4)1. Domestic expenditure on tourism is expected to rise due to the growing income of households 2. A number of niche offerings such as medical tourism and eco tourism are expected to create more demand 3. AtithiDevoBhavah is one of the successful initiative taken by the Ministry of Tourism to create awareness about the effects of tourism and sensitise people about our countrys rich culture 4. Strong growth in per capita income in the country is driving the domestic tourism market 5. A shift in demographics with rising young population (coupled with changing lifestyles) is leading to greater expenditure on leisure services 6. The ministry set up a Hospitality Development and Promotion Board, which will monitor and facilitate hotel project clearances/approvals 7. The ministry in consultation with state/UT administrations has proposed to employ tourist police at prominent tourist spots 8. January 2010, the government launched the Visa on Arrival Scheme for citizens of five countries Finland, Japan, Luxembourg and New Zealand to attract additional foreign tourists 9. In January 2012, the government further extended this scheme to the citizens of six countries: Cambodia, Indonesia, Vietnam, the Philippines, Laos and Myanmar 10. The scheme registered an average growth of 56.7 per cent over 201012 11. Incredible India is an international marketing campaign by the Government of India to promote tourism in India in 2002 internationally 12. Foreign tourist arrivals grew at a CAGR of 7.8 per cent during 200512 to 6.6 million in 2012 13. In 2012, India Tourism has launched two new campaigns : an International Campaign called Find What You Seek and a Domestic Campaign called Go Beyond 14. India currently attracts 0.63 per cent of world tourist and the government aims to increase it to one per cent

Supply demand balance(4) :-1. The Indian hotels industry appears to have embarked on a recovery cycle, triggered largely by the revival in domestic travel (both leisure and business) since the second half (H2) of fiscal 2009-10; FTAs have also improved since December 2009, and were up 7.9% to 55.8 lakh travellers during CY2010. Although the October 2010 2. Commonwealth Games were expected to provide a strong demand push to the Indian hotels industry, weak planning and execution diluted the benefits to hotels in the NCR and the rest of the country. 3. On the other hand, the Cricket World Cup in the fourth quarter (Q4) of 2010-11 provided a much stronger demand impetus, with hotels reporting high occupancies in Chandigarh, New Delhi and particularly Mumbai (during the Finals in early April 2011). FTAs have remained strong during the first six months of CY2011, growing by 10.9%. In this context, while the return of foreign tourists clears the deck for the much-needed ARR premiums, the importance and stability the domestic traveller imparts to the Indian hotels industry remains intact. 4. Despite the worrying signals from the global economy, ICRA expects demand in several Indian markets to report healthy growth during 2011-12, supported both by domestic and foreign travellers. The Formula 1 racing event scheduled to be staged in the NCR in October 2011 is an enabling factor in this regard. 5. Globally, the Asia-Pacific region is one of the key areas expected to witness a large addition to room supply during the next few years. Two regions in Indiathe NCR with a pipeline of over 9,900 rooms (across categories), and Mumbai with a active pipeline of around 3,800 roomsare two of the busiest hotel construction markets in the Asian sub-continent at present. 6. A significant part of the NCR pipeline was conceived with some sporting mega-events of 2010 and 2011 in sight: the Commonwealth Games (October 2010), the Cricket World Cup (Q4, 2010-11), the annual Indian Premier League matches, and the Formula 1 race (October 2011). Thus, the NCR witnessed a significant increase in room capacity uring 2010-11 itself, with the inventory of premium rooms increasing to over 10,000 (as of March 2011). Going by the plans announced and the site visits made, ICRA expects the NCR to add another 5,000 premium/luxury rooms or so by 2015. The figure takes into account the 13 hotels being constructed within the hospitality district of Delhi International Airport's 'Aerocity'; these are expected to be commissioned during 2012-13. Conclusion :-ICRA expects NCR and Mumbai, both being gateway regionsand the countrys national and financial capital, respectivelyto witness strong demand in the coming years. However, with supply also being strong, especially in the NCR (where supply is expected to grow by 50%), ICRA expects this market to experience a weak recovery, with tariff growth likely to be anaemic during 2011 and 2012. Besides, the viability of certain high-cost hotel projects in the NCR is also uncertain. High real estate prices and increase in the costs of construction materials and commodities have pushed up the project costs and break-evens for these new hotels significantly.

Professional trade bodies for hotel industryFederation ofHotelandRestaurant AssociationsofIndiaFHRAI, is the Apex Body of the four Regional Associations representing the Hospitality Industry. FHRAI provides an interface between the Hospitality Industry, Political Leadership, Academics, International Associations and other Stake Holders.SouthIndia Hotels&Restaurants Association(SIHRA )The South India Hotels & Restaurants Association was incorporated in 1951 as a company under Companies Act without having any share capital. The objective is to encourage, promote and protect the interests of proprietors and other persons concerned with and interested in hotels, restaurants and boarding houses.Hotel AssociationofIndia(HAI)Provides information advisory, consultative and representative services to the industry and Government. HAI serves as a national point of reference for the industry in India.

Hoteland RestaurantAssociationof NorthernIndiaFounded by the legendaryRaiBahadur M. S. Oberoion October 6, 1950.HRANIsconstant endeavor is to promote the standards and quality of the services extended to the tourism sector of the country for integrated growth of the industry.

Hotel& RestaurantAssociation( WesternIndia)The Association over the last several years has taken effective steps to encourage, promote and protect the interest of member establishments. It has been rendering professional assistance from time to time to all its members on topics of vital importance. The Association admits & assists members operating in the Western India Region viz. in the states of Maharashtra, Gujarat, Goa & Madhya Pradesh and the adjoining Union Territories.

Digital ServicesNot too long ago, getting a hotel accommodation meant making a direct reservation or approaching an agent for a booking. Things have now changed dynamically, and the one single enabler for this has been the web. Today, with high levels of internet penetration, it is normal to make online reservations for accommodation.In the current competitive hospitality scenario, a hotels website needs to be viewed as the hotels most important salesperson, avers SaurabhRaiBhatnagar, regional director, India, and director global sales, India, Middle East & Africa, Preferred Hotel Group.Gone are the days when a website used to be more of an electronic brochure of the hotel; today, under no circumstances can a hotel afford not to have a dynamic and fully functional website.Websites are designed in a manner that allows you to take virtual tours of the hotel from the comfort of your home, and are increasingly being viewed as online marketing platforms.Says Tarandeep, head, marketing and communications, JaypeeVasant Continental, New Delhi: A hotel without a strong web presence means losing out on an average 60% of potential customers. The hotel website not only helps us to shift from passive to interactive relationships with many customers, but also to deliver unique valuable offers and products, and work out a differentiated approach to key customers.Abhijit Beej Das, senior director development India, Hilton Worldwide, says that web presence is an incredibly potent sales and marketing tool.According to him, Hilton Worldwide and the web sites for the entire portfolio of brands are perhaps the webs most searched hotel sites. He stresses that web content should be constantly reviewed, re-imagined, and refreshed, and real-time responses are important.Mamta Sharma, owner of The Estate, a bed-and-breakfast based out of New Delhi, attributes a large part of the webs growing popularity and success to a decision she took of having the right online presence to market her business, which included using a dotcom address.We were focused on being prudent about the way we showcase ourselves online, that being the only marketing tool we intended to use. For a small business that does not have a big marketing budget, a website is a must-have. It is one of the most effective ways of reaching out to audiences globally on a shoestring budget, she says.Over time, hotel websites have become the nucleus of all marketing programmes and activities. Declares Nikhil Kapur, general manager, Ista Bangalore: Reservations are on the increase; 20% of total bookings are now online. It is therefore imperative for a hotel to have a website. We see about 300-400 unique visitors per day, and we answer queries within the same working day as received. The ratio we are seeing is 70:30 foreign to Indian guests.I would say the ratio is 70/30%, international to domestic, agrees RomilRatra, general manager, Intercontinental Marine Drive.References(1) Indian Hotel IndustrySurvey 2011-2012 - HVS.com

(2) www.tourism.gov.in(3) www.moneycontrol.com(4) www.hospitalityindia.com

ChapterPromoters And Management EthosManagement Ethos and PhilosophyTaj HotelsSince its inception the Taj had always exhibited people oriented philosophy. The group always hired fresh graduates from leading hotel management institutes from all over India so that it could shape their attitude and develop their skills that fitted its needs and culture. All new employees of the group were placed in an intensive two-year program, which familiarize them with business ethos of the group, management of the organization and the working of the cross functional of the departments. The group believed that talent management is utmost important to develop a sustainable competitive advantage.ITC Welcome groupITC is a professionally managed organization and the core value underlying our corporate philosophy is "trusteeship".They recognize society as an important stakeholder in this enterprise and therefore it is part of our responsibility to practice good corporate citizenship.All directors, senior management and employees have the obligation to conduct themselves in an honest and ethical manner and act in the best interest of the Company at all times.The Oberoi HotelsThe Companys philosophy on governance is documented in The Oberoi Dharmawhich is the fundamental code of conduct of the Company and in its MissionStatement.The code ofConduct which puts the customer first, the Company second and the self last.

The Leela HotelCorporate Governance is based on the principles of integrity, fairness, equity,transparency, accountability and commitment to values. Good governancepractices stem from the quality and mindset of the organization.Companiesstand to gain by adopting systems that bolster the stakeholders trust throughtransparency, accountability and fairness.

Kamat HotelsThe Company strongly believes in adopting and adhering to good corporate governance practices. It upholds the values of transparency, professionalism and accountability and endeavors to maintain these values on ongoing basis.The directors are eminent personalities in their respective fields like, hoteliering, banking, finance, and management, accounting and general administration. This combination has helped the company to take the benefit of rich experience and expertise of the directors in their core areas of competence.

Sayaji HotelsEffective corporate governance practices constitute the strong foundations on which successful commercialenterprises are built to last.Strong leadership and effective corporate governance practices have been the Companys hallmark and it has inherited these from the Sayaji culture.The Company has a strong legacy of fair, transparent and ethical governance practices.

Top Management personnelThe Oberoi GroupMr. P. R. S. OberoiExecutive Chairman

Mr. S. S. MukherjiVice Chairman and Chief Executive Officer

Mr. VikramOberoiChief Operating Officer and Joint Managing Director

Mr. ArjunOberoiChief Planning Officer and Joint Managing Director

Taj HotelMr. Raymond BicksonManaging Director & Chief Executive OfficeMr. AbhijitMukerjiExecutive Director - Hotel OperationsMs. DeepaMisra HarrisSr. Vice President, Sales and MarketingMr. PrabhatVermaChief Operating Officer - The Gateway Hotels & ResortsMr. Beejal DesaiVice President - Legal & Company SecretaryMs. JyotiNarangChief Operating Officer - Luxury DivisionTaj Hotels Resorts and PalacesMr. Veer Vijay SinghChief Operating Officer - Upper Upscale HotelsMr. Mehernosh S. KapadiaExecutive Director - Corporate AffairsMr. Anil P. GoelExecutive Director Finance

ITC Welcome groupChairmanYogeshChanderDeveshwarNakulAnandPradeepVasantDhobaleKurushNoshir GrantRajiv Tandon

Chief Financial OfficerBiswaBehariChatterjee

Executive Vice President & Company SecretaryKannadiputhurSundararaman SureshKamat HotelsExecutive Chairman & Managing DirectorDr. VithalVenketeshKamatDirectorMr. Ramesh N. ShanbhagMr. Vikram V. KamatMr. S. S. ThakurMr. VedPrakashKhuranaMrs. RajyalakshmiRao

Sayaji Hotels LimitedShriRazak D. DhananiChairmanShriKayum R. DhananiDirectorShri Sanjay AhujaNominee Director TFCIShri Y.S. Mehta - Nominee MPFCShri T. S. Bhattacharya DirectorCA. T.N. Unni DirectorCapt. Salim Sheikh Director

Hotel LeelaChairman Emeritus & Founder ChairmanCapt. C. P. Krishnan Nair 1

Board of DirectorsMr. Vivek Nair 2 Chairman & Managing DirectorMr. Dinesh Nair 2 Co-Chairman & Managing DirectorMr. Venu Krishnan Deputy Managing DirectorMr. Krishna Deshika Director Finance & CFOMrs. Madhu Nair DirectorMrs. Anna Malhotra DirectorMr. M. Narasimham DirectorMr. Vijay Amritraj DirectorMr. Anil Harish DirectorDr. K. U. Mada DirectorMr. IndurKirpalani DirectorMr. A. K. Dasgupta DirectorMr. M. MadhavanNambiar DirectorMr. Anil Kumar Sharma 3 Director- Nominee of Airport Authority of IndiaMrs. UttaraDasgupta4 Director- Nominee of State Bank of IndiaMr. T. Ravindranath5 Director- Nominee of Syndicate Bank

Brief profilesP.R.S OberoiPrithvi Raj Singh Oberoi(born 1935) is theChairmanandChief executive officerof EIH Limited, the flagship company ofIndias The Oberoi Group, which runs a chain of luxury hotels,Oberoi Hotels & Resorts.[1]In 2008, theGovernment of IndiaawardedOberoi with thePadma Vibhushan, India's second-highest civilian honour, in recognition of his exceptional service to the country.[2]Popularly known as "Biki",[3]he took over as the Chairman of EIH Limited with the death ofMohan Singh Oberoi, his father and the founding chairman of The Oberoi group.[4]Oberoi was educated in India (St. Paul's School, Darjeeling), the United Kingdom and Switzerland. He served as aDirectorofJet Airways(India) Limited since March 29, 2004. Oberoi is a graduate in Hotel Management fromLausanne,Switzerland.[5]In 2010, he was recognised as the Corporate Hotelier of the World by Hotels magazineShri Sajid DhanaiMD, Sayaji group of hotels Is considered to be true debonair and visionary entrepreneur in the hospitality industry. An astute businessman with a visionary acumen, he introduced several innovations in his hotels, which have now become industry standard for excellence. He was popularly known as SajidBhai, decided on two tenets for sayaji change is the rule of the game and Customer first. He instituted these values in every step of the sayajisaga, he lived his life serving and providing the very best facilities in luxury and cuisine to his guests and positioned sayaji as the only hotel in the world which called itself Truly Yours.Raymond BiksonRaymond Bickson's experience in hospitality spans thirty years and four continents. In January 2003, Mr. Bickson moved to India and joined the Board as Executive Director & Chief Operating Officer of Taj Luxury Hotels, overseeing the operations of all luxury properties and playing a key role in the global expansion and development of future hotels. He assumed the role as Managing Director & Chief Executive Officer of The Indian Hotels Company Limited in July 2003.CSR and initiatives towards Environmental ConservationThe Oberoi :-Company has supported education founderprivileged children as the cornerstone of its future Corporate Social Responsibility.The Company contributed to the Commonwealth Human Rights Initiative, an organizationworking for the realization of human rights in Commonwealth countries, to Save ourTigers Campaign of the Wildlife Conservation Trust, and to PurbachalUdayanSanghafor books and medicines to needy women and children.In response to the green initiative of the Ministry of Corporate Affairs, Governmentof India with regard to paperless compliance, Company has been sending annualreports and accounts, Annual General Meeting and postal ballot notices, circularsetc by e-mail.

The Taj :-Company believes in undertaking for the societyand play an active role in contribution towards thesociety and taking the environmental and socialresponsibility sincerely.Don BoscoNavajeevan a shelter for the streetchildren.Support by purchasing products from different NGOsto provide them sustainable income was a good steptaken in the right direction. Printing of associatesbirthday cards from PAWMENCAP, a school for thespecially challenged, purchase of articles made bythe physically challenged and leprosy affected.World EnvironmentDay on 5th June is observed worldwide and at the Tajhotels it is the EARTH - Environment Awareness andRenewal at Taj Hotels.Each year this day is of huge importance wherein activitiesinvolving associates are intended and achievementsby the hotels in areas like reducing water consumption,saving electricity and waste managementis dealt with. Activities included an Eco-walk in whichassociates of our hotels participated in solidarity forOur Planet Earth, sapling plantation, pollution checkfor guests and associates vehicles, sales by organizationswho promote and make environment friendlyproducts and to add a delicious Green Menu at thestaff cafeteria.

ITC :-Corporate Social Responsibilityprogrammes primarily in the economic vicinity of itsoperations towards making a meaningful contribution tosustainable and inclusive growth.Company has been involvedin the creation of on and off-farm sustainable livelihoodopportunities which empower stakeholder communitiesto conserve and manage their resources. A recentinitiative in this direction has been the dairy development programme.

KamatHotels :-The Orchid along with the Municipal Corporation of Greater Mumbai has initiated the Nirmalya Project wherein Nirmalya generated duringthe Ganesh festival is collected, segregated and converted into valuable vermicompost to ensure that the Nirmalya is not dumped. NirmalyaProject was acknowledged by granting The Golden Star- Most Admired CSR practice of the Year Award by the Stars of the Industry group.Earth Hour 2013 was observed in The Orchid by switching off non essential lights of the hotel to accomplish the endeavor to mobilize theentire globe to take action against Climate change.Several events namely poster competition, wealth out of waste competition, quiz competition, photography competition, screening ofdocumentaries on the environment, interactive sessions with NGO Green peace on Global warming and conservation of the environmentwere held to increase awareness of environmental issues.A silent rally was conducted by Green team members of The Orchid prior to Diwali to urge the public to reduce air and noise pollution in thecity by not using fire crackers

Sayaji Hotels:-The Companys hotels maintain clean and hygienic environmentand keep strict vigilance on their effluent generation and disposaladhering to standard norms in order to protect the environmentand surroundings.Health and Safety Management System in the Company aims toreduce, eliminate or control workplace hazards and associatedrisks of illness or injuries to the employees, customers andcontractors who might be affected by the Companys workactivities.

The Leela Hotels:-This year, each of the TheLeela property further strengthened partnerships with local NGOs in each destination to ensure charitable donations whereuniforms, books and magazines, kitchen utensils are donated to underprivileged groups and individuals. Each property also launched a TrainingProgramme, named Hunar Se RozgarTak, to create employable skills in the local youth from 18-25 years and who are minimum 8th standard pass.The Company has made substantial investments forimproving energy efficiencies, and also fresh and waste water management in itshotel properties. The Companys hotel in New Delhi has been conferred PlatinumLEED Certification, the first new hotel in New Delhi to be so conferred.The Leela properties to promote greening through plantation, and continued to achieve reduction inenergy and water consumption, waste management while limiting carbon emission.

ChapterExternal EnvironmentControlling Ministry for the Hospitality Industry.Ministry of Tourism, Govt. of India(1)The Ministry of Tourism, is the nodal agency for the formulation of national policies and programmes and for the co-ordination of activities of various Central Government Agencies, State Governments/UTs and the Private Sector for the development and promotion of tourism in thecountry. This Ministry is headed by the Union Minister of State for Tourism (Independent Charge).The administrative head of the Ministry is the Secretary (Tourism). The Secretary also acts as the Director General (DG) Tourism. The office of the Director General of Tourism {now merged with the office of Secretary (Tourism)} provides executive directions for the implementation of various policies and programmes.

Federation of Hotel and Restaurant Associations of India(2)The Federation of Hotel & Restaurant Associations of India, often known by the acronym, FHRAI, is the Apex Body of the four Regional Associations representing the Hospitality Industry. FHRAI provides an interface between the Hospitality Industry, Political Leadership, Academics, International Associations and other Stake Holders. FHRAI is committed to promote and protect the interests of the Hospitality IndustryBy actively seeking better privileges and more concessions for the Industry. FHRAI members are always kept abreast with the latest trade information and trends, statistical analysis and reports on various topics that have a direct impact on the Industry, Government notifications and circulars.FHRAI helps the Hospitality Industry to grow, prosper and keep in pace with the development in the International scenario.With more than 3824 members comprising of approximately 2484 hotels, 1204 restaurants, 132 associate members and the 4 regional associations, FHRAI is truly the voice of the Hospitality Industry that brings several million dollars to the exchequer andemploys more than 17 million direct workers.Hotel Association of India(3)1. Provides information advisory, consultative and representative services to the industry and Government.2. Serves as a national point of reference for the industry in India.3. Functions through a federal three-tier structure at the National level, State level and City level through Voluntary Chapters.4. Acts as a catalyst for industry action in regard to quality, productivity and human resource development.5. It is represented on all major policy making bodies concerned with the industry.6. Organises Seminar, Workshops, Research studies in the interest of the industry.

Legal ViolationsThe Oberoi Group:- The Central Bureau of Investigation on Tuesday carried out searches at residential and official premises of the vice-president of Hotel Oberoi Maidens and employees of the North Delhi Municipal Corporation in connection with alleged graft in clearing unauthorized construction.The case related to the alleged exchange of Rs 10 lakh as bribe to allow an unauthorized construction at the hotel--a 110-year old heritage building in old city--in violation of norms.

TajHotels :-A Mumbai-based pressure group says that the Taj Group of Hotels has violated the law by having only 11 instead of 14 independent directors, most of whom are on the boards of too many companies and are unable to attend shareholder meetings.SES said that if the chairman is a non-executive director, the companies should have at least 50 per cent independent directors on their boards. Its analysis showed that IHCL has 11 directors this year as against 14 last year.A penalty of Rs 25,000 was slapped onTaj Hotelby financial commissioner and deputy commissioner Brijender Singh for not maintaining proper records and using two underage employees to serve liquor on its premises.Key national issues affecting industryIncreasing Utility Costs:Energy costs continue to rise and pose a challenge to the hotel industry. TheSurvey, this year, has revealed a rise of 13% in PAR energy costs (`1,82,067) over that in the previous year(`1,61,479). Additionally, the Survey results show that only 26% of the hotels surveyed have an energymanagement system in place across India (Table 1-10). The rise in Energy costs coupled with the limitedconservation measures employed highlight the dire need for sustainable practices to be used in theindustry.2 HVS is currently tracking a proposed supply of 84,650 branded rooms , of which 60% is actively underdevelopment and is expected to enter the Indian hotel market over the next five years. Given theanticipated increase in hotel room supply, together with a high inflationary environment, HVS reemphasisesthe need for operational efficiency and sustainable practices in order to curtail furtherdecline of profitability. Going forward, companies like HVS Sustainability can assist hotels in improvingtheir financial performance along with the environmental and social one.

Continuing High Manpower to Room ratios: Employee-to-room ratios in India continue to be on thehigher side when compared with global benchmarks, almost twice as much. The all India average ofemployee-to-room ratio stands at 1.6. This can be attributed to the large chunk of four star and three-starhotel respondents, which have an average employee-to-room ratio of 1.7. Typically, hotels in Indiaprovide services and facilities beyond their positioning; hence, they require more manpower.With rising manpower costs, the higher ratios are posing a problem to hotel companies. Hence,companies are now seeking ways to rationalise employee-to-room ratios and cut down on payroll costs,which will improve operational efficiency. Effective manpower management is the need of the houralong with effective training programmes. The training programmes include cross exposure to other

Key initiatives by the government to promote hotel industry(4):-Incredible India CampaignTo promote India as an ultimate tourist destination on the global tourism map, in 2002, GoI promoted the Incredible India campaign in the overseas markets. The campaign was an integrated marketing communication effort to attract tourists to the country. It projected India as an attractive tourist destination by showcasing different aspects of Indian culture, history, spirituality, and yoga. This campaign included visible branding in the outdoor media such as advertising at airports, on trams, taxis and buses and through the print, online and electronic media as well as via participation in travel marts and road shows. The campaign was conducted globally and received appreciation from industry persons and travelers.AtithiDevoBhavahThis is another initiative of the Ministry of Tourism to harness the potential of the tourism industry in India. It aims to create awareness about the effects of tourism and sensitise people about our countrys rich heritage and culture, cleanliness and warm hospitality. It intends to instill a sense of responsibility towards tourists among the stakeholders of the tourism industry. The main components of the campaign are training and orientation of taxi drivers, guides, immigration officers, tourist police and other personnel directly interacting with the tourists, while simultaneously creating brand equity for the trained persons. This concept was designed to complement the Incredible India campaign.References (1) & (4) www.tourism.gov.in(2) www.fhrai.com(3) www.hotelassociationofindia.com

ChapterFinancialsProfitability chart(1):-Taj

2012-132011-122010-112009-102008-092007-08

Profit after tax (after extraordinary/ prior period items)8.7829.3343.3436.2752.7670.42

oberoi

2012-132011-122010-112009-102008-092007-08

Profit after tax (after extraordinary/ prior period items)5112264.557.2170.4217.2

Itc2012-132011-122010-112009-102008-092007-08

PAT74186162 498840613264 3120

Sayaji2012-132011-122010-112009-102008-092007-08

1.143.31-0.365.186.14

Hotel leela2012-132011-122010-112009-102008-092007-08

-433.4618.6338.8841.02144

Kaamat hotels2012-132011-122010-112009-102008-092007-08

-5.660.991.571.395.66

Revenue(2)Taj

oberoi

ItcSayajiHotel leelaKaamat hotels

Revenue (2012-13)254.241,156.75-117.63653.86138.32

Key factors contributing to industry:-Top 10 reasons contributing hotel investments:-1 Aligning with the right people2 Being stable by market cycles3 Understanding your location or the trends thatcould cause it to weaken over time

4 Underwrting assumptions5Understanding with expensive capital6 Getting impacted by cost overruns7 understanding new competition who may be causing an overbuiltmarket environment

8 Managing working capital reserves reduce productquality, value, profit and lifespan

9 Flexible management10 Management, service, and property maintenance

Ratio analysis(3) :-Ratios of hotel Oberoi

Mar '13Mar '12Mar '11Mar '10

Investment Valuation Ratios

Face Value10.0010.0010.0010.00

Dividend Per Share1.003.002.501.50

Net Operating Profit Per Share (Rs)69.7295.8388.5575.53

Profitability Ratios

Operating Profit Margin(%)30.1029.2531.5832.38

Profit Before Interest And Tax Margin(%)23.8022.1423.9224.51

Gross Profit Margin(%)23.8622.4724.2324.69

Cash Profit Margin(%)15.7912.5714.2511.86

Net Profit Margin(%)9.627.016.833.54

Adjusted Net Profit Margin(%)9.627.016.833.54

Return On Capital Employed(%)17.6713.1212.5510.58

Return On Net Worth(%)10.3311.2110.684.98

Adjusted Return on Net Worth(%)10.279.4310.935.93

Return on Assets Excluding Revaluations65.1360.7757.4454.21

Return on Assets Including Revaluations65.1360.7757.4454.21

Return on Long Term Funds(%)17.6918.7717.0416.19

Liquidity And Solvency Ratios

Current Ratio1.150.270.370.34

Quick Ratio1.030.850.620.59

Debt Equity Ratio0.461.882.142.34

Long Term Debt Equity Ratio0.461.011.311.19

Debt Coverage Ratios

Interest Cover2.381.641.771.36

Total Debt to Owners Fund0.461.882.142.34

Financial Charges Coverage Ratio2.992.102.211.73

Financial Charges Coverage Ratio Post Tax2.571.951.961.59

Management Efficiency Ratios

Inventory Turnover Ratio26.3828.21111.04111.23

Debtors Turnover Ratio13.0513.0814.1316.25

Investments Turnover Ratio26.3828.21111.04111.23

Fixed Assets Turnover Ratio0.480.480.450.39

Total Assets Turnover Ratio0.730.550.490.42

Asset Turnover Ratio0.670.540.490.42

Average Raw Material Holding--------

Average Finished Goods Held--------

Number of Days In Working Capital45.7336.8339.4622.65

Profit & Loss Account Ratios

Material Cost Composition8.49------

Imported Composition of Raw Materials Consumed--0.65----

Selling Distribution Cost Composition----8.047.78

Expenses as Composition of Total Sales57.6760.3750.4550.31

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit14.8643.9940.7564.78

Dividend Payout Ratio Cash Profit9.0222.5319.7720.55

Earning Retention Ratio85.0647.6760.2045.62

Cash Earning Retention Ratio90.9575.4780.4580.63

AdjustedCash Flow Times2.719.329.6114.08

Ratios of hotel Taj

Mar 13Mar '12Mar '11Mar '10


Face Value2.002.002.002.00

Dividend Per Share0.501.502.002.00

Operating Profit Per Share (Rs)9.7212.4515.3713.75


Free Reserves Per Share (Rs)----43.5238.90

Bonus in Equity Capital--------






Adjusted Cash Margin(%)13.8920.0824.5324.57

Net Profit Margin(%)3.4511.4616.6215.81

Adjusted Net Profit Margin(%)3.4511.4616.6215.81


Return On Net Worth(%)2.548.6313.5312.45

Adjusted Return on Net Worth(%)3.038.6213.5312.61






Quick Ratio0.920.840.560.39
















Number of Days In Working Capital76.87-15.23-38.03-68.28


Material Cost Composition--------

Imported Composition of Raw Materials Consumed--------




Dividend Payout Ratio Net Profit35.6937.2633.6240.31

Dividend Payout Ratio Cash Profit9.3221.2522.7926.16

Earning Retention Ratio70.0862.7066.3760.21



Ratios for Kamathotel



Face Value10.0010.0010.0010.00

Dividend Per Share--------



Free Reserves Per Share (Rs)----115.09112.65








Net Profit Margin(%)-3.470.601.191.17

Adjusted Net Profit Margin(%)-3.470.601.191.17


Return On Net Worth(%)-2.300.390.810.83

Adjusted Return on Net Worth(%)-5.240.890.140.48






Quick Ratio1.071.803.483.19

















Number of Days In Working Capital68.67363.54521.06480.93


Material Cost Composition--------

Imported Composition of Raw Materials Consumed0.08------




Dividend Payout Ratio Net Profit--------

Dividend Payout Ratio Cash Profit--------

Earning Retention Ratio--100.00100.00100.00



Ratios for Sayaji hotel



Face Value10.0010.0010.0010.00

Dividend Per Share--------



Free Reserves Per Share (Rs)--44.9335.0632.22








Net Profit Margin(%)0.922.94-0.436.27

Adjusted Net Profit Margin(%)0.922.94-0.436.27


Return On Net Worth(%)1.173.44-0.619.54

Adjusted Return on Net Worth(%)1.433.44-0.688.20






Quick Ratio0.481.391.621.98

















Number of Days In Working Capital-119.5551.7083.06129.63


Material Cost Composition9.109.359.496.87

Imported Composition of Raw Materials Consumed--------

Selling Distribution Cost Composition--0.761.170.35



Dividend Payout Ratio Net Profit--------

Dividend Payout Ratio Cash Profit--------

Earning Retention Ratio100.00100.00--100.00



Ratios for hotel Leela



Face Value2.002.002.002.00

Dividend Per Share----0.150.20



Free Reserves Per Share (Rs)---1.6617.1116.46




Profit Before Interest And Tax Margin(%)-3.93-14.2318.2014.29

Gross Profit Margin(%)-3.97-14.6419.1215.36

Cash Profit Margin(%)-44.79-48.6819.6424.44

Adjusted Cash Margin(%)-44.79-48.6819.6424.44

Net Profit Margin(%)-65.623.177.038.87

Adjusted Net Profit Margin(%)-65.623.177.038.87

Return On Capital Employed(%)-0.45-1.282.712.65

Return On Net Worth(%)-35.451.224.374.95

Adjusted Return on Net Worth(%)-35.54-25.434.515.39



Return on Long Term Funds(%)-0.49-1.302.912.74



Quick Ratio0.230.401.210.86




Interest Cover-0.05-0.212.214.02













Number of Days In Working Capital-814.64-348.90108.59-2.72


Material Cost Composition--5.534.254.98

Imported Composition of Raw Materials Consumed36.9933.9023.4017.75




Dividend Payout Ratio Net Profit----17.3921.48

Dividend Payout Ratio Cash Profit----6.308.05

Earning Retention Ratio--100.0083.1880.29

Cash Earning Retention Ratio----93.7892.21

AdjustedCash Flow Times----35.0125.47

References(1) &(2) Balance sheets and P & L account(3) www.moneycontrol.com

ChapterRecent DevelopmentsChallengesVarious challenges/issues faced by the domestic travel and tourism industry in India:1. Lack of proper infrastructure2. Human resources3. Service levels4. Lack of adequate marketing and promotion5. Taxation6. Security7. Regulatory issues8. Opportunities9. Prospect 1. Lack of proper infrastructureInfrastructure needs for the travel and tourism industry range from physical infrastructure such as ports of entry to modes of transport to urban infrastructure such as access roads, electricity, water supply, sewerage and telecommunication. The sectors related to the travel and tourism industry include airlines, surface transport, accommodation (hotels), and infrastructure and facilitation systems, among others.Access and connectivityTo harness Indias tourism potential, several efforts are being taken for opening new destinations and exploring niche segments. However, infrastructure facilities such as air, rail, road connectivity, and hospitality services at these destinations and the connecting cities are inadequate. This remains a major hurdle for development of tourism. Roadways form a vital network in the tourist industry with almost 70% tourists in India travelling by road. Moreover, many tourist circuits depend on roads. Despite numerous efforts to improve road infrastructure, connectivity remains a major problem. There is a greater need for strengthened road and rail network, development of more expressways, and tourist-specific routes to improve connectivity to various locations across different regions.Aviation infrastructure is also critical since it is a major mode of entry for inbound tourism. Passenger traffic is expected to increase in the coming years; however infrastructure facilities at airports are cause for concern. Expansion and development of airports at major gateway cities is underway to cater to the increasing passenger traffic. However, in addition, airport facilities at important secondary cities and tourist destinations also need to be improved to be able to handle greater passenger traffic.AmenitiesAmenities available at various tourist locations and en route need to be improved. These include basic amenities such as drinking water, well maintained and clean waiting rooms and toilets, first aid and wayside amenities (to meet the requirement of the tourists travelling to tourist destinations) such as lounge, cafeteria, and parking facilities, among others.India scores poorly in terms of availability of these infrastructure facilities. Inadequate infrastructure facilities affect inbound tourism and also could lead to an increase in the outflow of domestic tourists from India to other competitive neighboring countries. Hence, for the industry to register healthy growth, issues concerning all the related sectors need to be addressed.2. Human resourceAvailability of skilled manpower is a major challenge faced by the travel and tourism industry, one of the largest employment generators in the country. To sustain growth in the travel and tourism industry, trained manpower/ workforce is required at every level managerial, supervisory, skilled or semi-skilled. Challenges faced at each level are different. At mid and senior management levels, the industry faces talent crunch and at the front-line staff level, although human resources are adequate, a boom in other service industries such as banking, retail, airline and BPO have resulted in shortage of manpower at this level for the travel and tourism industry. Thus, we have a demand-supply mismatch with respect to manpower in the travel & tourism and hospitality sector in India. A study conducted by Ministry of Tourism suggests that existing supply of human resources do not cater to even 40% of the demand. Thus, the industry has no alternative but to fill the void with untrained resources. Such a high proportion of untrained manpower would adversely affect quality of services offered to the tourists.Attrition, shortage of tourism training infrastructure, qualified trainers, and lack of proper strategies and policies for human resource development also affect the industry. The industry needs to address these problems at the earliest.3. Service levelIn addition to tour operators and hotel staff, tourists interact with persons from different backgrounds, occupations and experience. Such people include staff at bus/railway station, immigration staff at airports, taxi/coach operators, ticketing/ travel agencies, small hotels, dhabas/roadside eateries, staff at heritage sites, and tour guides, among others. The degree of service offered by these various stakeholders has a significant impact on determining the tourists overall experience of India as a tourist destination. The government has taken initiatives to promote responsible tourism by sensitising key stakeholders of the tourism industry through training and orientation, to develop a sense of responsibility towards tourists and inspire confidence of foreign tourists in India as a preferred destination. One such major initiative is the AtithiDevoBhava campaign. More such efforts are required to improve the degree of service across various operators.4. Marketing and promotionMarketing and promotion of India as a major tourist destination is critical for the industry to achieve its potential. Lack of adequate budgetary support for promotion and marketing, compared with competing tourist destinations, is a major reason for India lagging behind as a tourist destination. Marketing under the Incredible India campaign helped place India as a good tourist destination on the global tourism map. Indian tourism products are promoted primarily by the Ministry of Tourism with the involvement of state governments through the State Tourism Development Corporations. Newer tourism concepts, which include cruise tourism, adventure tourism, agri tourism or rural tourism, are emerging in India and these require support to develop and flourish. Hence, greater marketing push for these different products is required. To remain competitive in the fiercely competitive field, India needs to change its traditional marketing approach to a more competitive and modern approach. There is a need to develop a unique market position and the brand positioning statement should capture the essence of the countrys tourism products: i.e., they should be able to convey an image of the product to a potential customer.5. TaxationTravel and tourism in India is a high-taxed industry, which makes India expensive as a tourist destination. This is affecting the growth of the industry in India and India is losing out to other low-cost destinations. Inbound tourism is the one most affected. Various taxes are levied across the entire industry right from tour operators, transporters, airline industry to hotels and these include service tax, luxury tax, tax on transportation, tax on aviation turbine fuel (airline industry), and various taxes on transportation. In addition, these tax rates tend to vary across different states in the country.6. SecuritySecurity has been a major problem as well for growth of tourism for a number of years. Terrorist attacks or political unrest in different parts of the country have adversely affected sentiments of foreign tourists. Terror attacks at Mumbai in November 2008 dealt a strong blow to tourism in the country. The terror attacks raised concerns of safety. In addition, insurgency in different parts of the country also mars Indias image as a safe destination. Following the terror attacks in Mumbai, security at tourist spots, airports and hotels has been beefed up to regain confidence of tourists. However, the government needs to take a proactive approach in addressing these issues and in averting the potential impact on the industry.Cybercrime is another major challenge the travel industry faces. Use of Internet in the travel and tourism industry has increased rapidly in recent years and has emerged as one of major segments for online spends. However, some of the biggest frauds have been detected in this segment and the issue of online security has assumed significant importance. While the online travel industry has registered robust growth, major concerns relating to security of online transactions persist. The industry needs to take measures to make the process of online bookings more secure and transparent and also needs to create awareness regarding this.7. Regulatory issuesFor inbound international tourists, visa procedures are seen as a hindrance. A number of countries competing with India for tourists provide visa on arrival. India should provide visa on arrival for more countries or for certain categories of tourists for a specific duration.A number of projects in the tourism infrastructure segment and in the hotels industry are delayed due to non-attainment of licenses and approvals on time. The government recently cleared the long-standing proposal for single window clearance for hotel projects to hasten the process of infrastructure development. Implementation of this proposal would help development of tourism and hospitality infrastructure in the country. There is a greater need for speedier clearances and approvals for all projects related to the industry.

8. OpportunitiesIndias size and massive natural, geographic, cultural and artistic diversity offers enormous opportunities for the travel and tourism industry. The promotion and aggressive marketing measures undertaken by the government is expected to aid influx of tourists. The industry would also benefit from introduction of new forms of tourism and development of niche segments.Medical tourism in India has gained considerable popularity in recent years. India has a major cost advantage in this field compared with other countries. In addition to cost advantages, Indian healthcare industry offers state-of-theart equipment, technological advancement, qualified and experienced medical personnel and a blend of modern and traditional medicines. Thus, medical tourism has immense potential in India.Opportunities also exist in ecotourism, adventure tourism, and cruise tourism. Eco-tourism is increasing in popularity, evident in the development of eco-friendly hotels and tour packages. With increasing environment awareness and consciousness among tourists and given efforts undertaken by the government and private players, the ecotourism segment is expected to record handsome growth in the coming years.India holds immense potential in adventure and cruise tourism. Indias greatest adventure tourism assets are Himalayas and its mighty rivers. The peak period for adventure tourism is the lean period of cultural tourism. Development of adventure tourism can make India a round-the-year tourist destination. The cruise industry is one of the most promising industries in India. However, strong efforts need to be made to develop this industry. Other forms of tourism such as agri tourism, pilgrimage tourism, heritage tourism, and MICE tourism also hold enormous potential.9. ProspectsHealthy economic growth recorded in past few years, especially in the services industry, has led to increase in business travel. Higher disposable income and affordability have increased domestic leisure travel in India. Foreign tourist arrivals in India have also grown. The industrys performance was hit in 2009 due to the global economic slowdown, terror attacks in Mumbai (November 2008) and H1N1 virus. However, the industry has shown signs of recovery in the first half of 2010. This is a clear indicator that the long-term prospects for the Indian travel and tourism industry are bright. India is expected to witness increased tourist activity both in the business and leisure segments in the coming years. International inbound traffic is expected to grow rapidly with increasing investment and trade activity. India has been identified as one of the fastest-growing countries in terms of tourism demand.Impact of Exim policy on hotel industryTHE hotel industry has welcomed the mini Exim policy announcement permitting duty-free imports by the hospitality industry as it would bring down the difference in the rates of food and beverages being charged by five-star and other category of hotels.According to the policy notification issued by the DGFT, heritage hotels, one and two-star hotels and standalone restaurants have been extended the benefits of duty-free imports admissible to the tourism sector. However, the entire benefits will have to be passed on to the customer.Reacting to the announcement, MrLalitSuri, President, Hotel Association of India, felt that the food and beverage intake in the categories covered in the policy is likely to go up. "The discrimination between the rates charged by the five-star hotels and other categories would decrease and it would encourage foreigners to use these hotels," he said.The Secretary-General of the Federation of Hotels and Restaurants Associations of India, MrShyamSuri, said that the measures announced were very good but felt that the statutory requirement of passing on the price benefits to customers was not a fair one. "We are not happy with the clause that hotels must pass on the concessions to the customer as we are already passing on the benefits to them. This kind of clause has not been fixed for any other industry," he said.The Exim policy clearly states that hotels, heritage hotels and standalone restaurants approved by the Department of Tourism and other service providers registered with it would be entitled for duty-free imports equivalent to five per cent of the average foreign exchange earned by them in the preceding three licensing years. For one and two-star hotels and standalone restaurants, the foreign exchange earned through international credit cards only shall be taken into account for entitlement under the scheme.The duty-free entitlement shall be used for import of any capital goods, including spares, office equipment and professional equipment, office furniture and consumables. However, agriculture, dairy products, motor cars, sports utility vehicles and all-purpose vehicles would not be allowed to be imported under the entitlement.

Technology Trends Revolutionizing The Hospitality Industry1.Cloud / Software as a Service (SaaS)Software delivered as a service, rather than held on premise is already a mainstream technology topic and despite being a new concept in the hospitality sector, it is already big news. At Infor, I would estimate around 85% of the queries we see from hospitality companies and hotels include a serious look at cloud computing. Two main factors are behind this.2.MobilityMobile is the new face of computing as devices such as tablets and smartphones revolutionise the way we interact with technology. Hospitality is no exception to this revolution, in some cases leading the way.3.SocialSocial media has had a profound impact upon the hospitality industry. Trip Advisor has become one of the main sources of information for people researching holidays, hotels and leisure facilities. Meanwhile, newer social tools like Facebook or Twitter are quickly becoming just as influential. For any hotel to not at least monitor social media is tantamount to willingly flying blind.4.Personalised systemsCustomers expect their experience within a hotel to be totally personalised to them: from the welcome message on the television screen and food preferences to additional services such as personal training or flowers in the room.5.IntegrationHotels span many functions - from accommodation and event catering to specialised facilities such as golf or health spas. Each of these areas has, traditionally, operated an individual software system. Whilst this approach has delivered specific functionality, it has also led to silos of information.6.GlobalisationThe last major trend currently in the hospitality industry is globalisation. In the 21st century, hotel companies will need to adopt different management approaches to survive and develop amidst high levels of economic uncertainty. As international trade and business expand, there is no question that international links will become more important for the hotel industry. This means that the technology systems in use - especially those in large chains - must account for the global perspective.BIBLIOGRAPHYwww.eihltd.comwww.tajhotels.comwww.itcportal.comwww.khil.comwww.sayajihotels.comwww.theleela.comwww.moneycontrol.comwww.hospitalityindia.comwww.fhrai.comwww.hotelassociationofindia.comwww.tourism.gov.inwww.ibef.orgwww.icra.in

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Final Report on Hotel Industry