Final Ppt

Tourism and Hotel Industry in India

Prepared By:

Deepika Garg Anup

Simplepreet Aishwarya

The Indian hotels industry is still in the nascent stages of recovery and is yet to make the transition from an occupancy-led cycle to one supported by rising average room realizations (ARRs)

Visitors are sub-divided into two categories: tourists and same day visitors

It is boom time for India’s tourism and hospitality sector.

The focus of the industry is on the “Atithi Devo Bhavah” campaign, targeted at the inbound foreign tourists in countey. Translated literally it means “Guest Is god”.

Tourism in India is the third largest foreign exchange earner, accounting for 2.5% of GDP.

Overview

The World travel and Tourism Council (WTTC) has named India along with China as one of the most fastest growing tourism industries for the next 10-15 years.

Despite lagging in the basic infrastructure, Indian Tourism Industry has been showing an impressive double- digit growth.

In order to sustain this growth, the Government should invest in infrastructure such as transport and accommodations.

According to Global hotel and hospitality consulting firms, HVS International, the strong performance in the tourist arrivals can be attributed to a strong sense of business and investment confidence in India inspired by :

Current status

India’s strong GDP performance Strengthening of ties with the

developed world, and Opening of sectors of the economy to

private sector/ foreign investment. The efforts made by the Ministry of

Tourism And Culture in the last few years have had a salutary effect on India’s tourism industry.

The Hotel Industry comprises a major part of the Tourism Industry

Prior to 1980’s, the Indian Hotel industry was a slow-growing industry, consisting primarily of relatively static, single-hotel companies.

In 1982’s, after partial liberalization of the Indian economy, it generated tourism interest in India, with significant benefits accruing to the Hotel And Tourism sector, in terms of improved demand patterns.

Growth in the demand for hotels was particularly high during the early 1990s following the initiatives taken to liberalize the Indian Economy in FY1991.

The Hotel Industry

The global hotels industry appears to be now on a path of slow recovery, having coming out of two exceptionally bad years (2009-10)

In India, the demand - or occupancy - led recovery that started with the return of domestic travellers late in calendar 2010, received a boost with foreign tourist arrivals (FTAs) picking up in the subsequent months. The latter half of 2010-11 saw the industry push for higher tariffs, although pricing recovery for the whole of 2010-11 stood at a tepid 5-8%.

INDIAN HOTELS INDUSTRY

International tourists in India

International tourists in India

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 travelers during CY2010.

Although the October 2010 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. 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).

Demand Recovery in India

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.

Expected Scenario in Premium Hotel Segment in Select Indian

Markets Market Demand

DriversProspects Outlook

Mumbai Gateway city and financial capital

Supply likely to be absorbed

Although there is supply lined up in North Mumbai and Navi Mumbai, being a gateway city and the country’s financial centre, demand is likely to be robust.

Bangalore

Foreign IT/ITES business travellers

Oversupply likely in the near term

Bangalore has seen significant room additions in 2009-11 and is likely to see more over the next few years, which would prolong the recovery.

Expected Scenario in Premium Hotel Segment in Select Indian

Markets Market Demand

DriversProspects Outlook

NCR Gateway city Oversupply likely in the near term

While supply is still spilling over from the Commonwealth Games period, the NCR is expecting to add around 5,000 rooms over the next three to four years. This is likely to suppress pricing power. However, over a longer period, growing demand should absorb the supply.

Market Demand Drivers

Prospects Outlook

Pune Foreign IT/ITES business travellers

Heavy oversupply likely

With supply additions still on, the outlook for the next two years is subdued. Pune is one of the few markets that saw occupancies and ARRs decline in Q1, 2010-11 because of supply addition.

Chennai Manufacturing and services sectors

Oversupply likely in the near term

With a strong supply pipeline for 2012 and 2013, the city is likely to experience significant pricing pressure over the next two years. Incumbents with lower cost structures are likely to benefit.

Market Demand Drivers

Prospects Outlook

Hyderabad

Manufacturing and services sectors

Oversupply likely in the near term

This market still has a large supply pipeline and hence recovery is likely to be slow till 2013. Incumbents and new developers with lower cost structures/break-even are likely to benefit.

Goa Domestic and foreign tourists

Supply limited and demand growing

Demand remained strong during the October-May 2011 peak season. Limited supply and foreign tourists are likely to keep the city’s prospects healthy.

Monthly ARR trend in Indian premium hotels

Monthly occupancy trend in Indian premium hotels

Trends in revenue and profits of Indian Hotels Industry

The Hotels in India is broadly classified into 7 categories (five star deluxe, five star, four star, three star, two 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.

(a) Premium and Luxury segment(b) mid-market segment(c) Budget segment(d) Heritage Hotels(e) Others

Structure of the Industry

Hotel Chains Small Chains Public Sector Chains International Hotel Chains Localized Hotel Chains

Major Players in the Indian Hotel Industry

Tourism being a concurrent subject under the indian constitution, both the state and central governments regulates the hotel industry.

(a)Tourism policyThe national tourism policy was formulated in the year 2002, the policy attempts to:

Position tourism as a major engine of economic growth.

Harness the direct and multiplier effects of tourism for employment generation, economic development and providing impetus to rural tourism

Focus on domestic tourism as a major driver of tourism growth

Position India as a global brand to take advantage of the burgeoning global travel trade and the vast untapped potential of india as a destination.

Policies And Initiatives

Acknowledges the critical role of private sector with government working as a pro-active facilitator and catalyst.

Create and develop integrated tourism circuits based on India’s unique civilization, heritage and culture in partnership with states, private sector and other agencies.

Ensure that the tourist to India gets physically invigorated, mentally rejuvenated, culturally enriched, spirtually elevated and “feel India from within”

The government’s major policy initiatives include:

Liberalization in aviation sector Pricing policy for aviation turbine fuel

which influences internal air fares.Rationalization in tax rates in the

hospitality sector Tourism friendly visa regime Immigration servicesProcedural changes in making available

land for construction of hotelsAllowing setting up of Guest Houses.

Allows domestic airlines to commence international flights, start-up of various low- cost carriers and fleet expansion

Booming aviation business is bringing an ever increasing number of passengers to India

(c) foreign trade policy FTP policy announced in 2006 offered

following incentives to the hospitality industry

Hotels and restaurants are allowed to import duty free equipment and other items

(b) Government’s open skies policy

100% FDI is permissible in the sector on the automatic route.

Tourism related industries provide facilities for cultural adventure and wild life experience.

(e) Other government initiatives Incredible India Atithie Devo Bhawa (guests are equal to God) Various infrastructure building initiatives. Encourage religious tourism Other projects are the rupees, 5400 million

National Highway Development Project, the, 5846 Km Golden Quadrilateral and the, 7300 Km north-south and east-west corridors.

(d) FDI in hotel and tourism industry.

There is vast room for growth in tourism industry

The expected growth of the industry in future provides various opportunities to invest in new technologies.

(a) Health Tourism 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 2,50,000 and USD 26,000 in India.

Opportunities and challenges

The key success factors for the hotel industry are mentioned as folllows:

Site and location Positioning Financial flexibility Brand equity

(b) Critical success Factors

Threat of losing foreign tourists to other competing countries.

India is highly prone to prevailing socio-economic and political conditions, which in the long run, is going to negatively impact the tourism industry in India.

The biggest challenge in the Indian Tourism Sector is that of entry of new players like Aman Resorts, Shangri-La Hotels, Four Seasons Hotels and The Hilton Group.

As the number of players increases, the competitive intensity in the sector is likely to increase.

Challenges

The indian tourism product

What’s new ????Infrastructure

Airports Fast trains

Hotels and resorts Recreation facilities

Eg: golf

India business opportunities 5th largest Economy (PPP)

High Growth -250 Middle Class

huge Outbound Market -Growth

huge Infrastructure Investment OpportunitiesTax Incentives Available

Steps taken to accelerate tourism growth

Reduction in entry fee and passenger tax for monuments

Over 17,000 additional international air seat capacity

Touch screen information kiosksMaximizing the use of information technology for

promotion

The 4 P’s of marketing The 4 Ps of marketing are Product ,Price, Place, and

Promotion. Think of each of these as a variable which you control. The idea is to set these variables in such

a way so that sales will take place. You cannot "make" a customer pull out her credit card, but you can

certainly help her in coming to a decision by setting the "right“ price, the retail location, the level

of advertising and even product attributes such as color or perceived quality. You control everything but

the customer itself. These variables are all interdependent. Taken together , they constitute a

certain mix.

PRODUCTIn the hospitality industry the service that the hotel provides and the other products that the hotel provides are the facilities the rooms the

restaurants the hotel has It's fully refurbished guest rooms and highly

personalized service, make you feel comfortable and cared for, miles away from home the product that the rarmadas is into is

always to keep the guests happy who enter and leave their premises

PRICE What is Price? The answer may not be as obvious as one may think.

Price is not just the sticker price or the price invoiced. It goes deeper. the Ramada is one of the only 5 star hotels in Goa that has prices

that even a common man can avail of on grand occasions they have a price tag which varies for different persons requirements may from any walk of life Ramada is a good price package that fits every ones budget due to which they do not face competition from other hotels

PLACEExclusive international 5 star deluxe resort located on colva beach . 186 rooms, 10suites, 6 villas with private balconies overlooking landscaped garden & the ocean And only 3 km from the airport so why wont anyone opt for a better place

than this

PROMOTIONThe Ramada have their advertising on local radios during

great events like valentines day , and the occasions in Goa which is very important . they have shows and discothèques

in which they have freebies like couple entry on 50%discount and etc their promotion is also done thru Indian airlines

which offers tickets and staying packages for Ramada and the rates are so nominal that people cannot resist

Segmentation Is essentially the identification of subsets of

buyers within a market who share similar needs and who demonstrate similar buyer behavior There are many ways that a segment can be considered. For example, the auto market could be segmented

by: engine size, model type, cost, and soon.Hence we see customers are targetted by

psychographics and also by sociocultural factors to a certain extent

Targeting Targeting is the second stage of the process. After the market has been separated into its segments,

the marketer will select a segment or series of segments and 'target' it/them . It's like looking at

a dart board or a shooting target. You see that it has areas with different scores -these are your

segments. Aiming the dart or the bullet at a specific scoring area is 'targeting'

Considering Goa being the hottest tourist location in India, foreigners are the major source of income .

hence their major target market would the foreigners who come to India on a vacation

POSITIONING

POSITIONING IS NOT WHAT YOU DO TO A PRODUCT

ITS IS WHAT YOU DO TO A MIND OF THE PROSPECT

VARIABLES: Factors that cause something to change and vary

INTANGIBILITY:A state of being abstract, as things cannot be

touchedCHANGEABILITY:

A condition of being subject to change or alteration PERISHABILITY:

The probability of the product ceasing to exist or becoming unusable within a limited amount of time

!!!!

Marketing strategies of hotels • Product mix: hotels stay innovative in the

peripheral services • Price mix: the diverse nature and the character

of dishes , involvement of cost and the spending power of the customers

• Place mix: location of the hotel is the most important decision for the hotel

• Promotion mix: advertisement, publicity, sales promotion, personal selling, word of mouth promotion and telemarketing are the components of the hotel strategy

• People: the hotel management should train its people regularly

• Physical evidence

The electronic channel : take a tour online

The best picture of the exotic travel destinations used to be found on the cardboard- cutout displays in the travel agency windows. But these days you and see and find out the destinations about the exciting travel locations online Most cities, states and countries have official travel and the tourism sections on their websites.!!!!WWW.NAMEOF THEPLACE.COM

Swot analysisStrengths:Very good and peaceful location .They have their own beach COLVA which is major tourist attraction.Good services toward customer Rates are much low as compared to their customer 

Weakness:Very far from airport, railway station and from the main city .No major tourist spot nearby except colva beach

Opportunity: As there is boom. in tourisms so opportunity of capturing the market . Major brand Ramada all over the world Support from Kokan government tourisms department If they do more advertisement and promotion then chances of capturing more market shares.ThreatsMajor competition from hotels like Leela, Taj, and holiday inn and Majorda beach resorts

Conclusion As India is rich with culture and heritage, but India is

facing not so good important place in the tourism industry. which can provide 30% to 50% of the G.D.P

of the country. But the government is not taking it very seriously to improve our condition so that the

tourism industry in the country can grow. Today man had money and wanted to see what he had learned and listened from the people. They are ready to pay for entertainment but they should feel that they had enjoyed. Foreign countries are taking the advantage by providing with the attractive offers and simplicity in obtaining tourist visa . They advertise themselves they had formed separate ministry to see that they are advertised and there is increase in the tourist.

1. The Indian Economy India's exponential FDI growth likely to continue Indian demographics, the right fit for global

business audiences Continued growth of projected GDP, at more

than 7% in the years ahead Resilient economy, only marginally affected by

the global financial crisis Exponential service sector growth, with

emergence of BPO, Telecom and other sectors

Ten trends influencing India’s hospitality

2. The Maturing of Indian Hotel Markets Emergence of secondary and tertiary

cities Emergence of micro-markets Continued marketing of Brand India Continued improvement of

infrastructure in Indian cities and towns Ease of attaining Indian visas Development of India's image as a safe,

secure and friendly destination Development and marketing of niche

tourism like medical tourism, religious circuits, adventure tourism etc.

3. Hotel Brand Explosions in India Entry of most major international brands Changing perception of Indian markets as a

lucrative opportunity among international brands Growth of the Indian middle class offering a large

consumer base of more than 1 billion people Educated and well exposed Indian audiences,

likely to accept global brands wholeheartedly Expected emergence of branded budget and

economy hotels

4. India – The MICE Business Opportunity Growth of science and technology related

industries like biotechnology and pharmaceuticals that then host large conferences

Growth of the manufacturing sector Increased interest in India as a travel-

worthy destination Expected emergence of dedicated

convention centres in more cities

5. Hospitality Marketing Trends Broadening of the playing field with entry of many

domestic and international hotel chains Well educated, travelled and experienced customer

base Evolution of the brand from a one-way communication

stream to a two-way one that accommodates customer needs and experiences

Consistent delivery of brand promises and customer experiences

Marketing equations changing in favour of the customer with online channels like Web 2.0 and social networking

6. Hotel Development Costs Likely rationalization of land costs, due to the

recent economic conditions Increased import of material from global

sources, as long as quality goods are available Expected rationalization of costs, with

government intervention in relaxing the license process

Expected rationalization of per key development costs, with entry of brands across all positionings

8. Food & Beverage (F&B) Concepts Rapid growth of standalone restaurants Well-travelled customer open to fine dining

experiences Entry of restaurant-focused funds Focus on Interior design, a priority for

restaurants

9. Manpower - The Human Element Continued good-quality talent crunch Increasing growth opportunities for the global

Indian to relocate to India Continued hiring from and attrition to related

service sectors Expected offerings of Employee Stock Options

and Competitive Healthcare plans by more hotel chains

Innovative solutions to the continued challenge of attracting and retaining trained employees

10. Technology & Hospitality Continued significant contribution of third

party travel websites to hotel reservations Increasing role of Brand.com sites in the

overall sales and marketing strategy of all hotel brands

Increasing reliance on search engine optimization, web advertising and e-marketing

Conclusion India – known the world over as the land of

hospitality – is today in the defining stages of the business of hospitality. While the possibilities for growth are immense, it will take an earnest effort, both from the industry's key stakeholders in the private sector and the relevant government bodies to truly change the Indian hospitality's landscape in the years ahead. Hospitality India has come a long way since 2000; however, it has a steep climb ahead

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