Hospitality industry growth and facts

Growth of hospitality and other major industries

BY -Vipin Kumar & Itisha

INDUSTRY PROFILE

It is one of the largest industries in both the global and national contexts.

It involves cooperative relationships with multiple organizations.

INDIA being a economical destination for leisure tourism ,unlimited tourism and untapped business prospects, we can expect green pastures of growth in the year ahead

Current scenario The world travel and tourism

council(WTTC) has predicted that India has potential to become the number one tourist destination in the world, with demand growing 10.1% per annum.

The hospitality industry is poised to grow at a faster rate and reach Rs.1500 billion.

The contribution of the entire travel and tourism sector including hospitality industry in India to Gross Domestic Product is estimated to rise from 8.6% (USD 117.9 billion) in 2014 to 9.0% (USD 330.1 billion) by 2020.

Unique Sales Points

Many higher end hotels in India are realized that their key USP in international competition is not their high-tech facilities, but rather their outstanding staff-to-guest ratios and the longstanding tradition of Indian hospitality as immortalized by "Atithi Devo Bhava".

Hospitality is about serving the guests and to provide them with a "feel-good-effect". Personalized comprehensive service, such as suites having their own personal butler, gives guests that extra feel of being valued by their hosts.

5

Hotel industry in india Foreign arrivals into India: 5 million appx. Vs. 35 million in China

• The two nations were on par 2 decades ago at 750,000 arrivals

Today, Beijing alone has as many hotel rooms as the whole of India

India’s luxury rooms availability is lower than even smaller East Asian

countries

0

10000

20000

30000

40000

50000

60000

70000

80000

HongKong Bangkok Singapore Malaysia India

Source: Compendium of Tourism statistics, WTO

STRUCTURE OF THE INDUSTRY

FIVESTAR DELUX

• Premium & luxury segment

FIVE STAR

• Mid - Market Segment

FOUR STAR

• Mid - Market Segment

THREE STAR

• Budget Segment

TWO STAR

• Budget Segment

ONE STAR

• Palaces & Forts

HERITAGE HOTELS

•Premium & luxury segment

Consumer segments

The business traveler. International and national sports&

game players The leisure traveler. Airline cabin crew.

Users of Hotel Services

Domestic ForeignPilgrims Political Representatives

Students Trade Representatives

Officials Cultural Representatives

Film Stars Educationists

Intellects Sportsmen

Business Executives Business Executives

Tourists Tourists

Market Segmentation in Indian Hotel Industry

05

10152025303540

1.1

39.5

8.1

1.9

19

94.8

1.65.8 6.3

3

DEMAND & SUPPLY SCENARIO

The main reasons for the demand are: India's strong GDP growth. Opening of sectors of economy to private

sector/foreign investment. Strengthening of ties with the developed

world. Reforms in aviation sector. Development of sports and games

scenario.

Supply scenario

According to HVS International Around 10,856 hotel rooms – DELHI Around 9,318 rooms – MUMBAI Around 7,794 rooms - BANGALORE Around 7,408 rooms – HYDERABAD India has a supply and demand mismatch

PROFILE OF SOME OF THE MAJOR PLAYER

The Indian Hotels Company With its subsidiaries collectively known as

TAJ HOTELS ,RESORTS &PALACE. Incorporated by the founder of TATA

Group. First property TAJMAHAL PALACE

HOTEL ,BOMBAY,1903. 83 proprties at 40 locations across INDIA

with an addition 17 international hotels.

INDIAN TOURISM DEVELOPMENT CORPORATION(ITDC)/THE ASHOK GROUP

Established in 1966 as an autonomous public sector corporation.

Entrusted with the task of helping, developing tourism infrastructure and promoting INDIA as a Tourist destination.

It has Elite Hotels , Comfort Hotels ,Classic Hotels.

33 Hotels in 22 Tourist destinations all over INDIA .

ITC/SHERATON CORPORATION

It was lunched on October 18th,1975. First Hotel –CHOLA SHERATON IN

CHENNAI. Currently there are 10 ITC-WELCOME

GROUP SHERATON HOTELS and more in pipe line.

15

ITC’s Hotel Business

ITC-Welcomgroup : a leading hotel chain in India

• Established presence in key business locations

• Over 6000 rooms under 4 distinct brands

Bangalore 292 room luxury hotel launched in October ‘09

Capacity expansion underway at Chennai & Kolkata; plans for other locations also

being progressed.

Fastest growing hotel chain with highest operating efficiency (PBDIT/Net Income

@ 40%) amongst the 3 leading chains

Leverages unique service proposition and international alliance with Starwood

Hotels & Resorts - ‘Luxury Collection’ / ‘Sheraton’

Category Brand PositioningLuxury ITC Hotel: Luxury Collection "Mansions of Luxury"Upper upscale WelcomHotel: Sheraton "Passion for Quality"Upscale - mid-scale Fortune Hotels "Promise of True Value"Heritage WelcomHeritage "Unique Experiences"

16

ITC’s Hotel Business

Manages 34 full service mid-market properties (2000 +

rooms ) under the Fortune Hotels brand

› 21 more hotels in pipeline; room inventory- 4800 appx.

› 100% subsidiary company : Fortune Park Hotels Ltd.

Also operates 60 properties under the ‘WelcomHeritage’

brand in 19 states - Maharaja Heritage Resorts Ltd. 50% JV with

Marudhar Hotels (P) Ltd.

7p’s of ITC

PRODUCT:High class accommodation, food and

beverage and it is a luxury product PRICES:Prices are very high and varies as per the

season PROMOTION:Very effective promotion to the targeted

customers through national and international magazines.

7p’s of ITC

PLACE: located in all metros and follows its own

regional tradition and treats their guests accordingly

PROCESS:Regular maintenance of the room,

keeping the surroundings clean and hygienic

7p’s of ITC

PHYSICAL EVIDENCE:Deep sleep is more than just the right

bed. It is about an environment that soothes all the five senses. Experience our rooms and know how it feels to sleep like a baby again.

PEOPLE:Highly professional

workers ,internationally qualified chefs.

POLICIES & INITIATIVES

HOSPITALITY & TOURISM INDUSTRY development goes hand by hand.

Tourism policy. Governments open skies policy. Foreign Trade policy. FDI in HOTEL & TOURISM INDUSTRY. Other government initiatives.

Govt major policy initiatives include(TOURISM POLICY)

Liberalization in aviation sector. Pricing policy for aviation fuel which

influences international air fare. Rationalization in tax rates in the

hospitality sector. Tourist friendly visa regime. Immigration services. Procedural charges in making available

land for construction of hotels. Allowing setting up a guest house.

Govt open skies policy

Permission for domestic airlines to commence international flights.

Star-up of various low cost carriers.

FDI 100% FDI is permissible in this sector

Other government initiatives

Incredible India Atithie devo bhava Various Infrastructure building initiatives. Rs.5400 million National Highway Project. 5856km Golden Quadrilateral. 7300km North-South and East-West

corriders. Sagarmala project.

Dependability & interdependence

Hospitality

Tourism

Infrastructure

Industrialization

Education

Major developments and Investments

Foreign tourist arrivals (FTA) during the Month of August 2013 stood at 4.74 lakh as compared to FTAs of 4.46 lakh during August 2012, registering a growth of 6.4 per cent.

Foreign exchange earnings (FEE) during the month of August 2013 were US$1.294 billion as compared to FEEs of US$1.306 billion during August 2012 and US$ 1.264 billion in August 2011.

The number of tourists availing the tourist Visa on Arrival (VOA) Scheme during January to August, 2013 have recorded a growth of 29.4 percent. During the period, a total number of 12,176 VOAs have been issued as compared to 9,412 VOAs during the corresponding period of 2012.

Cotnd..

India is expected to receive nearly half a million medical tourists by 2015, implying an annual growth of 30 per cent. The country has received 43.06 lakh foreign tourists during the period January-August 2013. India is perceived as one of the fastest growing medical tourism destination. The number of medical tourists coming to India has registered a growth of 40 per cent in the past six months. The inflow of medical tourists is expected to cross 45 lakh by 2015 from the current level of 25 lakh.

ITC Hotels has tied up with Bahrain-based India-born billionaire Mr Ravi Pillai to manage five of its hotels under the Welcom Hotel and Fortune brands in India and Dubai.

A glance at other industries

Automobile - The Indian automobile industry produced a total 1.69 million vehicles including passenger vehicles, commercial vehicles, three wheelers and two wheelers in August 2013 as against 1.56 million in August 2012, registering a growth of 8.18 percent over the same month last year.

The overall automobile exports grew by 2.03 per cent during April-August 2013. Furthermore, the production of passenger vehicles in India was recorded at 3.23 million in 2012-13 and is expected to grow at a compound annual growth rate (CAGR) of 13 per cent during 2012-2021, as per data published by Automotive Component Manufacturers' Association of India (ACMA).

Agriculture - India has emerged as a major player in the global agriculture market. In the last five years, the country’s agriculture exports have tripled from around Rs 80,000 crore (US$ 12.75 billion) to Rs 2.32 trillion (US$ 33.99 billion), said Mr Sharad Pawar, Union Minister for Agriculture, Government of India.

Total exports of Indian agri and processed food products from April to August 2013 stood at US$ 9,711.09 million as compared to US$ 8,806.41 million during the same period last year, according to the data released by the Agricultural and Processed Food Products Export Development Authority (APEDA).

IT industry -India's IT-business process outsourcing (BPO) industry revenue is expected to cross US$ 225 billion mark by 2020, according to a Confederation of Indian Industry (CII) report, titled 'The SMAC Code-Embracing New Technologies for Future Business.

India is expected to become world's second-largest online community after China with 243 million by June 2014, according to a report by Internet and Mobile Association of India (IAMAI) and IMRB International.

India’s total IT industry’s (including hardware) share in the global market stands at 7 per cent; in the IT segment the share is 4 per cent while in the ITeS space the share is 2 per cent. India's IT and BPO sector exports are expected to grow by 12-14 per cent in FY14 to touch US$ 84 billion - US$ 87 billion, according to Nasscom.

Major difference between hospitality and durable sales

Physical evidence - in terms of touch and feel..services are intagible

Retention plays an important role in hotel sales

Not only product knowledge, thorough knowledge of the process and operation is required

Neither perishable nor replaceable

Tha

nk

You.

.