AN ANALYSIS OF CORPORATE COMMUNICATION AT TAJ GROUP OF HOTELS

PROJECT REPORT

Project report submitted in partial fulfillment of the requirement of South Asia University for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION2010

Submitted By

NAME : SELVAGANESH.C

ENROLMENT NO : SAA04M137ELBIHA3

Under the guidance of

Dr. Nirmal Kumar. R. T M.Com.,M.B.A.,AMIBM.,Ph.D.,

SOUTH ASIA UNIVERSITY LONDON

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GEMS B SCHOOL PUDUCHERRY

CERTIFICATE

This is to certify that project entitled “ AN ANALYSIS OF CORPORATE

COMMUNICATION AT TAJ GROUP OF HOTELS is submitted by

SELVAGANESH.C (ENROLMENT NUMBER – SAA04M137ELBIHA3 ), GEMS B

SCHOOL, PUDUCHERRY in partial fulfillment of the first trimester requirement in

Business Communication for the award of the degree Master of Business Administration

and is certified to be an original and bonafide work.

PLACE : Guide Signature

DATE :

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ACKNOWLEDGEMENT

I am indebted to all powerful almighty God for all the blessings he showered on me and

for being with me throughout the study.

I also express with great pleasure and sincerity to record my thanks, gratitude

and honour to Mr. L. Alphonse Liguori-Managing Director, Mr. M. Tamijuddin-Director

academics for their valuable advice and for timely help concerning various aspects of project.

I place on record my sincere gratitude and appreciation to my project guide

Dr. NIRMALKUMAR.R.T for his kind co-operation and guidance which enable me to

complete this project.

I take this opportunity to dedicate my project to our loving faculty

Dr. NIRMALKUMAR.R.T who was a constant source of motivation and I express my deep

gratitude for his never ending support and encouragement during this project.

Finally I thank each and every one who helped me to complete this project.

DATE : SELVAGANESH.C

EXECUTIVE SUMMARY

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Quality is the area where there is no margin of error/compromises especially in case of a services industry where the impression is made right from the first time; every-time and no mistake are acceptable. Thus, since no compromises can be made at the delivering front, a lot of emphasis is laid on cost control measures and perfectionism in terms of service quality. One of the prime areas of concern for any modern day mega-organization is effective management in terms of resource allocation and utilization in a cost effective manner; especially in an organization like one in context – Taj Palace Hotel.

It then reflects the Taj Palace Hotel background, introduction and the important milestones achieved along with the competitive analysis and market positions.

This is followed by a brief review of the working of the various sub- departments of the Finance department at Taj Palace Hotel. The report highlights operational aspects and functions of the sub departments.

The next section of our study deals with a detailed analysis of the various operational expenditures incurred by the hotel. The study revealed startling facts. Major savings in terms of money and resources could be achieved by minor changes in the existing system.

My report deals with two such areas:1) Comparative analysis between hotels.2) Allowances raised at the hotel

The report highlights avenues for cost cutting measures and savings wherever possible. Recommendations on aspects such as better resource utilization and improvements in existing management practices.

CHAPTERS TITLE PAGE

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ACKNOWLEDGEMENT 3

EXECUTIVE SUMMARY 4

CHAPTER-1 INTRODUCTION

1.1 INTRODUCTION TO TAJ HOTEL 8

1.2 NEED OF THE STUDY 10

1.3 OBJECTIVES OF THE STUDY 11

1.4 PERIOD OF STUDY 12

1.5 RESEARCH METHODOLOGY 12

1.6 LIMITATION OF THE STUDY 13

CHAPTER-2 AN OVERVIEW OF TAJ HOTEL

2.1 HOSPITALITY INDUSTRY IN INDIA 15

2.2 COMPANY PROFILE 19

2.3 HISTORY 24

CHAPTER-3 DEPARTMENTAL ACTIVITIES

3.1 FINANCIAL DEPARTMENTAL

ACTIVITIES 43

3.2 PURCHASE DEPARTMENT 43

3.3 RECEIVING DEPARTMENT 435

3.4 STORES 44

3.5 FOOD AND BEVERAGE DEPARTMENT 45

3.6 INCOME DEPARTMENT 46

3.7 CREDIT DEPARTMENT 46

3.8 PAYROLL DEPARTMENT 47

3.9 AUDIT DEPARTMENT 48

3.10 MIS/EDP DEPARTMENT 51

CHAPTER-4 COMPETITIVE ANALYSIS

4.1 FORMULAS USED 54

4.2 MARKET ANALYSIS 54

CHAPTER-5 AN OVERVIEW OF ALLOWANCES IN TAJ5.1 FRONT OFFICE ALLOWANCE 59

5.2 BACK OFFICE ALLOWANCE 62

CHAPTER-6 ANALYSIS 63

CHAPTER-7 CONCLUSION 69

REFERENCES 71

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CHAPTER – 1

INTRODUCTION

1.1 INTRODUCTION TO TAJ HOTEL:

Throughout history, businesses have survived for a long time without any serious understanding

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1.1 INTRODUCTION TO TAJ HOTEL

1.2 NEED OF THE STUDY

1.3 OBJECTIVES OF THE STUDY

1.4 PERIOD OF THE STUDY

1.5 RESEARCH METHODOLOGY

1.6 LIMITATIONS

of what is consumer behaviour; businessmen have managed to produce and sell their products by

only using their intuitive understanding of what consumers want and need. According to Schiffman et

al. (2008, 4-5), before the 1950‟s the market situation had been quite different of what it is

today; the availability of products was limited, and consumers had to conform to the supply. Back

then, businesses produced the products they wanted, and then they tried to convince consumers that

they needed those products. It did not take long until they realised that producing what consumers

actually needed was far more successful than just producing anything they wanted. The late

1950‟s was the turning point when the marketing concept was born. And with it came along

consumer research and the consumer behaviour theories that we know today.

Consumer behaviour was back then quite a new field of study. Marketing theorists had to borrow

from others areas such as psychology, sociology, and even anthropology. Consumer behaviour

intends to give answers to how and why consumers search, purchase, use, evaluate and dispose of

products and services (Schiffman at al. 2008, 3).

Consumer learning is a branch of consumer behaviour that focuses in the learning processes of

consumers. This area has been of great interest to marketers since this knowledge represents an

important opportunity to teach individuals in their role as consumers. By teaching them, marketers can

ensure that their products and services will be preferred over their competitors.

In today‟s competitive and ever-changing business environment, it is more and more important for a

company and its brand(s) to be able to stand out from the competitors, and to offer something

genuinely unique for the consumers. In addition the increasingly growing volume and spread of

marketing and advertising is creating a big challenge for the companies to either create awareness of

their new products or keep the interest of consumers in their current products.

Learning theorists do not completely agree on how learning takes place, and therefore it has been

difficult to come up with a general definition of learning. From a psychological perspective, learning

refers to a relatively permanent change in behaviour which comes with experience (Solomon, M.,

Bamossy, G., Askegaard, S. 1999, 65). From the marketing point of view, consumer learning is the

process by which individuals acquire the purchase and consumption knowledge and experience

they apply to future related behaviour (Schiffman, L., Bednall, D., O‟Cass, A., Paladino, A., Ward, S., 8

Kanuk, L. 2008a, 185).

Individuals do not always learn by direct means; they can also learn by observing events that affect

other people around them, or even unconsciously when they are not even trying to. This

unintentional acquisition of knowledge is known as incidental learning. The concept of learning is

vast, and ranges from consumer‟s simple association between stimulus and response to a complex series

of cognitive activities. Psychologists who study learning have advanced several basic theories to

explain the learning process. In this work we will handle the main learning theories that are divided

into two major categories: behavioural and cognitive learning.

1.2 NEED OF THE STUDY:

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To clearly understand the working of a modern day mega-organization thereby practically applying the theoretical knowledge gained during the undergoing course. In all, exploring the real corporate world.

1.3 OBJECTIVES OF THE STUDY:

The objectives of the study are as follows. 10

1. To study in depth, the various departmental activities in Taj Hotel.

2. To make an objective assessment of the various analysis.

3. To find out the various allowances in Taj Hotel.

 

1.4 PERIOD OF THE STUDY:

The period of the study limited for a span of three months.

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1.5 RESEARCH METHODOLOGY:

Research methodology is a very important aspect of any research. Sampling technique

has been used. Random sampling is used in the study. The research design of this project is as

follows.

a) Literature survey

b) Compilation of data

Primary data and secondary data have been assiduously collected. As mentioned earlier

the random sampling technique has been used.

In short the research design has been closely followed for the project.

1.6 LIMITATIONS OF THE STUDY:

It is hereby stated that the study was conducted for a span of three months and

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as a result the inferences and the conclusions are slightly biased due to the constraint of

the short time span.

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CHAPTER – 2

AN OVERVIEW OF TAJ HOTEL

2.1 HOSPITALITY INDUSTRY IN INDIA:

India’s tourism and hospitality industry is often referred to as one of the greatest 14

‘socio-economic’ success stories. The industry is a source of employment generation to about 2.9% of the total employment in the organized sector (Source: WTTC and the Tenth Five-Year plan). The annual revenue of the hospitality industry alone is estimated at Rs. 60 billion (Source: deduction based on Expenditure Tax). Of this revenue earned by the hotel industry, 56% comes from the Five Star Deluxe and Five Star categories. Today, India has over 85,000 hotel rooms (approved by the government), ranging from the Five Star Deluxe category to heritage properties to one star property (Source: Department of Tourism).

The hotel industry is a derived demand business, which is directly co-related to the internal economic progress. Positive signals on liberalization coupled with a GDP forecast of 8% are bound to stimulate demand. In addition, India’s emerging status as an IT superpower has further established her firmly on the itinerary of the world’s most hard-to-please business travelers. Changing lifestyles mean that more middle-class Indians are travelling, eating out and attending banqueting events at luxury hotels.

The first half of the fiscal is usually lackluster for the hotel industry with more than 60% of the revenue pouring in only in the second half. However, with the robust performance of hotel companies in FY10, the difference between lean season and the peak season has reduced to some extent.

a).INTERNAT IONAL TOURIST ARRIVAL P ATTERN:

Indian tourism continues to touch new heights with international tourists arrival growing by about 13% and foreign exchange earnings growing by about 19% in 2009. For the full year 2009, 3.8mn tourists visited the country while the number during the corresponding period of last year was 3.4mn. Similarly, foreign exchange earnings through these arrivals were Rs262bn against Rs220bn during the corresponding period of last year.

India has emerged as the fastest growing tourism, with 8.8% annual growth rate while the global tourism is growing at about 5% annually. As per the World Travel and Tourism Council (WTTC), India has potential of earning US$24bn annual foreign exchange earnings through tourism by 2015.

The following table demonstrates trends in growth of international tourist numbers in India.

b).TOURISTS ARRIVAL DURING THE YEAR 2010

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Month 2007

2008

2008

2008/07 (%gr

2009/08 (%gr

JAN 274215 317510 363631 15.8 14.5

FEB

262692 317498 372269 20.9 17.3

MARCH 218473 272796 341554 24.9 25.2

APRIL 160941 219064 255212 36.1 16.5

MAY 141508 180314 223258 27.4 23.8

JUNE 176324 217463 252258 23.3 16

JULY 225359 269171 288921 19.4 7.3

AUG

204940 263511 281670 28.6 6.9

SEPT 191339 235970 262925 23.3 11.4

OCT

260589 300944 321980 15.5 7

NOV

290583 355609 383373 22.4 7

DEC

319271 417527 463613 30.8 11

TOTAL 2726234 3367377 3810573 23.53

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c).F OR EI GN E XCHANGE E ARN I NGS ( I N RS B N) DUR I NG T HE Y E AR 2005 I N I ND I A

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PERCENTAGE CHANGEMonths 2007(amt) 2008 (amt) 2009 (amt) 2008/07 (%) 2009/08(%)

Jan 15 20 25 32.8 26.4Feb 14 20 26 38.6 29.8March 12 18 23 48.3 29.0April 12 14 17 23.4 18.8May 10 11 15 13.0 27.7June 13 17 20 31.4 17.8July 15 1 20 23.3 10.1Aug 14 18 20 33.8 9.6Sep 13 16 18 26.0 15.9Oct 14 18 21 26.4 18.8Nov 16 24 27 50.7 11.8Dec 17 26 30 48.7 15.3Total 164 220 262 34.0 18.8

The above table clearly indicates the quantum of transactions in foreign exchange, largely owing to the rise in foreign tourists in India. There has been a consistent and good growth in foreign exchange trends over the past 3 years. The table suggests the huge potential for tourism in India. This idea is also strengthened by the fact that Indian economy is booming (so more business travelers) and the common wealth games are to be held in India. This opens up huge avenues and opportunities for Indian five star hotels to grow and expand.

d).RISE IN AVERAGE ROOM REVENUE IN INDIA:

Robust growth in ARR and OR throughout the country was driven by business as well as leisure travel. While, cities like Goa and Jaipur witness higher inflow of foreign leisure travelers during this season, Mumbai, Delhi, Bangalore and Hyderabad

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continue to buoy with rise in business travel and increasing MICE activities.

Bangalore, the costliest city in the country and third most expensive city in the world is expected to see a17-20% rise in ARR at Rs10,700 to Rs12,000 with the occupancy level of about 80-82% during the quarter ended December 2009. Similarly, Goa is expected to report ARR between Rs 4,250 to Rs4,500 with an occupancy level of about 58-60% during the same period.

APR DEC-09 APR-DEC09 E GROWTH (%)

ARR OR ARR OR ARR 0R

MUMBAI 5080 70.0 5680 71.5 11.8 2.1

DELHI 4986 74.0 6030 75.2 20.9 1.4

BANGALORE

9022 79.9 10580 81.0 17.3 1.4

KOLKOTA 3379 65.0 3480 72.1 3.0 10.8

GOA

4112 55.7 4150 58.2 0.9 4.1

CHENNAI 3696 65.9 4560 72.0 23.4 9.3

Source: Industry data and IIL estimates

e).R I S I NG AV E RAGE ROOM R E V E NU E : DR I V E S T HE GROW TT H I N R E V E NUE:

We expect a 15-20% hike in room rates during the second half of the fiscal by all the companies over the previous quarter. Revenue of the companies is expected to rise on the back of increase in room rates across the properties while occupancies are expected to remain more or less stable.

f).INDUSTRY OCCUP ANCY RATE AND AVERAGE ROOM REVENUE:

An overall booming hotel industry and Q3 FY10 being the peak season, hotels across the country witnessed strong growth in ARR and OR. During the quarter under review average room rates in the seven major cities rose by 25% yoy to Rs6, 034 while OR grew by 9% yoy at 72%. Aggregate revenues of the 5 leading players in the sector

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have registered a 29% CAGR. Revenue growth has been driven by higher occupancies and firm ARR.

g).GROW T H I N AV E RAGE ROOM R E V E NUE AND OCCU P ANCY RA T E I N M A JOR C ITIE S DUR I NG F I NANC I AL Y E AR 2010:

Strong revenue growth driven by higher room rates:

A large part of the growth in Q3 for the universe under our coverage has come through ARR increases. ARR for Indian Hotels Company grew by 35% yoy at Rs8150 while occupancies were down a percentage point at 74% in Q3 FY10 due to company’s focus on improving Rev PAR.

FY10 with a 27% yoy growth in ARR at Rs11485 while OR was down 4% yoy at 74%. For 9M FY10EIH Ltd reported ARR of Rs7, 550 with 64% occupancy against 62% in the same period previous year. Our universe of 5 companies posted a 29% yoy growth in revenue at Rs7.6bn in Q3 FY10.(Refer table above)

*yoy = year on year**ARR = average room revenue***OR= Occupancy Rate

2.2 COMPANY PROFILE:

The Indian Hotels Company Limited (IHCL) and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces and is recognised 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 Taj

Mahal Palace Hotel, Bombay in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003.

Taj Hotels Resort and Palaces comprises more than 60 hotels in 45 locations across

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India with an additional 15 international hotels in the Malaysia, United Kingdom, United States of America, Bhutan, Sri Lanka, Africa, the Middle East and Australia.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.

IHCL operate in the luxury, premium, mid-market and value segments of the market through the following:

Taj (luxury full-service hotels, resorts and palaces) is our flagship brand for the world’s most discerning travelers seeking authentic experiences given that luxury is a way of life to which they are accustomed. Spanning world-renowned landmarks, modern business hotels, idyllic beach resorts, authentic Rajput palaces and rustic safari lodges, each Taj hotel reinterprets the tradition of hospitality in a refreshingly modern way to create unique experiences and lifelong memories.

Taj also encompasses a unique set of iconic properties rooted in history and tradition that deliver truly unforgettable experiences. A collection of outstanding properties with strong heritage as hotels or palaces which offer something more than great physical product and exceptional service. This group is defined by the emotional and unique equity of its iconic properties that are authentic, non- replicable with great potential to create memories and stories.

Taj Exotica is our resort and spa brand found in the most exotic and relaxing locales of the world. The properties are defined by the privacy and intimacy they provide. The hotels are clearly differentiated by their product philosophy and service design. They are centered around high end accommodation, intimacy and an environment that allows its guest unrivalled comfort and privacy. They are defined by a sensibility of intimate design and by their varied and eclectic culinary experiences, impeccable service and authentic Indian Spa sanctuaries.

Taj Safaris are wildlife lodges that allow travelers to experience the unparalleled beauty of the Indian jungle amidst luxurious surroundings. They offer India’s first and only wildlife luxury lodge circuit. Taj Safaris provide guests with the ultimate, interpretive, wild life experience based on a proven sustainable ecotourism model.

Upper Upscale Hotels (full-service hotels and resorts) provide a new generation of travelers a contemporary and creative hospitality experience that matches their work-hard play-hard lifestyles. Stylish interiors, innovative cuisine, hip bars, and a focus on technology set these properties apart.

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The Gateway Hotel (upscale/mid-market full service hotels and resorts) is a pan-India network of hotels and resorts that offers business and leisure travelers a hotel designed, keeping the modern nomad in mind. At the Gateway Hotel, we believe in keeping things simple. This is why, our hotels are divided into 7 simple zones- Stay, Hangout, Meet, Work, Workout, Unwind and Explore.

travel often means more hassle than harmony, more stress than satisfaction, modern travelers are looking for smarter choices. Driven by our passion for perfection, we welcome our customers to a refreshingly enjoyable and hassle-free experience, anytime, everywhere. Offering the highest consistency in quality, service and style we set new standards and take the unwanted surprises out of traveling. Our warm welcomes make our guests feel at home, away from home and our crisp and courteous service empowers them to get more done with greater effectiveness and control. And through our unrivalled network we provide service that is effortless, simple, never overwhelming, always warm.

Ginger (economy hotels) is IHCL’s revolutionary concept in hospitality for the value segment. Intelligently designed facilities, consistency and affordability are hallmarks of this brand targeted at travelers who value simplicity and self-service.

Taj Hotels Resorts and Palaces is committed to replicate its domestic success onto international shores with plans to build an international network of luxury hotels, which will provide an exemplary product- service combination and in the process create a global brand. The current international portfolio includes luxury resorts in the Indian Ocean, business and resort destinations in the Middle East and Africa, serviced apartments in the UK, the first hotel in Australia and three a top-end luxury hotels in the US.

Throughout the Company’s expansion, its mandate has been twofold: to infuse a sense of Indian heritage and culture within each diverse property, while also anticipating the needs and desires of the sophisticated traveller. Over the years, the Taj has won international acclaim for its quality hotels and its excellence in business facilities, services, cuisine and interiors.

The Taj strengthened its presence in the Indian Ocean rim with the Exotica Brand. The Taj Exotica was evolved as part of Taj Hotels Resorts and Palaces intent to position it as a brand that is clearly differentiated by its product philosophy and service design. The Taj Exotica Resort and Spa, in Maldives is centered on high-end accommodation, intimacy and an environment that allows its guest’s unrivalled comfort and privacy.

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Taj Hotels further expanded its global footprint by securing management contracts at Palm Island, Jumeirah in Dubai, Saraya Islands in Ras Al Khaimah, Aldar Group in Abu Dhabi, UAE Langkawi in Malaysia and Thimpu in Bhutan. The most significant additions to the portfolio have been The Pierre, the iconic landmark hotel on New York's Fifth Avenue, Taj Boston and Blue, Sydney.

The presence of Taj Hotels Resorts and Palaces internationally has been developed through a network of Taj regional sales and PR offices in the United Kingdom, France, Germany, Italy, Dubai, Singapore, Australia, Japan, Russia and the United States of America.

At the Taj Hotels Resorts and Palaces luxurious living and fine dining find common ground. Whether it is introducing exotic world cuisines to India or taking authentic Indian fare to the world, the Taj Hotels Resorts and Palaces is renowned for the eclectic culinary experiences it brings to its guests. Through a vast repertoire of award-winning restaurants, legendary recipes from royal kitchens and celebrated food festivals, the Taj has pioneered innovation in fine dining across the world.

Taj Hotels also promise a whole new experience of tranquillity and total ‘wellness’, through Jiva Spas a unique concept, which brings together the wisdom and heritage of the Asian and Indian Philosophy of Wellness and Well-being. Rooted in ancient Indian healing knowledge, Jiva Spas derive inspiration and spirit from the holistic concept of living. There is a rich basket of fresh and unique experiences under the Jiva Spa umbrella of offering, Yoga and Meditation, mastered and disseminated by accomplished practitioners, authentic Ayurveda, and unique Taj signature treatments. Royal traditions of wellness in service experiences, holistic treatments involving body therapies, enlivening and meaningful rituals and ceremonies and unique natural products blended by hand, come together to offer a truly calming experience.

IHCL operates Taj Air, a luxury private jet operation with state-of-the-art Falcon 2000 aircraftsdesigned by Dassault Aviation, France; and Taj Yachts, two 3-bedroom luxury yachts which can be used by guests in Mumbai and Kochi, in Kerala.

IHCL also operates Taj Sats Air Catering Ltd., the largest airline catering service in South Asia, as a joint venture with Singapore Airport Terminal Services, a subsidiary of Singapore Airlines.

Additionally, it operates the Indian Institute of Hotel Management, Aurangabad since 1993. The institute offers a three-year diploma, designed with the help of international faculty and has affiliations with several American and European

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programmes.

C O R PO RA TE S U ST A INA B I L I TY A N D S OC IA L R E S PO N SB I L I T Y: As a part of Tatas; India’s premier business house; we; at Taj Hotels, have always believed in society and environment being integral stakeholders in our business along with our shareholders, customers, vendors and others. Over the last decade, the movement towards ecologically sound tourism has gained urgency and importance across the globe and we recognize that responsible practices in vogue are as diverse as the geographies.

We promote corporate citizenship through our strategic public-private partnerships which encourage building livelihoods of less-advantaged youth and women. The causes we promote include reducing malnutrition, promoting indigenous artisans and craftsmen and enhancing employability of identified target groups by sharing our core competencies as a leading hospitality company. We encourage training and development of differently abled youth.

We at Taj have the unique scope and opportunity to develop raw potential into a skilled workforce that is immediately employable by various players in the industry. A majority of our community projects are focused around extending our key strengths in food production, kitchen management, housekeeping, customer service and spas to promote economic empowerment of candidates from vulnerable socio- economic backgrounds. We are fully committed to the cause of building a sustainable environment by reducing the impact of our daily operations on the environment and improving operational efficiencies, resource conservation, reuse and recycling of key resources.

A g li mp s e of i nd i cat i ve projects undertaken by Taj group

Our sixth C orporate Su s ta i n a b ili ty R eport was submitted to the United Nations Global Compact society in August, 2009. The United Nations Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, safety & security, environment and anti-corruption. This Corporate Sustainability report also serves as our GRI (Global Reporting Initiative) as well as Triple Bottom Line report. The report focuses on identified priorities at IHCL and responds to key stakeholder

needs. We plan to continue and further strengthen our commitment to the environment and societies in which we operate.

We believe in continuous learning and sharing and would be delighted to have

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your thoughts and suggestions.

EARTHIn an endeavour to reinstate its vision and efforts to boost sustainable tourism, Taj Hotels Resorts and Palaces presented EARTH (Environment Awareness & Renewal at Taj Hotels) this year. Implementing schemes such as the Gangroti Glacier Clean-Up Expedition, as well as designated Earth rooms, which minimise environmental impact, Taj is one of Asia’s largest group of hotels to commit to energy conservation and environmental management. EARTH has received certification from Green Globe, the only worldwide environmental certification program for travel and tourism.

The Taj began a century ago with a single landmark – The Taj Mahal Palace Hotel, Mumbai. Today, the various Taj hotels, in all their variety and historical richness, are recognised internationally as the symbols of true Indian hospitality. The Company’s history is integral to India’s emergence into the global business and leisure travel community; and looking to the future, Taj Hotels Resorts and Palaces is well positioned to meet the increase in travel activity with the rapid expansion of the Indian economy.

2.3 HISTORY:

The Company was incorporated in 1902 and it opened its first hotel, T he T aj M ahal Pa l ace & T o w er, M u m ba i , in 1903. The Company then undertook major expansion of T he T aj M ahal Pa l ace & T o w er, M u m bai by constructing an adjacent tower block and increasing the number of rooms from 225 to 565 rooms. With the completion of its initial public offering in the early 1970s, the Company began a long term programme of geographic expansion and development of new tourist destinations in India which led to its emergence as a leading hotel chain in India. From the 1970s to the present day, the Taj Group has played an important role in launching several of India's key tourist destinations, working in close association with the Indian Government. The Taj Group has a philosophy of service excellence which entails providing consistently high levels of personalized service and innovative means of improving service quality.

The Taj Group has been active in converting former royal palaces in India into world class luxury hotels such as the T aj L ake Pa l ace in Udaipur, the Ra m bagh Pa l ace in Jaipur and U m a i d Bha w an Pa l ace in Jodhpur. In 1974, the Taj Group opened India's first international five star deluxe beach resort, the Fort A guada Beach Re s ort in Goa. The Taj Group also began its business in metropolitan hotels in the 1970s, opening the five-star deluxe hotel T aj Coro m andel in Chennai in 1974, acquiring an equity interest and operating contract for the T aj Pre s i den t , a business hotel in Mumbai, in 1977, and opening the T aj M ahal H o t el in Delhi in 1978.

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In 1980, the Taj Group took its first step internationally by opening its first hotel outside India, the Taj Sheba Hotel in Sana'a, Yemen and in the late 1980s, acquired interests in the Cr o w n P l aza, L ondon, S t . J a m es Cour t , L ondon and 51 Buck i ngham G a t e L uxury Su it es and A par tm en t s in London.

In 1984, the Taj Group acquired under a license agreement each of T he T aj We s t E nd, Banga l or e , T aj Conne m ara, Chennai and Savoy H o t e l , O o t y , with which the Taj Group made its foray into Bangalore.

With the opening of the five star deluxe hotel T aj Bengal in Kolkata in 1989; the Taj Group became the only hotel chain with a presence in the five major metropolitan cities of Mumbai, Delhi, Kolkatta, Bangalore and Chennai. Concurrently with the expansion of its luxury hotel chain in the major metropolitan cities, the Taj Group also expanded its business hotels division in the major metropolitan and large secondary cities in India.

During the 1990s, the Taj Group continued to expand its geographic and market coverage in India. It developed specialized operations (such as wildlife lodges) and consolidated its position in established markets through the upgrading of existing properties and development of new properties. Taj Kerala Hotels & Resorts Limited was set up in the early 1990s along with the Kerala Tourism Development Corporation. In 1998 the Taj Group opened the T aj E xo ti ca Ben t o t a which strengthened the Taj Group's market position in Sri Lanka. In 2000, the launch of the 56 acre T aj E xo ti ca, G oa and the T aj H ari M ahal in Jodhpur were completed.

In 2000, the Taj Group entered into a partnership with the GVK Reddy Group to set up Taj GVK Hotels and Resorts Limited and thereby obtained a prominent position in the market in the southern business city of Hyderabad, holding three hotels and a major share of the market. In 2001, the Taj Group took on the management contract of T aj Pa l ace H o t e l , D uba i , and has established itself as an up-market hotel in the Middle East region. T he T aj E xo ti ca Re s ort & Spa, M a l d i ves launched the Taj Group into the premium luxury hotel market and since its opening in July 2002, has won several international awards. The Taj Group also obtained licenses to manage and operate two leisure hotels; the Ra w a l - K o t , J a i s a lm er and U s ha K i ran Pa l ace, G w a li or in October 2002.

In September 2002, the Taj Group acquired an equity interest in the former Regent Hotel in Bandra which gave the Taj Group access to the midtown and North Mumbai market. The hotel has since been renamed as the T aj L ands E nd, M u m ba i .

In 2003, the Company celebrated the centenary of the opening of its Flagship hotel, the

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T aj M ahal Palace & Tow er, M umbai.

In 2004 the Taj Group opened We lli ng t on M e w s , its first luxury serviced apartment in Mumbai. In the same year, the Taj Group also launched the first of its "value-for-money" hotels in Bangalore branded 'Ginger', which division has 11 hotels in various locations in India and is owned through its wholly owned subsidiary.

In 2005 the Company acquired on lease T he P i erre , a renowned hotel in New York City, to enter the luxury end of the developed hotel markets internationally. The Company entered into a management contract for Taj Exotica in Palm Island Jumeirah in Dubai to expand its existing presence in the United Arab Emirates.

The Company enhanced its position as an operator of converted palaces by entering into a management contract for U m a i d Bha w an Pa l ace, J odhpur in the princely state of Rajasthan in India. The Company, through a subsidiary, acquired the erstwhile ‘W’ hotel in Sydney, Australia in February 2006 and renamed it as ‘Blue, Woolloomooloo Bay’. To expand its presence in the US market, the Company acquired in early 2007 Ritz Carlton in B o s t on and T aj Ca m p t on P l ace in San Francisco.

Hotels operated by the Taj Group internationally are located in US, Australia, Dubai, Maldives, Malaysia, Sri Lanka, the United Kingdom, Yemen and Zambia.

Scheme of A malgamat ion ("Scheme")

On October 12, 2006, the Board of Directors of the Company approved the Scheme, under Sections 391 to 394 of the Companies Act for the for the amalgamation of Indian Resorts Hotel Limited, Gateway Hotels and Getaway Resorts Limited, Kuteeram Resorts Private Limited, Asia Pacific Hotels Limited, Taj Lands End Limited (Transferor Companies) with the Company. The Scheme was approved by the respective High Courts.

Ra ti ona l e for t he Sche m e of A m a l ga m a ti on:

The Transferor Companies and the Company were engaged in the leisure and business hotels as part of the Taj group of hotels. A consolidation of the Transferor Companies and the Company was therefore expected to lead to greater synergy in operations, a more efficient utilisation of capital and create a stronger base for future growth of business in general and the Company in particular. The amalgamation was expected to result in administrative rationalization, organizational efficiencies, and optimal utilization of various resources.

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Milest ones achieved by the Com pany since incorporat ion are list ed below:

Year Event

1903 The Company opens its first hotel, the "T aj M ahal Pa l ac e " in Mumbai, India.

1974 The Company opens its first five star deluxe beach resort, the "Fort A guada Beach Res ort" in

Goa.

The Company begins business in metropolitan hotels by opening the five star deluxe hotel, the"T aj Cora m ande l " in Chennai.

1980 The Company opens its first hotel outside India, the "Taj Sheba Hotel" in Sana'a, Yemen.

1984The Company entered into a licence agreement to operate the "T aj We s t E nd " in Bangalore, "T aj Conna m er a " in Chennai and the "Savoy" in Ooty.

1989 The Company opens a five star deluxe hotel in Calcutta, the "T aj Benga l ."

1990The Company establishes the Taj Kerala Hotels and Resorts Limited with the

Kerala TourismDevelopment Corporation.

1998 The Company opens the "T aj E xo ti c a " in Bentota, Sri Lanka.

2000The Company establishes Taj GVK Hotels and Resorts Limited with the GVK group to operate three hotels in Hyderabad.

The Company is awarded the management contract for the "Taj Palace ", Dubai.2001

2002

The Company launches the "T aj E xo ti ca S pa and Re s or t " in Maldives.

The Company obtains licences to manage and operate two leisure hotels: the "Ra w a l - K o t " inJaisalmer and the "U s ha K i ran Pa l ac e ", Gwalior.

The Company acquires an equity interest in "Regent Hotel" in Bandra, Mumbai.

2003

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The Company relaunches its flag ship property as the "T aj M ahal Pa l ace and T o w er ."

The Company launches its first luxury serviced apartments, "Wellington M ew s" in Mumbai.

2004

2005

2006

The Company opens its first economy hotel under the brand "Ginger" in Bangalore.

The Company obtains a management contract to operate "T he P i err e " in New York, USA.

The Company entered into a management contract to operate the "Taj Exotica" in Palm Island, Jumeirah, Dubai.

The Company obtained the operating agreement for the "U m a i d Bhavan Pa l ac e "

in Jodhpur. The Company acquires the "W" hotel in Sydney, Australia which is

later renamed as the "B l ue Sydney".

The Company commences operation of its first wildlife lodge at M ahua K othi, Bandhavgarh .

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2007 The Company acquires the "Ritz-Carlton" in Boston, USA which is later renamed as the "T aj Bos ton ."

The Company commences operation of its second wildlife lodge at Baghvan, Pench.

2008 Taj's flagship property in the United Kingdom, 51 Buck i ngham G a t e, T aj Su it es and Re s i dence’s South Indian restaurant, Quilon has received the ultimate culinary accolade - a Michelin star.

Taj Hotels Partner with Saraya Islands to Operate Taj Exotica Hotel in Ras Al Khaimah, UnitedArab Emirates.

Taj Hotels and the Tashi Group join hands to create the new benchmark for premium hotels inBhutan - Taj Tas hi Bhutan.

ALDAR Hotels and Hospitality and Taj Hotels enter into an exclusive agreement involving a number of hotel projects. The first hotel to be developed by ALDAR Hotels and Hospitality under the agreement is a five-star, 500 room luxury resort hotel which will be in a spectacular waterfront location on ALDAR's mega entertainment destination, YAS Island.

The Taj Safaris circuit will be complete in Madhya Pradesh with the addition of two more luxury lodges in Panna, P a s han G arh and Kanha, Ban j aar T o l a.

T he T aj M ahal H o t e l , N ew D e l hi unveils Delhi’s first contemporary Japanese restaurant ‘WASABI by Morimoto’.

Taj Hotels Resorts and Palaces won 2 prestigious awards at The 2008 World Travel Awards: 1) Rajput Suite at T he T aj M ahal Pa l ace & T o w er , India won India’s Leading Suite. 2) T aj L ake Pa l ace, U da i pur awarded India’s Leading Castle & Palace.

T aj B o s t on celebrates the 120th season of summer polo matches at the Myopia Polo Club inHamilton, MA sponsoring the 2nd annual Taj Boston Cup.

Taj International Hong Kong Ltd, signed a management contract with Cuiting Hotspring Hotel Management Company Ltd. Taj will operate the latter’s Temple

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of Heaven Park property in Beijing and the Hainan Hotel project.

Taj Safaris unveiled two new luxury lodges: P a s han G arh and Ban j aar T o l a which will be the third and fourth lodges added to the Taj Safari circuit.

Taj Hotels Resorts and Palaces Introduces Telepresence Services in Collaboration with Tata Communications.

Graze, the Modern European dining restaurant at T ajRe s i dency , the only restaurant in Bangalore to be honoured the coveted Wine Spectator Award of Excellence 2008 from America's leading wine appreciation magazine Wine Spectator.

The Taj M ahal Hotel launches VARQ.

Taj Hotels Resorts and Palaces have won the Condé Nast Traveller UK in 10th Readers' Travel Awards. Taj's luxury properties have been recognised within the following categories: Overseas Business Hotel, the World's Top 100 and Overseas Leisure Hotel in Asia and the Indian Subcontinent.

Taj Hotels Resorts and Palaces unveiled a premium business hotel – T aj Re s i dency T r i vandru m . Enters into a Management contract with Dodla Intenational Limited.

Taj Hotels Resorts and Palaces, launched a new brand “The Gateway Hotel”.

Taj Hotels Resorts and Places has ranked No. 1 in the Best Hotel Chain in India category at the Business Traveller Awards 2008. The spas at the U s ha K i ran Pa l ace, G w a li or and the Ra m bagh Pa l ace, J a i pur have been included among The 101 Best Spas in The World - Tatler Spa Guide2008.

T aj B o s t on is the First United States Hotel and 51 Buck i ngham G a t e, T aj Su it es and Re s i dences is the First UK Hotel introducing Cisco TelePresence Rooms for Public Use Taj Hotels Resorts and Palaces in collaboration with Tata Communications and Cisco.

T aj B o s t on in cooperation with Susan Cole of Boston Assemblies launches Social Style for Children. These etiquette programs for children provide easy access to the social skills essential in daily life.

T he T aj M ahal Pa l ace & T o w er, M u m bai was under siegh during the 26/11

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Mumbai Terror attacks.

The T aj Bo s t on was named the best hotel in Boston and for the second year in a row ranked #22 among the world's top 100 hotels in the latest survey of hotels worldwide by Institutional Investor magazine.

The Taj Hotels Resorts & Palaces 'No room for the Ordinary' advertising campaign for the print media bagged the 2008 PATA Gold Award in the Marketing – Hospitality category and also won a second award – the 2008 Gold Magellan Award.

T he G a t e w ay H o t el A t h w a Li nes Surat has added a new block of rooms to take up its inventory to 208 making it the largest hotel in Gujarat. It also launches three brand new restaurants - "Flow" the all day dining restaurant, "Spice" an Indian specialty restaurant and "T3" a Tea lounge and Deli.

Taj launches The Jiva Spa Boat at T aj L ake Pa l ace, U da i pur .

On December 21st, T he T aj M ahal Pa l ace & T o w er reopens the rooms in the The Taj Mahal Tower.

Taj Hotels Resorts & Palaces announced the opening of their 'Upper Upscale' brand in

Bangalore. The hotel bears a new name and identity: “ V i van t a by T aj - Wh it ef i e l d, Banga l ore ” .

With the announcement of its forthcoming reopening, T he T aj M ahal Pa l ace & T o w er provides further details on the reopening of the Tower Wing. 268 rooms will be available, which include9 Suites and 26 Taj Club Rooms. Exclusive services to commemorate the special occasion of the hotel's reopening have been introduced with the opening of the Tower Wing.

The Taj Group set up a public service welfare Trust fund named - “ T aj Pub li c Serv i ce We l fare T ru s t ” (TPS Welfare Trust), In response to the unprecedented attack on Mumbai between November 26 to 29, 2008, where many people from the security forces, the Police, Fire service, hotel employees, guests of the Taj and general public were killed or wounded.Taj Hotels Resorts and Palaces unveiled a new world-class premium hotel in Chennai – T aj M ount Road .

2009 T aj L ake Pa l ace, U da i pur voted as the winner of the Editor's Choice Award 2008

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for Gallivanter's Guide.

T aj B o s t on awarded 2009 Mobil Four-Star honors in recognition of its gracious and efficient service and luxurious accommodations and public spaces.

Taj Hotels Resorts and Palaces introduces Kefi - the Mediterranean restaurant at T aj M ount Road.

Taj Safaris open doors of its new luxury lodge, Ban j aar T o l a at Kanha National Park from February 18, 2009.

T he P i err e , re-opens on June 1 following a meticulous $100 million renovation to create new guestroom and bath interiors and to reconfigure first floor public areas to accommodate a new restaurant, Le Caprice at The Pierre, as well as 2 East, a new lobby lounge, and a graciously welcoming reception area.

Taj Hotels Resorts and Palaces announce their new premium hotel, "V i van t a by T aj - Pana ji , G o a ", slotted in the "upper upscale" segment.

Indian Hotels Company Limited announced that it is going to acquire a controlling stake in ELEL, the company which holds a long term sub-lease for the land on which the Sea Rock Hotel is located in Bandra, Mumbai, for Rs. 680 crores.

The T aj Re s i dency U mm ed i n A h m edabad migrated to The Gateway Hotels portfolio, making this its third property in Gujarat and the 31st Gateway hotel in India.

Taj launches V i van t a by T aj i n M a l d i ve s .

Karambir Singh Kang, General Manager, T he T aj M ahal Pa l ace & T o w er, M u m bai has been awarded the prestigious Virtuoso Hotelier of the Year Award, 2009 at the Virtuoso "Best of the Best" Hotel Awards held in Las Vegas recently during the Virtuoso's 21st Annual Travel Mart Conference.

T aj L ands E nd introduces 125 new rooms comprising 107 Taj Club rooms and 18 Suites, increasing the inventory to 493 rooms.

The Gateway Hotels has signed a management contract to set up a 125 room hotel on a 16-acre prime location in Shirdi.

Ra m bagh Pa l ace, J a i pur has been voted the Best Hotel in the World by Condé Nast

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Traveller in the Readers Travel Awards for 2009 across travel and industry categories, in the World Top 100. It also tops the list of 'Overseas Leisure Hotels for Asia and the Indian sub-continent'. Scoring an overall 95.62, Rambagh Palace has the 'best ambience/décor' (98.12) and 'location' (96.5) of all hotels in the category.

T aj E xo ti ca Re s ort & Spa M a l d i ves has been ranked 18th best Overseas Leisure Hotel in Middle East, Africa & the Indian Ocean Islands in the Condé Nast Readers' Awards 2009.

T aj Coro m andel relaunches Golden Dragon - The signature Specialty Schezwan restaurant in the city.

T he T aj Pa l ace launches Blue Ginger thus introducing Vietnamese cuisine to

the Delhi. T aj Pa l ace introduces 'The Blue Bar'.

T aj E xo ti ca Re s ort & Spa M a l d i ves has challenged to protect the natural tropical flora and fauna and surrounding blue waters of Emboodhu Finolhu island.

On 26th of November 2009, T he T aj M ahal Pa l ace & T o w er, M u m bai saw the coming together of employees and families of staff members, for a remembrance meeting that paid respects to those who lost their lives last year. There were multi faith prayers held for peace and harmony.

The standalone hotel, previously known as the Ummeid Jodhpur, was migrated to the brand T he G a t e w ay H o t el J odhpur . This is the third Gateway property in Rajasthan after Jaisalmer and Jaipur and the 33rd property in the country overall.

The Taj celebrates the opening of Taj Khazana at T aj L ands E n d , its first signature boutique store in Mumbai.

T he T aj M ahal Pa l ace & T o w er, M u m bai announced the reopening of the iconic restaurant Golden Dragon on the 25th of November 2009.

The legendary Wasabi and the historical Harbour Bar at T he T aj M ahal Pa l ace & T o w er, M u m bai reopened their doors on Dec 3, 2009.

The Indian Hotels Company Ltd announces its foray into Srinagar, in Jammu and Kashmir. A management contract for a hotel under the upper upscale brand Vivanta by Taj was signed on, December, 10, 2009 at Srinagar with SAIFCO Hill Crest Hotels Pvt. Ltd, part of a well-known business house in the state.

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Taj Hotels Resorts & Palaces has been recognised for its excellence and service for its properties - T aj E xo ti ca Re s ort & Spa M a l d i ves and T aj We s t E nd Banga l ore – at the Leading Hotels of the World Annual Convention held in Venice, Italy in November 2009.

T he U m a i d Bha w an Pa l ace, J odhpur has been voted the Hotel Of The Year by the Gallivanter'sGuide Editor’s Choice Awards.

Taj Hotels Resorts and Palaces, one of Asia's largest and finest group of hotels, and VICTORIA-JUNGFRAU COLLECTION, an exclusive hotel group comprising four of Switzerland's leading luxury hotels have entered into a strategic joint marketing alliance to develop cross-promotional opportunities for both companies to harness each other's strengths in their respective markets.

Taj Hotels Resorts and Palaces announced the opening of T aj Cape T o w n . This new luxury hotel in the historic city of Cape Town is a joint venture between Indian Hotels Company Ltd and city centre developers Euro cape, with the investment in the project topping R500 million.

2010- T aj H ari M aha l , J odhpur won the award in 'Hotel Providing Best Facilities for Differently Abled guest' category. Chef Ananda Solomon, Executive Chef, T aj P re s i dent M u m bai and Corporate Chef Taj Group of Hotels along with Chef V.K. Chandrassekaran, Executive Chef T aj We s t E nd, Banga l ore has been awarded as 'Best Chef in India' in the National Tourism Awards 2008-2009 by The Ministry of Tourism, Government of India.The Indian Hotels Company Ltd announced a new hotel in North-East India, with the unveiling the foundation stone for Vivanta by Taj - Guwahati, Assam.

O r g a n i z a t i o n a l S t ru c t u re o f Ta j Ho t el :

Board of D i rec t ors Ratan N. Tata ChairmanR. K. Krishna Kumar Vice ChairmanJ. J. BhabhaN. A. SoonawalaS. K. Kandhari K. B. Dadiseth Deepak Parekh Jagdish Capoor Tejendra Khanna Shapoor MistryRaymond N. Bickson Managing DirectorDev Bajpai Company Secretary

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Co mmit t ees of t he Board A ud i t Co mmit t ee S. K. Kandhari ChairmanDeepak ParekhJagdish Capoor

Re m unera t i on Co mmitt e e Jagdish Capoor ChairmanR. N. TataR. K. Krishna KumarN. A. Soonawala

Reg i s t ered O ff i ce Mandlik House, Mandlik Road, Mumbai 400 001. Tel: 6639 5515Fax: 2202 7442

Share D epar tm ent Mandlik House, Mandlik Road, Mumbai 400 001. Tel: 2202 6260Fax: 2202 7442Email: s hares .dept@ tajhote ls .com

Solicitors

Mulla & Mulla & Craigie Blunt & CaroeUdwadia and Udeshi

A ud it ors S. B. Billimoria & CompanyN. M. Raiji & Company

BankersThe Hongkong and Shanghai Banking Corporation Ltd. Standard Chartered Grindlays BankCitibank n.a.Website: www .tajhotels .com

M anage m ent Raymond N. Bickson Managing DirectorAnil P. Goel Sr. Vice President - Finance

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Ajoy K. Misra Sr. Vice President - Sales & Marketing Yogi Sriram Sr. Vice President - Human Resources Prakash Shukla Sr. Vice President - Technology & CIORajiv Gujral Chief Operating Officer & Sr. Vice President-

- Mergers, Acquisitions & DevelopmentFranz Zeller Sr. Vice President & Chief Operating Officer

Luxury SBU - InternationalAbhijit Mukerji Chief Operating Officer - Luxury SBU - India Jyoti Narang Chief Operating Officer - Leisure SBU Jamshed S. Daboo Chief Operating Officer - Business SBUDev Bajpai Vice President (Legal) & Company Secretary

Only f or Taj Hot els:

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Restaurants at Taj Palace Hotel:

Blue Ginger:

As a fitting first, the Taj Palace introduces Vietnamese cuisine to the capital through the worldly- venerated Blue Ginger-

Experience the brand new culinary journey of the unexplored land of Vietnam, with the launch of ‘Blue Ginger’- capital’s contemporary Vietnamese restaurant. Indeed, with it, the Taj Palace further consolidates its position as the soul of style cuisine. Blue Ginger is a perfect place to enjoy the ultra- fresh flavors of Vietnamese cooking by International Vietnamese Chefs- Chef Chau Tan Hai and Chef Dao Thi Bich.

Visually stunning in every way, Blue Ginger is all set to make an ever lasting impression on the global palate. In bringing Blue Ginger to the capital, The Taj has once again, reinforced its reputation for introducing novel food concepts to Delhi.

Food affaire….

Blue Ginger fare brings together an aromatic blend of flavors drawn from Vietnam's past. The low- calorie, light and tantalizing, food adds allure to the exhaustive menu, which includes plenty for vegetarians, salad, soups, grilled curries and stir fries.

Grand Master Chef Hemant Oberoi terms it as “nouvelle cuisine of Asia or Mediterrasian cuisine”. The menu at Blue Ginger is contemporary, influenced by Chinese, Indian, Thai and French food, yet has a very distinct flavors and texture of its own. The food could be classified into three categories- North Vietnamese which is traditional and reflects a Chinese bend; central reflects the monarchy and northern cuisine is modern and trendy influenced by French and Indian bend like baguettes with curries. It also has herbs like mint, cilantro, lemon grass, red chilies from Cambodia and Thailand. Blue Ginger has a balanced flavour- includes sweet sour and regular food.

A wide array of selections ranging from cold appetizers to hot ones, from soups to curry and stew, from main course to grills, from rice & noodles to the tempting desserts is available. ‘Pho’ soup meal which includes noodles, vegetables and chicken is a must try at this world class restaurant. At Blue Ginger, both freshness and fusion take root. The result is yet another dining experience at the Taj Palace that promises to be first rate.

Décor…

To set the perfect mood for an evening, Blue Ginger is set against the internal foyer

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space, which allows guests to access the Blue Ginger dining room. The green marble floor punctuated with a yellow-oche oil painting, reminiscent of the classic green and oche is an ode to colonial architecture of Hanoi. It offers a massive feature wall of raked granite with tea candle niches, and undulating stones for an unforgettable dining experience. Four booths are raised on a platform along the innermost wall of the space, allowinga remarkable view over the new bar and out to the gardens beyond. Dusted plum metallic pillows that resemble the bones of a fish, shimmer against the glass mosaic wall. Table tops are inlayed with mother- of-pearl, and set on bronze legs.

A series of custom pendant lamps are constructed from mirrored silver glass beads and elaborated with ivory silk tassels with onyx beads and cast nickel fish motifs. The pendants hang in the foyer entry and the Private Dining Room. Fibre optic chandeliers represent rain 'frozen in time'. Thousands of hands cut mirrors line the rear wall, fracturing the light from the chandeliers into millions of sparkling points of light. The silver beaded chandelier in the foyer makes a magnificent statement of hand crafted luxury. Bespoke cast bronze sculpture of 56 fish in the main dining room is created specially for Blue Ginger.

A private dining room seating 12 is located off the main hall. The center-piece is a mother-of-pearl inlayed dining table and a beaded chandelier- amazing works of hand-crafted art in them. Walls are upholstered in gold infused woven bamboo to soften the acoustics. The ceilings are cast aluminum in a vermiculated art-deco pattern, which is repeated in the fabrics of the seating.

Design...

Blue Ginger takes its' design cue from the influence of the French-Colonial aesthetics that still suffuse Vietnamese society. Art-Deco reproductions of classic Ruhlmann furniture- a design style used at the Bao Dai Palace in Dalat, are appropriately selected for this world class restaurant.

A special ceiling in the main dining hall is constructed from cast bronze panels in the shape of croissants- or a snail motif that appears as the hair of Buddha. Bespoke 'Drouant' Dining chairs are faithfully reproduced from the 1920 Ruhlmann originals. Indian Rosewood frames and custom vermiculated fabric add a touch of old-world, French-Colonial Art-Deco glamour.

Blue Ginger staff will have remarkable hostess and the world renowned Taj service staffs will wear the flowing white Ao-Dai traditional Vietnamese dress and glass beaded slippers.

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With the launch of Blue Ginger, Taj continues the tradition of offering unexplored cuisines to a city which thrives on new tastes

Kaf e Font ana:

Overlooking lush lawns, this 24-hour coffee shop has a refreshing ambience and distinctlyMediterranean feel. . The ambience is followed through in the menu as well, which showcases food from all over Asia and Europe's Mediterranean. A buffet featuring popular mezze, a live pizza oven and a shawerma grill further add to the Mediterranean feel. Mood lighting changes according to the time of the day, so guests feel as though they are under the Tuscan sun or in a market place in Istanbul.

In the evenings, live music is offered as well as an excellent Indian section in the a la carte menu. Guests can also enjoy international favourites, from carpaccio of tenderloin to fish and chips. Dieters' corner has been specially conceived, by popular demand, where ingredients for salads and low-calorie whips please the palate and flatter the waistline

Masala Art:

For all those who think that light, healthy Indian food is an oxymoron, Masala Art is the answer. A show kitchen, contemporary décor, and a superb menu is the recipe that makes Masala Art a one-of-a-kind dining experience.

At Masala Art, authentic spices are used judiciously to complement, rather than to overshadow the other ingredients. The show kitchen is interactive, a feature usually associated with western cuisines. Guests can actually tell the chef exactly how they like their meals. Indian breads too, are baked on a griddle atop a unique trolley.

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While most of the menu comprises old favourites, a few, like doodiya murg, have been specially created for Masala Art.

Orient Express:

The Orient Express at the Taj Palace Hotel captures the mystique of the legendary train, the Orient Express, which has been traversing Europe for over a century. The dining area successfully recreates a carriage in the train, and with it, the ambience of a bygone era.

The table d'hote menu consists of three/four courses, including the entrée before the main course, a course that only served in the world’s grandest restaurants. Although the Orient Express menu includes cuisines from all those countries through which the train passes, the focus is on classical French. Sorbets appear between courses as palate cleansers, and amusee bouches include smoked salmon canapés topped with caviar.

Outside the 'train', in the bar area, a jazz singer and accompanying pianist complete the Orient Express experience.

The Blue Bar:

A seamless blend of chic interiors, decadent ambience, effervescent music and a range of world class beverages – The Blue Bar at Taj Palace invites you to indulge your senses, reclaim yourself and soak in the environment.

Menu Redefined...

The newly launched bar promises an experience that is sensuous and provocative coupled with an immaculate attention to detail and comfort. Uniquely designed drinks termed as The Blue Bar- Signatures- creations tried and tasted over and over to create perfection and balance; Revivals- of the forgotten greats; The Top Shelf-classics made like no other and only with the finest ingredients and finally AWOL’s ( alcohol without liquids!!) and Infusions , would definitely leave the guests craving for more. It revives the classics with the finest and freshest ingredients. From sublime single malts to top drawer tequila, stellar saketinis and zesty zinfandels, The Blue Bar is stocked full of the greats.

The Blue Bar is about food as much as it is about drinks. The cuisine does not have boundaries. Guests will be served fresh and premium ingredients, be it fruit purees, imported herbs, oysters, or Indiainspired spiced starters. The snack menu at The Blue Bar is a collection of very eclectic tastes. The menu has a delicate balance of liquor, fruits and delicious appetizers.

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The bar extraordinaire…

The Blue Bar with its international look, feel and contemporary cutting edge design brings the best to Delhizens. It is located along the perimeter of the hotel, facing the lush central garden and pool. It offers unique ambience, be it indoors or outdoors. Guests inside can view water flowing outside which seems like a water body over curtains. Sitting outside you can enjoy the outdoors at the timber alfresco deck, which is greened with bonsai trees and large over-scaled seating with bespoke standing French baroque torchers and giant candle clusters. The Blue Bar’s alfresco dining pampers those who want to lounge on contented conversational sofas. The bar has city’s only outdoor foyer.

The design and element has an ascent of Bohemian art. Textures and colors used to design the dazzling bar are exceptionally edgy. The bar looks enormously stunning with black carpets, shimmers and white curtains. The ox blood red upholstery sits on metallic black carpeting.

A special feature of transparent concrete is constructed at the bar top. The black Luccon top looks solid in the daylight, but as the night falls, millions of fiber-optic threads allow light to pass through the stone and onto your drink placed on the bar.

Uber cool music…

The evenings would witness a wide selection of music starting from smooth jazz, rhythm and blues, progressing to funk and followed by modern day electronica in the late evening, when guests can shake a leg. The bar sets the mood with sensual and Bohemian undertone lighting which keeps changing depending on the mood of the evening. The resident DJ will spin chill-out tracks while the mood is enhanced with intense LED lighting.

International bartender ‘Nick’ brings his decade and expertise of operating in bars across the world in his signature style creations. The Blue Bar also provides Wi-fi facility where in guests can use laptops.

Great drinks, groovy music, scrumptious food, elegant décor set in the ultimate ambience is what defines Taj Palace Hotel’s latest offering. The Blue Bar is 'THE' place to spend the entire evening and unwind yourself over great drinks, fabulous music and uninterrupted conversations.

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CHAPTER-3

DEPARTMENTAL ACTIVITIES

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3.1FINANCE DEPARTMENT ACTIVITIES:

It is the department interconnected to all these sub departments are very well connected and networked. There is an automatic cross check of each and every transaction made in each sub department. Without the sub division of the finance department it would have been impossible for this organization to function with stability and effectiveness. As a result, the possibility of an error is minimized; and in any case of error detection is systematized and easy.

3.2 PURCHASE DEPARTMENT:

This sub department is concerned with making the purchases for the entire hotel.

The procedure is as follows :

The respective department raises a purchase indent and sends it to the purchase

department Contact Supplier (telephone, fax, courier) and seek quotation from at

least 3 different suppliers Finalize deal with best quotation Procure as per quality

standards and product specifications

Documentation: copy of the purchase order is provided to the supplier,

accounts, purchase and receiving department Amendment and Cancellation of the Purchase Order, in case of any change in the quantity or rate mentioned in the purchase order are made through mutual agreement between both the parties (The hotel & vendor). A copy of the amendment is sent to the concern department for follow up Signing authority for the purchase order: upto Rs. 5000/- is with the Purchase Manager, Order amount between Rs.5000/- to 25000/- is required by the Purchase Manager and Area Financial Controller (both ), and any order amount above Rs.25000/- requires necessarily the signatures of the Purchase Manager, Area Financial Controller and the General Manager.

3.3 RECEIVING DEPARTMENT:

This department is concerned with receiving the goods ordered by the purchase department. The role of this department is to scrutinize the goods supplied at

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them for the specifications, rates, quality and quantity. In case of any discrepancies between the purchase order and actual goods received, the goods are returned and copies of documentation (sales return) sent to supplier, purchase manager, accounts for reference and further correspondence.

GRR (Goods Receiving Report): Incorporating the transaction for all engineering goods, stationery, cutlery, linen, fuel, lighting etc. Copies of GRR is sent to concerned sub departments. DRR (Daily Receiving Report): Incorporating the transactions of the following items: fruits, vegetables, non vegetarian food, dairy items, and all other perishable goods received on a daily basis. Copies of the DRR is sent to respective kitchens, and Food & Beverage Controls.Rejection Report: In case of rejections due to inferior quality by the kitchen or by the receiving department, specifications and reasons for such rejection is documented in this book. A copy of this report is sent to purchase department, and the other copy sent to the kitchen.Inspection report: This report is made for some specific items like textiles, glass wares, imported crockery, cutlery, silver wares, and other similar items.

3.4 STORES:

The Engineering Unit maintains the inventory of sanitary fittings, electric fittings, enamel, and computer accessories.

The General Unit maintains the inventory of daily items like cereals, flour, rice, ghee, stationery etc. For e.g.: Nescafe Coffee, Tomato paste, Cadbury chocolates, Spices, Note Books, Cake bases, and other stationery items (envelopes, letter heads, writing pads, pens etc.)

The Beverage Unit maintains the liquor inventory. For e.g.: Whisky, Beer, Champagne, Tequila, Vodka, Rum, etc.

The Inventory Process at Taj palace hotel is as follows:-

The material is transferred to the individual units after inspection by the receiving departmentEach item received by the stores is entered on the individual computerized item card.All the departments (actual users of the purchased goods / site of consumption) raise their requisition to the concerned stores to get the required

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itemsStores issues the material based upon the requisition and the availability of the itemsThe item card in the computerized CARDEX system is used to pass the entry of the material issuedStores also look after the stock to be returned and other adjustments if necessary and it is made within the same day of the issuing date.A stock ledger is maintained which clearly states the items available in the stores and also shows the worth of the total inventoryIf the stores fall short of any item they prepare a purchase indent and send it to purchase department for the procurement of that particular itemAfter receiving those items , the details of receiving is entered (date, item code and quantity)in the ‘IN COLUMN’ of the CARDEX systemA stock balance is conducted for all items at month end; the respective codes of items present and values recorded in store ledger showing: opening balance (+) receipts (-) issues= closing balanceFor the food and beverage inventory, physical check is also carried out from time to time.

3.5 FOOD BEVERAGE DEPARTMENT:

F&B is responsible for the management of the F&B operation of the Hotel. Other responsibilities are as follows:• This department does the food and beverage (liquor) costing. Ensure that

contribution margins are maintained through containing the costs of item, by proper effective control systems i.e. right quantity is purchased, right quality is received and appropriate/reasonable procurement time is given.

• Responsible for maintaining all records including scheduling beverage inventory, forecasting food cost and maintaining the statutory records i.e. bakery excise and liquor excise.

Raw Material Consumed Report (meat consumption, cafeteria consumption, mini bar sales, banquets costing and sales, complimentary baskets, imported liquor costing, tobacco cost etc)Raw Material Costing ReportBasic Excise Report: for bakery and confectionary items.

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3.6 INCOME DEPARTMENT:

This department looks after the income earned by the hotel through various activities

(sales, restaurants, rooms, etc).This department gets a daily sales recapitulation (green

sheet) in which all the information relating to the revenue generated from room

accommodation services; sale of cigarettes, soft drinks, liquor; hotel expenditure tax;

banquets; discounts allowed; allowances; restaurants; etc. This department also deals with

the tips issued to the stewards. Tips are paid on a weekly basis, and pending tips are

recorded by issuing receipts mentioning amount of tip pending, steward name and details.

The sheet is given by the night auditor and is reconciled with amounts mentioned in the posting journal. This sheet contains bifurcated amount of sales from various sources in the hotel. On the basis of the green sheet 2 types of reports are generated in the computer whose hard copies are maintained namely:

Sales journal: prepared on a daily basis and after 30 days closing of books takes place, whereby the consolidated figure for the total sales for the 30 day period is made as the final entry

Daily report: Includes the summary regarding performance this year is measured against last year’s performance and also against performance as per budget. This analysis is done for each outlet of the hotel

And used to prepare the marketing report.

2 kinds of ledgers maintained by this department are: CITY LEDGER and the GUEST LEDGER. City Ledger contains details of guest who have checked out of the hotel by clearing their dues (partially or through credit, not yet received by hotel in cash from the respective banks)Guest Ledger contains the details of records of those customers who have checked in and are availing room facilities in the hotel.

3.7 CREDIT DEPARTMENT:

The credit department is divided into different sub departments dealing with transactions related to credits only. This department keeps a track of all the credit

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transactions taking place in the hotel (such as credit card transactions: American Express, Visa Card, Master Card, Bob Card, Can Card).The basic work of this department is to reconcile the amount mentioned in the charge slips and posting journals for transactions. Charge slips are given to them on the daily basis by the front office and the restaurants. These are then segregated on the basis of the credit card being used for the payments. The posting journal for transactions contains the amount for which payment was made through credit cards in these charge slips and then compared with the amount mentioned in the charge slips for that particular credit cards and reconciliation is made on the daily basis.

The other sub section makes the following reports:

CITY LEDGER TO ACCOUNT RECEIVABLE TRANSFER TRANSFER A/R FOLIO TO A/RPAYMENT FOLIOS TRANSFERFILES FOR INTERNATIONAL TRAVEL AGENTS FILE FOR DOMESTIC TRAVEL AGENTS

3.8 PAYROLL DEPARTMENT:

This department is responsible for making payments for sale and purchase of materials/inventory by the hotel. There are 2 kinds of payments:

Cash payments: Payments forwarded to suppliers of food and beverages, general suppliers, conveyance, stationery contractors, engineering goods, salary to employees, stipends to trainees, salary to internal & external auditorsCheque payments: Payments given through cheque, e.g.: taxes like sales tax, service tax, luxury tax, custom duty, licenses, excise duty, payments to NDMC, rent to DDA, etc

The total CF amount of Rs.10,50,000 is divided as Rs.50,000 to the project department and Rs.10,00,000 to the General Cashier. The general cashier gives a part of the CF received by him (known as imprest) to the front office; a portion used for foreign exchange currency and coins given to the restaurants for emergency.

There is also a concept of RISK PURCHASES: Done by the purchase personnel in case supplier is unable to provide the goods to the hotel at the stipulated time. As per the annual rate contract with supplier, rates of each item ordered is predetermined and fixed. So in cases of risk purchases due to the mistake of supplier, and failure to meet

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order requirements by stipulated time, the difference of rate of items purchased from open market and the negotiated rate offered by supplier as per contract is fulfilled by the supplier. So the personnel can procure goods at a higher market price, excess cost of procurement (amount paid in excess to the rate fixed with supplier as per annual contract) is paid by supplier, along with cost of cartage. This difference amount is recovered from supplier in future orders or adjusted in future payments.5 kinds of books maintained in this

department are: IVR (INTERNAL VOUCHER RECEIPT) GVR (GENERAL VOUCHER RECEIPT) JE (JOURNAL ENTRIES)CF (CONTIGENT FUNDS)RESTRICTED LICENSE FOR CURRENCY EXCHANGE (issued by the RBI, without which no hotel has authority to exchange foreign currency)

3.9 AUDIT DEPARTMENT:

(DAY AUDIT AND NIGHT AUDIT)

FOREIGN EXCHANGE DISPLAY BOARD:

To check the forex rates are updates on a daily basis on the display board as received from the authorized dealer and in CLS including the rates for conversion of room rates (Dollar applicable).

To check the information has been entered and verified. Check registered card entries in arrival departure register. Highlight and discrepancies in serial no.Check void registration cards (whether or not

verified) B) C-FORM

RANDOM CHECKCheck whether all formalities in case of foreigners.C-Forms have been completed and C-forms of the previous day have been sent to the concerned authorities.

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(Front office guest lockers): Check the guest locker cards and keys are available as per policy

Check all the exemption folios/bills are duly supported by exemption certificate. Check the tax exemption amount and tax type (i.e.) sales tax and luxury tax.

CHECK INCOME TAX REQUIREMENT:

PAN number for any cash settlement above Rs.25000/- with proofEnsure complete address details mentioned on every folio.

INTERNAL CONTROL REQUIREMENT: GUEST LEDGER

Guest ledger figure should be arrived manually as explained below on a separate register which should tally with the guest ledger figure of CLS/Day book. In case the three way balancing is not tallied even after the other reports are tallied the night auditor will do the force night audit to identify the difference with the financial books. This difference has to be highlighted and resolved on the same day.

Opening balance (i.e. Closing balance of the previous day) + total cash sale of the entire Hotel - F.O.Allowance - cash collection at front office - Transfer to city Ledger

= Closing balance for the day.

Check complimentary room authorization form as per policy and duly approved and attached with second copy of registration card or filed separately.

FRONTOFFICEALLOWANCE

Check all allowances vouchers serial no. Check reasons for giving discounts/allowances, check authorized by relevant authorities. Check bifurcation of discount/allowances amount between various components like room F&B etc.

Follow upon the issues highlighted by the night auditor.

SCANTY BAGGAGE:

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Scanty baggage report to be checked and advance/preauthorization has been taken or not. Highlight all discrepancies.

WASHANDCHANGE:

Check and report- no. of wash and change rooms and authorized by whom (ref. to policy)

Paid outs at front office are as per policy procedure in respect of authorization and guest signature should be strictly followed.

RESTAURANTVOIDCHECK:

All void checks must have authorization of the concerned manager or executive chef.

DISCOUNT IN THE RESTAURANT:

All discount check must have authorization with the proper reason and duly approved by the concerned manager or executive chef.

PENDING CHECKS:

Report all pending checks-refer to policy

BANQUET CHECKS:

To check banquet checks.

OTHER/GENERAL:

Bills on hold and disputed bills. All bills in hold should be report on daily basis-report as per policy.

SPOT CHECKS OF CASH (OUTLET CASH-GENERAL CASH)

Conduct surprise /spot check of all outlets where the money is given or check corresponding cash.

SPOT CHECK

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Once in a week, Auditor will also do the spot check of the following area:- At front office.All outlets.Kitchen.

MINIBAR:

Analysis of large allowances.Spot check in minimum six rooms to check the expiry date of the item stored in the minibar. Check food store once a month for the expiry item.Travel Agent Comm. -- Payment as per policy to approved travel agents.Review the report of the night audit in respect of guest lockers and report any deviation to controller.

Check all Local and STD calls reports with authorization.

3.10 MIS/EDP DEPARTMENT:

Management of information studies is a department that looks after the flow of information for the entire hotel. It maintains 8 records that are used by the following departments: purchase, stores, receiving, accounts, and a copy for the supplier.1. General Voucher Receipt: This book keeps a record of all cheque payments made by guests2. Internal Voucher Receipt: This book keeps a record of all transactions that are made internally amongst the various divisions of Taj Palace Hotel.3. Contingent fund: Taj Palace Hotel maintains a CF; a kind of suspense account.4. Journal Entries: All provisional entries as well as rectification entries5. Credit sheet: Maintains all records of payments received by the guest6. Debtor ledger account: Maintains records of daily transactions of the guest regarding food, beverages and laundry7. Allowances account: Maintains records of all the discounts given to regular customers or VIPS8. A currency exchange licensor from government

The EDP (ELECTRONIC DATA PROCESSING) Department is responsible for trouble shooting in the network (intranet) within the hotel. It has to look after the following

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servers:

Computer Loading SystemAnti Server: for managing calls inter departmentFederal Computer System: for managing administrative and guest callsSQL Server: for maintaining employee payrolls

The EDP department takes a backup of information once in every 6 hours and is based on the UNIX operating system. In case any department wants to send information to any other department it is done through the EDP department.

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CHAPTER-4

COMPETITIVE ANALYSIS

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4.1 FORMULAS USED:

The statement is a Marketing Share Report of the top 12 business hotels in New Delhi with the exception of Hotel Hilton Trident which is situated in Gurgaon, but is taken into consideration in this report because it is a key competitor in the business hotel Industry.

1) Rooms per day= T o t al no. of room n i gh t s s o l d i n a year 365

2) Gross ARR=T o t al a m ount of revenue earned from t he roo m s per day No. of room nights sold per day

Here, ARR = Average Room Revenue

3) Rev PAR=T o t al a m ount of revenue earned from roo m s i n t he ho t el Total no. of rooms available in the hotel

Here, Rev PAR = Revenue per available room

4) Value index= Rev P A R of t he H o t el Rev PAR of the City

4.2 MARKET ANALYSIS:

The report also compares the progress of the hotels to their performance in the previous year by the means of GOLY (Growth Over Last Year).With the help of this report the standing of Taj Palace Hotel in the business hotel industry can be clearly inferred.

ROOMS OFFERED:The first main column in the report gives the total number of rooms offered by all the hotels. The total number of rooms is given for the current year (TY=this year) as well as for the previous year (LY=Last Year).Also given here is the growth in the number of rooms over last year in percentage terms (GOLY%). In this regard it can be seen that only Taj Palace and the Hyatt offered rooms in excess of 500 in number till last year. On the other end of the spectrum is the Trident which offers only 136 rooms.

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It can be seen that Taj Palace Hotel has decreased the number of rooms from 515 in 2008-09 to 484 in

2009-10 resulting in a GOLY% of -6%.There were two reasons behind the reduction in the no. of rooms in Taj Palace Hotel. Firstly the hotel clubbed rooms together to offer bigger rooms. For instance 8 rooms were clubbed together to construct the Grand Presidential Suite for visiting foreign dignitaries. Secondly many rooms were put under renovation. All the other hotels considered in the report did not make any changes in the number of rooms offered by them. It was only because of this change made by Taj Palace Hotel that for the total market GOLY turned out to be -0.70%.

The total number of rooms in the market changed from 4299 in 2008-09 to 4268 in 2009-10.The second main column in the report deals with Occupancy Percentages in the hotels. This data is also given for the present year and the previous year, along with the GOLY. For the entire market occupancy rates increased from 76% to 78% resulting in a GOLY figure of 2.8%.

The entire hotel industry in India witnessed growth in occupancy rates because of the booming Indian economy with GDP growth of 8.1%. India attracted a lot of Foreign Direct Investment (FDI) and this resulted in a lot of foreign business travelers coming to India. Taj Palace Hotel being a business hotel also reported higher occupancy rates.

For Taj Palace Hotel it can be seen that the occupancy rates have increased from 75% to 78% resulting in GOLY of 4%.Some hotels like the ITC Maurya, Le Meridian and Radisson show negative GOLY figures indicating a decrease in their occupancy rates over the previous year. The Grand and the Intercontinental show the biggest GOLY figures at 14.5% and 9.4% respectively.

ROOMS PER DAY:

The third main column in the report is titled Rooms per Day. These figures are obtained for a particular year by dividing the total number of room nights sold in a year divided by the number of days in a year i.e.365 days.

For Taj Palace Hotel the figure for rooms per day decreased from 386.25 to 377.52 resulting in a GOLY of only -2.3% inspite of the fact that there was a 6% decline in the total no. of rooms available. This was due to an increase in the occupancy rates.

ITC Maurya hotel and the Marriot also showed negative GOLY figures. The best performers with respect to GOLY figures were again the Grand and the Intercontinental with 14.5% and 9.4% respectively because of new promotional packages for lean period. For the total market the rooms per day increased from

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3267.24 in the previous year to 3329.04 in the current year with GOLY of 1.9%.

GROSS AVERAGE ROOM AVENUE:The next main column in the report deals with Gross ARR (Average Room Revenue). For the total market there is a positive trend in this trend as the Gross ARR increased from Rs. 5542 to Rs. 7667 resulting in GOLY of 38.3%.Taj Palace Hotel’s Gross ARR jumped from Rs. 5999 to Rs. 8078 resulting in GOLY of 34.7%.

The maximum increase in Gross ARR was reported by the Park Royal, Grand and Radisson at 55.5%,52.2% and 52.1% respectively. In the previous year Average Gross ARR for the entire industry wasRs5635. Taj Palace’s Gross ARR was Rs. 5999-6% more than the industry average.

In the current year Average Gross ARR for the entire industry was Rs7851.Taj Palace’s Gross ARR was Rs. 8078 in this year, 2.8% more than the industry average. Hence Taj Palace’s position has slightly worsened in this regard. The Hyatt in comparison had its Gross ARR 11.4% less than the industry average last year and 12.8% less in the current year.

ANNUAL MARKET SHARE:

The next main column is titled Annual Market Share and deals with the proportion of the total number of rooms nights sold in a year by the entire industry that are sold by a particular hotel in that year. For Taj Palace Hotel the market share declined from12% in the previous year to 11% in the current year resulting in GOLY of -8.3%. The Le Meridian also reported decline in their market shares by 12.5% and 11.1% respectively. On the other hand the Trident and Hyatt showed increase in market shares by 33.3% and 8.3% respectively.

REVENUE PER AVAILABLE ROOM:

The next main column deals with Rev PAR (Revenue per available Room) .For Taj Palace Hotel Rev PAR increased from Rs. 4520 in the previous year to Rs. 6289 in the current year. This increase can be explained in part by the fact that Taj Palace Hotel has decreased the number of rooms from 515 to 484 the industry average Rev PAR stood Rs 4124 in the last year and Rs 6245 in the current year. Hence Taj Palace’s lead over the average industry Rev PAR declined from 9.41% last year to less than 1% in the present

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year. For the entire market Rev PAR increased from Rs 4205 to Rs 5982.

The next column tabulates the Revenue Share of each hotel. It deals with the proportion of the total revenue earned by the entire market in a year that is earned by a particular hotel in that year.

VALUE ADDED INDEX:

In order to compare the hotels, a Value Index was calculated for each hotel. The Value Index was calculated in the following manner:

Note:

For calculation of the Rev PAR of the City the Hilton Trident was excluded because it is situated inGurgaon.

It can be seen that for Taj Palace Hotel the figure has increased from 107.4 to 109.3 with a GOLY of1.8%.With the Value Index calculated, the hotels were ranked on basis of their Value Index figures.

Taj Palace’s ranking as no.4 has remained the same over both the years. There has been no improvement in this regard. The Imperial’s performance with respect to these categories has been excellent as it has retained its no.1 ranking in both the years

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CHAPTER-5

AN OVERVIEW OF ALLOWANCES IN TAJ

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5.1 FRONT OFFICE ALLOWANCE:

One major source of non revenue generating expenditure at Taj Palace Hotel is rooted from high issue of allowances. Allowance Bills are passed as per company policy in the following cases:

Guests Disputes and any discrepancies arising with regards to consumption of food/liquor/other facilities provided by the hotelGuests complaints with regards to unsatisfactory serviceUnaccountable consumptionsGuests leaves hotel premises without payment of bill, such as without formal check outDiscounts and EDMs passed with reference to special sales, sales under any schemes, sales during happy hours, membership schemes, internal sales, dignitaries or customers entitled to such discountsComplementary sales or items not chargeable are charged as allowances, e.g.: food unsatisfactory so entire dish was made complementary and free cake was given to customer to maintain goodwillAllowances passed against mini-bar disputesTravel agents’ commissions against bookings of rooms is passed as allowanceInternal sales not charged to company but charged as allowanceBank fees against certain credit payment facilities are raised as allowances

The analysis of sum total of allowances passed at Taj Palace Hotel, during the year 2009-10 brought forth shocking results. The amount of such allowances was as high as Rs.81,950,303/- The breakup is given in the following section in detail.

TOTAL FRONT OFFICE ALLOWANCE-21,298,134

TOTAL BACK OFFICE ALLOWANCE -60,652,169

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GRAND TOTAL OF ALLOWANCE DURING 2009-10=81,950,303

LI ST OF A LL OWANC E S G I V E N T O T HE GU E S T S UND E R VAR I OUS M E M BE RS H I P SCH E M E S

(SERVICE DESIGN)

Difference in Luxury Tax to be borne by hotelLuxury tax exempted to high commission & embassies Hotel to bear the charges, hence allowance passed Laundry complimentary, as per system designRoom rent wrongly charged to the guest, hence allowance passed Entire stay complimentary as per special billing instruction, ref GM Welcome award scheme for the period from 1st to 10th Oct.09Welcome link scheme for the period from 1st to 10th Oct Jet privilege scheme for the period from 1st to 10th Oct Allowance for laundry complements as per system design2.75 % discount given on Amex card1.28 % discount given on Master Visa card1.02 % discount given on ICICI card1.25 % discount given on Citibank M/Visa Card2.25 % discount given on Citibank CardEntire stay Complimentary as per complimentary voucherTax exempted as per internal auditVAT Tax to be absorbed as per internal saleAllowance for laundry as per standing instruction25 % to ETVP discount as per scheme

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ANA L YS I S OF F RONT O FF I CE A LL OWANC E S

The major part of front office allowance is against rooms (Rs.8.13 million) as is clearly indicated by the graph; closely followed by food and beverage allowances (Rs. 6.04 million).The major factor for such high allowances is guest disputes and complaints regarding service quality etc. Laundry, Telephone, Discounts from another set of major source for allowances in the front office. Here discounts refer to all such deductions or allowances passed while billing with respect to various membership or promotional schemes offered at the hotel to its customers. The allowance from the category “Others” includes discounts/deductions/waive offs if any on charges such as internet connections, beauty parlour etc.

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Rs.

FRONT OFFICE ALLOWANCE AGAINST ROOM CHARGES

1200000

1000000

800000

600000

400000

200000

0

The above graph refers to all the allowances passed at the front office regarding room charges and billings. These include deductions or waive offs on the room charges in cases of customer dissatisfaction with room services, disputes, complaints, errors committed at the time of billing (such as excess charged). The graph shows higher amounts passed as allowances in the months of October (Rs.993189) and February (Rs. 1002073).

5.2 BACK OFFICE ALLOWANCES:

Highest allowance for liquor was passed in January and February. It can be hence established from the graph that allowance trends match with sales trends of the hotel. In other words, months showing higher sales show higher allowances.

Highest allowance for laundry was passed in January and February. It can be hence established from the graph that allowance trends match with sales trends of the hotel. In other words, months showing higher sales show higher allowances.

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CHAPTER-6ANALYSIS

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As per the above interpretations, it can be established that months showing higher sales and occupancy have higher allowances. The research brings forth the fact that most allowances can be broadly attributed to two main sources or factors. These are:

Factors resulting in allowances that fall under service designFactors other than those that don’t fall under service design (such as guest complaints, disputes, errors in billings, deductions made on special requests, disputed bills, non recovery of payment/ debts, luxury tax borne by the hotel, breakfast tax disputes, difference in bills due to up-gradation of rooms, poor service, mismanagement on part of the hotel etc)

The bifurcation is done in the following section.

SERVIC E DESI GN :

1. Bank Fees2. Travel Agent Commission3. Taxes4. Welcome Awards5. ETVP schemes & membership schemes

A LLOWA NC ES OTHER THA N SERV IC E D ESI GN :

1. Guest Complaints2. Disputes3. Complementary Sales4. Employee/Staff errors ( wrong Billings)5. Over Charging6. Change of room due to complaints, noise7. Poor service, facility (Guest Complaints/Disputes)8. Mini Bar disputes9. Over Charging10. Change of room due to complaints, noise11. Poor Internet services Billing errors

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B R E AKUP OF A LL OWANC E S F ROM VAR I OUS SOURC E S F ROM T HE B ACK O FF I CE ( non de d uc t ible allowance)

TOTAL REPORT ON BACK OFFICE ALLOWANCE FOR 2009-10

ROOMS

F&B LAUNDR

LIQUOR

TELEPHON

OTHERAPRIL 3,200,12

3937,083

50,446 175,977

52,077 162,094MAY 2,894,40

01,140,688

87,496 157,171

40,478 364,349JUNE 2,674,78

21,146,763

488,120 150,185

276,489 34,609JULY 2,721,76

91,004,846

535,651 193,082

37,888 158,374A

UGUST3,387,432

1,101,892

416,221 156,207

258,648 27,679S

EPTEMBE2,536,372

1,076,614

482,049 292,533

200,987 51,207O

CTOBER2,746,470

1,177,985

299,441 194,793

267,076 14,320N

OVEMBE2,809,805

1,020,693

406,516 212,870

144,150 63,532D

ECEMBE3,601,061

1,754,729

228,476 269,335

297,140 76,854J

ANUAR3,021,073

1,909,530

237,719 286,152

230,086 30,214F

EBRUAR3,757,640

1,353,403

230,359 262,016

432,600 20,001MARCH 2,347,82

2878,245

132,152 188,704

21,913 1,054,512

TOTALG R O SS

35,698,748

14,502,471

3,594,647

2,539,023

2,259,534 2,057,747

TOT A L 60 , 6 5 2 , 169

As per the data, the total allowance arising for the year 2009-10 from back office is Rs. 6,06,52,169. This includes allowances passed as part of service design as well as other factors (other than those falling under service design). This figure (Rs.6,06,52,169) excludes discounts under various schemes (ETVP) although they are

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treated as service design since they are fixed in nature. The portion of service deign allowances that are unavoidable and variable are included in this figure (Rs.6,06,52,169)

BACK O F F ICE A L L OW A NC E S 200 9 - 10 OT HER T HAN SERVICE DESIGN

MONTHS GUEST COMPLAINTS COMPLEMENTAAPRIL 208,239 915,933

MAY 513,754 915,566

JUNE 606,667 1,033,073

JULY 623,866 787,016

AUGUST 1,006,474 1,222,496

SEPTEMBER 202,359 847,991

OCTOBER 150,735 1,605,611

NOVEMBER 255,024 852,816

DECEMBER 448,190 1,324,062

JANUARY 792,227 896,973

FEBRUARY 909,463 610,673

MARCH 976,642 4,885,266

TOTAL 6,693,639 15,897,475

REDUCABLE ALLOWANCE

22,591,114

Total reducible allowance from back office = Rs. 22,591,114

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T AJ P A L ACE HO TE L F RONT OFF ICE ALLOWANCES FOR THE FY 09- 10

C A TE GO R Y DI S C O UN M O N T H S

APRIL 85252MAY 10685

2JUNE 77807JULY 19488

2AUGUST 246885SEPTEMBER 173571OCTOBER 84842

NOVEMBER 63082DECEMBER 46547JANUARY 32958FEBUARY 12687

4MARCH 61049

TOTAL 1300602

Total reducible allowance from front office = Rs. 1,30,06,02.

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COMPUTATION:

Total back office allowance 6,06,52,169Less: allowance due to service design

Bank fees 2,23,29,414Travel agent commission 49,92,817Welcome awards (discounts) 93,63,241Others 13,75,583

3,80,61,0552,25,91,114

Hence, the balance allowance of Rs. 2,25,91,114 we have reducible allowances in the form of Complementary Sales and Guest Complaints. Both areas can be worked upon to eliminate episodes of error and disputes.

Total front office allowance 2,12,98,1Less: discounts 13,00,60

2Reducible allowance 1,99,97,532

G R O SS R E DU C I BLE A LL O W A N C E F R O M F R O N T OFF IC E & BAC KOFFIC E

= 1,99,97,532 + 2,25,91,114= Rs. 4,25,88,646 per annum

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CHAPTER-7CONCLUSION

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CONCLUSION:

The report attempts to shed light on areas where cost can be reduced and strategies to enhance efficiency of operations. The issues taken up in this report reveals the following:

-ALLOWANCE:

Deductible allowance amounted to Rs. 4,25,88,646 per annum. Assuming reductions in such allowances through minor improvements in service and other areas as recommended will be an add on to profit by am amount of 1.5 to 2 crores.

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REFERENCES:

1. www.indiainfoline.com 2. www.tajpalacehotel.com 3. www.fhrai.com

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