Hospitality Management 33

8/3/2019 Hospitality Management 33

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Avi Batra : BBA/4501

Saloni Nanda : BBA/4519

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The basic function of hospitality is toestablish a relationship or to promote

exchange of goods and services, bothmaterial and symbolic, between thosewho give hospitality (hosts) and thosewho receive it (guests) (Lashley and

Morrison)

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Hospitality Management refers todifferent areas of Tourism

Reflects aspects of

Hotel Management

Restaurants Holiday Destinations

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Prosper in certain destinations andattractions

The mostfamous ones

being

Paris

Hollywood

CancunNew Zealand

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Estimated at US$17 billion

Contributes 5.9% of Indias GDP

Expected to reach US$35 billion by 2017

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Growth of over 5% in hotel rooms in thepast 3-4 years

A total investment of US$12.7 billion and20 international hotel brands are soon toarrive in India

Some existing ones are - Ginger Hotels,Lemon Tree, Sarovar Hotels, FortuneHotels, etc.

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US-based casual dining chain CaliforniaPizza Kitchen(CPK) planning to launch

new outlets in India

Its bullish as existing outlets have proved

successful

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Whitbread, UK based hospitalitycompany, has announced to invest

US$53.3 million by 2020

With the investment, over80 properties

shall be developed over the new 10years

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Provides employment to over42 millionpeople

Also on the verge of becoming a majorhub for medical tourism, as US$333

million in 2007 is predicted to rise toUS$2.2 billion by end of 2012

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Available rooms are approx. 110,000 asagainst the demand of 250,000

100% FDI for construction of infrastructureand airport development projects has

been permitted

Estimated to receive investments ofUS$11.41 billion from 2011-2014

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Conrad Lashley and Alison Morrisonformulated 3 domains, i.e., interactions

of people and service provided

First domain is about interaction andrelationships between them and theirconsumers

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Second domain or Private domain

Standalone food outlets that establish

relationships with consumers on foodbased elements

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Commercial Domain, i.e., business sideof hospitality industry

Refers to service or business promoted to

consumers

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Tourism industry attracts consumers todifferent destinations

Generally through promotion &marketing

Hospitality provides comfort and leisureto those consumers

Role of Tourism with Hospitality

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Have global connections with Hospitalityservices

To provide the best deals and top-notchservice to consumers

Helps in relationship building with clients

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5000 year history, culture, religion andalternative medicine fascinate both

budget & luxury travelers

The focus is on Atithi Devo Bhavah

campaign, which translated literallymeans, Guest is God

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Tourism is 3rd largest foreign exchangeearner

Accounting for 5.9% of GDP

Direct contribution to economy withhandicrafts, horticulture, etc.

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WTTC named India & China fastestgrowing Tourism industries for the next 10

to 15 years

Despite poor infrastructure, tourism

industry has shown an impressive double-digit growth

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According to HVS International, strongperformance in 2005 can be attributedto Strong GDP performance

Strengthening of ties with developed world

Opening sectors of economy toprivate/foreign investment

o Efforts made by Ministry of Tourism & Culturehave had a salutary effect on the industry

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Directly employs 150,000 people as ofdate

Prior to 1980s, very-slow growth andstatic single-hotel companies existed

ASIAD meet in 1982 and partialliberalization boosted demand

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As per IMF, Indias economy liberalized inFY 1991

Euphoria prompted major chains, newentrants and international chains

Target consumers were business travelersand foreign clientele

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Classified into 7categories

Five stardeluxe

Five-star

Four star

Threestar

Two star

One-star

Heritage

Ratings arereviewed every

5 years

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Business Traveler

Corporate, both domestic & foreign Extended stays and use PCs, fax,

conference halls, etc

Demand lesser discounts and give betterF&B revenues

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Leisure Traveler

Domestic or foreign traveler Main purpose is sight-seeing

India has wild life, hill resorts, beaches,

etc. Seek higher discounts and provide lesser

F&B revenue

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Airline Cabin Crew

Provide repetitive and guaranteedbusiness

Part of annual contract and, for a fixed

rate, demand fixed number of rooms Ask for highest discounts and provide

low-yield to hotels

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Delhi11,000 Mumbai9,000

Bangalore8,000

Hyderabad7,500

According to HVS International

rooms are expected to be added in the next 5 years

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Indian Hotels Company(Taj Group)

EIH Limited (Oberoi Group)

ITC Hotels Limited ITDC (Ashok Group)

Aggressively expanded after economicboom and are well established entitiesnow

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Hotel Leela Venture(with Kempinski)

Asian Hotels(Hyatt Corp.)

Bharat Hotels(formerly with Hilton)

Late entrants and lack of experience

Plans to initiate expansion before 2020

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Marriott

Starwood

Berggruen Hotels

Joining with Indian players to raise

awareness Ambitious expansion plans

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Mainly comprise of early entrants whosesole focus is localized presence and loyal

customer base

No immediate expansion plans

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Incredible India

Atithie devo bhava

Promotion of Buddhist abodes Other projects such as

Rs. 5,400 million National Highway Dev.

Project 6000km Golden Quadrilateral

7,300km north-south and east-westSagarmala

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Opportunities :

Need to exploit cost advantage for ahealth tourist

Unique basket of services such as yoga,

meditation, ayurveda, allopathy, etc Provided by internationally qualified and

experienced specialists

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Site & Location

Convenient access and connectivity

Positioning

Approaching target segment by providingservices to both leisure as well as business

travelers

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Financial Flexibility

Development of hotels is capital intensive.Proper funding is essential during early yearsof operations

Brand Equity

When classified, chain and independenthotels gain association with the brand, thisreducing advertising and promotion cost

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Poor domestic infrastructure

India being highly prone to prevailingsocio-economic and political conditions

Growth in tourism sector is followed byimminent destruction of local ecology,which in the long run, will negativelyimpact us

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Entry of new players only in mid-marketsegment

Aman Resorts, Shangri-la Hotels, FourSeasons Hotels and The Hilton Groupprovide fierce competition to newentrants

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9th largest aviation market in the world

Approx. 30million passengers traveled

to/fro India in 2008, increased by 30%w.r.t 2007

Predicted to touch 50million passengersby 2015

69 foreign airlines from 47 countries arelikely to enter

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28

2416

14

12 3

2 1

Sales

Kingfisher Airlines andKingfisher Red

Jet Airways & Jet Lite

Air India and Indian

IndiGo

Spicejet

GoAir

Paramount Airways

MDLR Airlines 40


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Name of the players Market ShareKingfisher Airlines and Kingfisher

Red (previously Air Deccan)

28%

Jet Airways and Jet Lite

(previously Air Sahara)

25%

Air India and Indian (previously

Indian Airlines)

16%

IndiGo 14%SpiceJet 12%

GoAir 3%

Paramount Airways 2%

MDLR Airlines 0.004% 41


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Civil Aviation market grew at a CAGR of18% (round value US$5.6 billion in 08)

Domestic Airlines flew 3.67 million as ofAugust 2009 as against 2.92 million inAugust 2007

Estimated to handle 100million+passengers yearly

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Growth provided by Aviation industryincreased GDP above 8%. Rate will be

sustained for a good number of years

Air traffic has grown enormously andexpected to have growth above 25% intravel segment

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Februrary 18th, 1911, first commercial

flight from Allahabad to Naini by aFrench pilot named Monseigneur Piguet

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Initializing privatization of airport activities

Modernization of airlines fleet to handlepressure of competition

Rapid expansion plans for major airports

Immense development of regionalairports

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Hospitality Management 33

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