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9/12/2009 Service Marketing Assignment
Contents HOSPITALITY INDUSTRY – AN
OVERVIEW....................................................................3
Atithi Devo Bhavo (guest is
God)............................................................................
4
Accommodation...................................................................
...................................5
Bars &
Clubs...........................................................................
.................................5
Travel and
Tourism.........................................................................
.........................5
Service and
Support.........................................................................
.......................5
CONTRIBUTION TO INDIAN
ECONOMY........................................................................6
Future-wise.....................................................................
.........................................6
The driving
force...........................................................................
..........................7
SWOT
ANALYSIS........................................................................
.................................8
TRENDS IN HOSPITALITY
SECTOR..........................................................................
.....9
CHALLENGES FOR HOSPITALITY
INDUSTRY..............................................................10
RECOMMENDATIONS.................................................................
...............................11
Recommendations to the
government..................................................................11
Recommendations to the hospitality
industry:......................................................12
FUTURE OF HOSPITALITY
SECTOR..........................................................................
..13
HOTEL INDUSTRY
OVERVIEW........................................................................
............13
LEADING COMPANIES IN
HOTELS..........................................................................
....17
ROAD
AHEAD:..........................................................................
.................................21
ROAD AHEAD: F I NDUSTRY A NALYSIS O IBS I NDIAN H OTEL & H OSPITALITY I NDUSTRY
HOSPITALITY INDUSTRY – AN OVERVIEW Hospitality is all about offering warmth to
someone who looks for help at a strange or unfriendly the commercial context
refers to the activity of hotels, restaurants, catering, inn, resorts or clubs
who make a vocation of treating tourists. Helped With unique efforts by
government and all other stakeholders, including hotel owners, resort managers,
tour and travel operators and employees who work in the sector, Indian
hospitality industry has gained a level of acceptance world over. It has yet to
go miles for recognition as a world leader of hospitality. Many take Indian
hospitality service not for its quality of service but India being a cheap
destination for leisure tourism with unlimited tourism and untapped business
prospects, in the coming year’s Indian hospitality is seeing green pastures of
growth. Availability of qualified human resources and untapped geographical
resources give great prospects to the hospitality industry. The number of
tourists coming to India is growing year after year. Likewise, internal tourism
is another area with great potentials. The hospitality industry is a 3.5
trillion dollar service sector within the global economy. It is an umbrella term
for a broad variety of service industries including, but not limited to, hotels,
food service, casinos, and tourism. The hospitality industry is very diverse and
global. The industry is cyclical; dictated by the fluctuations that occur with
an economy every year. Today hospitality sector is one of the fastest growing
sectors in India. It is expected to grow at the rate of 8% between 2007 and
2016. Many international hotels including Sheraton, Hyatt, Radisson, Meridian,
Four Seasons Regent, and Marriott International are already established in the
Indian markets and are still expanding. Nowadays the travel and tourism industry
is also included in hospitality sector. The boom in travel and tourism has led
to the further development of hospitality industry. In 2003-04 the hospitality
industry contributed only 2% of the GDP. However, it is projected to grow at a
rate of 8.8% between 2007-16, which would place India as the second-fastest
growing tourism market in the world. This year the number of tourists visiting
India is estimated to have touched the figure of 4.4 million. With this huge
figure, India is becoming the hottest tourist destination. The arrival of
foreign tourists has shown a compounded annual growth of 6 per cent over the
past 10 years. Atithi Devo Bhavo (guest is God)
We have all heard this phrase many times during our childhood from our parents
and grand- parents. We can also find its presence in the earliest Vedas and
religious epics. Hospitality is deep-rooted in our traditions and comes as an
integral part of our heritage. In very simple terms, hospitality is the art of
being warm to strangers and has been Derived from the Latin word hospitalitem,
this means “friendliness to guests”. The hospitality industry covers a diverse
range of establishments in the form of accommodation, food and drinks. It
includes:- The concept of hospitality business started when people started
traveling away on business and they needed a place away from home which could
cater to all their needs. Today hospitality has evolved from the basic food and
accommodation industry and taken a very important position in almost all
businesses. In fact, it has become a huge industry and drives economies across
the globe. The scope of hospitality/ service industry today is far more than one
could have ever imagined a few years back. Earlier people who graduated from a
Hotel School could get
employed either in Hotels, Cruises or Airlines. But service is the BUZZ word
for all businesses today. Be it the Retail Sector, Banking Industry, BPO,
Telecom world, Real Estate or any other sector having direct customer contact, a
person with hospitality background has an edge above the rest, because of their
sheer capability of understanding the needs of a customer better and handling
difficult customers/ situations efficiently. Hotel industry depends largely upon
the foreign tourist arrivals further classified into business travelers (around
65% of the total foreign tourists) and leisure travelers. The following figures
show that business as well as the leisure travelers (both domestic and
international) formed major clientele for hotels in 2004. Over the last two
years, the hotel industry has seen higher growth rates due to greater number of
tourist arrivals, higher occupancy rate (being around 75% in FY 06) and
significant increase in average room rate (ARR). Accommodation Hotels,
Residential Public houses Motels R es o r ts S an ato r iu m Bars & Clubs
Nightclubs
Public houses
Restaurants
Travel and Tourism Travel Agents Airline Cabin Staff Travel technology
Service and Support Accountancy Occupational Health and Spa CONTRIBUTION TO
INDIAN ECONOMY The Indian hospitality industry is going great guns presently,
with high operating margins and \ increase in the number of travelers visiting
India - both inbound and outbound. Thus, the only direction left for the sector
points upwards. However, what needs to be focused on is the fact that
opportunities are not missed, which presently includes the large gaps in rooms
supply as compared to demand. India has approximately 100,000 rooms only in
totality, which is lesser than that in Las Vegas, besides contributing to an
insignificant portion of the GDP - just 5.4 per cent, In comparison to nations
like China, Thailand and Malaysia where the hospitality share ranges between 12
and 15 per cent. Within the nation, major contribution as destinations will be
from the growing tier I and II cities with a special emphasis on business hotels
across categories as well as the prime leisure destinations like Goa, Rajasthan,
etc, which will remain on the growth path, creating the aura for India as a
leisure destination. Accordingly, the needs of the traveler will be nothing less
than perfection. With an increase in choices available, they will be less
forgiving of service deficiencies. Guests will require higher levels of service
in the full- service segments, which will warrant greater training requirements
for hotel staff. The limited service hotels will require a complete shift in the
perception of customer service. Future-wise The driving force behind these will
be global brand standards and therefore they will have standard specifications
creating a degree of uniformity and standardization in certain limited and
mid-market hotel segments. Differentiations in product type will evolve more at
the higher end of the market with:- boutique hotels r es o r ts convention
centers The need to differentiate design will play an important role. Various
brands and operators will play a larger role in driving design standards,
getting involved at early project planning stages. As hotel segments cater to
specific demand segments, design typologies will be more customized to suit
traveler’s lifestyle. Equal importance will also be given to green-building
concepts in terms of development and operations, which will go beyond
cost-saving, placating the demands from both investors and customers... In
addition, green-conscious business and corporate groups will patronize hotels
and brands that support green concepts. Besides all this, the reliance on
technology will move beyond Wi-Fi and internet requirements to tools to support
sales and marketing as well as yield management. Even basic interiors will be
upgraded with the use of technology like self check-in and information kiosks.
This will also revamp sales and marketing as international brands will leverage
their central reservation systems and will initiate networks with third party
reservation agencies. In addition, systems will become more sophisticated and
targeted, customizing sales and marketing efforts for each targeted traveler.
F&B, an area of immense importance within a hotel will also evolve, especially
for the select-service hotel categories. However when discussing service, which
is the main play of this industry, it has to be understood that the growth phase
is still on and the market is currently undersupplied in terms of trained hotel
staff to cater to the large supply pipeline. The driving force If the country is
able to sustain its economic growth especially in the service sector, it will
have a direct influence on the hotel industry. This is directly related to the
incoming foreign investments, not just in the hotels but the economy as a whole.
Also equally important is the fact that India has now discovered the power of
marketing and with campaigns like Incredible India, there are also the various
large scales regional and global events like the upcoming Commonwealth Games,
Asian Games and the recent Indian Premiere League that builds interest about the
nation... Apart from these external factors there are other factors where the
industry can be given a great boost. For instance if land prices became more
realistic, the process of getting approvals and licenses to build and operate
hotels are streamlined, together with strong infrastructure development and
investment and more tax/levy incentives being provided to build hotels, it would
prove very fruitful for the industry SWOT ANALYSIS STRENGTHS 1. Natural and
cultural diversity: India has a rich cultural heritage. The "unity in diversity"
tag attracts most tourists. The coastlines, sunny beaches, backwaters of Kerala,
snow capped Himalayas and the quiescent lakes are incredible. 2. Demand-supply
gap: Indian hotel industry is facing a mismatch between the demand and supply of
rooms leading to higher room rates and occupancy levels. With the privilege of
hosting Commonwealth Games 2010 there is more demand of rooms in five star
hotels. This has led to the rapid expansion of the sector 3. Government support:
The government has realized the importance of tourism and has proposed a budget
of Rs. 540 crore for the development of the industry. The priority is being
given to the development of the infrastructure and of new tourist destinations
and circuits. The Department of Tourism (DOT) has already started the
"Incredible India" campaign for the promotion of tourism in India. 4. Increase
in the market share: India s share in international tourism and hospitality
market is expected to increase over the long-term. New budget and star hotels
are being established. Moreover, foreign hospitality players are heading towards
Indian markets. WEAKNESSES 1. Poor support infrastructure: Though the government
is taking necessary steps, many more things need to be done to improve the
infrastructure. In 2003, the total expenditure made in this regard was US $150
billion in China compared to US$ 21 billion in India. 2. Slow implementation:
The lack of adequate recognition for the tourism industry has been hampering its
growth prospects. Whatever steps are being taken by the government are
implemented at a slower pace. 3. Susceptible to political events: The internal
security scenario and social unrest also hamper the foreign tourist arrival
rates. OPPORTUNITIES 1. Rising income: Owing to the rise in income levels,
Indians have more spare money to spend, which is expected to enhance leisure
tourism. 2. Open sky benefits: With the open sky policy, the travel and tourism
industry has seen an increase in business. Increased airline activity has
stimulated demand and has helped improve the infrastructure. It has benefited
both international and domestic travels. THREATS 1. Fluctuations in
international tourist arrivals: The total dependency on foreign tourists can be
risky, as there are wide fluctuations in international tourism. Domestic tourism
needs to be given equal importance and measures should be taken to promote it.
2. Increasing competition: Several international majors like the Four Seasons,
Shangri-La and Amman Resorts are entering the Indian markets. Two other groups -
the Carlson Group and the Marriott chain - are also looking forward to join this
race. This will increase the competition for the existing Indian hotel majors
TRENDS IN HOSPITALITY SECTOR Trends that will shape the future of hospitality
sector are:
1. Low Cost Carriers
2. Budget Hotels
3. Service Apartments
4. Technology
5. Loyalty Travel
1. Low cost carriers: Travelers in general are more price sensitive to airfare
than they are to hotel room rates. Often a low airfare will stimulate demand for
travel even if hotel prices are increasing. LCCs are a good option for business
travelers, as they have advantages like low costs, more options and
connectivity. 2. Budget hotels: More than 50 per cent of occupancy of a majority
of hotels comes from the business travel segment. The average room rate (ARR)
realized from business travelers is normally higher than from leisure travelers.
Heightened demand and the healthy occupancy rates have resulted in an increase
in the number of budget hotels. Some of the new players entering into this
category of hotels include Hometel, Kamfotel, Courtyard by Marriott, Country
Inns & Suites, Ibis and Fairfield Inn. 3. Service apartments: The concept of
service apartments, though a recent phenomenon in India, is an established
global concept. Villas in Spain, flats in the UK and apartment complexes in the
US have all created a viable market for those who want more than just a room in
a hotel. Service apartments are the latest trend in accommodation, offering the
comfort and convenience of a home without the hassles of having to maintain or
look after it. Ideally suited for medium- to-long staying guests, service
apartments are a natural choice for corporate employees or expatriates
relocating to a particular city, non-resident Indians visiting the country for
long spells and foreigners visiting the city for long durations. 4. Technology:
Travel and technology have become inseparable. Technology is making its own
advances with high-tech video conferencing facilities, web cameras and virtual
reality mode of conferencing. On-line bookings, e-ticketing, Wi-Fi Internet
connectivity, easy access to information, etc. are just a few areas where
technology has completely changed the way we travel. 5. Loyalty travel: Today,
airline-credit card company tie-ups have brought a whole range of benefits to
the travelers. These include insurance cover, upgrades, free tickets, access to
executive lounges, and a host of other Goodies. CHALLENGES FOR HOSPITALITY
INDUSTRY 1. Shortage of skilled employees: One of the greatest challenges
plaguing the hospitality industry is the unavailability of quality workforce in
different skill levels. The hospitality industry has failed to retain good
professionals. 2. Retaining quality workforce: Retention of the workforce
through training and development in the hotel industry is a problem and
attrition levels are too high. One of the reasons for this is unattractive wage
packages. Though there is boom in the service sector, most of the hotel
management graduates are joining other sectors like retail and aviation. 3.
Shortage of rooms: The hotel industry is facing heavy shortage of rooms. It is
estimated that the current requirement is of 1, 50,000 rooms. Though the new
investment plan would add 53,000 rooms by 2011, the shortage will still persist.
in Mumbai, India. Taj Hotels Resorts and Palaces is grouped into luxury, leisure
and business categories. The Taj luxury hotels offer suites and rooms, gourmet
specialty restaurants and bars, business facilities, fitness centers, spas, and
banquet and meeting facilities. It has restaurants and bars that serve a range
of cuisines from across the globe. The Taj leisure hotels include beach resorts,
palaces, garden retreats, and historic and pilgrim centers. It offers rooms by
the sea, restaurants, water sports facilities, tennis courts, freshwater
swimming pools, spas, and travel assistance. The Taj business hotels are spread
across India, Sri Lanka, Africa, and the Middle East. It offers rooms,
telecommunication facilities such as wireless internet connectivity, specialty
restaurants and bars, business centers, and conference facilities and banquet
areas. It also offers swimming pools, coffee shops, fitness centers, and travel
assistance. IHCL also operates Taj Air, a luxury private jet operation with
Falcon 2000 aircrafts designed by Dassault Aviation, France; and Taj Yachts, two
3-bedroom luxury yachts. The company also operates Taj Sats Air Catering, an
airline catering service in South Asia, as a joint venture with \ Singapore
Airport Terminal Services, a subsidiary of Singapore Airlines. IHCL also
operates Taj Wellington Mews Luxury Residences, which is a complex of 80
luxurious serviced apartments in South Mumbai. Additionally, the company also
operates the Institute of Hotel Management, Aurangabad, which offers a three
year diploma, designed with the help of international faculty and has
affiliations with several American and European programmers.
Market Value Forecast In 2013, the Indian hotels and motels industry is
forecast to have a value of $11.2billion, an increase of 96.5% since 2008. The
compound annual growth rate of the industry in the period 2008-2013 is predicted
to be 14.5%.
ROAD AHEAD: A focus on quality, behavior-based evaluation, market choice and
market response has predominantly shaped the country s hotel & hospitality
industry. Increased competition and increase in demand has consolidated the
hospitality segment, whilst opening up a plethora of opportunities. Fierce
competition has led to innovative ideas by hotel majors, thereby delivering
impressive hospitality products and services. This has, in turn, also prompted
them to generate new lines of revenue with creative approaches, be it by
reducing transaction costs, increasing productivity or promoting traditional
Indian values. Combining unparalleled growth prospects and unlimited business
potential, this industry is certainly on the foyer towards being a key player in
the nation s changing face.
Hospitality Industry
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Reads:2,831Uploaded:11/15/2009Category:School Work>Essays & ThesesRated:(1
Rating)Service Marketing Assignment 9/12/2009
Contents
HOSPITALITY INDUSTRY – AN OVERVIEW................. .........................
..................... (More) Service Marketing Assignment 9/12/2009
Contents
HOSPITALITY INDUSTRY – AN OVERVIEW................. .........................
......................... .3 Atithi Devo Bhavo (guest is
God)..................... ......................... .........................
.....4 Accommodation............ .........................
......................... ......................... ...............5 Bars &
Clubs.................... ......................... .........................
......................... ......... (Less)
hospitality industry hotels service industrydevelopmentfactors
hampermalaysiacountryanalysis(more tags)hospitality industry hotels service
industrydevelopmentfactors
hampermalaysiacountryanalysiscompetitionwithinseasonal factorsindustry
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