Hospitality Industry India

HOSP IT AL ITY IN DU STRY

H O S P I T A L I T Y I N D U S T R Y

HOTELS HOTEL INDUSTRY

• STAR RATED HOTELS • HERITAGE HOTELS • BUDGET HOTELS • FASCILITY HOTELS • RESORTS • UNCLASSIFIED

RESTAURANTS TRAVEL & TOURISM INDUSTRY

CONTRACT CATERERS TOURISM

TRAVEL

• FAST FOOD CHAINS • CASUAL DINING • FINE DINING • COFFEE BARS

CURRENT MARKET SITUATION

• INDIAN HOSPITALITY INDUSTRY IS FACING A MISMATCH BETWEEN THE DEMAND AND SUPPLY OF ROOMS. • THE DEMAND IS HIGH AND IS ONLY EXPECTED TO RISE IN FUTURE • INDIAN HOTEL BRANDS ARE MAKING THEIR PRESENCE FELT GLOBALLY. THE TAJ HOTELS, RESORTS & PALACES AND OBEROI HOTELS & RESORTS ARE LEADING EXAMPLES.

• IN INDIA, PEOPLE ARE BREAKING AWAY FROM TRADITIONAL METHODS AND LIFESTYLES. (THANKS TO HIGH INCOME). THIS CHANGED MINDSET IS CREATING A HUGE DEMAND FOR HOTELS THAT PROVIDE QUALITY AT AFFORDABLE RATES. EXAMPLE: FORTUNE PARK HOTELS LTD, A SUBSIDIARY OF ITC LTD AT 46 PROPERTIES (OUT OF WHICH 25 ARE UP AND RUNNING) ACROSS 38 CITIES.

• THE CONCEPT OF HOTELS IN MALLS IS ALSO FLOURISHING. BUDGET HOTELS IN MALLS WHICH OFFER SHOPPING EXPERIENCE WITH ENTERTAINMENT FACILITIES UNDER ONE ROOF ARE ELICITING ATTENTION FROM VARIOUS HOSPITALITY PLAYERS. AN UPCOMING FIVE-STAR HOTEL IN EAST END MALL IN GHAZIABAD IS ONE SUCH EXAMPLE.

REASONS FOR MORE DEMAND

•

HOTEL INDUSTRY DEPENDS LARGELY UPON THE FOREIGN TOURISTS ARRIVALS FURTHER CLASSIFIED INTO BUSINESS TRAVELERS AND LEISURE TRAVELERS (BOTH DOMESTIC AND INTERNATIONAL)

•

THE BUOYANT DOMESTIC GROWTH HAS RESULTED IN THE GROWTH OF BUSINESS TRAVEL TO INDIA. (HIGH INCOME CHANGED MINDSETS)

•

INDIA HAS NOW DISCOVERED THE POWER OF MARKETING AND WITH CAMPAIGNS LIKE ‘INCREDIBLE INDIA’ AND VARIOUS LARGE SCALE REGIONAL AND GLOBAL EVENTS LIKE THE UPCOMING COMMONWEALTH GAMES, ASIAN GAMES AND THE RECENT INDIAN PREMIERE LEAGUE BUILDS INTEREST ABOUT THE NATION AND IS ATTRACTING MORE DOMESTIC AS WELL AS INTERNATIONAL LEISURE TRAVELERS.

• THE POLICIES AND INCENTIVES PROVIDED TO THE HOTEL INDUSTRY IS ACTING AS A CATALYST FOR ITS GROWTH. • AN AMOUNT OF RS 624 CRORE TO BE ALLOCATED FOR THE COMMONWEALTH GAMES! • FIVE YEAR HOLIDAY FROM INCOME TAX IS GRANTED TO TWO, THREE OR FOUR STAR HOTELS ESTABLISHED IN SPECIFIED DISTRICTS HAVING UNESCO-DECLARED 'WORLD HERITAGE.

• THE CENTRE AND STATES ARE ALSO WORKING OUT A MODEL TO INCREASE HOTEL CAPACITY. • EFFORTS TO DIVERSIFY TOURIST ATTRACTIONS BY OFFERING NEW PRODUCTS SUCH AS ADVENTURE TOURISM, WELLNESS TOURISM, MEDICAL TOURISM AND GOLF TOURISM ARE EXPECTED TO HAVE A POSITIVE EFFECT ON BOTH FOREIGN TOURIST ARRIVALS AND DOMESTIC TOURISM.

INVESTMENTS

NEED FOR INVESTMENT •

DUE TO THE STRONG GROWTH IN INFORMATION TECHNOLOGY AND BPO SEGMENT.

• INCREASE IN NO. OF FOREIGN TRAVELLERS. • EMPHASISED FOCUS GOVERNMENT.

ON

TOURISM

• COMMONWEALTH GAMES IN DELHI.

BY

INTERNAL INVESTMENTS  TO OVERCOME THE SHORTAGE INDIAN HOTEL INDUSTRY IS ADDING ABOUT 60,000 QUALITY ROOMS, CURRENTLY IN DIFFERENT STAGES OF PLANNING AND DEVELOPMENT, WHICH SHOULD BE READY BY 2012.  GOVERNMENT HAS APPROVED 300 HOTEL PROJECTS WHICH INDEED SHOWS WHAT THE INDUSTRY IS UP TO.  A LOT OF REAL ESTATE DEVELOPERS ARE ALSO INVESTING INTO THE BUSINESS TO BRIDGE THE DEMAND-SUPPLY GAP.

EXTERNAL INVESTMENTS • BERGGRUEN HOLDINGS INDIA, A SUBSIDIARY OF NEW YORK-BASED INVESTMENT COMPANY BERGGRUEN HOLDINGS, HAS ANNOUNCED THAT IT IS SEED-FUNDING A NON-LUXURY HOTEL CHAIN IN INDIA. • PRIVATE EQUITY FIRM WARBURG PINCUS HAS PICKED UP AROUND 27 % STAKE IN DELHI-BASED MID-PRICE HOTEL CHAIN,LEMON TREE, FOR $ 60.2 MILLION • STARWOODS, HILTON, INTERCONTINENTAL HAVE SIGNIFICANT GROWTH PLANS FOR INDIA.

PROJECTS IN INDIA’S PIPELINE •

THERE ARE 161 PROJECTS IN PROGRESS OUT OF WHICH, 100 WILL HAVE FOUR AND FIVE STAR DESIGNATIONS.

•

THE OTHER 61 ARE ONE, TWO AND THREE STAR DEVELOPMENTS. A NUMBER OF THEM ARE NEW ECONOMY BRANDS RECENTLY DESIGNED FOR THE INDIAN MARKET PLACE.

•

TAJ’S IS ONE SUCH BRAND, LEMON TREE AND RED FOX ARE OTHERS IN THIS CATEGORY.

•

THE CENTRE AND STATES ARE ALSO WORKING OUT A PPP (PUBLIC-PRIVATE PARTNERSHIP) TO INCREASE HOTEL CAPACITY.

THE ENGINE OF GROWTH: TOURISM

EXPECTED GROWTH • ACCORDING TO TOURISM MINISTRY, TOURIST INFLOW WILL SOAR TO 10 MILLION BY 2010, THUS LEADING TO A DEMAND FOR ROOMS.

100,000 MORE

• ACCORDING TO A RESEARCH RELEASED BY WORLD TRAVEL & TOURISM COUNCIL, INDIA’S TRAVEL & TOURISM IS EXPECTED TO GENERATE

US$ 100 BILLION IN 2008

US$ 275.5 BILLION BY 2018. AS REPORTED BY MA FOI MANAGEMENT CONSULTANTS AROUND 40

• INTERNATIONAL HOTEL CHAINS ARE EXPECTED TO INVEST IN THE INDIAN HOTEL MARKET BY 2011. THIS INCLUDES HILTON, ACCOR, MARIOTT INTERNATIONAL.

TOURIST INFLOW

HOTEL DEMAND

ACCORDING TO U.N. WORLD TOURISM ORGANISATION ( UNWTO) • Foreign Tourist Inflow INCREASED FROM : 3.9 MILLION (2005) 4.4 MILLION (2006) 4.95 MIILION (2007) • Domestic Tourist Inflow INCREASED FROM: 366.23 MILLION (2004) 462 MILLION ( 2006) • BOOM IN TOURISM TOURIST INFLOW INCREASED HOTEL OCCUPANCY RATIO ( CURRENTLY 75 – 80%) AVERAGE INCREASE IN ROOM RATE ( CURRENTLY 22 – 25% )

HOTEL SEGMENTATION

5

STAR RATED HOTELS HERITAGE HOTELS

BUDGET HOTELS

HOTELS FACILITY HOTELS

5 HERITAGE CLASSIC

4 3

HERITAGE GRAND HERITAGE

2 1

BUSINESS HOTELS AIRPORT HOTELS

LUXURY

HONEYMOON HOTELS

BUSINESS

RESORTS MOTELS UNCLASSIFIED

DELUXE

GUEST HOUSES LODGE

LEISURE

FORMS 30% OF INDUSTRY

Eg :

ITC, TAJ GROUP, OBEROI GROUP, ITDC

BUILT OVER 18000 sq.m AREA

STAR RATED HOTELS DELUXE & 5 : LUXURY AT HIGH PRICE , 27 % GOVT. APPROVED ROOMS

4

5

2

&1 : AROUND TOURIST SPOT, PREFERRED BY DOMESTIC TOURIST

& 3 : FOR MIDDLE LEVEL BUSINESS EXECUTIVES/LEISURE TRAVELLERS

HERITAGE HOTELS HERITAGE CLASSIC:

HERITAGE GRAND:

HERITAGE:

HOTELS CONSTRUCTED BETWEEN 1920 - 1935

HOTELS CONSTRUCTED PRIOR TO 1920

HOTELS CONSTRUCTED AROUND 1935 – 1950



CHARACTERISED BY LESSER CAPITAL EXPENDITURE AND AFFORDABILITY .



OPERATE FROM FORTS, PALACES, CASTLES, RIVER LODGES, HERITAGE BUILDINGS ETC.

FACILITY HOTELS BUSINESS HOTELS

• SPECIALLY EQUIPED WITH CONFERENCE ROOMS, SEMINAR HALLS, INTERNET FACILITIES ETC. TO SUIT THE CORPORATE GUESTS. • Eg: INTER-CONTINENTAL, CROWNE PLAZA •

AIRPORT HOTELS

LOCATED NEAR AIRPORTS AND SUITABLE FOR SHORT STAY TRAVELLERS. • ARE FOUND NEAR ALL MAJOR CITY AIRPORTS. •

HONEYMOON HOTELS

MOSTLY LOCATED AT HILL STATIONS AND SPECIALLY FASCILITATED TO SUIT THE COMFORTS OF HONEYMOON COUPLES. • Eg. HOTEL WOODVILLE PALACE, CARLTON HOTEL, HOTEL HONEYMOON INN ETC.

MAJOR MARKET PLAYERS

THE MAJOR PLAYERS IN THE HOTEL INDUSTRY CAN BE BROADLY CLASSIFIED INTO Public Players AND Private Players. PUBLIC SECTOR PLAYERS:  ITDC HOTELS  Hotel Corporation Of India PRIVATE SECTOR PLAYERS:  ITC HOTELS  INDIAN HOTELS COMPANY LTD.(THE TAJ HOTELS RESORTS & PALACES)  OBEROI HOTELS (EAST INDIA HOTELS)  Hotel Leela Venture  Asian Hotels Ltd.  Radisson Hotels & Resorts

PRIVATE SECTOR PLAYERS

ITC HOTEL GROUP SEGMENTATION SUPER DE LUXE

LUXURY HOTE L

ITC HOTELS -LUXURY COLLECTI -ON:

ITC -SHERATO N HOTELS:

 SUPER DELUXE

 OFFER COMFORT SERVICE TO GLOBAL TRAVELLER AND A CHANCE TO CONNECT

 LOCATED AT STRATEGIC BUSINESS & LEISURE LOCATIONS

5 S TAR HOTE L

BUDGE T HOTE L

HERITA G E HO TEL

WELCOM HOTELS:

FORTUNE HOTELS:

WELCOM HERITAGE:

 FULL SERVICE PROPERTIE S ALL OVER INDIA

 CHAIN OF PALACES, FORTS, HAVELIS & RESORTS

 5 STAR  SPECIALLY FOR THE BUSINESS & LEISURE TRAVELLER

 IDEAL FOR BUDGET TRAVELLER

ITC: DEVELOPMENTS  ITC-WELCOMGROUP HAS PIONEERED THE CONCEPT OF "BRANDED ACCOMMODATION" IN THE HOSPITALITY INDUSTRY. BRANDING LED TO THE SEGMENTATION OF ROOMS WHICH WERE TERMED AS BRANDED EXECUTIVE CLUB, THE TOWERS AND ITC ONE.  IN 2007, ITC-WELCOMGROUP TIED UP WITH STARWOOD TO LAUNCH ITS PREMIUM BRAND, THE ‘LUXURY COLLECTION’.  THE COMPANY HAS MORE THAN 75 HOTELS IN INDIA WITH ABOUT 5,500 ROOMS AND IS DEVELOPING 27 MORE PROPERTIES THAT WILL ADD ABOUT 3,000 ROOMS.

THE TAJ GROUP OF HOTELS SEGMENTATION

TAJ LUXURY HOTELS –

TAJ BUSINESS HOTELS:

TAJ LEISURE HOTELS:

TAJ PALACE, TAJ MAHAL, TAJ BENGAL, TAJ WEST END

TAJ PRESIDENT, TAJ RESIDENCY, TAJ CONNEMARA, TAJ BLUE DIAMOND

TAJ BEACH RESORT, TAJ CULTURAL CENTRE, TAJ GARDEN RETREATS

 OFFER FINEST STANDARD OF HOSPITALITY & SERVICE

 OFFER MULTI – CUISINE RESTAURANTS & BEST BUSINESS FASCILITIES

 LOCATED AT BEACH RESORTS, PALACES, PILGRIM CENTRES ETC.

TAJ : DEVELOPMENTS  TAJ HOTELS, RESORTS AND PALACES COMPRISES 57 HOTELS IN 40 LOCATIONS ACROSS INDIA WITH AN ADDITIONAL 18 INTERNATIONAL HOTELS.  TAJ WAS THE FIRST TO INTRODUCE SICHUAN, THAI, ITALIAN, MEXICAN, AND CALIFORNIAN CUISINE INTO THE COUNTRY.  THE TRAVEL DAILY NEWS REPORTED THAT THE TAJ GROUP OF HOTELS HAD A TURN OVER OF RS. 1823.18 CRORES WITH THE YEAR ENDING ON MARCH 31, 2008.

THE OBEROI GROUP OF HOTELS THE OBEROI HILTON THE OBEROI GRAND HOTEL THE TRIDENT HOTEL THE WILDFLOWER HALL THE HOTEL AMAR VILAS

OBEROI SHAREHOLDING PATTERN

Particulars • Indian promoters • Foreign promoters • Acting persons • Other promoters • MFs/UTI • Banks/FIs • FIIs • Public corporate bodies • Indian public • Others • No. of shares

Mar – 08 46.34 2.10 13.29 3.54 20.35 14.02 0.23 392953972

PU BL IC SECT OR PL AYE R

ITDC ASHOK GROUP Ashok, New OF HOTELSHotel Delhi, Kovalam

ELITE HOTELS

COMFORT HOTELS CLASSIC HOTELS

Ashok Beach Resort, Kovalam, Lalitha Mahal Aurangabad Palace Hotel Ashok, Aurangabad, Lake View Ashok, Bhopal, Brahmaputra Ashok, Guahati Agra Ashok, Bharatpur Forest Lodge, Kalinga Ashok Bhubaneswar, Jaipur Ashok

ITDC : PORTFOLIO • • • •

NETWORK OF 8 ASHOK GROUP OF HOTELS 6 JOINT VENTURE HOTELS 2 RESTAURANTS TARGETS TOPLINE OF RS.900 CRORE BY 2010 • HOTEL LAKE VIEW ASHOK HAS EARNED A PROFIT OF RS. 23.87 LAKH IN 2006-2007 • HOTEL RANCHI ASHOK’S PROFIT INCREASED BY 1472 PER CENT

CHALLENGES TO FACE

Intense competition and image of India

Manual back-end

Shortage of skilled employees

Retaining quality workforce

CHALLENGES FOR HOTEL INDUSTRY

Human resource development

Shortage of rooms

Lack of adequate infrastructure development

THE EN D