Ecotel

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Ecotel

  1. 1. HVS International FHRAI Table of Contents Foreword from the President, FHRAI…………………………………………………………………… 1 Message from HVS International………………………………………………………………………… 5 Introduction & Key Highlights of the Survey…………………………………………………………... 7 Trends & Opportunities in the Indian Hotel Industry………………………………...……..……….. 13 1. Indian Hotel Industry – by Star Category……………..…………………………………... 22 2. Indian Hotel Industry – by Hotel Size & Chain Affiliated v/s Independent…………... 31 3. Indian Hotel Industry – Seven Major Cities…………..…………………………………... 41 4. Indian Hotel Industry – Twelve Other Cities..………..…………………………………... 52 Hotel Analysis Worksheet…………………………………………………………………………………63 HVS International at a Glance…..………………………………………………………………………...64 ECOTEL® ……….………………………………………………………………………………………… 65
  2. 2. HVS International Page 1 FHRAI FOREWORD The Federation of Hotel & Restaurant Associations of India is pleased to present the ninth annual edition of the Indian Hotel Industry Survey in cooperation with HVS International and our sponsor ECOTEL®. We started this research project in 1998 with operational and financial figures of the Indian hotel industry based on the responses received from our members for the financial year 1997-98. We are happy to say that this project has been sustained by us for the last nine years and we hope to continue with it in future. We are grateful for the cooperation extended by a large number of FHRAI hotel members who have supplied the detailed information on our format of Hotel Fact Sheet (HFS) for this survey report. The figures in this report are, therefore, based on authentic data from hotels across the country and give a true picture of the performance and trends in the Indian hotel industry in the year 2005-06. The document covers a number of areas in terms of facilities, manpower, occupancies, marketing trends and operational performance, integrating all aspects of the hotel industry. We are aware that a large number of hotel professionals, investors, bankers, consultants, researchers, government officers in tourism departments, media persons and others value this document for a study of the Indian hotel industry. Most of all, it provides reliable data for feasibility studies and investment decisions to those interested in setting up new hotel projects in various cities in India. As in the previous years, we have included an analysis of seven major cities from where we have received detailed information and twelve other cities where information was available with us for some hotels, though not in sufficient number for all the star categories. We would like to include information on additional cities, provided we get sufficient number of responses from our member hotels through the Hotel Fact Sheet sent to them every year in April. We also urge upon them to try and send us their full financial / operational data as per the HFS, as many members are not including full data on these parameters. The result is that while we have basic data for 1,151 members, we have the financial data only for 484 hotels. We will continue to make efforts to persuade more of our hotel members to participate in this research project. We again assure you that all the data is used only for averages and no data on individual hotels are released by HVS International or by FHRAI to anyone under any circumstances. We continue to strive for improvements in the content and presentation of the annual edition of the Indian Hotel Industry Survey. We will be happy to receive any comments and suggestions from the users of this report. We are thankful to HVS International for their continued support for this project for the past nine years. Our sincere thanks also to ECOTEL® who has sponsored the current edition. Rajesh Mishra President, FHRAI
  3. 3. FHRAI Page 2 HVS International HVS International is the world's leading full-service consulting and appraisal firm devoted exclusively to the hotel industry. Founded in 1980 in the United States, the company has 24 offices across the globe, and 4 in South Asia including New Delhi and Executive Search offices in Mumbai, Chennai and Hyderabad. Over the last 26 years, HVS International has performed more than 16,000 assignments throughout the world for virtually every major industry participant. Our principals literally “wrote the book” on hospitality consulting, authoring numerous authoritative textbooks and hundreds of articles. HVS International is client driven, entrepreneurial, and dedicated to providing the best advice and services in a timely and cost efficient manner. • Consulting & Valuation Services • Development strategies • Feasibility studies and Return on Investment analysis • Market studies & desktop research • Management contract analysis and negotiation • Operator selection • Land bid evaluations and residual land valuations • Ecotel® Certification Process • HVS Executive Search • Investment Advisory Services and Transaction Structuring • Asset Management and Operational Advisory Services • Agra • Ahmedabad • Allahabad • Amritsar • Aurangabad • Bangalore • Bentota • Bhopal • Bhubaneshwar • Calicut • Chandigarh • Chennai • Colombo • Coimbatore • Dhaka • Gandhinagar • Ghaziabad • Goa • Greater Noida • Gurgaon • Hyderabad • Indore • Islamabad • Jaipur • Jalandhar • Kanpur • Karachi • Khajuraho • Kochi • Kolkata • Lahore • Lucknow • Ludhiana • Male • Manali • Manesar • Mumbai • Mysore • Nagpur • Navi Mumbai • New Delhi • Noida • Pune • Ranchi • Rawalpindi • Siliguri • Surat • Thiruvananthapuram • Udaipur • Vadodara • Varanasi • Vizag ABOUT HVS OUR SERVICES IN SOUTH ASIA CITIES COVERED IN SOUTH ASIA
  4. 4. HVS International Page 3 FHRAI HVS Consulting & Valuation Services has one of the most experienced professional staffs, an impeccable worldwide reputation and the highest level of credibility. Thus, hotel projects attract immediate attention when accompanied by an HVS consulting report. Our valuation and consulting services are driven by the needs of our clients. Those who come to HVS want information that is highly regarded and accepted by leading lenders, investors, operators and other interested parties. We stand alone in our support for investors and operators who are new to this marketplace, as well as to those who have vast experience in hospitality. The unique needs of each client are met because we structure our assignments in order to meet your timing needs and all of your other requirements. THE HVS SOLUTION HVS International was founded to satisfy the demand for strong consultation services and valuation needs. Over the years, the scope of our professional services has expanded to include a wide range of consulting activities. Our database of hotel information, combined with broad insight and extensive local and international experience, enables HVS Consulting & Valuation Services to produce well-documented appraisal reports that contain fully supported value conclusions. Our consultants and appraisers understand the hotel business. Most have degrees in hotel management from top international hotel schools, and each has actual hotel operating experience. Our staff has extensive training in real estate and valuation techniques. THE HVS METHODOLOGY We have a database of information along with broad insight and extensive experience that enables us to produce well-documented consulting reports that contain fully supported recommendations and conclusions. The HVS approach on hotel and real estate appraisal is the approach most widely used by hotel management companies, financial institutions and banks, equity investors and developers of hotels in formulating their investment decisions in the South Asian hospitality industry. HVS Consulting & Valuation If you are an investor interested in the hospitality industry, you need to be willing to put your money into a market that is increasingly sophisticated and global in its outlook. Differences in local markets, legislation, business cultures and positioning issues must be effectively communicated in a way that is meaningful in an international context. In today’s competitive market environment, hotel operators and owners must work harder than ever to satisfy the increasingly well-traveled and discerning customer. Through our operator search and management contract advisory services, we support hotel owners and operators in making optimal decisions. Our objective is to provide a win-win solution. Hospitality sector in South Asia has shown robust performance in the past few years resulting in huge growth in the form of enhanced investment and development opportunities. Addressing the needs arising out of high interest levels in South Asia, HICSA 2007 aims to bring all the stakeholders of the hospitality industry together. For registration enquiries visit www.hvsinternational.com/HICSA or e-mail hicsa@hvsinternational.com HVS CONSULTING & VALUATION SERVICES OPERATOR SEARCH & MANAGEMENT CONTRACT ADVISORY SERVICES HOTEL INVESTMENT CONFERENCE SOUTH ASIA (HICSA)
  5. 5. FHRAI Page 4 HVS International The ECOTEL® Certification program is not just for Hotels that want to effect increased cost-saving benefits for themselves, but also for Hotels that want to give something worthwhile back to the environment by providing a benevolent helping hand to the community on the whole. These benefits might be multihued, but will ultimately lead to an improved inter-community relationship while providing a healthy and safe future for the world. The ECOTEL® Certification is given to hotels, which show a heightened level of environmental responsibility. The certification is based on 5 criterions termed as globes: A hotel must achieve at least 2 of the 5 ECOTEL® globes to qualify as an ECOTEL® Hotel. A hotel primes for an ECOTEL® certification by creating and implementing a meticulous environmental program according to the ECOTEL® globes. Each of these globes is unique in the sense that, in isolation it covers one responsible aspect of the environment, and all together in totality encompasses the environmental ethos of our earth. The ECOTEL® certification once granted lasts for two years during which period the hotel must submit to regular inspections, to ensure the steadfast belief and unmitigated faith in their environmental curriculum. Current ECOTEL ® Hotels in India: • The Orchid, Mumbai • Uppal’s Orchid, New Delhi • Rodas, Mumbai • Lotus Suites, Mumbai • The Raintree, Chennai • Hotel Gautam, Mahabaleshwar – Developing ECOTEL® • Hotel Laguna, Lonavala – Developing ECOTEL® Cities where new ECOTEL ® Hotels are planned: Pune, Hyderabad, Kolkata, Johannesburg For further details on the ECOTEL® certification program contact: Ms. Harinakshi Nair Senior Associate HVS International - New Delhi Ph: +91 124 461 6000 Fax: +91 124 461 6001 Cell: +91 9820203036 Email: hnair@hvsinternational.com
  6. 6. HVS International Page 5 FHRAI HVS International is an association of integrated companies providing a wide range of services to hotel owners, lenders and operators. In 2006, HVS International completed 26 years of operations. As one of the leading hospitality consulting firms we continue to endeavour to fulfil the growing demand for reliable and well-documented hotel market studies and feasibility reports. Today, our firm provides the hospitality industry a full range of consulting services, including valuations, market and feasibility studies, executive search, hotel acquisitions, strategic analyses, development support, environmental consulting (ECOTEL®), operator search & selection, operational and management strategy development, timeshare consulting, marketing communications, and technology strategies. Our company has offices in 24 cities across the globe and 4 offices in South Asia including New Delhi, and Executive Search offices in Mumbai, Chennai and Hyderabad. HVS International has worked on over 16,000 assignments in more than 65 countries across the globe, involving many hotel projects, including 52 cities in South Asia. With more than 320 professionals worldwide, we are able to offer global services that are locally delivered. We have been in India since 1997 and have now completed over 250 consulting assignments in the South Asian region including various cities in Pakistan, Bangladesh, Maldives and Sri Lanka. HVS International’s New Delhi office has been active on the advisory front for hotel acquisitions and exclusive sales mandate of hotel assets across India. It has also extended its services to operator/investor search and negotiating management contracts, convention services consulting and consulting for mixed-use real estate development. The New Delhi office of HVS International is also responsible for all ECOTEL® certifications globally. The Executive Search division in New Delhi commenced operations in May 2001. The division caters mainly to the hospitality, services and real estate markets: our core competencies include retained executive search, compensation design, and employee assessment. The Association of Executive Search Consultants (AESC) governs our practice and our objective is to set up new benchmarks within the recruitment process in the hotel sector in this part of the world. The Indian Hotel Industry Survey 2005-2006 once again brings together the industry’s key statistics in one easy reference volume. The publication continues to emphasise the scale and importance of the hospitality, tourism and leisure industry in the Indian economy, by providing readers key information about this vast and growing industry. We are truly grateful to all those who have kindly contributed their hotel's results and we look forward to further increased participation from hotels in the years to come. As always, we welcome any suggestions for improvement. For further clarification on this report or on HVS International’s services, please contact us at: HVS International - New Delhi, 6th Floor, Tower - C, Building No. 8, DLF Cyber City, Phase II, Gurgaon (NCR) 122 002, India (Address applicable from February 1, 2007). Tel: (91) (124) 461 6000 Fax: (91) (124) 461 6001 email: smallapur@hvsinternational.com To learn about HVS‘ worldwide operations, please visit www.hvsinternational.com Manav Thadani Managing Director Sohaila Mallapur Consulting & Valuation Associate Sameer Tandon Consulting & Valuation Associate Sally D’Souza Research Analyst HVS Logo
  7. 7. HVS International Page 7 FHRAI Introduction & Key Highlights of the Survey Introduction to the FHRAI Indian Hotel Industry Survey Statistics are presented by star category, by size (according to number of rooms) and by ‘chain affiliated’ and ‘independent’ hotels. Also, separate operating indicators are included for the following 19 cities: Agra Goa Kolkata Pune Udaipur Ahmedabad Hyderabad Mumbai Shimla Vadodara Bangalore Jaipur Nagpur Thiruvananthapuram Visakhapatnam Chennai Kochi New Delhi - NCR Trichur To ensure confidentiality and to provide a meaningful representation, data for each star category and city has been presented only in cases where the sample consisted of at least four hotels. In addition, All India trends for the past five years are also presented. As in the previous years, this report presents the number of participating hotels for each area of analysis – room profile, F&B facilities, employee information, market segmentation, occupancy, revenue and expense information, and so forth. This allows the reader to assess the validity of the results, based on the number of participants. ‘ID’ indicates insufficient data received. To enable better comparability of data, we have presented the financial statements up to net income, before any deduction of depreciation and interest, which are too hotel/owner specific to render their comparison to be meaningful. All amounts presented in this report have been rounded to the nearest whole number and are in Indian rupees (Rs) for fiscal year 2005-06 (April-March). In the financial statements, Rupee amounts are shown as amounts per available room (PAR) and per occupied room (POR) in order to eliminate differences in the size of hotels surveyed. Market mixes, ratios of various sales and appropriate departmental expenses have also been presented. In addition, we have provided highlights throughout the document to reflect certain key aspects of our findings. Market data has been presented as an average of the respective segments and as a percentage. Financial data has been presented according to the most common measures of industry performance: as a percentage of revenue, and as amounts PAR and POR. The amounts and ratios presented should not be considered a standard for any type of property, region, city, star category or price category, but only as a guideline for comparison with the
  8. 8. FHRAI Page 8 HVS International operating results of a specific category. Readers of this report must also keep in mind that large differences from one year to the next for a particular item may be partly on account of a different mix of survey participants (thus affecting the average figure), rather than an actual year-to-year change. This is relevant for some of the unusual figures in the city trends also. We have also included a Hotel Analysis Worksheet at the end of the report, for hoteliers to analyse their financial data and compare with that of their competitors, which will help them in budgeting and in developing their strategies. Highlights of the Indian Hotel Industry Survey 2005-06 This ninth edition of the Indian Hotel Industry Survey presents a study of 1,151 hotels (62,055 rooms) across various cities in India. Mumbai had the largest number of survey participants (125 in all categories), followed by Kolkata (52 in all categories), Pune (48 in all categories), Bangalore (43 in all categories), Delhi and Goa (40 each in all categories). However, it is important to note that responses for the financial data were not as complete and this factor, combined with our stringent analysis criteria, resulted in 484 useable financial responses. As before, in this issue as well, we present two key operating characteristics - occupancy and average rate - for 30 important hotel markets, and on an ‘All India’ basis. City 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 All India 53.2% 54.8% 59.7% 63.6% 64.1% Rs2,058 Rs2,004 Rs 2,689 Rs3,413 Rs3,227 Agra 42.9% 42.2% 51.0% 62.7% 60.7% Rs1,269 Rs1,232 Rs 2,201 Rs1,895 Rs2,389 Ahmedabad 59.9% 51.3% 57.0% 52.6% 68.9% Rs1,749 Rs1,740 Rs 2,004 Rs1,825 Rs2,572 Aurangabad ID 34.1% 63.0% 61.1% 43.2% ID Rs1,733 Rs 2,998 Rs1,784 Rs1,837 Bangalore 62.8% 72.4% 78.9% 79.8% 71.7% Rs1,921 Rs2,149 Rs 4,109 Rs6,762 Rs6,534* Bhopal ID 62.3% 59.6% 71.2% 65.8% ID Rs1,145 Rs 1,677 Rs1,785 Rs1,604 Chennai 65.0% 63.9% 61.6% 73.3% 78.0% Rs1,936 Rs2,048 Rs 2,061 Rs2,384 Rs3,080 Coimbatore ID ID 64.5% 67.5% 79.7% ID ID Rs 1,407 Rs1,401 Rs2,311 Darjeeling 28.2% ID 62.6% 66.3% 50.1% Rs1,630 ID Rs 1,902 Rs1,570 Rs1,912 Goa 56.1% 60.2% 65.3% 60.1% 66.7% Rs1,756 Rs1,982 Rs 2,147 Rs2,704 Rs3,994 Hyderabad 67.2% 71.0% 72.8% 75.2% 80.2% Rs1,131 Rs2,049 Rs 2,406 Rs2,729 Rs4,305 Indore 77.5% 64.7% 61.4% 60.0% 64.9% Rs850 Rs782 Rs 521 Rs661 Rs773 Jaipur 56.2% 56.9% 62.6% 71.5% 60.2% Rs1,543 Rs1,289 Rs 1,628 Rs1,791 Rs2,220 Jodhpur 32.5% 37.4% 45.9% 56.2% 45.1% Rs1,290 Rs1,561 Rs 1,226 Rs3,346 Rs1,679 Kochi 58.7% 57.6% 69.0% 64.8% 65.9% Rs1,306 Rs1,089 Rs 1,368 Rs1,062 Rs1,247 Kolkata 61.7% 63.6% 64.6% 67.1% 65.0% Rs1,417 Rs1,342 Rs 2,520 Rs2,210 Rs2,668 Kullu-Manali 39.8% ID 34.5% 47.0% 48.0% Rs1,498 ID Rs 1,964 Rs2,668 Rs1,585 Lucknow 56.5% 56.6% 66.3% 66.7% 75.0% Rs1,166 Rs1,129 Rs1,642 Rs1,867 Rs2,060 Mount Abu 42.1% 38.1% 51.8% 47.1% 52.7% Rs980 Rs922 Rs 1,084 Rs1,255 Rs1,338 Mumbai 63.8% 62.6% 66.3% 74.9% 75.8% Rs2,075 Rs1,822 Rs 3,063 Rs4,307 Rs4,615 Mussoorie ID ID 70.0% 61.0% 55.0% ID ID Rs 2,685 Rs2,997 Rs656 Mysore ID 51.1% 34.8% ID 60.9% ID Rs1,120 Rs 878 ID Rs1,249 Nagpur 60.0% 57.2% 51.3% 46.1% 71.0% Rs1,113 Rs1,032 Rs985 Rs931 Rs1,307 New Delhi - NCR 55.9% 58.3% 69.1% 76.6% 74.8% Rs3,434 Rs2,918 Rs 4,247 Rs5,498 Rs6,699 Pune 58.0% 59.9% 62.1% 77.2% 77.3% Rs1,044 Rs1,141 Rs1,820 Rs1,295 Rs2,621 Shimla 43.6% 46.7% 45.0% 53.8% 45.2% Rs1,578 Rs1,022 Rs 2,080 Rs1,679 Rs813 Thiruvananthapuram 55.4% 60.3% 51.1% 47.5% 57.6% Rs966 Rs983 Rs 1,302 Rs1,805 Rs1,665 Udagamandalam (Ooty) 38.0% ID 48.8% 44.4% 50.3% Rs947 ID Rs 1,609 Rs1,861 Rs1,690 Udaipur 44.3% 46.6% 45.7% 54.5% 55.3% Rs1,924 Rs1,644 Rs2,473 Rs3,800 Rs3,580 Vadodara 43.5% 46.4% 62.5% 62.6% 70.0% Rs1,039 Rs1,110 Rs458 Rs467 Rs2,085 Visakhapatnam 56.6% ID 70.1% 80.6% 77.2% Rs1,184 ID Rs 1,293 Rs1,531 Rs1,686 ID - Insufficient Data * Please note that while the survey reveals a decline in average occupancy and rate which is driven by the mix in the sample, HVS research reveals significant growth in average occupancy and rate Average RateAverage Occupancy Note: HVS will like to clarify that for certain cities occupancy has increased but the average rates have gone down, this is partly a result of increase in participation by smaller hotels in the survey
  9. 9. HVS International Page 9 FHRAI • All India average occupancy was 64.1%, a marginal increase over the previous year’s level. All India average room rate decreased 5.4% over the previous year, as a result of increased participation by two-star and one-star properties and lower average rates achieved by two-star and one-star properties located in tier two and tier three cities. • In 2005-06, Hyderabad was the market leader in terms of occupancy, registering an occupancy of 80.2%. Coimbatore achieved the second-highest occupancy at 79.7%. • Properties in Ahmedabad recorded the highest growth in average occupancy, growing over 16 occupancy points from 52.6% in 2004-05 to 68.9% in 2005-06. Ahmedabad was followed by Coimbatore and Thiruvananthapuram, which grew by approximately 12 and 10 occupancy points over the previous year, from 67.5% and 47.5% respectively in 2004-05 to 79.7% and 57.6% respectively in 2005-06. • New Delhi - NCR had the highest average room rate (ARR) among the 30 cities, with an ARR of Rs6,699. Bangalore recorded the second highest ARR, registering an ARR of Rs6,534. Bangalore hotels also recorded a decrease in average occupancy over the previous year which, also in respect to the average rate, may be attributable to a change in the mix and composition of respondents. HVS’s independent research reveals a more robust growth in average occupancy and rate for Bangalore hotels. • Properties in Vadodara registered the highest growth in ARR recording an ARR of Rs2,085 in 2005-06. This increase may again be attributed towards a change in the mix and number of respondents from Vadodara. Hyderabad registered the second highest growth in ARR in 2005- 06 recording an ARR of Rs4,305 in 2005-06 compared to Rs2,729 in 2004-05. • Net income as a percentage of revenue has gone up in nearly all categories (except in the four- star and Heritage categories). Key Operating Characteristics COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of responses: 32 26 49 204 101 46 21 5 484 Average Total Rooms Per Hotel: 230 122 88 52 38 34 33 49 66 Average Occupied Rooms Per Hotel: 59,923 31,339 22,307 11,605 8,324 7,893 5,721 12,713 15,549 Average Occupancy Per Hotel: 75.2% 72.3% 71.0% 62.9% 64.2% 63.9% 42.9% 72.4% 64.1% Average Rate Per Hotel: Rs6,667 Rs4,123 Rs2,880 Rs1,504 Rs864 Rs556 Rs3,501 Rs1,284 Rs3,227 Average Revenue Per Available Room (RevPAR): Rs5,012 Rs2,982 Rs2,045 Rs946 Rs554 Rs355 Rs1,503 Rs930 Rs2,069 Net Income (After Operating & Overhead Expenses, before Depreciation, Interest Payments & Taxes) - As a Percentage of Revenue 39.9% 38.2% 37.0% 24.5% 21.0% 20.9% 28.2% 42.2% 36.5% - Per Available Room Rs1,200,480 Rs669,037 Rs448,993 Rs158,039 Rs71,929 Rs47,822 Rs320,174 Rs214,366 Rs487,241 *Others include approved/unapproved hotels without star category • Average occupancies showed a greater variance compared to the previous year, with the five- star deluxe category achieving an average occupancy rate of 75.2% and the heritage category achieving an average occupancy of 42.9%. • Average room rates across all categories increased over the previous year except for two-star and one-star category hotels, which experienced a decline of 5.7% and 13.5% respectively over the previous year. The heritage and five-star deluxe hotel categories experienced the highest average rate growth at 47.4% and 21.2% respectively over the previous year. • The All India average revenue per available room (RevPAR) decreased marginally over the previous year, from Rs2,170 in 2004-05 to Rs2,069 in 2005-06, reflecting an decrease of 4.7%. All hotel categories experienced an increase in RevPAR, except for the two-star and one-star hotel categories.
  10. 10. FHRAI Page 10 HVS International • All India total departmental expense as a percentage of total departmental revenue reflected an increase from 30.9% in 2004-05 to 31.6% in 2005-06. The increase in All India total departmental expense is attributable towards increases in Rooms department expense and Food & Beverage department expense and a 5.4% decrease in average rates over the previous year. Increases in departmental expenses may be attributable to a 12.4% increase in responses from hotels with less than 150 rooms and a 38.6% decrease in responses from hotels with more than 150 rooms. Smaller properties achieve relatively lower departmental operating efficiencies, compared to larger properties, as a result of distributing expenses over their small room inventories. Smaller properties also cannot maximise, to the same extent as larger properties, on Room revenue due to their lower inventory, thereby resulting in relatively higher departmental expenses as a percentage of departmental revenues. Breakdown of Revenue – 2005-2006 Departmental Expenses as a Percentage of Revenue – 2005-2006 Rooms 57.3%Food & Beverage 25.7% Minor Operated* 3.0% Telephone & Other 2.1% Rental & Other Income 2.4% Banquet & Conferences 9.4% 15.7% 56.7% 34.3% 57.0% 8.1% 0% 10% 20% 30% 40% 50% 60% Rooms Food & Beverage Telephone & Other Minor Operated* Rental & Other Income AsaPercentageofRevenue • House Profit and Net Income as a percentage of total revenue increased marginally from 40.7% and 35.4% in 2004-05 to 41.2% and 36.5% in 2005-06. The increase in overall profitability, given that total average turnover declined 24% over the previous year, is attributable towards decreases in most operating expenses. • Property Operations & Maintenance and Administrative & General declined significantly over the previous year, from Rs91,981 PAR and Rs112,477 PAR respectively in 2004-05 to Rs68,511 PAR and Rs97,729 PAR in 2005-06. The decline in fixed expenses may be attributable to an increase in responses from properties with less than 150 rooms and a decrease in the number of responses from properties with more than 150 rooms. Smaller properties generally have lower Property Operations & Maintenance and Administration & General costs compared to larger properties. • Property taxes increased to 1.2% of total average revenue in 2005-06, the highest recorded since 2000-01. Property taxes were recorded at 0.6% in 2004-05 and 1.0% in 2003-04. • Internet, e-mail and website systems used by hotels as distribution channels continued to gain importance growing from 64.5% and 33.2% respectively in 2004-05 to 86.7% and 77.3% respectively in 2005-06. The table on the following page depicts a comparison of the percentage of hotels using each technology, during the 2005-06 year. • Accounting systems and internet/email were utilised the highest by hotels among all technology systems, representing approximately 92% and 87% respectively of hotels using each technology in 2005-06.
  11. 11. HVS International Page 11 FHRAI • The maximum utilisation of energy management systems was recorded by hotels in the five- star deluxe and five-star categories. Energy costs at five-star deluxe and five-star properties in 2005-06 represented 7.0% and 9.2% of total revenue, compared with 8.0% and 9.1% in 2004-05. Energy costs declined across all hotel categories in 2005-06 over the previous year, except for the two-star and heritage hotel categories, registering an All India PAR of Rs493 in 2005-06 compared with Rs531 in 2004-05. Technology in Hotels - Percentage of Hotels Using Each Technology 92.2% 86.7% 77.3% 65.6% 65.2% 58.5% 55.1% 42.6% 35.4% 28.1% 24.9% 20.2% 17.6% 9.0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Accounting System Internet / E-Mail Internet / Website Point of Sale System for Food and Beverage Local Area Network (LAN) Call Accounting System Management Information System Property Management System Intranet System Electronic Keycard Central Reservation System (CRS) Energy Management System Yield Management System Other Percentage of Hotels • Percentage of foreign guests decreased to 24.9% in 2005-06, compared to 28.3% in 2004-05. Of the foreign guests, the UK provided the largest demand at 16.1%, followed by USA at 12.3%. • Foreign guests accounted for 24.9% of all guests in 2005-06 registering an average length of stay of 3.4 days, compared to 3.0 days in 2004-05. Domestic guests continue to be the most important segment for the Indian hotel industry, accounting for 75.1% of all guests in 2005-06 registering an average length of stay of 2.6 days. • Leisure guests accounted for 42.6% of all guests in 2005-06 registering an average length of stay of 2.4 days compared to 2.3 days in 2004-05. Business guests accounted for 57.4% of all guests in 2005-06 registering an average stay of 2.6 days, showing a robust growth from 2.4 days in 2004-05 and 2.0 days in 2003-04. • November and December remain the busiest months of the year for most hotel categories, except for the five-star deluxe, five-star, four-star and heritage hotel categories. Five-star deluxe hotels achieved the highest occupancies in January and February at 82.4% and 84.4% respectively in 2005-06, whereas the five-star and four-star hotel categories achieved occupancies of 77.3% and 76.3%, respectively, in February and 75.7% and 76.9%, respectively, in December. • Reservations made through the Chain Reservation System (CRS), Global Distribution Systems (GDS) and hotel/chain website declined 1.0% over the previous year. Heritage and one-star category hotels experienced the highest growth in the use of CRS, GDS and hotel/chain website representing 23.6% and 2.7% respectively of total reservations in 2005-06, compared with 15.0% and 1.8% respectively in 2004-05.
  12. 12. FHRAI Page 12 HVS International • Print advertising was recorded as the most popular media used by the Indian hotel industry with the all India average at 89.8%, followed by 77.4% using direct mails. Radio advertising was recorded as the least popular media used by the Indian hotel industry with the all India average at 9.2%. • Credit cards as the mode of transaction has decreased from 30.4% and 32.5% in 2003-04 and 2004-05 respectively to 29.5% in 2005-06. Credit cards remained the most popular method of payment at luxury hotels at 45.3%. The most popular method of payment across all hotel categories was cash sales at 46.9% of all payment methods used. Change in Performance Ratios: 2005-06 over 2004-05 COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Average Occupancy Per Hotel: 5.3% 3.2% -1.5% 5.5% -0.5% 1.2% -21.2% 56.5% 0.8% Average Rate Per Hotel: 21.2% 19.2% 12.7% 8.3% -5.7% -13.5% 47.4% 15.3% -5.4% RevPAR 27.7% 23.0% 11.1% 14.4% -6.2% -12.5% 16.1% 80.3% -4.7% *Some changes may have occurred due to a different mix of hotels participating in our survey • The table above compares the results of our survey in 2005-06 with the previous year. All hotel categories (except four-star, two-star and heritage hotels) saw an increase in occupancy and an increase (except two-star and one-star hotels) in average rates. The decrease in average rates across the two-star and one-star hotel categories resulted in a 5.4% decrease in All India Average Rates. Consequently All India Average RevPAR declined by 4.7% over the previous year. • Use of pesticides and herbicides in dry rations was the least monitored environmental issue with the All India average at 28.7%, followed by use of pesticides and herbicides in green groceries at 31.5%. Environmental Issues - Percentage of Hotels Monitoring Quantitative Performance 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% EnergyConsum ption (Electricity) EnergyConsum ption (Gas) W aterConsum ption Use ofPesticidesand Herbicides (PestControl) Use ofChemicals(House Keeping) EnergyConsumption (Oil) FreshW aterQuality UseofChem icals (M aintenance) UseofPesticides and Herbicides (Public Area) UseofPesticides and Herbicides (InsideBuilding) Use ofPesticides and Herbicides (Horticulture) Noise(In House) W aste W aterVolum e StaffTraining in Environm entalIssues Air(IndoorAirQuality) W aste W aterQuality Noise(External) Solid W asteProduction (Segregation) Air(ExternalEm issions) Solid W asteProduction (Volum e) Solid W asteDisposal Com m unity Interaction Solid W asteProduction (Quality) Use ofPesticides and Herbicides (Green Groceries) Use ofPesticidesand Herbicides (Dry Rations) PercentageofHotels
  13. 13. HVS International Page 13 FHRAI Trends & Opportunities in the Indian Hotel Industry Introduction In this section, we seek to draw attention to some broad industry characteristics and present certain marketwide trends over the last few years. This being the ninth edition of the Indian Hotel Industry Survey, we are in a position to analyse survey results for the last few years and provide a historical trend for the users of this report. We have also attempted to provide brief market analyses for 18 cities, under ‘City Trends’. The city analysis reflects HVS International’s market perception for each city, as well as our expectations with regard to its performance in the current year (2006-07). Indian Hotel Industry - Size and Category Hotels in India are categorised into two main types: approved and unapproved. The Ministry of Tourism, Government of India grants approval to hotels at the project stage and then classifies them into one of the star categories. This approval status is voluntary; however, only approved hotels can avail of various incentives, import licenses and other benefits from the government. The following table lists the number of FHRAI member hotels in different categories in the last five years. Nearly all the five-star deluxe, five-star, four-star and three-star hotels in the country are members of FHRAI, although membership is not so comprehensive in lower star categories. The majority of hotels and hotel rooms in India are included in the unapproved type, as many hotels, especially those that are equivalent to lower star category hotels, do not take part in the Government classification process. Avg. Annual Rooms Growth Category Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms (2002-2006) Five-Star Deluxe 68 15,672 68 16,050 74 17,903 78 18,625 85 19,935 6% Five-Star 72 8,662 72 8,669 71 8,554 77 9,326 81 9,162 1% Four-Star 100 7,614 102 7,408 104 7,355 124 8,693 119 8,086 2% Three-Star 413 21,387 409 21,098 414 21,433 468 24,401 455 24,123 3% Two-Star 234 9,278 226 8,903 221 8,639 212 8,242 196 7,009 -7% One-Star 48 1,696 44 1,520 43 1,480 44 1,504 35 1,098 -10% Heritage 71 2,492 67 2,258 69 2,297 75 2,567 76 2,611 1% Approved (Unclassified) 308 12,515 297 11,921 304 12,058 333 13,426 440 17,937 9% Un-approved 455 17,925 452 17,895 477 18,796 470 18,286 493 19,431 2% Total 1,769 97,241 1,737 95,722 1,777 98,515 1,881 105,070 1,980 109,392 3% 2005 20062002 2003 2004
  14. 14. FHRAI Page 14 HVS International Indian Hotel Industry −−−− Revenue and Profitability: Average Per Hotel 4.59 5.18 9.15 1.25 0.97 1.95 2.80 11.49 4.54 8.75 4.08 3.20 31.7% 25.9% 29.2% 34.8% 40.7% 41.2% 0.00 2.00 4.00 6.00 8.00 10.00 12.00 2000-2001 All India Average 2001-2002 All India Average 2002-2003 All India Average 2003-2004 All India Average 2004-2005 All India Average 2005-2006 All India Average Rs(Crore) 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% HouseProfit(%) Revenue (in Rs crore) Net Income (in Rs crore) House Profit (in %) • For the 2005-06 survey we have witnessed a 12.5% increase in responses from hotels with inventory of less than 150 rooms, most of them being in the un-branded segment. The overall response from hotels in the branded segment with inventory of more than 150 rooms has declined by 38.6%. Total departmental expenses as a percentage of total departmental revenue (from the representative sample of hotels that participated in the survey) witnessed a marginal increase, from 30.9% in 2004-05 to 31.6% in 2005-06. HVS International would like to qualify that hotels in the branded segment continue to show improved profit performance as a result of enhanced revenue. The above trend stands true only for this survey and it should be noted that the trend is also impacted by a change in the mix and number of responses from properties compared with the previous year. • Chain affiliated hotels registered a strong House Profit growing from 41.5% in 2004-05 to 44.9% in 2005-06. Independent hotels registered a decline in House Profit from 40.5% in 2004-05 to 36.9% in 2005-06. • December, followed by November, was the busiest month in 2005-06. Average occupancy was at its highest in December (70.2%), while November recorded an average occupancy of 67.9%. July and August were the slowest months, recording an average of 55.5% occupancy. • Over 89.0% of hotels across all categories used print advertising as a marketing medium, followed by direct mail and hotel website at 77.4% and 74.5% respectively. Radio advertising was the least utilised marketing media at 9.2%. • Over 90% of hotels across all categories utilised accounting systems. However, less than 18% of hotels utilised a yield management system in 2005-06 compared to approximately 26% in 2004-05.
  15. 15. Trends in Key Operating Statistics COMPOSITION 2001-02 All India Average 2002-03 All India Average 2003-04 All India Average 2004-05 All India Average 2005-06 All India Average 2001-02 All India Average 2002-03 All India Average 2003-04 All India Average 2004-05 All India Average 2005-06 All India Average 2001-02 All India Average 2002-03 All India Average 2003-04 All India Average 2004-05 All India Average 2005-06 All India Average Number of responses: 424 417 484 509 484 424 417 484 509 484 424 417 484 509 484 Average Total Rooms Per Hotel: 63 66 82 81 66 63 66 82 81 66 63 66 82 81 66 Average Occupied Rooms Per Hotel: 11,727 13,129 18,435 19,392 15,549 11,727 13,129 18,435 19,392 15,549 11,727 13,129 18,435 19,392 15,549 Average Occupancy Per Hotel: 53.2% 54.8% 59.7% 63.6% 64.1% 53.2% 54.8% 59.7% 63.6% 64.1% 53.2% 54.8% 59.7% 63.6% 64.1% Average Rate Per Hotel: Rs2,058 Rs2,004 Rs 2,689 Rs 3,412 Rs3,227 Rs2,058 Rs2,004 Rs 2,689 Rs 3,412 Rs3,227 Rs2,058 Rs2,004 Rs 2,689 Rs 3,412 Rs3,227 REVENUE Rooms 53.2% 50.8% 54.2% 57.3% 57.3% Rs380,562 Rs398,802 Rs 607,328 Rs 813,001 Rs764,321 Rs2,058 Rs2,004 Rs 2,689 Rs 3,412 Rs3,227 Food&Beverage 30.9 31.3 29.6 28.3 25.7 220,976 245,970 332,217 401,240 343,191 1,195 1,236 1,471 1,684 1,449 Banquet &Conferences 6.8 8.9 7.8 7.7 9.4 48,324 69,850 87,662 109,463 125,309 261 351 388 459 529 Telephone &Other 3.1 2.5 2.3 1.6 2.1 22,063 19,844 25,202 22,614 27,652 119 100 112 95 117 Minor Operated* 2.7 2.8 3.4 3.2 3.0 19,336 21,901 38,420 44,725 40,532 105 110 170 188 171 Rental &Other Income 3.4 3.6 2.7 2.0 2.4 24,338 28,581 30,172 27,707 32,557 132 144 134 116 137 Total 100.0 100.0 100.0 100.0 100.0 715,599 784,949 1,121,000 1,418,749 1,333,560 3,869 3,945 4,965 5,955 5,630 DEPARTMENTAL EXPENSES Rooms 20.6 20.7 17.8 14.7 15.7 Rs78,234 Rs82,462 Rs108,205 Rs119,369 Rs119,959 423 414 479 501 506 Food&Beverage 62.2 58.7 55.9 53.9 56.7 167,450 185,236 234,771 275,303 265,815 905 931 1,040 1,156 1,122 Telephone &Other 57.7 50.0 47.6 64.3 34.3 12,732 9,921 12,007 14,533 9,497 69 50 53 61 40 Minor Operated* 51.8 52.7 53.7 58.8 57.0 10,016 11,547 20,624 26,283 23,085 54 58 91 110 97 Rental &Other Income 10.1 7.3 8.1 8.2 8.1 2,466 2,097 2,919 2,269 2,627 13 11 14 10 11 Total 37.9 37.4 33.7 30.9 31.6 270,898 293,662 378,052 437,756 420,984 1,465 1,476 1,674 1,897 1,777 DEPARTMENTAL INCOME 62.1 62.6 66.3 69.1 68.4 444,701 491,286 742,949 980,993 912,580 2,405 2,469 3,291 4,118 3,853 OPERATING EXPENSES Administrative &General 10.3 8.5 8.4 7.9 7.3 Rs73,323 Rs66,328 Rs94,401 Rs112,477 Rs97,729 396 333 418 472 413 Management Fee 2.4 2.3 2.3 1.6 2.6 16,944 18,302 25,842 22,069 33,980 92 92 114 93 143 Marketing 3.5 3.2 3.6 3.1 2.9 24,718 24,980 40,681 43,564 39,050 134 126 180 183 165 Franchise Fees 0.4 0.5 0.4 0.5 0.5 2,796 4,145 3,874 6,902 7,218 15 21 17 29 30 Property Operations &Maintenance 7.3 6.9 6.2 6.5 5.1 52,179 54,321 69,735 91,981 68,511 282 273 309 386 289 Energy 12.5 12.3 10.5 8.9 8.7 89,228 96,439 118,093 126,417 116,577 482 485 523 531 492 Total 36.2 33.4 31.5 28.4 27.2 259,188 262,117 352,626 403,409 363,065 1,401 1,317 1,562 1,693 1,533 HOUSE PROFIT 25.9 29.2 34.8 40.7 41.2 185,512 229,169 390,323 577,584 549,514 1,003 1,152 1,729 2,424 2,320 FIXEDEXPENSES Property Taxes 1.1 1.1 1.0 0.6 1.2 7,831 8,919 11,068 7,959 15,711 42 45 49 33 66 Insurance 0.7 0.8 0.6 0.5 0.5 4,992 6,131 6,845 7,545 6,371 27 31 30 32 27 Other FixedExpenses 1.8 1.1 1.6 2.0 1.9 13,104 8,740 17,840 28,465 25,507 71 44 79 119 108 Rent 0.9 1.3 1.0 2.2 1.1 6,482 10,115 10,947 30,552 14,685 35 51 48 128 62 Total 4.5 4.3 4.2 5.3 4.7 32,408 33,905 46,700 74,521 62,273 175 170 207 313 263 NET INCOME** 21.4% 24.9% 30.7% 35.4% 36.5% Rs153,104 Rs195,264 Rs 343,622 Rs 503,063 Rs487,241 Rs828 Rs981 Rs 1,521 Rs 2,112 Rs2,057 * Minor operated departments include: laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth Percentage of Revenue Amount Per Available Room Amount Per Occupied Room HVSInternationalFHRAIPage15
  16. 16. FHRAI Page 16 HVS International City Trends The positive growth experienced by the Indian hotel industry, which commenced in 2003-04, continued through 2005-06. Research undertaken in key hotel markets by HVS International in 2005- 06 reveals that most cities experienced growth in average rates and occupancy levels over the previous year. Analysis undertaken as part of the FHRAI survey reveals a more subdued operating environment, with a number of markets experiencing declines in average occupancies and room rates. This may be attributable to the increased participation by the two-star and one-star hotel categories, both of which experienced a decline in average room rates. The following paragraphs also detail our expectations of new supply and performance for 18 important hotel markets, based on research undertaken and forecasts made by HVS International. New Delhi - NCR: Occupancy was recorded at 74.8% in 2005-06, a decline of 1.8 occupancy points over 2004-05. Average rates were recorded at Rs6,699 in 2005-06, a 21.8% increase over 2004-05. The National Capital Region is expected to see approximately 11,000 to 12,000 rooms to enter the market over the next five years, particularly in Gurgaon and Noida. Demand for hotel accommodation in the NCR market would be enhanced by improved road connectivity (including the Delhi-Gurgaon Expressway and proposed roads connecting Delhi and Gurgaon). Improved air connectivity and seat capacity into Delhi driven by the operation of the New Delhi airport by the GMR-Fraport Consortium, demand induced from the proposed SEZ developments and Commonwealth Games 2010 will also drive demand for commercial accommodation. The on-going auction of sites by each of the nodal Development Authorities in an effort to increase hotel room supply in the NCR to meet with hotel room requirements at the time of the Commonwealth Games will further boost hotel activity in the capital. Mumbai: Citywide occupancy in Mumbai increased marginally to 75.8% in 2005-06 from 74.9% in 2004-05, whereas the average rate was recorded at Rs4,615 in 2005-06. Mumbai is expected see between 9,000 and 10,000 rooms to enter the market over the next five years. Rising land costs in south and central Mumbai, and a greater availability of land in suburbs such as Bandra-Kurla, Andheri, Malad and Navi-Mumbai has facilitated significant growth in commercial and planned hotel development in these suburbs. The release of Mills Land by the Supreme Court in 2006 in central Mumbai is likely to drive significant commercial and hotel development. The completion of the Bandra-Worli Sea Link and other planned road developments would significantly improve connectivity in Mumbai. The proposed convention centre in the Bandra-Kurla Complex facilitated by increased air capacity and connectivity driven by the operation of Mumbai airport by the GVK ACSA consortium will also drive significant demand for hotel accommodation in Mumbai. Kolkata: In 2005-06, Kolkata witnessed a decrease of 2.1 occupancy points: from 67.1% in 2004-05 to 65.0% in 2005-06. Average rates in Kolkata increased by 20.7% from Rs2,210 in 2004-05 to Rs2,668 in 2005-06. Kolkata is also expected see between 2,000 and 3,000 rooms to enter the market over the next five years. The key room night demand generating areas of Kolkata traditionally included Dalhousie, Writers Building, Park Street and central Kolkata and the port at Haldia. The city has more recently witnessed development in the IT, ITeS, BPO and financial services sectors, particularly in Salt Lake, which is increasingly contributing to demand for room nights in the city. Upcoming commercial suburbs include Salt Lake, Rajarhat, along the EM Bypass, Kolkata West International City, Dankuni and Kariadanga. Kolkata is also gaining popularity as a MICE destination, with a large number of conferences currently hosted at Science City. The proposed 100-acre convention centre in Rajarhat will also induce significant demand for hotels in Kolkata. The West Bengal Government’s initiatives in auctioning hotel sites in Kolkata are likely to continue to stimulate hotel activity in the city. However, recent trends indicate that high land costs associated with hotel sites is increasingly becoming a critical issue for investors to make viable hotel business cases.
  17. 17. HVS International Page 17 FHRAI Pune: Occupancy in Pune was recorded at 77.3%, registering minimal growth over the previous year compared to a significant increase in average rates from Rs1,295 in 2004-05 to Rs2,621 in 2005-06. Pune is expected to see over 3,000 rooms in various categories to enter the market over the next five years. The city is gaining popularity in the biotechnology and pharmaceutical industry following the establishment of major pharmaceutical companies in Kurkumbh and Jejuri. Hinjewadi (and Kharadi to an extent) is a hub for IT, ITeS and BPO industries and generates significant demand for hotel room nights in the city. The development of the International Convention Centre will increase Pune’s market share in the conference and meetings industry with particular focus on the lucrative medical conference market driven by the increasing pharmaceutical activity in the city. Chakan, Pimpri and Chinchwad are upcoming auto component hubs. The proposed new airport, which is pending approval, would significantly improve connectivity and facilitate demand into the city. Chennai: Chennai witnessed an occupancy increase of 4.7 occupancy points to 78.0% in 2005-06, following a decline for two consecutive years. The city saw a simultaneous increase in average rate by approximately 29.2% to Rs3,080 in 2005-06. Chennai is expected to see between 4,000 and 5,000 rooms in various categories to enter the market over the next five to six years. Chennai’s booming manufacturing and IT sectors are providing the city with the essential impetus for economic growth. The Old Mahabalipuram Road (OMR) currently houses 8-10 fully operational IT parks and private campuses of large firms, which contribute a large proportion of room night demand in the city. Future rooms demand generators include the development of 18-20 IT parks currently under development on the OMR, IT development in the industrial area of Guindy, and SEZ development at Sriperumbudur and Mahindra World City. We see Chennai as a buoyant city, with proposed supply being absorbed successfully in the market. Bangalore: The survey reveals a decrease in both average occupancy and rates in Bangalore over the previous year. Although the survey indicates an average occupancy of 71.7% and an average rate of Rs6,534, HVS research reveals a significantly more buoyant market, owing to the acute shortage of quality accommodation in the city. Demand continues to be robust owing to the heightened commercial activity in the city, reflected in significant office space absorption in 2005/06. We anticipate that the planned supply of between 8,000 and 9,000 hotel rooms for the city may lead to an oversupply situation around 2010, which would see a sharp correction in the escalating average room rates. The IT, ITeS, banking, research and development and engineering sectors are the dominant drivers of growth in the local economy. Infrastructural inadequacies, especially road and public transportation, continue to be the biggest challenge for the city. With construction of the new airport, metro rail project, road widening and flyover projects underway, we expect the city to witness an improvement on this aspect, especially in the suburban and peripheral areas. In our opinion, Bangalore's first mover advantage in the IT/ITeS sector coupled with improving infrastructure will enable it to retain its attractiveness as a prime investment destination. Goa: In Goa, overall occupancy was recorded at 66.7% in 2005-06. Average rates grew from Rs2,704 in 2004- 05 to Rs3,994 in 2005-06. Goa is expected to see development of between 2,500 and 3,000 rooms in various categories over the next five years, however, with less than 20% currently under development. Goa is an extremely promising market with the highest average length of stay by both foreign and domestic guests. The city’s demand growth is primarily being driven by the domestic market, particularly from the weekend market from destinations with good air connectivity into Goa. Recent demand trends show increased demand for hotel rooms in Goa year round, reducing the impact of seasonality on the local hotel market. As a result overall occupancy and average room rates grew 11.0% and 47.7% respectively. The proposed Mopa international airport, currently proposed in North Goa but pending confirmation, would facilitate an increase in flight frequencies and air
  18. 18. FHRAI Page 18 HVS International capacity into Goa, particularly from the international charter market. A proposed new convention centre has also been announced on a site close to Goa University, which would induce significant demand for room nights from associated conferences and meetings held at the proposed venue. Agra: Agra has seen a decrease in occupancy of 2.0 occupancy points to 60.7% in 2005-06. Average rates increased by 26.0% to Rs2,389 in 2005-06. Improved road and rail connectivity between Delhi and Agra has impacted on the city’s ability to generate additional demand for room nights, with Agra increasingly being viewed as a day destination. Hotel development activity in Agra is more subdued compared to other major markets, with approximately 400 to 500 mid-market and budget hotel rooms expected to enter the market over the next five years. Ahmedabad: The survey indicates a significant increase in occupancy and average rates across the Ahmedabad hotel market, from 52.6% and Rs1,825 respectively in 2004-05 to 68.9% and Rs2,572 respectively in 2005-06. Ahmedabad is expected to see between 800 and 1,000 hotel rooms to enter the market over the next few years. Development norms, following the 2001 earthquake, has facilitated commercial and retail development in areas such as CG Road, Gandhinagar-Sarkhej Highway, Ashram Road and Satellite Road. Key industries contributing to hotel room night demand include the pharmaceutical, financial, telecom, textile, BPO and IT sectors. Ahmedabad is fast emerging as a hub to host pharmaceutical and medical symposiums, having hosted approximately 16 such events over the past two years. The Gandhinagar - Ahmedabad highway is showing robust absorption trends from the IT sector, which would further induce demand for room nights in the market. Kochi: Kochi registered an average occupancy and rate of 65.9% and Rs1,247 respectively in 2005-06. The city hosts a large number of leisure based health and ayurvedic tourists each year, boosted by the ‘Incredible India’ campaign. The city also has the presence of the banking and finance sectors which provide considerable commercial demand for hotels. Similar to other cities in India, Kochi’s IT, ITeS and BPO sectors have been growing over recent years. A number of international firms, including Wipro, Tata Consultancy Services and TQ3 are seeking to enter the market, which, in addition to the proposed IT Infopark in Kakkanad, would contribute towards demand for hotel rooms in the city. Kochi Port, oil refineries and the Petronet terminal are expected to induce growth. Hyderabad: In Hyderabad, overall occupancy increased by 5.0 occupancy points to 80.2% in 2005-06. Average rates registered an increase of 57.7% over the previous year to Rs4,305 in 2005-06. Hyderabad is expected to see an addition of between 7,000 and 8,000 rooms to the city’s current room inventory. The recently opened Hyderabad International Convention Centre has put the city on the map of key conferencing destinations nationally and internationally, and will drive significant demand for hotel accommodation in the city. Key demand driving sectors in Hyderabad include the IT, BPO and KPO sectors, located at HITEC City, Genome Valley and ICICI Knowledge Park. The proposed new international airport at Shamshabad is scheduled to open in early 2008 and will significantly enhance Hyderabad’s connectivity both nationally as well as internationally, and facilitate growth in the national and international conventions and meetings markets. Current growth trends in Hyderabad indicate that the city has significant potential for hotel activity in the future. Jaipur: Occupancy levels decreased by 11.4 occupancy points to 60.2% in 2005-06 and average rates increased by 24.0% over the previous year to Rs2,220 in 2005-06. This may be attributable towards a change in the mix and number of respondents from Jaipur. Jaipur is expected to see an addition of over 2,500 hotel rooms over the next five years. In addition to being a popular tourist and wedding destination, Jaipur is also establishing itself into a commercial destination, driven by the local gems, jewellery and textile market. The proposed convention centre in proximity to Tonk Road, proposed SEZ and
  19. 19. HVS International Page 19 FHRAI proposed international airport close to the existing airport would facilitate growth in commercial demand in the city. The Jal Mahal tourism project and the state government’s initiatives in restoring historical monuments are likely to enhance leisure tourism in the city. Nagpur: Nagpur witnessed a significant increase in average occupancy from 46.1% in 2004-05 to 71.0% in 2005- 06 and a 40.3% increase in average rate to Rs1,307 in 2005-06, after a two-year decline in average occupancy and rate. This significant increase in average occupancy and rate may be attributable towards a change in the mix and number of respondents from Nagpur. Traditionally, commercial demand in Nagpur has been from the industrial belts of Butibori and Kamleshwar. However, following the development of the integrated cargo hub and a multiproduct SEZ, Nagpur is likely to witness an increase in commercial demand. The announcement by Boeing to develop a maintenance, repair and overall facility coupled with an aviation academy at Gondia, near Nagpur is also expected to boost commercial demand in the city. Thiruvananthapuram: The city witnessed an increase in occupancy of 10.0 occupancy points to 57.6% in 2005-06, and a decrease in average room rate of 7.7% to Rs1,665. Being the state capital (of Kerala), the city is a hub of political activity. Moreover, Thiruvananthapuram, with its famous beaches, is among the top tourist destinations in India. The city has grown as a tourist and commercial centre, with the international airport being one of the gateways into Kerala. Commercial activity in the city is driven by the IT and Biotechnology sectors, with the establishment of a technopark in Kazhakoottam (phase II of which has been accorded SEZ status) and the Rajiv Gandhi Centre for Biotechnology. Udaipur: Citywide occupancy increased to 55.3% in 2005-06. Average rate showed a decrease of 5.8% to Rs3,580 in 2005-06. The city is primarily a leisure market. However, some proportion of the commercial demand in the city is generated by industries such as textile, marble, granite, mining and minerals, and diamond cutting and polishing industries. Vadodara: Citywide occupancy increased from 62.6% in 2004-05 to 70.0% in 2005-06. Similarly, the average rate has increased from a level of Rs467 in 2004-05 to Rs2,085 in 2005-06. The steep increase in average rate is attributable towards a change in the mix and number of survey respondents from Vadodara. Visakhapatnam: Visakhapatnam (or Vizag) witnessed a decrease in occupancy by 3.4 occupancy points to 77.2% in 2005-06 and an increase in average rates by 10.1% to Rs1,686. Vizag’s traditional shipping and petroleum industrial market perception is slowly changing with the advent of the IT, ITeS, BPO and KPO sectors. In addition to Wipro, HSBC’s BPO, Satyam Technologies, NuNet Technologies and Gallega Software Solutions a number of companies, including Infosys and Tata Consultancy Services, have expressed interest in entering the market. Vizag is also a fishing port, handling major seafood exports, and India’s oldest ship-building yard. The growth of Vizag’s special economic zone, initiatives taken by the Government to classify Vizag as a Special Tourist Zone as well as promote it as a wellness destination are likely to facilitate hotel activity within the city over the medium to long term. Shimla Shimla registered a decline in average occupancy and rate to 45.2% and Rs813 in 2005-06, on account of a larger number of responses from smaller hotels compared to the previous year. The continued growth of the economy will facilitate an improvement in performance in the future.
  20. 20. FHRAI Page 20 HVS International New Supply of Hotels HVS international maintains its own database of new supply entering key existing and developing markets in India. The graph below highlights the 281 hotels, up from 155 last year or 95 in 2004, under active development in various cities, of which HVS International is currently aware. It is important to note that most HVS data for new supply represents branded properties. It is also quite likely that a large number of hotels are in the early stages of planning and/or development. New economy segment hotels (approximately 200 - 300 in number) are being promoted by some leading hotel chains in India (like Ginger, Formula 1 & Ibis), and these have not been accounted for in this survey. Number of New Hotel Developments 60 36 34 29 24 19 18 17 12 6 4 4 4 3 3 3 3 2 0 10 20 30 40 50 60 70 Delhi(NCR) Mumbai Bangalore Hyderabad Pune Chennai Jaipur Goa Kolkata Kochi Visakhapatnam Ahmedabad Udaipur Agra Ludhiana Lucknow Mysore Coimbatore No. of hotels The demand for rooms has risen in nearly all cities for the current financial year (April 06 – March 07). Comparatively the rooms supply has only marginally increased in the key cities. This has led to a sharp increase in average room rates in Delhi (NCR), Hyderabad, Bangalore, Mumbai Pune, Goa and Kolkata. There is going to be a major shortage of rooms for the next 3-4 years and the above- mentioned cities will see a further 30-50% increase in average rate in the current fiscal and possibly again 20-25% next year. An interesting development is also the active participation of major real estate developers of the likes of DLF, Emaar-MGF and Unitech. All of them have entered the hospitality space with a vengeance and this should also result in hospitality projects coming up much faster. A classic case of this was seen in the recently opened Hyderabad International Convention Centre which got completed in record time along with the first class business hotel next door. What the Future Holds Tourist arrivals to India have shown a robust growth and we will go past the 4 million international arrival mark for the first time in 2006. However, the focus has to shift towards domestic travel, which is the real driver of hotel business in the country. While the Incredible !ndia campaign has been a huge success in the recent past, India now runs the risk of over playing it. We are suddenly amongst the most expensive hotel markets in the region. Our infrastructure of airports and roads still remain a disappointment and by enticing tourist to come and pay those high prices for a stay and providing them with hotel products which do not match price expectations we are doing more damage to our tourist industry than any good in the medium to long term. We desperately need world-class conference facilities in many of our India cities. HVS also foresees the development of resort destinations, which would cater not only to the families but also to the MICE segment. An opportunity which has not really been tapped to its fullest is the extended stay segment. The government should also encourage hotels to look at the concept of Condo hotels, which will help rationalise the steep prices of land and make hotels more affordable to build. Other issues that need to be addressed include higher FSI norms for hotels while keeping stricter parking norms for the same. Moreover, banks should look at longer-term lending than what is being offered presently in India.
  21. 21. FHRAI Page21 HVS International 1. Indian Hotel Industry by Star Category In this section, we have analysed hotel performance by star classification. An overall total of 1,151 hotels participated in our survey for 2005-06. The hotels have been classified into the eight star categories available in India (see tables 1-1 to 1-10), and their responses analysed accordingly. In order to be fair to the approved hotels that are awaiting classification, we have combined them with their expected star category. ‘Unapproved’ hotels have been put under the ‘Others’ category. To provide further interesting comparisons, we have included a column for All India totals across all star categories. Each section includes the total number of respondents for each component of the survey, allowing the reader to judge the validity of the data received. The layout has been standardised in each section to enable consistency throughout the entire document. All figures pertain to 2005-06 (April-March), and monetary figures are in Indian Rupees. The US dollar conversion rate can be taken at 1US$ = Rs45.0 (average conversion rate for the period 2005-06). • Table 1-1: presents a typical facilities analysis including rooms configuration, F&B outlets, a subdivision of employees into managerial, supervisory and staff positions and a breakdown of trained and total employees; • Table 1-2: presents the individual revenue and expense components as a percentage of revenue; • Table 1-3: presents financial statements on a PAR (per available room) basis; • Table 1-4: presents financial statements on a POR (per occupied room) basis; • Table 1-5: presents market data including market segmentation, guest analysis and the country of origin of guests; • Table 1-6: presents a monthly and daily occupancy analysis; • Table 1-7: presents the sources of reservations of hotel rooms; • Table 1-8: presents the use of various forms of marketing media; • Table 1-9: presents an analysis of payment methods and the use of credit cards; • Table 1-10: presents the technology used and environment-related issues and practices.
  22. 22. FHRAI Page22 HVS International TABLE 1-1: Indian Hotel Industry by Star Category – Facilities Analysis and Staffing Typical Room Profile of an Average Hotel COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 40 42 70 447 249 95 45 147 1,135 Air-Conditioned Single 27.8 12.5 7.3 2.7 2.4 1.5 0.7 1.3 3.8 Double 165.9 106.1 68.4 36.8 18.7 11.2 20.3 14.3 36.2 Suites 23.9 11.8 10.0 4.8 3.1 1.7 7.0 2.3 5.2 Non-Air-Conditioned Single 0.0 0.0 0.0 0.8 1.7 2.9 1.6 2.5 1.3 Double 0.0 2.0 2.0 6.5 9.3 12.9 6.5 10.4 7.5 Suites 0.0 0.2 0.1 0.5 1.1 0.8 1.1 1.3 0.7 Total average rooms 217.6 132.6 87.7 52.0 36.2 31.0 37.2 32.1 54.6 * The number of non-air-conditioned rooms in lower star category hotels appears to be higher, partly because many are located in hill stations where air-conditioning is not provided in hotels Average Number of Food & Beverage Outlets Per Hotel COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 39 39 66 403 204 67 38 96 952 Restaurant 3.6 3.4 2.1 1.6 1.3 1.1 1.5 1.2 1.7 Bars 1.5 1.3 1.1 0.8 0.6 0.4 0.7 0.5 0.8 Others 1.1 0.8 1.0 0.9 0.5 0.5 0.7 0.4 0.7 Total 6.3 5.5 4.1 3.3 2.4 2.0 2.9 2.1 3.2 Average Number of Total Employees Per Hotel (Permanent / Contract / Full Time / Part Time) COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 38 38 67 412 233 92 42 119 1,041 Managers Male 48.3 22.1 12.5 5.1 2.4 2.0 4.1 1.9 6.5 Female 15.7 5.7 1.8 0.7 0.2 0.2 0.6 0.2 1.3 Supervisors Male 57.3 29.4 16.4 8.3 3.9 3.1 6.1 2.7 9.2 Female 14.5 5.6 2.8 1.2 0.5 0.3 0.7 0.4 1.6 Staff Male 260.5 158.5 110.8 58.8 29.0 21.0 39.8 20.5 58.0 Female 33.7 14.1 9.0 4.9 2.4 1.5 2.4 1.2 5.2 Total 430.0 235.3 153.2 79.0 38.4 28.1 53.7 26.9 81.7 Avg. Employees / Room 2.0 1.8 1.8 1.5 1.1 0.9 1.5 0.9 1.5 Average Percentage of Trained Employees Per Hotel COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 34 32 49 240 100 40 26 21 542 Managers 87.7% 91.5% 88.9% 85.7% 85.0% 86.2% 97.5% 94.1% 87.3% Supervisors 82.6 81.3 78.5 76.2 75.3 83.4 89.6 67.9 77.8 Staff 77.5 68.2 66.2 67.9 61.0 57.0 76.8 51.5 66.1 Total Avg. Trained Employees* 82.6 80.3 77.9 76.6 73.8 75.5 87.9 71.1 77.1 Total Avg. Un-Trained Employees 17.4 19.7 22.1 23.4 26.2 24.5 12.1 28.9 23.0 Hotels with Training Department 87.5% 66.7% 47.1% 19.2% 11.1% 4.4% 31.1% 2.1% 20.4% * Trained Employees includes those with a minimum one year certificate course in an educational institute, however some hotels may have included those with short term (in-house) training
  23. 23. TABLE 1-2: Indian Hotel Industry by Star Category – Financial Report – Percentage of Revenue COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 32 26 49 203 101 46 21 5 484 Average Total Rooms Per Hotel: 230 122 88 52 38 34 33 49 66 Average Occupied Rooms Per Hotel: 59,923 31,339 22,307 11,605 8,324 7,893 5,721 12,713 15,549 Average Occupancy Per Hotel: 75.2% 72.3% 71.0% 62.9% 64.2% 63.9% 42.9% 72.4% 64.1% Average Rate Per Hotel: Rs6,667 Rs4,123 Rs2,880 Rs1,504 Rs864 Rs556 Rs3,501 Rs1,284 Rs3,227 REVENUE Rooms 57.8% 60.6% 60.1% 51.7% 55.6% 56.6% 52.8% 70.2% 57.3% Food & Beverage 22.9 24.1 26.4 32.9 32.8 33.8 35.6 22.2 25.7 Banquet & Conferences 10.4 8.8 6.9 10.8 3.8 2.6 4.3 5.1 9.4 Telephone & Other 3.0 1.1 1.4 0.8 1.0 0.8 0.6 0.8 2.1 Minor Operated* 3.7 3.3 2.5 1.6 0.8 4.5 2.5 0.9 3.0 Rental & Other Income 2.3 2.1 2.7 2.2 6.0 1.8 4.1 0.8 2.4 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 DEPARTMENTAL EXPENSES Rooms 15.3 14.3 14.4 18.2 24.4 30.2 15.6 21.5 15.7 Food & Beverage 55.4 55.0 57.0 62.3 72.0 62.7 52.0 43.1 56.7 Telephone & Other 17.4 46.6 77.7 139.3 134.5 159.6 118.1 110.0 34.3 Minor Operated* 52.2 43.5 71.4 97.7 158.7 15.3 72.2 140.5 57.0 Rental & Other Income 2.8 2.4 13.9 14.8 21.4 76.8 11.8 30.8 8.1 Total 29.7 28.8 30.9 39.6 43.8 43.2 32.0 29.2 31.6 DEPARTMENTAL INCOME 70.3 71.2 69.1 60.4 56.2 56.8 68.0 70.8 68.4 OPERATING EXPENSES Administrative & General 6.8 7.0 8.2 9.0 6.6 9.2 10.7 9.7 7.3 Management Fee 3.5 2.0 1.3 1.6 1.1 1.0 1.8 0.4 2.6 Marketing 3.2 3.2 2.3 2.5 2.7 2.2 4.9 1.2 2.9 Franchise Fees 0.7 0.5 0.4 0.3 0.1 0.0 0.4 0.0 0.5 Property Operations & Maintenance 4.2 5.5 6.0 6.6 7.6 4.9 7.7 5.1 5.1 Energy 7.0 9.2 9.5 12.9 13.4 13.9 10.9 10.2 8.7 Total 25.3 27.5 27.7 32.8 31.4 31.2 36.4 26.6 27.2 HOUSE PROFIT 45.0 43.7 41.4 27.7 24.9 25.6 31.6 44.2 41.2 FIXED EXPENSES Property Taxes 1.5 1.3 0.6 0.7 1.1 2.1 0.3 0.3 1.2 Insurance 0.5 0.5 0.4 0.4 0.4 0.6 0.4 0.1 0.5 Other Fixed Charges 2.2 1.7 1.9 1.3 1.6 1.0 1.5 0.2 1.9 Rent 0.9 2.0 1.6 0.8 0.9 0.9 1.2 0.3 1.1 Total 5.1 5.6 4.5 3.1 3.9 4.7 3.4 0.9 4.7 NET INCOME** 39.9% 38.2% 37.0% 24.5% 21.0% 20.9% 28.2% 42.2% 36.5% * Minor operated departments include: laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth ** Net Income is before depreciation, interest payments and taxes HVSInternationalPage23FHRAI
  24. 24. TABLE 1-2: Indian Hotel Industry by Star Category – Financial Report – Amount Per Available Room COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 32 26 49 203 101 46 21 5 484 Average Total Rooms Per Hotel: 230 122 88 52 38 34 33 49 66 Average Occupied Rooms Per Hotel: 59,923 31,339 22,307 11,605 8,324 7,893 5,721 12,713 15,549 Average Occupancy Per Hotel: 75.2% 72.3% 71.0% 62.9% 64.2% 63.9% 42.9% 72.4% 64.1% Average Rate Per Hotel: Rs6,667 Rs4,123 Rs2,880 Rs1,504 Rs864 Rs556 Rs3,501 Rs1,284 Rs3,227 REVENUE Rooms Rs1,738,180 Rs1,061,280 Rs729,616 Rs332,847 Rs190,404 Rs129,459 Rs598,773 Rs331,785 Rs764,321 Food & Beverage 687,885 422,235 320,882 211,675 112,263 77,262 404,136 105,041 343,191 Banquet & Conferences 311,358 153,868 83,156 69,759 12,890 5,961 49,195 24,114 125,309 Telephone & Other 90,517 20,046 17,528 4,957 3,244 1,918 6,214 3,736 27,652 Minor Operated* 110,621 58,045 30,902 10,240 2,734 10,184 28,712 4,110 40,532 Rental & Other Income 68,645 36,903 32,610 14,302 20,681 4,002 46,808 3,988 32,557 Total 3,007,210 1,752,380 1,214,690 643,781 342,216 228,786 1,133,840 472,772 1,333,560 DEPARTMENTAL EXPENSES Rooms 265,419 152,229 105,000 60,423 46,470 39,067 93,284 71,293 119,959 Food & Beverage 553,194 316,939 230,183 175,385 90,147 52,155 235,790 55,602 265,815 Telephone & Other 15,767 9,342 13,627 6,904 4,363 3,061 7,339 4,110 9,497 Minor Operated* 57,755 25,219 22,064 10,003 4,340 1,553 20,740 5,772 23,085 Rental & Other Income 1,939 882 4,538 2,109 4,418 3,074 5,521 1,228 2,627 Total 894,074 504,612 375,412 254,823 149,738 98,909 362,674 138,004 420,984 DEPARTMENTAL INCOME 2,113,130 1,247,770 839,283 388,958 192,478 129,877 771,164 334,768 912,580 OPERATING EXPENSES Administrative & General 203,568 122,684 99,679 57,726 22,415 21,008 121,798 45,984 97,729 Management Fee 103,646 35,177 15,640 9,947 3,688 2,299 20,004 1,707 33,980 Marketing 95,042 56,703 28,109 16,137 9,114 5,119 55,530 5,780 39,050 Franchise Fees 22,218 8,942 4,292 1,578 370 0 3,956 0 7,218 Property Operations & Maintenance 125,115 96,349 73,185 42,226 25,960 11,219 87,588 23,984 68,511 Energy 209,954 161,520 115,343 83,089 45,734 31,733 123,901 38,569 116,577 Total 759,543 481,373 336,247 210,701 107,280 71,378 412,777 116,024 363,065 HOUSE PROFIT 1,353,590 766,394 503,036 178,256 85,198 58,499 358,387 218,744 549,514 FIXED EXPENSES Property Taxes 44,046 23,309 7,678 4,171 3,595 4,768 3,244 1,451 15,711 Insurance 15,547 9,025 4,883 2,607 1,302 1,426 4,614 610 6,371 Other Fixed Charges 67,089 29,365 22,667 8,395 5,386 2,371 17,147 1,098 25,507 Rent 26,432 35,658 18,815 5,043 2,985 2,110 13,208 1,220 14,685 Total 153,114 97,357 54,043 20,217 13,268 10,677 38,213 4,378 62,273 NET INCOME** Rs1,200,480 Rs669,037 Rs448,993 Rs158,039 Rs71,929 Rs47,822 Rs320,174 Rs214,366 Rs487,241 * Minor operated departments include: laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth ** Net Income is before depreciation, interest payments and taxes FHRAIPage24HVSInternationalHVSInternationalPage24
  25. 25. TABLE 1-4: Indian Hotel Industry by Star Category – Financial Report – Amount Per Occupied Room COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 32 26 49 204 101 46 21 5 484 Average Total Rooms Per Hotel: 230 122 88 52 38 34 33 49 66 Average Occupied Rooms Per Hotel: 59,923 31,339 22,307 11,605 8,324 7,893 5,721 12,713 15,549 Average Occupancy Per Hotel: 75.2% 72.3% 71.0% 62.9% 64.2% 63.9% 42.9% 72.4% 64.1% Average Rate Per Hotel: Rs6,667 Rs4,123 Rs2,880 Rs1,504 Rs864 Rs556 Rs3,501 Rs1,284 Rs3,227 REVENUE Rooms Rs6,667 Rs4,123 Rs2,880 Rs1,504 Rs864 Rs556 Rs3,501 Rs1,284 Rs3,227 Food & Beverage 2,638 1,640 1,266 957 509 332 2,363 407 1,449 Banquet & Conferences 1,194 598 328 315 58 26 288 93 529 Telephone & Other 347 78 69 22 15 8 36 14 117 Minor Operated* 424 225 122 46 12 44 168 16 171 Rental & Other Income 263 143 129 65 94 17 274 15 137 Total 11,535 6,807 4,794 2,909 1,552 983 6,629 1,830 5,630 DEPARTMENTAL EXPENSES Rooms 1,018 591 414 273 211 168 545 276 506 Food & Beverage 2,122 1,231 908 793 409 224 1,379 215 1,122 Telephone & Other 60 36 54 31 20 13 43 16 40 Minor Operated* 222 98 87 45 20 7 121 22 97 Rental & Other Income 7 3 18 10 20 13 32 5 11 Total 3,429 1,960 1,482 1,152 679 425 2,120 534 1,777 DEPARTMENTAL INCOME 8,105 4,847 3,312 1,758 873 558 4,509 1,296 3,853 OPERATING EXPENSES Administrative & General 781 477 393 261 102 90 712 178 413 Management Fee 398 137 62 45 17 10 117 7 143 Marketing 365 220 111 73 41 22 325 22 165 Franchise Fees 85 35 17 7 2 0 23 0 30 Property Operations & Maintenance 480 374 289 191 118 48 512 93 289 Energy 805 627 455 375 207 136 724 149 492 Total 2,913 1,870 1,327 952 487 307 2,413 449 1,533 HOUSE PROFIT 5,192 2,977 1,985 806 386 251 2,095 847 2,320 FIXED EXPENSES Property Taxes 169 91 30 19 16 20 19 6 66 Insurance 60 35 19 12 6 6 27 2 27 Other Fixed Charges 257 114 89 38 24 10 100 4 108 Rent 101 139 74 23 14 9 77 5 62 Total 587 378 213 91 60 46 223 17 263 NET INCOME** Rs4,605 Rs2,599 Rs1,772 Rs714 Rs326 Rs206 Rs1,872 Rs830 Rs2,057 * Minor operated departments include: laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth ** Net Income is before depreciation, interest payments and taxes HVSInternationalPage25FHRAI
  26. 26. FHRAI Page 26 HVS International TABLE 1-5: Indian Hotel Industry by Star Category – Market Data Market Segmentation COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 34 35 66 325 176 69 33 39 777 Airline Crew 5.3% 6.1% 2.5% 1.2% 0.4% 0.3% 0.2% 0.2% 1.3% Business Traveller - Domestic 15.1 27.1 32.5 38.1 46.3 47.3 13.1 36.3 37.6 Business Traveller - Foreign 31.9 21.9 15.4 7.0 7.0 4.4 7.5 5.2 9.2 Complimentary Rooms 1.5 1.5 1.9 1.8 1.6 1.1 2.3 2.2 1.7 Domestic - Tourists/Leisure FIT 6.0 10.6 10.9 18.5 22.0 25.0 26.4 32.0 19.3 Foreign - Tourists/Leisure FIT 13.5 6.5 8.9 7.5 6.1 7.6 20.5 6.2 8.0 Meeting Participants (Less than 100 Attendees) 3.5 4.8 4.9 3.4 2.3 1.8 3.0 1.7 3.1 Meeting Participants (Over 100 Attendees) 7.6 7.2 6.9 6.8 3.4 2.8 1.9 5.8 5.5 Tour Groups - Domestic 3.5 2.9 5.6 8.1 7.1 5.6 7.6 7.1 6.9 Tour Groups - Foreign 8.3 8.0 8.8 5.1 2.5 1.9 16.1 1.8 5.1 Other 3.9 3.5 1.8 2.6 1.5 2.2 1.4 1.6 2.3 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Guest Analysis COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 39 39 68 377 192 84 38 48 885 Domestic Guests 41.4% 54.2% 63.1% 78.7% 82.3% 85.7% 42.8% 87.3% 75.1% Foreign Guests 58.6 45.8 36.9 21.3 17.7 14.3 57.2 12.7 24.9 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Total Business Guests 63.8% 68.4% 60.7% 56.3% 58.6% 62.0% 22.3% 59.2% 57.4% Total Leisure Guests 36.2 31.6 39.3 43.6 41.4 38.0 77.7 40.8 42.6 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Avg. Stay of Foreign Guests (Days) 4.6 4.4 3.8 2.4 4.4 6.0 2.5 3.6 3.4 Avg. Stay of Domestic Guests (Days) 2.5 2.5 2.6 2.2 3.3 3.0 2.5 3.9 2.6 Avg. Stay of Business Guests (Days) 3.0 2.4 2.9 2.1 3.5 2.7 1.9 2.9 2.6 Avg. Stay of Leisure Guests (Days) 2.8 2.2 2.5 2.2 2.5 2.4 2.6 3.4 2.4 Percentage of Repeat Guests 38.4 30.8 45.1 45.5 51.5 56.5 22.7 43.6 45.4 Country of Origin of Guests COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 37 32 67 262 124 48 34 26 630 ASEAN* 4.2% 7.4% 5.7% 7.8% 5.3% 6.2% 1.7% 9.5% 6.5% Australia 2.6 3.6 3.0 3.1 3.3 3.5 3.2 3.3 3.2 Canada 2.5 2.0 3.2 3.1 2.6 3.9 2.9 4.0 3.0 Caribbean 0.3 0.2 0.2 0.7 0.4 0.6 0.2 0.1 0.5 China 2.1 2.5 2.6 3.1 2.2 1.1 0.5 5.0 2.6 France 4.7 5.6 6.8 5.9 4.0 5.8 13.1 5.5 5.9 Germany 4.8 6.5 7.4 8.0 5.6 5.9 12.9 6.8 7.2 Japan 6.2 3.8 6.7 4.8 3.7 3.1 2.5 3.5 4.5 Middle East 3.2 2.0 2.9 3.3 4.8 7.5 0.6 3.5 3.7 Other European 7.5 8.8 6.6 10.4 9.3 8.8 18.6 9.1 9.8 Russia 4.5 4.0 5.2 3.3 2.6 1.8 2.0 0.9 3.2 SAARC ** 2.1 4.0 5.7 7.1 13.6 11.4 2.1 15.6 8.2 South Africa 1.2 2.1 1.9 2.3 1.7 1.8 0.6 1.9 1.9 UK 17.3 19.8 17.7 15.4 15.1 16.6 19.8 12.4 16.1 USA 17.8 14.6 14.0 12.2 9.6 11.9 13.4 11.2 12.3 Other 19.1 13.2 10.4 9.7 16.0 10.2 6.1 7.9 11.5 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 * ASEAN: Association of South East Asian Nations ** SAARC: South Asian Association for Regional Co-operation - India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives
  27. 27. HVS International Page 27 FHRAI TABLE 1-6: Indian Hotel Industry by Star Category – Monthly & Daily Occupancy Average Monthly Occupancy COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 38 35 67 356 170 80 37 49 832 January 82.4% 73.6% 74.4% 64.4% 63.4% 64.2% 50.4% 59.0% 65.2% February 84.4 77.3 76.3 64.6 61.5 62.3 54.2 58.9 65.3 March 79.9 70.4 69.1 58.8 57.9 59.8 48.9 52.7 60.2 April 73.5 64.9 62.8 58.2 58.8 60.6 36.6 54.9 58.7 May 63.7 59.1 61.3 60.7 62.1 64.6 32.7 63.0 60.4 June 63.9 57.8 59.8 58.0 59.7 63.9 34.6 63.4 58.6 July 65.7 55.9 56.9 54.2 55.7 59.0 33.0 61.0 55.2 August 69.1 58.1 59.0 54.0 56.3 59.1 37.2 57.1 55.7 September 70.6 62.7 62.0 55.5 56.9 60.3 32.1 55.6 56.7 October 71.7 65.5 66.9 60.9 62.1 65.9 51.2 60.4 62.3 November 82.3 73.7 74.1 67.2 66.4 67.5 57.0 63.7 67.9 December 76.9 75.7 76.9 70.3 69.1 71.0 51.2 68.1 70.2 Average Daily Occupancy COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 36 35 64 323 164 78 28 42 770 Monday 75.8% 69.5% 65.5% 55.3% 57.7% 56.0% 35.0% 54.0% 57.5% Tuesday 78.1 70.1 68.4 57.6 58.5 56.3 32.3 57.0 59.1 Wednesday 78.1 71.0 70.2 58.8 61.2 58.4 32.9 56.7 60.6 Thursday 74.5 70.9 70.2 59.4 60.9 60.0 33.4 58.9 60.9 Friday 71.0 63.8 70.2 61.8 60.8 59.3 41.8 58.1 61.6 Saturday 69.8 59.3 63.5 59.0 58.0 59.4 51.4 54.4 59.2 Sunday 72.2 60.6 59.1 50.4 51.1 52.7 47.5 48.6 52.8 TABLE 1-7: Indian Hotel Industry by Star Category – Sources of Reservations Source of Advance Reservations COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 37 39 68 372 183 84 35 51 869 Chain CRS (Central Reservation System) 16.0% 11.3% 7.6% 2.6% 1.9% 0.6% 8.6% 0.6% 3.7% Direct Enquiry / Hotel Representation 42.5 50.5 52.2 57.3 61.6 71.2 28.3 67.1 57.6 Global Distribution System (GDS) 7.8 4.2 1.4 0.9 0.4 0.2 0.7 0.3 1.2 Hotel / Chain Website 4.8 2.8 4.7 5.9 5.1 1.9 14.3 3.3 5.3 Travel Agent and Tour Operator 18.6 19.1 22.9 21.1 16.8 11.6 38.1 15.6 19.6 Other Online Reservation Systems 6.0 4.1 4.5 2.0 2.1 0.4 3.7 0.7 2.3 Other Website 2.0 1.8 2.5 2.4 2.5 3.2 2.4 2.8 2.5 Other 2.2 6.3 4.2 7.9 9.7 10.9 4.0 9.7 7.9 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
  28. 28. FHRAI Page28 HVS International TABLE 1-8: Indian Hotel Industry by Star Category – Marketing Media Marketing Media - Percentage of Hotels Using Each Media COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 39 37 68 354 163 66 33 41 801 Direct Mail 89.7% 91.9% 91.2% 79.4% 69.3% 65.2% 84.9% 58.5 77.4% Hotel Website 100.0 100.0 92.7 79.1 59.5 48.5 81.8 53.7 74.5 Loyalty Card Program 94.9 78.4 45.6 25.1 16.6 13.6 30.3 17.1 29.8 Merchandising 33.3 40.5 30.9 19.5 16.0 9.1 18.2 14.6 20.2 Other Internet Site 61.5 64.9 63.2 50.9 46.6 37.9 57.6 22.0 49.9 Outdoor Advertising 76.9 73.0 69.1 66.1 50.3 57.6 60.6 48.8 62.2 Print Advertising 100.0 94.6 94.1 90.4 85.9 84.9 97.0 80.5 89.8 Promotions 97.4 97.3 76.5 67.2 55.2 39.4 72.7 43.9 65.2 Radio Advertising 35.9 27.0 10.3 8.5 3.7 1.5 3.0 12.2 9.2 Telemarketing 74.4 78.4 70.6 51.7 30.1 36.4 21.2 24.4 47.3 TV Advertising 35.9 48.7 25.0 31.9 20.9 21.2 18.2 12.2 27.6 TABLE 1-9: Indian Hotel Industry by Star Category – Payment Methods Payment Methods Used COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 35 33 61 364 176 82 34 43 828 Cash Sales 13.2% 23.8% 27.7% 43.5% 58.1% 73.0% 26.7% 68.8% 46.9% Credit Card Sales 45.3 39.8 35.7 31.2 26.9 17.4 25.9 22.3 29.5 Credit Sales (other than cards) 39.7 35.7 33.9 22.8 13.6 9.1 44.4 7.8 21.6 Electronic Fund Transfer 1.9 0.7 2.8 2.6 1.4 0.6 3.0 1.1 2.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Credit Cards Used COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 33 32 59 330 137 45 32 30 698 American Express 29.5% 22.5% 13.9% 9.0% 7.1% 4.0% 12.2% 5.0% 10.3% Diners Club 5.8 6.7 4.9 3.7 3.4 4.9 4.4 2.4 4.0 Mastercard / Eurocard 29.7 30.3 32.8 38.3 38.0 40.6 39.9 42.3 37.4 Visa 34.1 35.7 45.1 44.0 47.2 47.7 41.4 44.7 44.0 Other 0.8 4.9 3.2 5.0 4.2 2.7 2.2 5.5 4.2 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Average Credit Card Commission COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 30 31 53 289 116 41 26 20 606 American Express 3.3% 3.4% 3.4% 2.9% 2.4% 1.6% 3.7% 1.5% 2.8% Diners Club 2.1 2.0 1.3 1.1 1.0 0.6 1.3 0.7 1.1 Mastercard / Eurocard 1.2 1.3 1.4 1.8 1.9 2.0 2.4 1.9 1.8 Visa 1.1 1.3 1.7 1.8 1.9 2.0 3.9 1.9 1.9 Other 0.5 0.4 0.3 0.3 0.4 0.2 0.1 0.2 0.3
  29. 29. HVS International Page 29 FHRAI TABLE 1-10: Indian Hotel Industry by Star Category – Technology & Environmental Issues Technology in Hotels - Percentage of Hotels Using Each Technology COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 37 35 64 336 149 60 34 29 744 Accounting System 94.6% 91.4% 93.8% 94.4% 88.6% 90.0% 82.4% 96.6% 92.2% Call Accounting System 81.1 68.6 76.6 60.4 49.0 35.0 55.9 55.2 58.5 Central Reservation System (CRS) 73.0 62.9 39.1 21.7 12.1 6.7 44.1 3.5 24.9 Electronic Keycard 91.9 65.7 42.2 23.8 17.5 11.7 26.5 10.3 28.1 Energy Management System 62.2 42.9 29.7 19.1 12.8 1.7 23.5 3.5 20.2 Internet / E-Mail 94.6 97.1 95.3 90.5 75.2 71.7 94.1 82.8 86.7 Internet / Website 94.6 88.6 90.6 81.3 65.8 53.3 91.2 58.6 77.3 Intranet System 70.3 74.3 50.0 32.4 26.9 13.3 52.9 13.8 35.4 Local Area Network (LAN) 97.3 94.3 82.8 72.6 47.7 30.0 52.9 41.4 65.2 Management Information System 75.7 82.9 82.8 60.1 40.3 20.0 64.7 13.8 55.1 Point of Sale System for Food and Beverage 94.6 97.1 87.5 71.1 49.0 36.7 58.8 31.0 65.6 Property Management System 83.8 77.1 60.9 45.8 26.2 8.3 50.0 17.2 42.6 Yield Management System 40.5 34.3 31.3 17.6 10.1 1.7 23.5 3.5 17.6 Other 18.9 22.9 9.4 8.3 6.7 1.7 17.7 3.5 9.0 Environmental Issues - Percentage of Hotels Monitoring Quantitative Performance COMPOSITION Five-Star Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others 2005-2006 All India Average Number of Responses 37 35 60 314 142 58 32 27 705 Air (External Emissions) 86.5% 57.1% 60.0% 43.0% 28.9% 20.7% 37.5% 14.8% 41.4% Air (Indoor Air Quality) 86.5 68.6 55.0 47.5 38.7 39.7 37.5 22.2 47.4 Community Interaction 75.7 60.0 40.0 35.0 21.8 19.0 46.9 14.8 34.6 Energy Consumption (Electricity) 100.0 97.1 100.0 95.9 92.3 93.1 93.8 100.0 95.6 Energy Consumption (Gas) 100.0 94.3 95.0 89.8 83.1 69.0 87.5 85.2 87.7 Energy Consumption (Oil) 97.3 91.4 88.3 80.9 63.4 56.9 62.5 74.1 76.3 Fresh Water Quality 100.0 91.4 83.3 76.4 68.3 60.3 75.0 51.9 75.0 Noise (External) 86.5 57.1 53.3 42.7 39.4 24.1 56.3 14.8 44.0 Noise (In House) 86.5 60.0 58.3 50.6 45.1 36.2 37.5 33.3 50.1 Solid Waste Disposal 56.8 60.0 45.0 38.5 21.8 25.9 25.0 11.1 35.0 Solid Waste Production (Quality) 70.3 57.1 51.7 33.4 18.3 10.3 31.3 7.4 32.1 Solid Waste Production (Segregation) 78.4 68.6 65.0 41.7 29.6 17.2 40.6 18.5 41.6 Solid Waste Production (Volume) 67.6 68.6 56.7 40.8 32.4 19.0 40.6 14.8 40.4 Staff Training in Environmental Issues 86.5 88.6 56.7 50.3 33.1 27.6 53.1 14.8 48.1 Use of Chemicals (House Keeping) 86.5 77.1 81.7 80.9 78.2 58.6 59.4 48.2 76.5 Use of Chemicals (Maintenance) 89.2 80.0 83.3 70.7 65.5 48.3 59.4 40.7 68.7 Use of Pesticides and Herbicides (Dry Rations) 51.4 22.9 28.3 32.5 22.5 20.7 34.4 3.7 28.7 Use of Pesticides and Herbicides (Green Groceries) 54.1 25.7 31.7 35.7 27.5 22.4 25.0 7.4 31.5 Use of Pesticides and Herbicides (Horticulture) 83.8 71.4 75.0 60.5 51.4 37.9 46.9 14.8 57.5 Use of Pesticides and Herbicides (Inside Building) 81.1 74.3 73.3 71.3 55.6 46.6 46.9 37.0 64.5 Use of Pesticides and Herbicides (Pest Control) 89.2 88.6 83.3 84.7 77.5 67.2 62.5 40.7 79.4 Use of Pesticides and Herbicides (Public Area) 86.5 71.4 73.3 73.3 56.3 41.4 50.0 18.5 64.7 Waste Water Quality 91.9 74.3 68.3 46.2 27.5 25.9 46.9 14.8 45.3 Waste Water Volume 91.9 77.1 68.3 49.0 36.6 29.3 53.1 33.3 49.8 Water Consumption 100.0 94.3 85.0 86.0 74.7 77.6 78.1 85.2 83.7
  30. 30. FHRAI Page 30 HVS International 2. Indian Hotel Industry – Hotel Size & Chain Affiliated vs. Independent In this section, we present key operating and other data for the survey participants according to the number of rooms. The participating hotels have been classified into three categories: ‘less than 50 rooms’, ‘between 50 and 150 rooms’, and ‘more than 150 rooms’. We have also made a comparison between chain affiliated and independent hotels. • Table 2-1: presents a typical facilities analysis including rooms configuration, F&B outlets, and a breakup of trained and total employees; • Table 2-2: presents financial information of chain affiliated hotels vs. independent hotels; • Table 2-3: presents financial information of hotels according to hotel size; • Table 2-4: presents market data including market segmentation, guest analysis and the country of origin of guests; • Table 2-5: presents a monthly and daily occupancy analysis; • Table 2-6: presents the sources of reservations; • Table 2-7: presents the marketing media most widely used by hotels; • Table 2-8: presents an analysis of payment methods and the use of credit cards; • Table 2-9: presents the technology used and environmental issues measured by hotels.
  31. 31. HVS International Page 31 FHRAI Section Highlights The majority of responses in our survey for 2005-06 have been from the smaller properties, with 737 hotels participating in the less than 50 rooms category, followed by 361 hotels in the 50 to 150 rooms category and 54 hotels in the more than 150 rooms category. The number of survey participants increased in the smaller (less than 50 rooms) and the 50 to 150 rooms segment; from 671 in 2004-05 to 737 in 2005-06 and from 306 in 2004-2005 to 361 in 2005-2006 respectively. The 150 rooms and more category, this year registered a decrease in response from 88 to 54 respondents. An analysis of the survey participants in the Chain Affiliated and the Independent hotels segments reveals a decline in the number of responses received from the Chain Affiliated hotels from 158 responses in 2004-05 to 136 in 2005-06.The number of Independent hotel responses increased from 907 in 2004-05 to 1,016 for the year 2005-06. The absence of adequate representation from Chain Affiliated hotels has led to a decrease in the all India averages. We hope to have more Chain Affiliated hotels participating the next year, to project a true picture of the Industry’s performance. Some key highlights of the survey are as follows: • Average number of trained employees registered a significant increase of 10.9% and 7.5% in hotels with less than 50 rooms and the Independent hotels segment respectively. • The average number of employees in the Chain Affiliated hotels registered a significant increase of 11.1% over the previous year. • Hotels with more than 150 rooms registered the highest average rate increase of Rs802 across all the three categories. The occupancies however increased on an average of approximately 2.6% for all the three categories. • The net income per occupied room in Chain Affiliated hotels increased by Rs381 but went down in the Independent hotels segment by Rs598 thus bringing the All India average down by Rs56 over the previous year. • The United Kingdom, United States of America and other European countries were the key source markets of foreign arrivals across all hotel categories. • Direct Enquiry and the Travel Agent continued to be the main source of advance reservations for the Chain Affiliated and Independent hotels. • Hotel /chain website and other online reservations systems continued to grow this year. Their ability to deploy better rates and inventory restrictions and their user friendliness is fast gaining the likes of the hotels and their patrons. • Print advertising, hotel website and promotions were the most preferred marketing mediums for the Chain Affiliated hotels this year while print advertising, direct mail and the hotel website were the most preferred marketing mediums for the Independent hotels. • Cash sales registered an increase in both the Chain Affiliated and Independent hotels. The most utilised credit card was the visa with mastercard/eurocard as the next frequent choice of travellers. American Express continued to charge the highest commission amongst all credit cards.
  32. 32. FHRAI Page 32 HVS International TABLE 2-1: Indian Hotel Industry – Hotel Size & Chain Affiliation: Facilities Analysis and Staffing Typical Room Profile of an Average Hotel COMPOSITION Less Than 50 Rooms 50 to 150 Rooms More Than 150 Rooms Chain Affiliated Independent Number of Responses 721 360 54 135 1,000 Air-Conditioned Single 1.7 4.2 28.6 11.7 2.7 Double 17.3 53.0 176.7 88.9 29.1 Suites 2.8 7.3 22.6 11.2 4.4 Non-Air-Conditioned Single 0.9 1.8 2.9 0.1 1.5 Double 6.8 9.1 5.4 3.8 8.0 Suites 0.7 0.8 0.3 0.3 0.8 Total Average Rooms 30.3 76.2 236.4 116.0 46.3 Average Number of Food & Beverage Outlets Per Hotel COMPOSITION Less Than 50 Rooms 50 to 150 Rooms More Than 150 Rooms Chain Affiliated Independent Number of Responses 578 322 52 127 825 Restaurant 1.4 1.8 4.0 2.6 1.5 Bars 0.6 0.9 1.5 1.1 0.7 Others 0.6 0.9 0.8 0.8 0.7 Total 2.6 3.6 6.3 4.5 3.0 Average Number of Total Employees Per Hotel (Permanent / Contract / Full Time / Part Time) COMPOSITION Less Than 50 Rooms 50 to 150 Rooms More Than 150 Rooms Chain Affiliated Independent Number of Responses 664 326 51 130 911 Managers Male 2.8 9.1 38.4 19.5 4.7 Female 0.3 1.4 12.9 4.7 0.8 Supervisors Male 4.2 13.2 50.5 24.4 7.1 Female 0.5 2.0 13.1 4.2 1.2 Staff Male 30.9 82.9 256.6 133.3 47.3 Female 2.1 7.1 32.7 12.9 4.1 Total 40.9 115.6 404.1 199.0 65.0 Average Number of Employees per Room 1.4 1.5 1.8 1.8 1.4 Average Percentage of Trained Employees Per Hotel COMPOSITION Less Than 50 Rooms 50 to 150 Rooms More Than 150 Rooms Chain Affiliated Independent Number of Responses 291 208 43 100 442 Managers 86.8 88.6 83.7 91.5 86.3 Supervisors 79.1 76.5 74.9 85.5 76.0 Staff 67.8 63.8 66.8 74.7 64.2 Total Avg. Trained Employees* 77.9 76.3 75.2 83.9 75.5 Total Avg. Un-Trained Employees 22.1 23.7 24.8 16.1 24.5 Hotels with Training Dept. 10.9 31.9 69.8 61.5 14.7 * Trained Employees includes those with a minimum one year certificate course in an educational institute, however some hotels may have included those with short term (in-house) training
  33. 33. TABLE 2-2: Indian Hotel Industry – Chain Affiliated vs. Independent: Financial Report (2005-2006) Number of Responses 96 388 484 Average Total Rooms Per Hotel: 116 53 66 Average Occupied Rooms Per Hotel: 29,123 12,190 15,549 Average Occupancy Per Hotel: 64.6% 64.0% 64.1% Average Rate Per Hotel: 4,742 2,331 3,227 COMPOSITION Percentage of Revenue Amount Per Available Room Amount Per Occupied Room Percentage of Revenue Amount Per Available Room Amount Per Occupied Room Percentage of Revenue Amount Per Available Room Amount Per Occupied Room REVENUE Rooms 58.8% Rs 1,187,330 Rs 4,742 55.5% Rs 535,060 Rs 2,330 57.3% Rs 764,321 Rs 3,226 Food & Beverage 23.5 474,860 1,897 28.2 271,830 1,184 25.7 343,191 1,449 Banquet & Conferences 9.5 192,360 768 9.2 88,969 388 9.4 125,309 529 Telephone & Other 2.9 57,549 230 1.2 11,449 50 2.1 27,652 117 Minor Operated* 3.1 62,995 252 2.9 28,358 124 3.0 40,532 171 Rental & Other Income 2.1 42,531 170 2.8 27,152 118 2.4 32,557 137 Total 100 2,017,620 8,059 100.0 962,818 4,194 100.0 1,333,560 5,630 DEPARTMENTAL EXPENSES Rooms 14.0 165,742 662 17.8 95,147 414 15.7 119,959 506 Food & Beverage 54.9 366,237 1,463 58.6 211,390 921 56.7 265,815 1,122 Telephone & Other 20.5 11,808 47 72.0 8,244 36 34.3 9,497 40 Minor Operated* 54.9 34,553 138 59.5 16,869 73 57.0 23,085 97 Rental & Other Income 4.2 1,774 7 11.4 3,090 13 8.1 2,627 11 Total 28.8 580,113 2,317 34.8 334,740 1,458 31.6 420,984 1,777 DEPARTMENTAL INCOME 71.2 1,437,510 5,742 65.2 628,078 2,740 68.4 912,580 3,853 OPERATING EXPENSES Administrative & General 6.4 128,488 513 8.4 81,059 353 7.3 97,729 413 Management Fee 4.0 80,032 320 0.9 9,020 39 2.6 33,980 143 Marketing 2.8 55,736 223 3.1 30,006 131 2.9 39,050 165 Franchise Fees 0.7 14,760 59 0.3 3,131 14 0.5 7,218 30 Property Operations & Maintenance 4.7 94,369 377 5.7 54,496 237 5.1 68,511 289 Energy 7.8 157,344 628 9.8 94,483 412 8.7 116,577 492 Total 26.3 530,730 2,120 28.3 272,195 1,186 27.2 363,065 1,533 HOUSE PROFIT 44.9 906,781 3,622 36.9 355,882 1,550 41.2 549,514 2,320 FIXED EXPENSES Property Taxes 1.1 21,775 87 1.3 12,424 54 1.2 15,711 66 Insurance 0.6 11,073 44 0.4 3,823 17 0.5 6,371 27 Other Fixed Charges 2.2 44,790 179 1.6 15,055 66 1.9 25,507 108 Rent 1.6 32,281 129 0.5 5,148 22 1.1 14,685 62 Total 5.5 109,919 439 3.8 36,450 159 4.7 62,273 263 NET INCOME** 39.5% Rs 796,861 Rs 3,183 33.1% RS 319,432 Rs 1,391 36.5% Rs 487,241 Rs 2,056 * Minor operated departments include: laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth ** Net Income is before depreciation, interest payments and taxes Chain Affiliated Independent 2005-2006 All India Average FHRAIPage33HVSInternational
  34. 34. TABLE 2-3: Indian Hotel Industry – Financial Figures: As On Per Available Room (2005-2006) Less Than 50 Rooms 50 to 150 Rooms More Than 150 Rooms 2005-2006 All India Average Less Than 50 Rooms 50 to 150 Rooms More Than 150 Rooms 2005-2006 All India Average Less Than 50 Rooms 50 to 150 Rooms More Than 150 Rooms 2005-2006 All India Average Number of Responses 259 189 36 484 259 189 36 484 259 189 36 484 Average Total Rooms Per Hotel: 32 79 243 66 32 79 243 66 32 79 243 66 Average Occupied Rooms Per Hotel: 6,869 18,736 63,100 15,549 6,869 18,736 63,100 15,549 6,869 18,736 63,100 15,549 Average Occupancy Per Hotel: 61.6% 66.9% 75.0% 64.1% 61.6% 66.9% 75.0% 64.1% 61.6% 66.9% 75.0% 64.1% Average Rate Per Hotel: 1,326 2,416 5,885 3,227 1,326 2,416 5,885 3,227 1,326 2,416 5,885 3,227 REVENUE Rooms 51.7% 57.6% 58.2% 57.3% Rs 287,226 Rs 572,727 Rs 1,529,340 Rs 764,321 Rs 1,326 Rs 2,415 Rs 5,884 Rs 3,226 Food & Beverage 35.1 27.1 23.0 25.7 194,780 268,752 605,037 343,191 900 1,134 2,328 1,449 Banquet & Conferences 7.7 9.2 9.8 9.4 42,944 91,586 258,581 125,309 198 386 995 529 Telephone & Other 0.6 1.1 3.0 2.1 3,301 10,956 78,679 27,652 15 46 303 117 Minor Operated* 1.4 2.7 3.6 3.0 7,787 26,374 94,932 40,532 36 111 365 171 Rental & Other Income 3.5 2.3 2.3 2.4 19,443 23,073 60,631 32,557 90 97 233 137 Total 100.0 100.0 100.0 100.0 555,481 993,467 2,627,200 1,333,560 2,565 4,190 10,110 5,630 DEPARTMENTAL EXPENSES Rooms 22.8 14.3 15.5 15.7 65,402 82,115 237,625 119,959 302 346 914 506 Food & Beverage 62.4 57.4 55.8 56.7 148,276 206,679 481,885 265,815 685 872 1,854 1,122 Telephone & Other 172.4 76.8 19.2 34.3 5,691 8,411 15,127 9,497 26 35 58 40 Minor Operated* 119.4 62.3 50.3 57.0 9,295 16,432 47,770 23,085 43 69 184 97 Rental & Other Income 21.4 9.8 3.2 8.1 4,165 2,258 1,949 2,627 19 10 8 11 Total 41.9 31.8 29.9 31.6 232,829 315,891 784,356 420,984 1,075 1,332 3,018 1,777 DEPARTMENTAL INCOME 58.1 68.2 70.1 68.4 322,651 677,576 1,842,850 912,580 1,490 2,858 7,091 3,853 OPERATING EXPENSES Administrative & General 8.5 8.0 6.8 7.3 47,416 79,096 178,828 97,729 219 334 688 413 Management Fee 1.7 1.9 3.5 2.6 8,451 16,742 86,949 33,980 39 71 335 143 Marketing 2.9 2.7 3.2 2.9 16,037 25,856 83,783 39,050 74 109 322 165 Franchise Fees 0.1 0.4 0.7 0.5 467 4,267 18,633 7,218 2 18 72 30 Property Operations & Maintenance 5.9 6.1 4.4 5.1 33,134 60,131 115,115 68,511 153 254 443 289 Energy 12.3 10.3 7.2 8.7 68,025 102,514 189,106 116,577 314 432 728 492 Total 31.5 29.2 25.8 27.2 173,530 288,606 672,414 363,065 801 1,217 2,587 1,533 HOUSE PROFIT 26.6 38.9 44.3 41.2 149,122 388,971 1,170,430 549,514 689 1,641 4,504 2,320 FIXED EXPENSES Property Taxes 0.7 0.6 1.7 1.2 4,032 5,587 43,765 15,711 19 24 168 66 Insurance 0.4 0.4 0.6 0.5 2,389 3,613 14,738 6,371 11 15 57 27 Other Fixed Charges 1.1 2.3 1.8 1.9 6,383 23,185 47,089 25,507 29 98 181 108 Rent 0.8 1.9 0.7 1.1 4,591 18,486 17,471 14,685 21 78 67 62 Total 3.1 5.1 4.7 4.7 17,395 50,870 123,062 62,273 80 215 474 263 NET INCOME** 23.4% 33.8% 39.7% 36.5% Rs 131,727 Rs 338,101 Rs 1,047,370 Rs 487,241 Rs 608 Rs 1,426 Rs 4,030 Rs 2,056 * Minor operated departments include: laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth ** Net Income is before depreciation, interest payments and taxes Percentage of Revenue Amount Per Available Room Amount Per Occupied Room HVSInternationalFHRAIPage34

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