Vivek kumar

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Vivek kumar

  1. 1. 2010 Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata A strategy delineates a territory in which a company seeks to be unique. Appropriate changes in strategies are mandatory to sustain in marketplace. This depends on the present situation and future predications. However, till now very little research has been carried out for hotel industry in Kolkata, India. This study is focused on point- of-differentiation; present marketing strategies and demand-supply gap of luxury hotels in Kolkata. This study also concentrated to find out gap between guests‟ expectations Vis-à-vis hoteliers‟ perception about expectation of guests. ITC, The Sonar The Luxury Collection Vivek Kumar Kolkata ,India
  2. 2. A REPORT ON SUPPLY CREATES ITS OWN DEMAND: A STUDY OF KOLKATA HOTEL INDUSTRY By Vivek Kumar (09BS0002756) ITC, The Sonar The Luxury Collection A report submitted in partial fulfillment of the requirements of MBA Program of The ICFAI University, Dehradun Distribution list: Ms. Snigdha Majumdar (Six Sigma Manager, ITC Sonar) Mr. Anupam Ghosh (Faculty, IBS Kolkata) Date of Submission: 14th May, 2010
  3. 3. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Authorization: The report is submitted as partial fulfillment of the requirements of MBA Program of ICFAI University, Dehradun “
  4. 4. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Acknowledgement I would like to thank Mr. Ranveer Bhandari , General Manger ,ITC Sonar for giving me permission to carry out this project. With immense pleasure and deep sense of gratitude, I wish to express my sincere thanks to company guide Ms. Snigdha Majumdar ,Six Sigma Manager, ITC Sonar and faculty guide Mr. Anupam Ghosh , Lecturer, IBS, Kolkata for his constant interest, encouragement and expert guidance throughout the course of this project, which provide the necessary driven force that enabled me to pursue our work with vigor and keen interest. I would like to extend a deep sense of heartfelt thank to my friend Harshit sethi, Richa Ranjan and Sujan Chakarobarty for their guidance and suggestions because without them this project wouldn‟t have been possible. At last, I express my sincere gratitude to my peers and family for their moral support and the love rendered during the course of my dissertation work.
  5. 5. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Contents Authorization: .......................................................................................................................................... i Acknowledgement................................................................................................................................... ii Abstract................................................................................................................................................... v List of Illustration.................................................................................................................................... vi 1. Introduction..................................................................................................................................... 1 1.1. Background .............................................................................................................................. 2 2. Overview of Hotel Industry .............................................................................................................. 4 2.1. Overview: Indian Economics..................................................................................................... 4 2.2. Overview: Hotel Industry in India ............................................................................................. 7 2.3. Overview: Hotel Industry In Kolkata ....................................................................................... 11 3. Research Design............................................................................................................................. 13 3.1. Sampling Frame ..................................................................................................................... 13 3.2. Sample Size ............................................................................................................................ 13 3.3. Methodology ......................................................................................................................... 14 4. Discussion...................................................................................................................................... 15 4.1. Positioning of Hotel industry in Kolkata .................................................................................. 15 4.1.1. Convenient location:....................................................................................................... 17 4.1.2. Service quality ................................................................................................................ 18 4.1.3. Food and Beverage ......................................................................................................... 18 4.1.4. Brand ............................................................................................................................. 19 4.1.5. Other Variables .............................................................................................................. 19 4.1.6. Combining all Variables .................................................................................................. 20 4.2. GAP between customer’s expectation and hotelier’s perception about customer’s need ....... 22 4.2.1. GAP Analysis with Guests................................................................................................ 22 4.2.2. GAP Analysis with IT & ITES industry ............................................................................... 24 4.2.3. GAP Analysis Model for Hotel Industry ........................................................................... 26 4.2.4. FMEA for largest GAP area: Room Service....................................................................... 31 4.3. Present Market Strategies of Hotel Industry in Kolkata........................................................... 35 4.4. Prediction of Demand and supply in Kolkata in future ............................................................ 36
  6. 6. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 5. Recommendation .......................................................................................................................... 39 6. Conclusion ..................................................................................................................................... 41 Annexure I: About ITC Ltd. ........................................................................................................................ i Annexure II: About ITC WelcomGroup .................................................................................................... iii Annexure III: About ITC ,The Sonar (Kolkata,India) ................................................................................... v Annexure IV: List of Company in Salt Lake..............................................................................................viii Annexure V: Questionnaire for Guest ..................................................................................................... xi Annexure VI: Questionnaire for Hotelier ................................................................................................ xiii Annexure VII: Questionnaire for IT Industry ........................................................................................... xvi Annexure VIII: Calculation for Area for Perceptual Map ....................................................................... xviii Bibliography: .......................................................................................................................................... xx Glossary ............................................................................................................................................... xxii
  7. 7. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Abstract A strategy delineates a territory in which a company seeks to be unique. Appropriate changes in strategies are mandatory to sustain in marketplace. This depends on the present situation and future predications. However, little research has been carried out for hotel industry in Kolkata, India. This study is focused on point-of-differentiation; present marketing strategies and demand-supply gap of luxury hotels in Kolkata. This study also concentrated to find out gap between guests‟ expectations Vis-à-vis hoteliers‟ perception about expectation of guests. A survey has been conducted on hoteliers, guests and IT industry to get to collect the data. Data has been interpreted by perceptual map, GAP analysis and FMEA (Failure mode and effects analysis).It is found that guests‟ perceive ITC, The sonar as best hotel in the city (Kolkata, India). This study also reveals that there is a huge gap in customers‟ expectation and hoteliers‟ perception regarding room services and restaurants. Hence hotelier should improve service quality in these two areas to minimize the customers‟ complain. The implication of this study will be to improve marketing strategies for hotel industry in future. Also this article will contribute for new entrants to develop proper strategies against different threats.
  8. 8. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata List of Illustration List of Figure Figure 1 : RevPAR and GDP Trend for the Hospitality Industry.................................................................. 6 Figure 2 : Trend of changing Number of Room and hotel throughout decades ........................................ 7 Figure 3: Perceptual map of Different Hotels in Kolkata ......................................................................... 16 Figure 4 : GAP between Guests expectation and Hoteliers Perception about Guest ............................... 23 Figure 5 : GAP between IT & ITES Company's expectation and Hoteliers Perception about Guest .......... 25 Figure 6 : GAP analysis Model for a Hotel from a Hotel Chain ................................................................ 27 Figure 7 : Parato Graph for Complain in Room services .......................................................................... 33 Figure 8 : Area Calculation for Perceptual Map .................................................................................... xviii List of Tables Table 1 : ARR of Different Category of Hotel ............................................................................................ 8 Table 2 : Occupancy Level of Different Category of Hotels ....................................................................... 9 Table 3 : Number of Rooms and Hotels in Kolkata.................................................................................. 11 Table 4: Average of Rating corresponding to Hotels and different Factors ............................................. 16 Table 5 : Area under the curve for a Perceptual Map ............................................................................. 21 Table 6 : GAP between guest’s expectation and Hoteliers Perception about Guest ................................ 23 Table 7 : GAP between IT & ITES Company's expectation and Hoteliers Perception about Guest ........... 25 Table 8 : Name of GAPs for Hotel Industry ............................................................................................. 27 Table 9 : Calculation of Risk priority numbers (RPN) For Room Services ................................................. 32 Table 10 : Arrangement of RPN in Descending Order ............................................................................. 33
  9. 9. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 1. Introduction Service sector industry is growing in India and it contributes 57 % of total GDP (Central Statistical Organization,India). Hospitality is one of the service sector industry which is booming. Hotel or hospitality is being used as synonyms of each other and throughout the report these two terms will be used as alternative of each other. Hotel is commercial establishment providing lodging, meal and other guest services (BusinessDirectory.com). This is a basic need of hotels but now in a competitive marketplace it is highly needed to retain the guest1. To get “WOW” from guest all player in this industry are providing services more than guest‟s expectations. This war, of getting more and more “WOW” develops tough competition among rivals and ultimately it increases the bargaining power of customer. Presently, in all category of hotels in India around 1, 10,000 rooms are available which is expected to increase by 100 percent by year 2015 ( HVS, 2007). All global players had planned to tap Indian market and big player like Starwood, Hilton Group, Westin and Accor had already either directly invested in India or they made collaboration with any Indian company. Also IT & ITES2 and low cost domestic airline fueled hotel industry in India. 1 Customer of Hotel Industry is called guest in hospitality industry 2 ITES stand for IT enabled services
  10. 10. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Now, due to continuous and rapid changes in hospitality industry in India, it is need to do in-depth study of hotel for future strategies. This report includes in-depth analysis of hotel which covers following objectives: To understand position strategies of five star deluxe hotels in city. To estimate customer expectation while selecting a luxury hotel. Present marketing strategies of Hotel industry. To understand demand supply GAP in Future. 1.1. Background Kolkata is a metro city in India where development in term of technology from last three decades is comparatively lesser than other metro cities in India. Now Government is emphasizing in IT and ITES services to invest inside the city. In term of providing appropriate infrastructure, Government developed IT park in Kolkata which is known as “Salt Lake”. After looking positive impact on economy of state (West Bengal), government has decided to come up with new IT Park called “Rajarhat” which is three times bigger than “Salt Lake” in area. After development of this ITPark it is expected to grow per head income and also it will increase number of consumers for hotel industry. Hotel room‟s demand is very income elastic. It dips or increases faster than the increase or decrease in income growth. As of now, for hotel industry, Kolkata market is mostly occupied by business traveler and less by tourist. In Kolkata, by year 2015, number of domestic and foreign tourism is expected to increase by 15.63 % and 17.18 % (Ministry Of Tourism, 2008) respectively. It will create
  11. 11. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata more demand of room for each category of hotels and to meet demand supply gap few new hotels will be coming in this industry. Now it is a need to analyze what will be the demand-supply statistics in coming year. Also it is highly required to understand the impact of above scenario on different category of hotels.
  12. 12. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 2. Overview of Hotel Industry According to an estimate, international tourist inflow in India by 2020 would be 10 million (World Trade Organization, 2002). This makes the country one of the fastest growing tourist destinations in the world. India accounts for 0.5% of world tourism ( HVS, 2007). Strong GDP growth, improving infrastructure, confidence in the country's economic prospects, open sky policy and the 'Incredible India' campaign has improved the outlook for India. This positive outlook would increase the tourist arrival in the country. Hence hotel industry is expected to be the major beneficiary. Even domestic tourism is gaining momentum. Rising disposable incomes, cheaper airfares and better connectivity would continue to increase the demand for rooms. Many international hotel chains either have or are on the lookout for setting up shop in the country. This clearly shows that India is on the international tourism radar. The five star hotel segments have grown the fastest during the last five years clocking a CAGR 3 of 12% (World Trade Organization, 2002). Economic liberalization has given a new impetus to the hospitality industry. The current gap between supply and demand expected to widen further as the economy opens and grows (DATAMONITOR, 2009). The country is ranked fourth among the world‟s must see countries ( HVS, 2007). 2.1. Overview: Indian Economics India‟s GDP 4 recorded a growth rate of 6.7% for the financial year 2008-09 (Central Statistical Organization,India) after recording growth above 9% for three consecutive years. The economic recovery of the country can be further kept on course by a stable 3 CAGR – Cumulative Average Growth rate 4 GDP stands for Gross Domestic Product of India
  13. 13. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata political environment provided by the Congress-led United Progressive Alliance (UPA) returning to power through a comfortable majority in the general elections last year. Policies of the newly elected government of leaning towards disinvestment and infrastructure development have helped sustain economic growth. The increased spending on infrastructure development will boost the tourism industry and backbone of tourism i.e. Hospitality will also grow. Although the last year began under high inflationary pressures, there were concerns about negative inflation towards the year end. This financial year saw low inflation levels and even fears of deflation due to the dropping of the WPI5. In its downward slide from the previous year's all-time high of 12.38 % (August 2008), WPI for June 2009 turned negative (-1.3%) The drop in commodity prices can benefit hotel developers, who can take advantage of cheaper construction materials. This weak period is probably the best time to make investments into the hotel sector After the globalization in India, Hospitality industry has seen two cycles for the economy downturn (Figure 1). The first cycle peaked in 1997, after which it started a downward trend hitting the bottom in the year 2001/02.The second cycle started with the recovery of the economy in 2002/03, peaking in 2007/08 after a period of continuous growth. Figure 1 shows the RevPAR 6 trend for fourteen years, from 1995/96 to 2008/09 along with the GDP growth rate for the same years. Leading macroeconomic indicators GDP are correlated to the performance of the hotel industry. However, though the hotel industry is amongst the first to be hit by a downturn, it is amongst the slowest to 5 WPI stands as Wholesale Price Index of India. 6 RevPAR stand as Revenue Per Available room ,Which is commonly used in hospitality to major the performance
  14. 14. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata recover since the spending on travel is considered as discretionary for most leisure travelers and some business ones as well. Figure 1 : RevPAR and GDP Trend for the Hospitality Industry
  15. 15. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 2.2. Overview: Hotel Industry in India The financial year 2008/09 was an unforgettable one for the Indian tourism industry with the Mumbai terror attacks and the global economic downturn affecting the industry's performance. The hotel industry, too, observed an overall decline in occupancy and RevPAR 7 in most cities in India. To analyze the trend of number of rooms, number of hotels and average number of room per hotel from 1995 till year 2009 in India we can refer the Figure 2.The growth rate in number of room in last fifteen year is around 132% observed. Figure 2 : Trend of changing Number of Room and hotel throughout decades Source: HVS Hotel in India Trend and opportunity 2009 7 RevPAR stand for Revenue Per Available room Which is common terminology in hospitality industry
  16. 16. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 2.2.1. Luxury hotels and low cost hotels Throughout this report the term Luxury hotel is used for five star deluxe, five star and four star hotels where as Low cost hotel means three star hotels. From the Error! Reference source not found. we can analyze that there is rapid growth in RevPAR during year 2002/03 to 2007/08. During this period Indian economy was booming .during these years where we can see growth rate is very high, GDP at factor cost was touching at nine percent. After year 2007/08 there is a sharp decline in RevPAR due to global melt down and Mumbai terror strike. We can see the occupancy level of different category of hotel in the table below. Important fact can be interpreted from this table that there are decline in occupancy rate and Average room Rate (ARR) of luxury hotel but occupancy level and ARR in low cost hotel had increased Table 1 : ARR of Different Category of Hotel
  17. 17. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Table 2 : Occupancy Level of Different Category of Hotels 2.2.2. SWOT Analysis of Indian Hotel Industry From the survey, SWOT8 analysis can be concluded as below: 2.2.2.1. Strength i. India’s rich culture heritage: With a historical backdrop of 5,000 years, India is one big package of culture ii. Demand–supply gap: Indian hotel industry is currently facing a mismatch between the demand and supply of rooms leading to higher room rates and occupancy levels. iii. Government support: The government has realized the importance of tourism and is willing to spend towards the development of the industry. The „Incredible India‟ campaign is a product of this realization. 2.2.2.2. Weakness I. Poor support infrastructure: India is concentrating to improve infrastructure and India has planned to invest huge amount on infrastructure in 13 plan compare to 12 plans .China is spending seven times as much as India on infrastructure (excluding real estate) in absolute terms. 8 SWOT stands for “Strength, Weakness, Opportunity and threat”
  18. 18. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 2.2.2.3. Opportunity I. Rising Income: Income for domestic tourist is continuously increasing. Six pay commissions made government job more attractive and therefore private sector also changing their compensation structure. II. Open sky benefits: The opening up of the aviation industry in India brings exciting opportunities for the hotel industry .Increased airline activity has stimulated demand and has helped to improve India's troubled infrastructure. Also the open skies policy has benefited both international and domestic travel. III. New business opportunities: It is expected that over the next three to five years, the biggest surge in accommodation demand is expected to come from commercial zones that are being developed in metro suburbs and secondary markets. Mixed-use development projects that include retail and commercial space have also gained momentum. Also the new concept, which is going to gain importance, is that of budget hotels to make start category of hotels for more people. 2.2.2.4. Threat I. Event risk: Events like Mumbai Terror attack, 9/11, SARS outbreak and Afghanistan and Iraq wars have severely impacted the tourism industry in the past and the threat remains. II. Increasing competition: Global hospitality majors like the Four Seasons, Shangri-La and Aman Resorts are all making their entry into the Indian market.
  19. 19. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 2.3. Overview: Hotel Industry In Kolkata Kolkata is business hub for east India and it is only metro city in this region. Total number of hotel available under different category in east India is 734 out of which 173 hotels are in Kolkata itself. Total number of room available under different category in eastern India is 9928 out of that 3373 is situated in Kolkata. When we talk about luxury hotels we can see most of the hotel is situated in Kolkata from this region of country (Table 3) Category of Number of Hotel Number of Rooms Hotels In East India In Kolkata In East India In Kolkata 5 Star Deluxe 4 4 852 852 5 Star 4 2 332 466 4 Star 12 2 176 755 3 Star 33 5 263 1455 Table 3 : Number of Rooms and Hotels in Kolkata Source: MINISTRY OF TOURISM, 2008. Assessment of requirement of Hotel Room / Accommodation in Metro Cities and 50 major tourist cities in India, p.42 Over the last year, Kolkata witnessed a drop in room night‟s demand and the occupancies fell by approximately 3% (HVS research on the market pegs this decline at 7%). The slump was a byproduct of the overall dampening of room night‟s demand across most major Indian cities, following the November 2008 terrorist attacks in Mumbai and the overall depressed sentiment from the global recession. The average rates, however, did not see any movement owing primarily to the lack of new supply entering the market. Additionally, unlike other major cities, Kolkata hotels had not seen an exponential jump in average rates in the past few years and thus the immediate
  20. 20. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata need for rate correction was not warranted. Future supply is expected to be absorbed as room nights demand grows from the central city as well as the new business area of Salt Lake and Rajarhat. A few hotel projects are under construction and the city is expected to have an additional thousand branded rooms across various positioning in the next five years. That being said, while some of these hotel projects are finally seeing active development, there are several announced projects on EM Bypass and in Rajarhat that are suffering delays for a variety of reasons. The overall development of Rajarhat as the new commercial hub of Kolkata has been painstakingly slow and even stagnant in recent months.
  21. 21. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 3. Research Design 3.1. Sampling Frame This research has been started with secondary data collection from several research journal followed by the questionnaire survey. Questionnaire survey is divided in to three parts. First set of questionnaire is designed for guests (Annexure V: Questionnaire for Guest). This questionnaire helped us to understand customer expectation while they select the hotels. Second set of questionnaire is designed for the hoteliers (Annexure VI: Questionnaire for Hotelier) which helped to understand the strategies adopted by the hotelier for customer satisfaction and retention of customer. It was an personal interview of different hoteliers in Kolkata. Finally, we selected IT & ITES services to interview (Annexure VII: Questionnaire for IT Industry) since this is the industry which pulls maximum demand of rooms among any other industry, we tried to understand their requirements. 3.2. Sample Size During research forty one guests has been interviewed. People, who usually stay in star category of hotels, were part of this interview as guests. Also we have targeted only those guests who enjoyed almost all five star deluxe hotels in Kolkata, India. For the study at random twenty eight IT and ITES industry personnel has been selected. We have selected those personnel from these companies who usually book hotel rooms for their employee. During interviewed it was focus to understand why they select particular hotel for their employee. To know the strategies of hotel industry seventeen hoteliers were interviewed in Kolkata, India. This interviewed was done to understand the present strategies and future opportunity in hotel industry.
  22. 22. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 3.3. Methodology This research is started with secondary data collection with several research papers on hotel industry .After secondary data collection three set of questionnaire were prepared for guests, for IT industry and for hoteliers. Guests have been asked to fill a standard set of questionnaire (Annexure V: Questionnaire for Guest ) Where as, for hoteliers and IT industry, it was a personal interview (Annexure VI: Questionnaire for Hotelier and Annexure VII: Questionnaire for IT Industry ). Complete data has been analyzed in MS Excel 2007, with the help of different Radar chart, bar Chart and line chart.
  23. 23. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 4. Discussion 4.1. Positioning of Hotel industry in Kolkata Positioning is the act of designing the company‟s offering and image to occupy and distinctive place in the mind of target customer (Kotler, Kevin, Koshy, & Mithileshwar, 2009). In hotel industry positioning strategies for existing properties and for new venture is entirely different (Bowie & Francis, 2004). For existing properties some of the factors are fixed, those are location, geo-demographic area, and properties current facilities and properties historic image. Indian Hotel co., I T C Welcomgroup and EIH are top three hotel chain in India with market share of 14.35 %, 9.49 % and 8.31 % (Centre for Monitoring Indian Economy, 2010).We have selected three hotels of Kolkata from these three hotel chain to understand their positioning in the city. Taj Bengal, ITC The Sonar and Oberoi Grand are the three hotels in Kolkata from Indian Hotel co., I T C Welcomgroup and EIH respectively. Hyatt regency is also part of this survey since this hotel is the only hotel in five star deluxe hotels 9 categories in Kolkata which is operated by a global player. A Perceptual map (Figure 3) has been drawn as per the survey conducted by the guests10 . While studying the perception of customer we selected eleven attributes. After a pilot survey it is found that two attribute was confusing to the respondent. Hence survey to understand the perception of customer is done with nine attributes .Those nine attributes are Convenient location, Service quality, Food and Beverage, Brand, Technological advancement, Warmth and courtesy, Safety & Security, Value for money and Other facilities like spa and business centre (Annexure V: Questionnaire for Guest).These attribute is rated by guest on five point likert scale from 1-Very Good to 5 – Very Bad. Hence while analyzing the data, smaller the rating is better for particular attributes. All nine attribute can be explained with the reference of perceptual map (Figure 3).Explanation of how these nine factors affects to create perception in customer‟s mind is illustrated below: 9 Five star deluxe is the category of hotel in India which is provided by “Federation of Hotel and Restaurant association of India (FHRAI) 10 In Hospitality industry, Customer of Hotel is usually called “Guest”.
  24. 24. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Convenient location 3.00 Other facilities like spa and 2.50 Service quality business centre 2.00 1.50 1.00 Food and Value for money 0.50 Beverage 0.00 ITC,The Sonar TAJ Bangal Safety & Security Brand Hyatt Regency Oberoi Grand Warmth and Technological Average courtesy advancement Figure 3: Perceptual map of Different Hotels in Kolkata ITC, The TAJ Hyatt Oberoi Average Sonar Bengal Regency Grand Convenient location 1.89 2.77 2.45 1.91 2.26 Service quality 1.72 1.54 2.00 2.18 1.86 Food and Beverage 1.67 1.85 2.55 2.55 2.15 Brand 1.61 1.54 2.00 2.18 1.83 Technological advancement 1.78 1.62 1.45 1.82 1.67 Warmth and courtesy 1.61 1.54 1.73 2.18 1.76 Safety & Security 1.50 1.62 1.82 1.73 1.67 Value for money 2.00 2.23 2.09 2.27 2.15 Other facilities like spa and 1.83 1.62 2.00 2.00 1.86 business centre Table 4: Average of Rating corresponding to Hotels and different Factors
  25. 25. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 4.1.1. Convenient location: Location of ITC, The sonar and Oberoi Grand is rated as most convenient by the guest. Average rating 11 given by guest for ITC, The sonar and Oberoi was 1.89 and 1.91(Table 4) respectively. With a long gap of 0.54 units (i.e. 2.45-1.91) Hyatt Regency is being rated as 2.45 and being at last position and Taj Bengal is rated as 2.77. ITC, The sonar is situated at EM bypass which is in the middle of city (Park Street) and salt lake area is rated as highest compare to any other location. It shows convenient location from customer perception as it is convenient from their workplace and city as well. Second most convenient location for guest was Oberoi grand which is situated near to esplanade. This esplanade is located in the heart of the city and is one of the busiest portions (Wikipedia).Esplanade is near to Dalhousie Square which is filled with several government offices. This place is accessible for work. We can analyze both the hotels rated at top because of same factors. But in the Case of Hyatt Regency, this place is near to Salt lake and Rajarhat which is IT hub for the city but city proximity is not as good as ITC Sonar or Oberoi. And at last, Taj Bengal is situated in Alipur which is posh area in Kolkata and its accessibility in business area is comparatively less. Salt lake, Rajarhat, Park Street, Dalhousie etc are far away from Taj Bengal. Remember in Kolkata most of the traveler are business traveler and hence for them Taj Bengal is not convenient place. Location is the very important for new entrants, since location cannot be changed unlike other attributes. Most of the traveler in Kolkata are the business traveler and hence site selection for new entrants in this industry should be in such a way that business travelers can be targeted. 11 All nine attribute is rated by guest on five point likert scales from 1-Very Good to 5 – Very Bad. Here Average rating terminology is used for the average of all respondent for particular attribute of respective hotels.
  26. 26. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 4.1.2. Service quality Guests perceive the service quality of Taj Bengal is best among these four hotels followed by ITC, The Sonar (Figure 3).Average rating given by guests for Taj Bengal is 1.54 where as being at second position ITC, The Sonar has scored 1.72 with a small gap of 0.18 (i.e. 1.71 – 1.54). Service quality of Hyatt and Oberoi is far away from origin of the graph and customers perceive service quality of these hotels is not recommended compare to previous two. ITC, The Sonar can fill this small gap with Taj Bengal by putting little more effort to improve service quality. During discussion with hotelier it is found that important reason behind lake of service quality in ITC, The sonar is: Attrition rate is very high Training of Taj Bengal is better 4.1.3. Food and Beverage ITC, The Sonar has rated best by the guest for F&B 12 which is followed by Taj Bengal. Again for this attribute Oberoi grand and Hyatt regency is rated very poorly (Figure 3).ITC, the sonar and Taj Bengal has scored average rating 1.67 and 1.85 respectively with gap of 0.18 (i.e. 1.85 – 1.67) .Poorly rated hotel Oberoi grand and Hyatt regency has achieved same average rating of 2.55 where as Average of all four hotels under this category was 2.15. In F&B, ITC Sonar has expertise in Indian food. Peshawari and Dumpukhat 13 is their specialty restaurant which gives the feel of India. Also ITC chain of hotel gives test of local food and hence ITC sonar has Bengali food also. This customization for the food creates Point of differentiation (POD) for the ITC,The Sonar. 12 F&B is the terminology used in hotel industry for food and beverages 13 Peshawari and Dumpukhat is the restaurant in ITC, The Sonar
  27. 27. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 4.1.4. Brand Taj Bengal (Indian Hotel co.) topped in Brand name and it scored 1.54 followed by ITC, The Sonar (I T C Welcomgroup) scored 1.61.There are very small gap of 0.07 (i.e. 1.61 – 1.54 ) in Brand name shows both the brand is almost equally known by the guests. For this parameter again Oberoi Grand (EIH co.) and Hyatt Regency is rated very poor (Figure 3) Being as oldest hotel chain Indian hotel co. is well known by most of the guest. This brand name is associated with the name of “TATA Group”, which is considered as one of the most faithful company in India. It might be the reason of scoring highest for Taj Bengal. I T C Welcomgroup is almost equally known as Indian Hotel co. I T C welcomgroup (Annexure II: About ITC WelcomGroup) is associated with one of the premier brand name I T C which is well known company in India. I T C became famous by selling tobacco product in 1950‟s and still most of the citizen think I T C stands for “Indian Tobacco Company” .I T C Diversified (Annexure I: About ITC Ltd.) their business in several areas and to remove negative image of Tobacco, company is involve is several social work. Every division of I T C including ITC Welcomgroup has show some part of corporate social responsibility (CSR). In Recent year, these actions modified their brand image which is needed still to improve. 4.1.5. Other Variables Other Variables like Technological advancement, Warmth and courtesy, Safety & Security, Value for money and Other facilities like spa and business centre are almost equally rated for all the hotels. It shows this all are mandatory services which every guests are needed and hence all the hotels are emphasizing almost equally on it. Still discussion can be extended by taking each and every parameter separately one by one. The Term Technological advancement refer to computerized reservation system, development of global distribution network, commercial use of internet, development in
  28. 28. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata hotel computerized system which has improved in room comfort and security of guest. The current rate of change in technology is fast and new technologies are constantly altering the technological environment (Bowie & Francis, 2004). Hyatt regency is rated best with minute difference with Taj Bengal. Hyatt regency scored 1.45 where as Taj Bengal scored 1.62 which shows Hyatt regency is more likely then Taj Bengal with a minute difference of 0.16 (i.e. 1.62 – 1.45).Guest perceives, Hyatt has adopted advanced technologies since it is having a global experience. ITC, The sonar is also closer to Taj Bengal with Average rating of 1.78, which is lower then overall average value of 1.67. Oberoi Grand ranked last by scoring average rating 1.82 which far away from overall average of 1.67. When we discuss about Warmth and courtesy, Taj Bengal and ITC Sonar both topped with almost equal score of 1.54 and 1.61 respectively (Table 4).In ITC Sonar, attrition rate is comparatively higher then Taj Bengal. Because of this employee cannot give personalized service as per previous experience of particular guests. It is the important reason for ITC, The Sonar to score slightly lesser score compare to Taj Bengal. Service of Hyatt Regency is also acceptable by guest after Taj and ITC Sonar Whereas Warmth and courtesy of Oberoi Grand is much inferior from the same of other three hotels (Figure 3). For other three variable like Safety & Security, Value for money and other facilities like spa and business centre almost all the hotel is perceived equally by the guests ( Figure 3).and hence these variable cannot be treated as positioning difference among all four hotels in Kolkata. 4.1.6. Combining all Variables With reference of the positioning map (Error! Reference source not found.), we need to understand overall position of four hotels in Kolkata. To understand this we calculated the area under the perceptual map (Annexure VIII: Calculation for Area for Perceptual Map). Areas for each hotel are shown in Table 5.Also comparison of each hotel is illustrated below.
  29. 29. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata In this analysis also, lower the area under the curve is better (since guest has relied on five point likert scale from 1-Very Good to 5 – Very Bad). Area Comparison under the ITC, The TAJ Hyatt Oberoi Average curve Sonar Bengal Regency Grand (Unit2) ITC The Sonar 10.45 0.00 TAJ Bengal 11.22 0.77 0.00 Hyatt Regency 14.10 3.65 2.88 0.00 Oberoi Grand 15.15 4.70 3.93 1.05 0.00 Average 12.68 2.23 1.46 -1.42 -2.47 0.00 Table 5 : Area under the curve for a Perceptual Map Area under the curve for ITC sonar is 10.45 Unit 2, shows this hotel is most favorable hotel in city. For comparison of ITC Sonar with other hotel is illustrated in Column ITC,The sonar under comparison sub heading in Table 5 . Being at the second position with minute difference of 0.77 unit2, Area under the curve of Taj Bengal was 11.22 unit 2. whereas with large difference of 3.65 unit 2 and 4.70 unit2 with ITC sonar Hyatt Regency and Oberoi Grand scores 14.10 unit2 and 15.15 Unit 2.
  30. 30. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 4.2. GAP between customer’s expectation and hotelier’s perception about customer’s need Guest, hotelier and IT 14 industry personnel are interviewed to understand their perception. Guest, hotelier and IT industry are interviewed on seventeen parameter (Annexure V: Questionnaire for Guest , Annexure VI: Questionnaire for Hotelier ,Annexure VII: Questionnaire for IT Industry). Those seventeen parameter are efficient check In, Efficient check Out, Concierge, Room service, Dry Cleaning & Laundry, Choice of Cuisine, Size of Room and Bathrooms, Cleanness, Internet Connectivity, Business Centre & Conference facilities, Health club & Spa, Sports and Recreational activity, Distance from Airport, City proximity, Environment & Ambiance, Brand Loyalty and Value for Money. Guest and IT company is asked how important these parameter for him/her. Similarly hoteliers are asked which parameter they think more important for customer. Both Guest and hotelier ranked their importance in 1 to 5 likert scale in which 1 is very important whereas 5 is least important. Hence, Smaller the number shows more important for particular attribute. After collecting the data, Average for each attribute is calculated for all three set of questionnaire .Difference between guest‟s expectation and hotelier perception shows gap for each attribute. Positive Numerical value of these gaps shows hoteliers are giving more importance to particular attribute compare to Guests or IT industry and vice- versa. Now let us discuss GAP with Guests and IT industry individually 4.2.1. GAP Analysis with Guests In this section of discussion, “GAP” means gap between Guest expectation and hotelier perception about their (Guest) expectations. In this analysis, maximum GAP found with attribute “Value for money” (Figure 4). Guests ranked “Value for money” as 1.19 whereas hotelier ranked as 1.42 with a huge negative value (-0.24) of GAP (Table 6) 14 IT industry include IT & ITES (IT enabled Services) services.
  31. 31. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Figure 4 : GAP between Guests expectation and Hoteliers Perception about Guest Sl.No Parameter Average of Average of GAP (III)= Guest Hoteliers ( I ) – (II) (I) ( II ) 1 Efficient check In 2.08 1.00 1.08 2 Efficient check Out 1.92 1.00 0.92 3 Concierge 2.19 2.14 0.05 4 Room service 1.42 1.57 -0.15 5 Dry Cleaning & Laundry 2.27 2.14 0.13 6 Choice of Cuisine 1.85 1.86 -0.01 7 Size of Room and Bathrooms 1.58 1.71 -0.14 8 Cleanness 1.12 1.14 -0.03 9 Internet Connectivity 2.38 1.14 1.24 10 Bus. Centre & Conf. Facilities 2.85 1.71 1.13 11 Health club & Spa 2.81 1.57 1.24 12 Sports and Recreational activity 3.15 2.43 0.73 13 Distance from Airport 2.19 2.29 -0.09 14 City proximity 2.08 1.43 0.65 15 Environment & Ambiance 1.46 1.57 -0.11 16 Brand Loyalty 2.12 2.14 -0.03 17 Value for Money 1.19 1.43 -0.24 Table 6 : GAP between guest’s expectation and Hoteliers Perception about Guest
  32. 32. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Being at second position, GAP in Room service is – 0.14 units which is a large GAP. It shows most of the consumer gets unsatisfied by the room service since important given by hotelier is much lesser then customer expectation. Some of the variable likes Environment & Ambiance, Size of Room and Bathrooms, City proximity, Brand Loyalty and Distance from Airport are the attribute which either can not be changed or there are several barriers while changing them. For new entrance, these are the important attribute to focus on so that they can attract their target customer easily. Refer Table 6 for the GAP for these attribute. GAP with the attribute of “Choice of Cuisine” is another factor which is most vulnerable attribute for a hotel industry since guest‟s expectation for this attribute is higher then hotelier‟s perception for same attribute. Hence GAP in F & B15 needs to be filled by the by Hotelier to minimize the guest’s complain. 4.2.2. GAP Analysis with IT & ITES industry In this section of discussion, “GAP” means gap between IT company‟s16 perception and hotelier‟s perception about their (IT companies‟) expectations. In this analysis, maximum GAP found with attribute “Distance from Airport” (Figure 5). IT industry ranked “Distance from Airport” as 1.67 whereas hotelier ranked as 2.28 with a huge negative value (-0.62) of GAP (Table 7).It shows most of the business travelers are concern about the distance from airport which is not given equally priority by hotelier. GAP of room service again came at second rank similar as it was in “GAP analysis with Guest”. This should again a focus point for hotelier to give more important to this attribute to minimize the complain for IRD 17. Being at the third position, Negative GAP for “dry cleaning and laundry” is more business traveler 18 which may be a less focused attribute by the hotelier and they need to focus on this. Detail of all seventeen GAPs can be referred in Table 7 and Figure 5 15 “Food and Beverage” is usually used as F&B in Hotel industry 16 IT stands for IT and ITES company 17 IRD stand for “In room drawing” which is usually used in hotel industry
  33. 33. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Figure 5 : GAP between IT & ITES Company's expectation and Hoteliers Perception about Guest Sl.No Parameter Average of Average of GAP ( III ) = IT Industry Hoteliers (I) - (II) (I) ( II ) 1 Efficient check In 2.17 1.00 1.17 2 Efficient check Out 2.17 1.00 1.17 3 Concierge 1.83 2.14 -0.31 4 Room service 1.00 1.57 -0.57 5 Dry Cleaning & Laundry 1.67 2.14 -0.48 6 Choice of Cuisine 1.83 1.86 -0.02 7 Size of Room and Bathrooms 2.00 1.71 0.29 8 Cleanness 1.00 1.14 -0.14 9 Internet Connectivity 1.67 1.14 0.52 10 Bus. Centre & Conf. Facilities 2.50 1.71 0.79 11 Health club & Spa 3.67 1.57 2.10 12 Sports and Recreational activity 3.83 2.43 1.40 13 Distance from Airport 1.67 2.29 -0.62 14 City proximity 2.17 1.43 0.74 15 Environment & Ambiance 1.17 1.57 -0.40 16 Brand Loyalty 2.17 2.14 0.02 17 Value for Money 1.33 1.43 -0.10 Table 7 : GAP between IT & ITES Company's expectation and Hoteliers Perception about Guest 18 Business traveler is the word used for the guest coming for business purpose. But survey is conducted only in IT and ITES industry
  34. 34. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 4.2.3. GAP Analysis Model for Hotel Industry GAP in hotel industry can be illustrated by eight GAPs (Figure 6 and Table 8).Most of the five star deluxe hotels in India are from a chain of hotels. Hence the illustrated model is designed to focus GAP‟s in any one hotel from a hotel chain. The difference between an individual hotel and a chain of hotel is, in chain of hotels several factors are decided by their corporate office. And a particular hotel of that chain cannot change those things unlike to individual hotels. Some time Hoteliers may not understand the need of guest and they anticipate guest‟s expectation wrongly. This creates dissatisfaction for guest which might be an important cause for losing the market share. Customer generation is much more expensive rather customer retention and hence wowing from guest is always mandatory. With reference to the GAP Model for hotel industry ( Table 6), Different parameters have been evaluated as discussed in section 4.2.1 and 4.2.2. In this model, all the seventeen parameter have been plotted as a satisfaction parameter and that parameter have been evaluated to find out the GAP. If Hotel industry can reduce these GAPS, They can increase their market share. GAP 1: GAP between Guest perception and management perception about distance from Airport or City to hotel affects the hotel’s business This GAP arises because of location of Hotels. While a guest is picked up at the airport how much time will it take from him to reach to the gate of hotel .A city like Tokyo or London where average speed of four wheeler is much higher than same of India .And hence this parameter is not much effective. But a city like Kolkata (India) where road maintenance and traffic jam is a huge problem this parameter is very effective. Same case applied for a person if he/she wants to come from their home or offices to restaurant of any hotel. They may select those hotels which are near to their place. This GAP is named as Proximity GAP (Table 8).
  35. 35. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Figure 6 : GAP analysis Model for a Hotel from a Hotel Chain GAP Number GAP Name GAP 1 Proximity GAP GAP 2 Welcome GAP GAP 3 IRD GAP GAP 4 F&B GAP GAP 5 Standard GAP GAP 6 Recreational GAP GAP 7 Perception GAP GAP 8 Expectation GAP Table 8 : Name of GAPs for Hotel Industry
  36. 36. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata GAP 2: GAP between Guest perception and their expectation from particular brand during Check in and checkout facilities. “Check in” is first impression where as check out is last impression for a guest in hotel. There is a saying “You will never get second chance to make a first impression” .Importance on First impression is always important. Check in of a particular guest gives an overall perception to the guest about hotel. If check in is more than their expectation then even in case of any service failure later on during his experience in hotel he/she can take it lightly and vice versa is also true. “Check out” is last impression and also this is last chance to do a service recovery. If guest is happy during check out, it shows customer retention for particular hotel will be more. This GAP is named as Welcome GAP ( Table 8) GAP 3: GAP between Guest perception and their expectation from particular brand during Room service. During survey it is found that GAP in room service is negative with large magnitude and hotelier needs to improve in this area to meet guest‟s expectations (Table 6 and Table 7). In this area customer spend his maximum time and for every moment they have expectation for good services. From hotelier point-of-view several constrain are there. Like restaurant may be bit far from room and since temperature of food is not as hot as it should be and hence customer is not proper test. Similar kind of several problem arises in room service which hoteliers are already aware but because of several constrain they are not able to improve it. This GAP is named as IRD 19 GAP (Table 8) GAP 4: GAP between Guest perception and their expectation from particular brand in restaurants. There is GAP in restaurant with Guest‟s expectations and perception after experience when they compare with the brand of hotel. For example ,ITC 19 IRD Stands for “In Room Drawing” which is commonly used in hotel industry
  37. 37. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata welcomgroup is known for Indianess .if a guest comes to restaurant if he/she will not get the test of Indian food then that creates a GAP and causes un- 20 satisfaction. This GAP is named as F&B GAP (Table 8) GAP 5: GAP between Guest perception and their expectation from particular brand about environment and ambiance. When guest go to the hotel they does not pay only for the services but also they pay for environment and ambiance. For example if they goes to Oberoi Grand, Kolkata they may want to feel the boutique experience. Similar every brand name has their point of differentiation in environment and ambiance. This is an experience which is applied everywhere in the hotel unlike previous GAPs which is applied only in particular area. This GAP is named as standard GAP (Table 8) GAP 6: GAP between Guest perception and their expectation from particular brand about sports and recreational activities. Now a day, it is an added feature that most of the luxury hotel gives for Spa, meditation, squash, sports and recreational activity. When guests choose a particular hotel he/she perceive something from particular brand. There is a GAP exist if customer expectation does not meet with their perception with particular brand. This GAP is named as recreational GAP ( Table 8) GAP 7: GAP between Guest perception and their expectation while they compare each and every service with “Value of Money” When guest experience all the service, they evaluate every parameter with amount they spent. This GAP is a function of all previous GAPs as shown below: 20 F&B stands for Food and Beverage which is commonly used in hotel industry
  38. 38. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata During survey it is found that this is the largest GAP (Table 6) if hotelier want to minimize this GAP they need to minimize all previous GAPs. This GAP is named as perception GAP (Table 8) GAP 8: GAP between Guest expectations for “Value of Money” and their expectation with the same. After Calculating the value of money guest need to compare it with his expectation. This GAP can be named as expectation GAP (Table 8). This GAP is the function GAP 7.
  39. 39. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 4.2.4. FMEA for largest GAP area: Room Service Negative GAP for room service is found the second largest GAP in both, GAP with guests and GAP with IT firms. Largest GAP for Guest were the “Value for money” Which is a function of all the six GAPs (Figure 6) and largest GAP for IT firms is found the distance from airport. This deliver un-satisfaction in guests and hence they complain most in room services. Now Value for money will automatically increase if customer will be satisfied in room service (Which is largest after “Value for money”) where as “Distance from airport” cannot be changed for existing hotels and hence it is a need to understand the usual complains , analysis of Complains and resolution for the same in room services. 4.2.4.1. Usual Complains in Room Services: Hoteliers are interviews to understand the problematic area in room services. Sixteen attributes were extracted from this interview .Those sixteen attributes are order taking, delivery time, preparation time, compliance with guest, specification, menu knowledge, clearance, quality Of food & beverage, service skill, tone of voice, listening skill, repeating and confirming the order, suggestive selling, trolley Setup, warmth & courtesy, portion Size and feed back 4.2.4.2. Analysis of Complains 21 FMEA (Failure mode and effects analysis Table 9 ) has been done followed by Parato22 graph ( Figure 7 and Table 10) for all sixteen attributes. For the FMEA a ordinal scale of 1, 3 and 9 has been selected which is explained below: For Severe – 1 means less severe and 9 means most severe 21 Failure modes are any errors or defects in a process, design, or item, especially those that affect the customer, and can be potential or actual. (Wikipedia, 2008) 22 Parato is a graphical representation which is used to prioritize some of the important attributes among several attributes
  40. 40. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata For Occurrences – 1 means frequency of occurrence is less and 9 means frequency of occurrences is more. For Detection – 1 means easily detectable and 9 means tough to detect. All sixteen parameter is tabulated by understanding their degree of severity, frequency of occurrences and possibility of detection in Table 9 and risk priority number (RPN) has been calculated. This RPN is shorted in Table 10 and a Parato is drawn in Figure 7 to prioritize some of the attribute on which hotelier can focus to increase customer satisfaction. Parameter Severe Occurrence Detection RPN23 (I) ( II) ( III ) (IV) = (I) x (II) x (III) Order Taking 9 9 9 729 Menu Knowledge 9 1 9 81 Listening Skill 9 1 1 9 Tone of Voice 3 3 3 27 Suggestive Selling 3 1 3 9 Repeating and confirming the order 9 1 1 9 Compliance with Guest 9 9 1 81 specification Trolley Setup 3 3 1 9 Preparation Time 9 9 3 243 Delivery Time 9 9 3 243 Clearance 9 3 1 27 Quality Of F & B 9 3 1 27 Service Skill 3 1 9 27 Warmth & Courtesy 9 1 1 9 Portion Size 3 1 1 3 Feed back 1 1 1 1 Table 9 : Calculation of Risk priority numbers (RPN) For Room Services From the Parato Graph (Figure 7), It is identified that almost 20 percent of problem (20 % of number of attributes i.e. 16 = 3.2), Contribute 80 percent of total RPN ( Figure 7 and Table 10). 23 RPN is a risk priority number which is a multiplication of degree of severe, frequency of occurrences and possibility of detection in FMEA analysis.
  41. 41. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Parameters RPN Percentage Cumulative Percentage Order Taking 729 47.52% 47.52% Delivery Time 243 15.84% 63.36% Preparation Time 243 15.84% 79.20% Compliance with Guest specification 81 5.28% 84.49% Menu Knowledge 81 5.28% 89.77% Clearance 27 1.76% 91.53% Quality Of F & B 27 1.76% 93.29% Service Skill 27 1.76% 95.05% Tone of Voice 27 1.76% 96.81% Listening Skill 9 0.59% 97.39% Repeating and confirming the order 9 0.59% 97.98% Suggestive Selling 9 0.59% 98.57% Trolley Setup 9 0.59% 99.15% Warmth & Courtesy 9 0.59% 99.74% Portion Size 3 0.20% 99.93% Feed back 1 0.07% 100.00% Total 1534 100% Table 10 : Arrangement of RPN in Descending Order Figure 7 : Parato Graph for Complain in Room services
  42. 42. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 4.2.4.3. Resolution Of Complain Hotelier can maximize the customer satisfaction by focusing on only three attributes order taking, delivery time and preparation time. Order taking itself is combination of several parameters like communication skill, listening skill, menu knowledge etc. Hence hotelier should give proper training to order taker to minimize the error or customer dissatisfaction in this area. Delivery time which scores second most RPN, can be improved by putting more resources to deliver the food to the guest. Also hotelier can think to minimizing distance of room from their delivery center to minimize turn-around-time (TAT). There are some Hands-on-time (HOT) which will always take to cook food. But still hotelier can do a market research to know the latest technology for cooking which may reduce the time.
  43. 43. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 4.3. Present Market Strategies of Hotel Industry in Kolkata As discussed in earlier section, Kolkata is business hub and most of the traveler in city is the business traveler. In Kolkata, Movement because of Business purpose pulls the demand of room. Unlike a Tourist place usually seasonality for traveler does not vary. In Kolkata, demand of room and banquets shows seasonality only because of Marwadi’s24 weddings. Most of the Marwari‟s wedding usually happen in month of November-December and May-June. This is a peak period for hotel industry in Kolkata and Hotel industry generate good amount of revenue because of raised demand. Also some of the events like medical conferences; cricket machetes etc. raised the demand of hotels which is not seasonal. But these kinds of big events are preplanned since long. And Hence hotelier keep ready them self to in cash this opportunity. Presently in luxury hotels, very less amount of people who pay room chargers from their own pocket instead there organization pay for them and hence hotelier target the different organizations to make their employee stay in particular hotels. Specifically different company‟s has contract with one or few hotels in the city. Presently most of the Luxury hotels25 in Kolkata are the chain of hotels and for customer retention they have some loyalty program (member ship plan).After taking member ship customer will get extra benefits out of that in whole chain of hotels. So that if one has taken the member ship of one hotel chain they cannot move to another chain since for him hotel where they have member ship will be more convenient. 26 Most of the budget class of hotel tries to attract the business traveler of public sectors or small companies. Budget class of hotel targeted the employee of public sectors since during travelling they do not get enough allowances to stay in luxury hotels. Also in Kolkata leather firm is very active which does not pay enough allowances to middle class employee to go in luxury hotels. 24 Mardwari is a community in India who usually belongs from a area called Marwad in Rajsthan 25 Luxury hotels stands for 5 star deluxe,5 star and 4 star hotels 26 Budget class of hotels means three star hotels
  44. 44. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 4.4. Prediction of Demand and supply in Kolkata in future Kolkata is only business hub in eastern India and hence development in business in east India will increase the demand of room in Kolkata. Kolkata port is also only port in this part of country. Demand and supply of room may affected by several factor apart form room demand by local business of Kolkata. People who usually go to the Assam for Tea or timber business they usually take a night stay in Kolkata. Also export of tea (Assam) is being done from Kolkata port. So Movement because of surrounding area is an important parameter for the demand of room. Also Fishery board and tourism department of west Bengal is developing different tourism sites and bitches to attract the tourism (FHRAI, 2008-09) industry which may increase the demand in future. Development of Henry Island (near to Bekhali) is a very good example of an attempt to make it a tourist sport by fishery department of west Bengal. Similar several developments are going on which may attract tourist in future. Supply of Room: Present supply of room available in eastern India is illustrated below: Location Category wise number of rooms Heritage 5 Star 5 Star 4 3 Star 2 Star 1 Approved Licensed Total Deluxe Star Star Kolkata 269 852 332 176 263 246 110 45 1080 3373 Puri / Bhubneshwar 34 0 59 285 327 32 0 12 1040 1789 Darjeeling 81 0 0 0 76 36 0 23 712 975 Siliguri 0 0 0 0 76 36 0 45 112 269 Digha 0 0 0 0 0 0 0 56 96 152 Guwahati 0 0 0 144 134 0 0 56 464 798 Patna 0 0 75 39 102 32 0 12 448 708 Ranchi 0 0 0 25 106 35 0 27 433 626 Shillong 0 0 0 40 49 0 0 45 272 406 Gangtok 25 0 0 46 63 0 0 87 240 461 Gaya / Bodhgaya 0 0 0 0 169 0 0 34 168 371 Total 409 852 0 755 1422 407 110 442 5065 9928 Source: MINISTRY OF TOURISM, 2008. Assessment of requirement of Hotel Room / Accommodation in Metro Cities and 50 major tourist cities in India, p.41
  45. 45. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata In latest economic downturn Occupancy level, ARR and RevPAR (Revenue per available room) of every city has fallen down in India but Kolkata is able to reach slight growth of 1.7 % in ARR (Crisil, 2010). Showing Positive growth show there is need of more and more number of rooms in the city. Demand of Room: Projected demand of room in Kolkata is 16919 by year 2011 under all categories of hotels. Which can be further divided in different category like luxury hotel (3753 rooms), Budget class hotel (6720 rooms), Classified hotels (10473 rooms) and others (6444 rooms) (Ministry Of Tourism, 2008). By year 2011, expected number domestic travelers and foreign travelers are 5841090 and 1058840 respectively (Ministry Of Tourism, 2008) in Kolkata. Projected demand of room in Kolkata is 35887 by year 2015 under all categories of hotels. Which can be further divided in different category like luxury hotel (8218 rooms), Budget class hotel (14028 rooms), Classified hotels (22246 rooms) and others (13643 rooms) (Ministry Of Tourism, 2008). By year 2015, expected number domestic travelers and foreign travelers are 12073871 and 2339365 respectively (Ministry Of Tourism, 2008) in Kolkata. A major reason for the growing demand for hotel rooms is the underlying boom in the economy, particularly the growth in the IT and ITES industries. The overall growth outlook appears buoyant and much of this growth will be driven by the BPO explosion, IT, Telecom and energy sectors (Tuteja, 2009)
  46. 46. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata In Kolkata some of the project has been withdrawn like Marriot Courtyard Hotels to open new hotel by 2009 (256 rooms), Intercontinental Hotels to open new hotel by 2008 (264 rooms), Hilton Group to open new hotel (2106 rooms), Bengal Ambuja to open new hotel by 2008 (140 rooms) (Ministry Of Tourism, 2008). Also several other company could not come here because of political environment like Tata Nano and Infosys shifted from west Bengal. Now it can be expected from government to make an business friendly environment to attract more hospitality company to meet hotel demands
  47. 47. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 5. Recommendation Positioning: Convenient location is an important attribute which is a point-of-differentiation for the hotels in Kolkata. Therefore the new entrants should search for location in the vicinity of both the dynamism of the business area and the hustle of the city. The existing hotels which are not at convenient locations should provide full time free-of- cost transportation facilities which could bridge the gap between the hotel and various locations of the city. Existing hotels should improve their service quality, food & beverage, and brand name to capture more market share. They should also continuously upgrade themselves to overcome the threat of latest technology from the new entrants. Customer Satisfaction: Hotelier should emphasize on improving room and restaurants services to retain existing and attract new customers. Since hoteliers are not able to meet guests‟ expectations in the two areas mentioned above. Hoteliers should understand order taking, delivery time and preparation time are most dominated complaint area which should be improved for both room and restaurant services. Hotelier should also think of minimizing their expenditure in some areas which does not add values for customer satisfaction .It was found in some cases the hoteliers overestimated customers expectations which actually erodes profitability of the hotels (Figure 5, Figure 6, Table 6 Table 7). Those areas are “Efficient check in”, “Efficient check out”, “Concierge”, “Room service” and “Dry Cleaning & Laundry” where
  48. 48. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata customer satisfaction will not decrease even by minimizing some degree of service quality. Strategies: Demand for rooms in Kolkata is far above the supply level and hence possibility of new entrants is very high in the coming years. Since all the premium brands of hotel industry provide almost similar services so the major point-of-difference will be the price factor. Therefore, Hoteliers will have to adopt better pricing strategy in near future. Affordability should be induced by detaching few facilities from the original package. With more number of hotels being lined up in the city, HR executives of existing hotels should gear up to retain skilled labor. Since, during survey it was found that huge numbers of hotel management students are switching their stream in mid way, because of the notion that other fields are more attractive for them. Hotelier should be also ready for the threat of the guest houses which is being developed by different organizations (like Wipro has already developed Star categories of guest houses in different cities).
  49. 49. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata 6. Conclusion This study focused on present and future marketing strategies and demand-supply gap of luxury hotels in Kolkata, India. Another aspect of the project was to find out the various gaps between guests‟ expectations Vis-à-vis hotelier perception about the same. A survey has been conducted on hoteliers, guests and IT industry personnel to collect the data. Data has been interpreted by perceptual map, gap analysis and FMEA (Failure mode and effects analysis). It was found that most of the customers perceived ITC, The sonar as the best hotel in the city (Kolkata, India). This study also revealed that there is a huge gap in customer expectation and hotelier perception regarding several parameters. Room services and restaurants are most dominating parameters from which majority of the complaints arises in a hotel. This study also revealed the emergence of several potential threats to the hotel industry which includes service apartment and guest houses. During interview it is found that several hoteliers were not happy to share their strategies for this interview. This article will contribute for existing hoteliers to improve their marketing strategies. On the other hand this will facilitate the new entrants to develop proper strategies against different present and probable threats.
  50. 50. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Annexure I: About ITC Ltd. ITC is one of India's foremost private sector companies in India. It has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri- Business, Branded Apparel, Packaged Foods & Confectionery, Greeting Cards and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Branded Apparel, Greeting Cards and Packaged Foods & Confectionery. ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills. Over time, the strategic forays into new businesses are expected to garner a significant share of the emerging high-growth markets in India. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. ITC employs over 15,000 people at more than 60 locations across India. ITC is ranked among India's most valuable companies by the 'Business Today' magazine. ITC continuously endeavors to enhance its wealth generating capabilities in a global environment to consistently reward more than 137916 shareholders, fulfill the
  51. 51. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the nation. For the Shareholder." ITC Limited: Mission ITC Limited: Vision
  52. 52. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Annexure II: About ITC WelcomGroup ITC Limited entered the hotel business on October 18, 1975, with the opening of a hotel in Chennai, which was rechristened Hotel Chola. ITC hotels currently own and operate 100 hotels in 75 destinations. Its restaurants Bukhara , Peshawari, Dakshin, DumPukht and Kebabs & Kurries are well known cuisine brands today. ITC-Welcomgroup has one of the most extensive art collections in India. A museum of their collection is being planned in Kolkata. The group today operates under several distinct brands: ITC - Luxury Collection Hotels WelcomHotel Sheraton Hotels Fortune Hotels, which has 54 hotels with 4446 rooms in 41 cities across India. WelcomHeritage Hotels List of ITC Hotels by Brand ITC Hotel Luxury Collection WelcomHotel / Sheraton properties ITC Maurya, New Delhi Sheraton Chola, Chennai ITC Mughal, Agra Sheraton Park Hotel & Towers, Chennai ITC Maratha, Mumbai Sheraton Rajputana, Jaipur ITC Grand Central, Mumbai Sheraton New Delhi, New Delhi ITC Sonar, Kolkata WelcomHotel Rama International, Aurangabad ITC Kakatiya, Hyderabad WelcomHotel Vadodara, Vadodara ITC Windsor, Bangalore ITC Royal gardenia, Bangalore
  53. 53. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata List of Fortune Hotels: Fortune Global Select Gurgaon Fortune Park Galaxy Vapi Fortune Select Palms Chennai Fortune Murali Park Vijaywada Fortune Select Trinity Bangalore Fortune Park Klassik Ludhiana Fortune Select Exotica Navi Mumbai Fortune Pandiyan Hotel Madhurai Fortune Select Manohar Hyderabad Fortune Park Panchwati Kolkata Fortune Select JP Cosmos Bengaluru Fortune Fences Tirupati Tirupati Fortune Park Bella Casa Jaipur Fortune Resort Bay Island Port Blair Fortune Landmark Ahmedabad Fortune Resort Sullivan Court Ooty Fortune Landmark Indore Fortune Chariot Resort Mahabalipuram Fortune Park Centre Point Jamshedpur Fortune Resort Central Darjeeling Fortune Hotel The South Park Trivandrum Fortune Inn Riviera Jammu Fortune Park Calicut Calicut Fortune Inn Jukaso Pune Fortune Inn Sree Kanya Vishakapatnam THE ITC WELCOMGROUP MISSION To be recognized as the premier professional organization providing the finest tourism, hospitality and travel related consumer services in the country and thereby contributing to the achievement of the following Corporate and National priorities CORPORATE Generating Adequate economic surpluses to meet the expectations of all stakeholders NATIONAL  Maximizing Foreign exchange earnings  Employment Generation  Development of Human Resources SLOGAN: Nobody gives you India like we do
  54. 54. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Annexure III: About ITC ,The Sonar (Kolkata,India) ITC Sonar, Kolkata, a part of the “Luxury Collection”, epitomizes the beauty of Bengal. Spread over 16 acres of prime property makes Sonar the ultimate business getaway. Exemplifying this term, this is a place that has all the trappings of a business hotel, along with the „feet-up-feel‟ of a resort. While offering travelers every possible modern convenience, it simultaneously gives them the opportunity to break away from the monotony of work and savor the varied pleasures of life .Designed by awarded Architects Kerry Hill of Singapore, The Sonar represents the Symphony of Earth and Water – of its 16 acres, over 4 acres comprise of water bodies, consisting of water lilies and reflection pools. It is in route from the airport and a 10 minute drive from Sector V, Salt Lake-silicon hub of Kolkata as well as the city„s shopping, entertainment, cultural and business districts. An array of award-winning culinary experiences range from the northwest frontier to traditional Indian delicacies, continental grills, and an Irish pub. Amidst the ambience of seclusion and luxury lies Kaya Kalp-The Spa, offering a delightful retreat from the pressures of the modern world. The architecture of its indoor and outdoor pavilions, spread over 13000 sq. ft., draws on local inspiration to blend harmoniously with the natural environment. It is the largest tropical hotel spa in Kolkata. The fully-equipped Wellness Centre features a Jacuzzi, sauna, steam room, state-of-the-art gym, as well as a unique outdoor swimming pool. In addition, it is also home to a beauty parlour, a salon, and a yoga room.
  55. 55. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Eight meeting and conference rooms with state-of-the-art facilities including WI-FI and outstanding services create an inspiring setting for grand international conferences, as well as corporate and social events. Different restaurant at ITC sonar and their specialty is explained below:- Eden Pavilion: Eden Pavilion, the 24 -hour restaurant at ITC Sonar, Kolkata, offers a delectable variety of buffet fare throughout the week, for lunch as well as dinner. The spread has the flavor of our entire signature outlets packed into one. West View, Gourmet Shop, Pan Asian (oriental), Dakshin, Dum Pukht, Peshawri and Maroush. Peshawari:Serving authentic cuisine from the rugged North West Frontier (Indian Barbeque), the restaurant recreates a rustic ambience where you tie on checked aprons and are encouraged to eat with your fingers! Dum Pukht: A celebration of the rich diversity of traditional Indian cuisines and the 200 year old culinary tradition of cooking food in sealed ‗deghs„. This Indian fine dine restaurant with a show kitchen serves a mix of Awadhi, Luckhnawi and traditional Indian cuisines. Pan Asian: Pan Asian invites gourmands to a journey across the Pan Pacific belt. At Pan Asian you can explore diverse culinary traditions: from the hearty fare of Mongolia to the fiery taste of Malaysia, Korea, Indonesia and Thailand. And, the delicate flavours of China and Japan. A food-lover„s foray into the subtle flavours that have created famous culinary traditions such asJapanese, Chinese, Thai, Korean and Mongolian.
  56. 56. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata West View Bar & Grill: A distinctive medley of "Western Bar cum Grill" offering a cornucopia of choicest wines along with the finest Single Malts, Cognacs and Cigars. The novel outlet seeks to be a culinary journey for the discerning dinner, complete with, the interactive charcoal grill with a widest selection of imported meats, crepe suzettes cooked right on your table. Dublin: The new bar code. A distinctive pub cum Discotheque representing the Gaelic Raj Irish Pub and the Indian Colonial era offering the widest and finest choice of wines and spirits.
  57. 57. Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata Annexure IV: List of Company in Salt Lake Sl.No. Name of the applicant for Area Plot No of allotted land allotted land (acres) 1 Systron Electronics (P) Ltd 0.2965 ( J-5) 2 Delta Electro Polymer (P) Ltd 0.2687 (J1-8) 3 Dhanashree Electronics (P) Ltd 1.0749 (X1-16) 4 Biptronics 0.2687 (J1-16) 5 Jain Link (P) Ltd 0.2965 (J-2) 6 Simoco Telecommunication (South 4.2996 (X1-9,10,13,14) Asia) Ltd 7 Stesalit Infotect Ltd 0.5 (J1-1) 8 Metalogic Systems 0.2356 J1-1 9 Institute of Engineering & 0.2525 (Y-12) Management 0.2514 (Y-11) 0.2514 (Y-24) 0.94 (D-1) 10 Pekon Electronics Ltd 0.269 J1-9 11 Eldyne Electronics Ltd 0.2687 J1-13 12 Electron Combine 0.2514 Y-15 13 RDH Technologies (P) Ltd 0.344 F-1 14 RPG Netcom Ltd 1.0773 X1-4 14A Webel Bhavan 2.67 B-2 15 Swamina International (P) Ltd 0.2514 Y-20 16 The Supreme Industries Ltd 1 X1-1 17 Bengal Intelligent Parks (P) Ltd 5.0637 A2,M2,N2 18 SAMEER 0.6232 L-2 19 Plasto Chem (P) Ltd 0.2965 J-1 20 Cimsys Research (I) Pvt Ltd 0.2514 Y-13 21 Globsyn Tehnologies Ltd 2.1498 X1-11,12 22 Siemens Ltd 7.8614 G 23 ECE Technologies India Ltd 0.2514 Y-4 24 Controlla Electrotech (P) Ltd 0.2521 Y-10 25 Tata Consultancy Services 3.5158 B-1,C 26 Superintendence Co. of India (P) Ltd 0.2514 Y-23 27 Bansal Electronics 0.2687 J1-2

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