The hotel industry


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The hotel industry

  1. 1. 1 | P a g e ACKNOWLEDGEMENT This research bears on imprint of many people from the field of academia to industry. I wish to express my sincere gratitude to Prof. Tridib Sengupta ( HOD Management, St. Xavier’s College, Autonomous) for providing me an opportunity to do my research on a leading five star deluxe hotel in the city. It was a grand experience for me to work under his guidance and would like to extend my appreciation to him for his incessant indorse. My special thanks to Mr.Shiraj Shikhar (Director of sales, The Oberoi Grand), Mr.Rahul Nair (Asst. Manager, Sales, The Oberoi Grand) and all other executives of the hotel for their co- operation and patronage.
  2. 2. 2 | P a g e OBJECTIVE OF THE STUDY The study aims to analyse the performance of the Indian hotel industry with regard to tourism trends, hotel supply, performances of major cities (metropolitan), major hotel brands in the country- their contribution to the existing and proposed room supply. The study also circumspect the future trends in the hotel industry. Furthermore its objective lies in finding the sales trend, of a leading hotel in the five star deluxe segment, in the city of Kolkata. It aims to find the variance between the forecasted and actual room sales of the said hotel. It seeks to evaluate the performance of the hotel with its competitors based on the parameters of occupancy, ARR and RevPAR. Taking customer feedbacks and interpreting the same to appraise the hotel‟s performance is an integral part of the study objective.
  3. 3. 3 | P a g e EXECUTIVE SUMMARY CHAPTER I- THEORETICAL FRAMEWORK The project report specifically addresses the key areas in the Indian hospitality industry which are as follows,  Industry backdrop  Tourism trends in India  Industry performance according to star category  Industry performance according to major cities ( Chennai, Delhi-NCR, Kolkata and Mumbai)  Hotel supply in India  City trends  Future trends in the Indian hotel industry CHAPTER II- COMPANY PROFILE The second half of the report basically aims at finding the course of a pioneer 5 star deluxe hotel in the city of Kolkata. It gives a detailed insight about the hotel, its founders, property holdings in India and across the globe, accommodations overview, room descriptions, facilities and guest services, dining facilities, room pricing- special and rack rates, its competitors and clientele. CHAPTER III- DATA ANALYSIS AND PRESENTATION It is the end segment of the report that covers the research work on the hotel specifically outlining its performance on current and month to date (MTD) sales, based on its occupancy, ARR (Average room rate) and RevPAR ( Revenue per available room). It also seeks to match its performance with that of its competitors based on the said parameters, its SWOT, customer experience and feedback. CHAPTER IV- APPENDIX It covers the conclusion and the data references of the study ranging from business publicationsto various web portals.
  5. 5. 5 | P a g e The hotel industry is very sensitive to economic cycles and is therefore intrinsically linked to the state of the economy. Within the Indian hospitality industry for the last 16 years we have witnessed two economic downturns and a historic growth period during this time. In 1995/96, we observed a downturn that lasted until 2002. Beginning 2005, the markets exhibited significant increases in revenue per available room (RevPAR) year after year until 2008 when a second depression commenced. The data provided below accounts for 120 hotels with a total of 18,160 rooms participated in the 1995/96 survey, unlike in 2011, where a record 462 hotels with a total room count of 58,612 rooms participated in the survey: an increase of 55 additional hotels and approximately 9,132 rooms since the last survey. The increase in the number of respondents over the years demonstrates an increase in the market's bandwidth. Exhibit 1 illustrates survey participation from the years 2001/02 to 2010/11, with 1995/96 being the first year for the survey. EXHIBIT 1: SAMPLE SIZE FOR THE TRENDS & OPPORTUNITIES SURVEY FOR THE YEARS 2001/02-2010/11 182 256 271 289 312 335 348 397 424 495 586 120 199 215 211 235 252 268 316 349 407 462 0 100 200 300 400 500 600 700 1995/96 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 PARTICIPATION No. of rooms (00's) No. of hotels Trendline (rooms) Trendline (hotels)
  6. 6. 6 | P a g e In 2010, one saw mixed economic performances across the world. Many countries that expected the year to mark their period of recovery were met with disappointment. The United States' economy remained in a somewhat precarious state as unemployment touched 9.6%, the highest it has seen since 1984. In Europe, countries such as Germany with a strong manufacturing base did well, however, Portugal, Italy, Ireland, Greece and Spain suffered from weak economies. Despite the global turmoil, India remained resilient and was estimated to grow by 8.6% by the Central Statistical Organisation (CSO) in 2010/11. For the Indian hospitality industry, 2010/11 was a year of managing revival alongside the country's growing economy. Having battled the dual problems of cost cutting by global corporate houses that resulted in a significant drop in corporate travel, and a perception of being an unsafe destination due to the terror attack in 2008, hotels have moved to improving their performances and managing growth. Although hotel room supply grew by nearly 15% in 2010/11, growth in demand outpaced supply, and nationwide occupancy grew by 1.7% over that of 2009/10. The growth in occupancy, despite a double digit growth in supply, signals the strength of the hospitality industry in India. However, as hotels focused on improving occupancies, average rates witnessed a slight drop (1.4%) over that of the previous year. Overall, nationwide RevPAR improved marginally (0.3%). In December 2010, the Union Cabinet approved setting up of a 'Hospitality Development and Promotion Board' (HDPB). Historically, hotel construction in India has been somewhat cumbersome owing to the multiple clearances/approvals required from central and state government agencies. These clearances/approvals differ from state to state and in some cases, as many as 110 licenses are required by hotel projects. To ease the woes of developers and investors, HDPB plans to implement a transparent system for the effective monitoring of hotel projects, facilitate timely clearances/approvals by being the single point for receiving applications, and review hotel development policies. The Indian hospitality industry is now on the path of recovery and the domestic traveller has spearheaded its growth. In 2010/11, domestic traffic was recorded in excess of 740 million, an 11- percent rise over that of 2009/10. Segments such as Leisure, Commercial and MICE witnessed a renewed interest from the domestic traveller with rising disposable incomes and improving air and road infrastructure. In fact, months such as May-July, which are traditional 'low occupancy' periods for most hotel markets in India, are gradually transforming into 'medium occupancy' periods. Since most schools close for holidays during this time, hotels, especially in leisure locations witness heightened demand from the domestic leisure traveller.
  7. 7. 7 | P a g e TOURISM TRENDS In 2010, travel and tourism has been estimated to contribute 8.6% towards India's GDP. Growth in the tourism sector, which had shown a moderate recovery in 2009, has increased its pace in 2010. According to estimates of the World Travel and Tourism Council (WTTC), direct and indirect contribution of travel and tourism to the GDP are expected to grow by 8.1% and 8.8%, respectively, in the next ten years. Under the Incredible India campaign, the government had introduced the Tourist Visa on Arrival Scheme to establish the country's image as a tourist-friendly nation. Initially extended to five countries namely Finland, Japan, New Zealand, Singapore and Luxembourg, the scheme was extended to an additional six countries in January 2011. These initiatives have helped garner interest for India as a tourist destination, a case in point being a growth of 8.1% seen in 2010/11 over that of 2009/10 in foreign tourist arrivals (FTA). The positive trend has continued into 2011 and the January -August FTA numbers depict a 10.2% growth over the same period in 2010. Over the past six years, FTA into India has shown growth of 42.5% from 3.91 million in 2005 to 5.58 million in 2010. However, even at this visitation level, India accounted for only 0.59% of the global tourist arrivals. EXHIBIT 2: FOREIGN TOURIST ARRIVALS AND DOMESTIC VISITATION TRENDS – INDIA (2005-10) 0 1 2 3 4 5 6 2005 2006 2007 2008 2009 2010 Foreigntouristarrivals(millions) Foreign tourist arrival Trendline
  8. 8. 8 | P a g e 0 100 200 300 400 500 600 700 800 2005 2006 2007 2008 2009 2010 Domesticvisitors(millions) Domestic tourist visits Trendline Exhibit 2 illustrates the Foreign tourist arrivals and the domestic visitation trends over a period of 5 years ( 2005-10). The demand from the domestic visitors has historically been much higher than that from foreigners. Most of the domestic demand is centred around Commercial and MICE segments. In the recent past, there has been an upsurge of domestic leisure travellers owing to their rising spending power coupled with the proliferation of low-cost carriers. Since 2005, domestic visitation has demonstrated a growth of over 89% from approximately 392 million travellers to 740 million travellers. This highlights the dominance of domestic travel in the country. Many leisure and city locations in the country have begun to tap into the potential of the domestic market. In addition, hotels have realized that the domestic market can help bridge the gap between low and high occupancy periods to attain higher year-round occupancies. This is evident from the increasing number of leisure packages and offers marketed by hotel brands during the summer months when domestic travel is at its peak. Going forward, domestic tourism will witness strong growth and will be the real driving force for this industry. This segment will be helped by the growing wealth base of India's population and increase in hotel room capacity in the long term.
  9. 9. 9 | P a g e INDUSTRY PERFORMANCE ACCORDING TO STAR CATEGORY The industry is clearly on its path of recovery. The revival in demand, which started in the second half of 2009/10, continued through 2010/11; as a result, the occupancy levels of the overall industry in 2010/11 grew by 1.7%, despite an increase of nearly 15% in supply during this period. Historically, average rates in India tend to lag occupancy performance by a year. True to this trend, average rates recorded a slight drop of 1.4% in 2010/11. However, nationwide RevPAR grew by a marginal 0.3% confirming the road to recovery of the hotel industry. Going forward, the RevPAR growth is likely to continue through 2011/12, predominantly driven through occupancy gains. As occupancy levels improve, average rates are also expected to improve. TABLE 1: KEY OPERATING CHARACTERISTICS BY HOTEL CLASSIFICATION- OCCUPANCY (2004-’11) YEARS 2004 /05 2005 /06 2006 /07 2007 /08 2008 /09 2009 /10 2010 /11 12-Month Growth Compounded growth Overall average 69% 71.5 % 71.4 % 68.5 % 59.5 % 59.5 % 60.5 % 1.7% -0.6% Five star deluxe 71.4 % 73.8 % 73% 71.7 % 62.5 % 61.6 % 60.6 % -1.6% -1.3% Five star 71.1 % 70.4 % 70.2 % 67.2 % 58.5 % 58.6 % 62.6 % 6.8% -0.5% Four star 71.8 % 72.7 % 71.7 % 68.9 % 58.5 % 60.3 % 60.9 % 1% 3% Three star 56.7 % 65.9 % 68.9 % 64.7 % 56.2 % 55.5 % 57.5 % 3.6% 0.7%
  10. 10. 10 | P a g e TABLE 2: KEY OPERATING CHARACTERISTICS BY HOTEL CLASSIFICATION- AVERAGE ROOM RATE (ARR) IN INR (2004-’11) TABLE 3: KEY OPERATING CHARACTERISTICS BY HOTEL CLASSIFICATION- REVPAR (REVENUE PER AVAILABLE ROOM) IN INR YEARS 2004/ 05 2005 /06 2006 /07 2007 /08 2008 /09 2009 /10 2010 /11 12-Month Growth Compounded growth Overall average 4,299 5,444 7071 7,989 7,722 6,489 6,400 -1.4% 5.1% Five star deluxe 5,606 7,168 9,778 11,200 11,096 9,277 9,298 0.2% 5.8% Five star 3,897 4,985 6,506 7,652 7,268 6,410 6,270 -2.2% 6.3% Four star 3,088 3,847 5111 5,722 5,745 4,638 4,904 5.7% 8.6% Three star 1,830 2,212 3,012 3,488 3,530 3,255 3,342 2.7% 7.0% YEARS 2004 /05 2005 /06 2006 /07 2007 /08 2008 /09 2009 /10 2010 /11 12-Month Growth Compounded growth Overall average 2966 3892 5049 5496 4598 3861 3872 0.3% 4.5% Five star deluxe 4003 5290 7120 8030 6933 5715 5634 -1.4% 4.4% Five star 2771 3509 4567 5142 4250 3756 3925 4.5% 5.7% Four star 2717 2297 3665 3942 3362 2797 2986 6.8% 9% Three star 1038 1458 2075 2257 1985 1806 1921 6.4% 7.8%
  11. 11. 11 | P a g e In 2009/10 report, all hotel categories sustained or marginally increased their occupancies from 2008/09 levels. In the current survey (2010/11), all hotel categories witnessed an improvement in their occupancy levels with the exception of the five-star deluxe category, which dropped 1.6%. Barring the five-star category, all categories saw an increase in their average rates. It is interesting to note that the highest occupancy growth was shown by the hotels in the five-star category (6.8%); however, this growth was achieved at the cost of average rates, which dropped 2.2%. The opposite also held true. In 2010/11, the highest growth in average rate was seen by the four-star category (5.7%), but it was this segment that witnessed the smallest growth in occupancy (1.0%). Table 1 reflects room occupancy by hotel classification for the period 2004/05 to 2010/11. Table 2 presents average rate performance in Indian rupees for the same period. In terms of RevPAR, for the first time since 2008/09, hotel categories did not witness substantial declines. All categories witnessed healthy increases in RevPAR barring the five-star deluxe category, which declined by 1.4%. The drop in RevPAR was again occupancy-led although average rates increased marginally in this segment. Table 3 presents RevPAR performance in Indian rupees for the period 2004/05-2010/11.
  12. 12. 12 | P a g e INDUSTRY PERFORMANCE ACCORDING TO MAJOR CITIES In 2010/11, most hotel markets witnessed a recovery, though markets such as Pune (11 . 4%), Delhi – NCR (1 . 9%) and Ahmedabad (0.9%) observed a decline in occupancies, and Mumbai's occupancy remained stable in 2010/11. It is vital to note at this point that these four markets were also the ones that saw double-digit growth in their new hotel supply in 2010/11, with Pune seeing a 76% increase in supply in 2010/11. The fact that occupancy levels exhibited only modest declines when compared to the significant supply increases highlights the high levels of unaccommodated demand in these markets and the potential of these markets to successfully absorb their growing supply and sustain their performances. Cities such as Bengaluru (9.8%), Chennai (9.8%) and Hyderabad (6.4%) saw the highest increases in occupancy levels. Their growth can be attributed to the revival of the IT/ITeS sector in 2010/11 and also to the fact that they did not witness significant increases in supply. Agra, the only market that saw an occupancy increase in 2009/10 continued its positive spree this year and grew by 7.7%. Other leisure destinations such as Goa and Jaipur also recovered and witnessed small levels of growth at 2.6% and 2.4%, respectively, mainly due to the domestic traveller. In terms of average rate (Indian rupee terms), there were mixed performances across different cities. Pune, Ahmedabad, Delhi- NCR and Mumbai witnessed the largest drops at 16.9%, 6.2%, 4.1% and 2.5%, respectively. The same can be attributed to the sizable quantum of new hotel supply that each of these markets has witnessed in 2010/11. Jaipur, Agra and Goa saw increases in average rates by 6.8%, 6.6% and 5.4%, respectively indicating their strength as popular leisure markets in the country. Chennai (0.7%) and Kolkata (3.1%) saw only moderate increases in their average rates. In terms of RevPAR growth in 2010/11, with the exception of Ahmedabad, Delhi-NCR, Mumbai, and Pune, all other markets witnessed RevPAR growth. Agra (14.8%), Bengaluru (11.2%), Chennai (10.6%), Jaipur (9.5%) and Goa (8.1%) saw significant growth in their RevPAR. This may be attributed to the increase in commercial and leisure travellers in 2010/11 along with the fact that these cities did not witness considerable new supply. Table 4 illustrates hotel occupancy for key cities (Metropolitan) in India between 1995/96 and 2010/11. Table 5 shows the average rates for each of these hotel markets, expressed in Indian rupees and table 6 presents the corresponding RevPAR data for each city.
  13. 13. 13 | P a g e TABLE 4: KEY OPERATING CHARACTERISTICS BY MAJOR CITY- OCCUPANCY (’04-’11) TABLE 5: KEY OPERATING CHARACTERISTICS BY MAJOR CITY-AVERAGE ROOM RATE (ARR) IN INR. YEARS 2004 /05 2005 /06 2006 /07 2007 /08 2008 /09 2009 /10 2010/ 11 12-Month Growth Compounded growth Chennai 72.9 % 78.2 % 74.7 % 72.8 % 63.1 % 62.1 % 68.2 % 9.8% -1.4% Delhi NCR 79.1 % 80.8 % 76.9 % 73.9 % 67.3 % 68% 66.7 % -1.9% -0.5% Kolkata 69.0 % 76.4 % 75.5 % 73.9 % 69.5 % 67.5 % 68.5 % 1.5% 0.5% Mumbai 72.0 % 76.2 % 77.9 % 74.6 % 60.6 % 62.5 % 62.5 % - -1.7% YEARS 2004 /05 2005 /06 2006 /07 2007 /08 2008/ 09 2009 /10 2010/ 11 12-Month Growth Compounded growth Chennai 3,714 4,357 5,378 6,340 6,677 5,710 5753 0.7% 5.0% Delhi NCR 5,103 6,909 9,192 10,429 9,811 8,655 8,300 -4.1% 6.9% Kolkata 3,240 3,887 5,288 6,575 6,686 6,087 6,272 3.1% 4.8% Mumbai 4,822 6014 8,738 10,932 10,679 8,428 8,219 -2.5% 3.2%
  14. 14. 14 | P a g e TABLE 6: KEY OPERATING CHARACTERISTICS BY MAJOR CITY- REVENUE PER AVAILABLE ROOM (REVPAR) IN INR. YEARS 2004 /05 2005 /06 2006 /07 2007 /08 2008/ 09 2009 /10 2010/ 11 12-Month Growth Compounded growth Chennai 2,708 3,407 4,017 4,616 4,210 3,546 3,924 10.6% 3.5% Delhi NCR 4,036 5,582 7,069 7,707 6,600 5,885 5,536 -5.9% 6.4% Kolkata 2,236 2,970 3,992 4,859 4,648 4,108 4,297 4.6% 5.3% Mumbai 3,472 4,603 6,807 8,155 6,473 5,268 5,137 -2.5% 1.4%
  15. 15. 15 | P a g e HOTEL SUPPLY The proposed supply of new branded and quality hotels in 2007/08 was 114,466 rooms, which declined to 94,115 rooms in 2008/09 due to the economic downturn. The decline continued through 2009/10 with the total proposed supply amounting to only 89,499 rooms. With the recovering economy, the proposed supply figure, which represents new hotels expected to open over the next five years, has risen to 102,438 rooms in 2010/11. 2010/11 witnessed an addition of 9,127 branded rooms to the existing supply second only to the supply which was introduced in 2009/10. Table 7 presents the existing and proposed supply entering each of the four metro markets and other cities. Moreover, the table reflects the anticipated growth over the next five years and quantifies the number of hotel rooms that are either under construction or are expected to open before March 2016.In table 8 the new hotel supply has been further classified into its potential segments of luxury, upscale, mid market, budget and extended stay hotels. TABLE 7: DISTRIBUTION OF EXISTING AND PROPOSED BRANDED HOTEL ROOMS BY MAJOR CITY- 2010/11-2015/16. Cities Existing supply 10/11 Proposed supply Increase over 5 years Active development of supply Chennai 4,066 7,819 192% 57% Delhi NCR 12,708 18,608 146% 75% Kolkata 1,588 3,612 227% 58% Mumbai 11,303 12,121 107% 35% Other cities 17,253 24,649 143% 56%
  17. 17. 17 | P a g e In the last survey, Kolkata and Chandigarh reflected the highest growth rates in hotel development among the cities over a five-year period. In this survey too, Chandigarh (236%) followed closely by Kolkata (227%) have the highest growth rates in hotel development. However, the actual numbers of rooms being developed are far fewer in comparison to cities such as Delhi-NCR, Bengaluru or Mumbai owing to their small existing supply bases. . Delhi- NCR is expected to witness maximum hotel development in terms of number of hotel rooms among all the cities over the next five years. Delhi-NCR may reflect that 18,608 rooms are under development, but only 75% of this proposed supply will actually be successfully developed by March 2016. 9,456 rooms which have opened in the past few months in the existing supply, as outlined in Table 13 have not been included in the existing supply of hotel rooms. Considering that they are at a nascent stage of their lifecycles, they have been accounted for within the proposed supply. EXHIBIT 3: GROWTH OF ROOM SUPPLY IN INDIA (2000/01 TO 2015/16) 24905 71531 102438 0 20000 40000 60000 80000 100000 120000 140000 2000/01 2010/11 2015/16 Growth of Room supply No.of rooms Trendline
  18. 18. 18 | P a g e EXHIBIT 4: DISTRIBUTION OF EXISTING SUPPLY ACROSS MAJOR HOTEL BRANDS- AUGUST 2011 In Exhibit 4, we note that from 2000/01 to 2010/11, in a period of ten years, the supply of rooms increased by 187.2%. As the government policies become more favourable towards hospitality development and India continues to attract attention as a promising market, the room supply is expected to increase by 43.2% in 2015/16 from that in 2010/11. Many international hotel brands have entered the Indian hospitality market in the past decade and are now aggressively focusing on their expansion strategies. Exhibit 5, presents the operating hotel supply distribution across various hotel brands as of August 2011. We note that currently the top five positions are no longer occupied by only indigenous brands, but by a mix of domestic and international hotel companies. The domestic market has shown enormous potential in the past and continues to support the growing tourism sector, shielding India to a significant extent from global economic and tourism downturns, with an annual travelling domestic population of over 740 million travellers, which is more than double the entire population of the US. Despite the growth in demand, the considerable quantum of proposed supply over the next few years will put pressure on hotel occupancies and average rates. Going forward, supply may outpace demand in the short run, occupancies will gradually improve, following which average rates should also exhibit increases. 0 2000 4000 6000 8000 10000 12000 Taj hotels & resorts ITC hotels Starwood hotels Carlson Hospitaality Mariott Int. Oberoi Hotels Hyatt Hotels The Leela Group No. of rooms
  19. 19. 19 | P a g e CITY TRENDS Chennai has witnessed stable average rates in the range of `5,300 to `6,700 and high occupancies (an average of 68.2%) in the last five years, primarily due to minimal addition of supply. Chennai witnessed an addition of only approximately 750 branded hotel rooms across all positionings from 2008/09 to 2010/11. However, going forward, an additional 2,500 rooms are expected in the next three years in the upscale and luxury segments, adding to an existing base of approximately 2,000 rooms in the same segments. The year 2011/12 witnessed the opening of the 327-key Hyatt Regency, Mount Road and the 204-key Hilton, Guindy. The large amount of supply entering the market is bound to put pressure on occupancy levels in the short to medium term, but the city-wide average rate is expected to witness growth due to the luxury and upscale products entering the market. Chennai has witnessed a resurgence of demand from the IT sector in 2010/11, with the automobile sector being a major contributor to the growth in demand. It may be pertinent to note that 2010/11 was a record year for the auto industry as a whole, which witnessed a strong year-on-year volume growth of 26% due to revival in demand and easy availability of financing. The city hotels also continue to receive demand from the traditional sectors such as banking and finance. In the long term, we expect the city to segregate into micromarkets, with the regions of Sriperumbudur and OMR attracting significant investments into hotels, primarily in the budget and mid market segments. OMR is the IT corridor of the city and Sriperumbudur, along with Oragadam, is fast becoming an industrial hub with manufacturing and automotive sectors playing a key role. Given the number of companies setting up their offices in the city and the number of factories being established in micro-markets such as Sriperumbudur and Oragadam, there is a significant amount of Extended Stay demand in the market that has until now been accommodated either by the mainstream hotels or by the unorganized unbranded sector. Going forward, we expect strong growth in the Commercial and Extended Stay segments, and expect the new hotels with large conferencing facilities to attract more MICE demand. The outlook for the market therefore remains positive. Delhi-National Capital Region (NCR) is the largest hotel market in the country both in terms of active assets under development and potential projects in planning. This continues to receive considerable media attention with respect to hospitality development and related market impact after supply doubles in the next four to five years. Land acquisition in some areas of Noida-Greater Noida have seen a slowdown in many announced projects but other identified growth areas like the DIAL Aero city (15 hotels under planning and development), Gurgaon, Dwarka, West and East Delhi continue to see active hospitality focused developments. NCR witnessed a growth of 15% in supply in 2010/11. Going forth, HVS is tracking over 90 hospitality development projects with an estimated 18,608 rooms. However, we expect only 75% (13,906 rooms) of these projects to be built over the next five years. In the short term, Delhi continues to be a strong market and the phased introduction of the DIAL hotels from late 2012 will see a growth in accommodated demand.
  20. 20. 20 | P a g e With respect to micromarkets, Gurgaon is expected to double its supply in the next five years. With the rapid commercial growth in the city extending all the way to Manesar, there has been a sharp increase in the number of hotel projects under development. In the past three years, Gurgaon has had the highest completion ratio of projects under development in NCR. The pace of execution and project completion in Noida and Greater Noida, on the other hand, has been slower and is expected to remain so in the short term. While Greater Noida is expected to host the country's first Formula One event this October, only four new properties would have opened in the trans Yamuna area in time for the event. However, in a five to six-year period, the city's base of branded and quality rooms is expected to expand ten-fold. There is significant over-supply in the five-star deluxe and five-star space in Noida and have serious concerns about the impact on the market if all the proposed hotels were to open. It is believed that one needs to be very circumspect about developing more hotels in Noida, especially as there will be several opportunities to acquire both greenfield and brownfield assets in the next few years. Kolkata, a highly rate sensitive market, witnessed a 3.1% increase in average rate with a modest 1.5% increase in occupancy levels as supply grew by 4%. Kolkata's biggest advantage is that it is not dependant on one source of demand for room nights and caters to the Leisure, Commercial and Meeting and Conference segments extensively. However, poor civic infrastructure, and a state administration that is generally viewed as lethargic, has limited the pace of development and growth in the city. Nevertheless, despite the slow pace of growth, the overall outlook for Kolkata remains positive owing to an increase in commercial activity in the city and new developing areas such as Rajarhat. Kolkata is currently tracking a 227% (3,612 rooms) growth in new room supply with a probability factor of 58% development taking place over the next five years. In the current year‟s survey there has been marginal increase in the proposed supply as compared to 2009/10. Of the developments in the pipeline, it is believed that currently there is more emphasis on the development of upscale and mid market hotels. Of the markets being tracked in this survey, Kolkata remains the only other city (besides Agra) that is yet to witness any development on the budget front. In the short term, the city hotels will retain their occupancy levels and see marginal improvement in average rates. In the long term, rates are expected to improve owing to supply pressure.
  21. 21. 21 | P a g e Mumbai has maintained its 2009/10 occupancy levels with a slight decline in average rates. The city saw a growth in supply of 14% in 2010/11. We would like to highlight that despite this growth in supply, the market maintained its occupancy and average rates witnessed a slight dip owing to most of the supply being in the mid market segment. It is currently tracking a supply growth pipeline of 107% (12,121 rooms), which is a substantial increase from the previous year's projected supply of 7,477 rooms. However, most of these projects are presently in their initial stages of planning. Hence, it is estimated that only 35% of these developments are likely to take shape by 2016. Though the percentage of active development has almost halved since the previous year, in absolute numbers the confirmed supply is nearly the same as last year. Going forth, the outlook for the Mumbai market remains bullish and it is expectd that the city will successfully absorb the incoming supply with its growing demand. North Mumbai continues to develop into a major commercial hub which is attributed to lower office rentals combined with the fact that a major portion of the city's working population resides in the northern areas of the city. On the infrastructure development front, the Chhatrapati Shivaji Airport is continuing its expansion and the Mumbai Metro Rail Project is expected to start partial operations of phase I in 2012. However, the intra-city roads remain a major sore point for commuters in the city. In 2010, the proposed Navi Mumbai International Airport received environmental clearance and development is expected to start soon.
  22. 22. 22 | P a g e FUTURE TRENDS The analysis of the various markets across the country leads us to believe that while demand is expected to increase across these cities in the future, there are markets where anticipated supply increases will exceed demand growth in the near future and will therefore put pressure on occupancy and average rate levels in the short term. In the long term, it remains bullish on the hospitality industry as the fundamentals remain strong and India's GDP is still projected to grow in the 7-8% range. An analysis of the Indian hospitality industry over the past fifteen years reveals very few transactions of existing and operating hotels, a result of a limited base of hotels in the various markets and asking prices by hotel owners that were significantly higher than the replacement cost for similar assets in that market. It is believed that as the number of hotels in each market increases and as institutional investors increasingly play a role in this sector, more operating assets will change hands. We are about to enter the next phase in the lifecycle of the Indian hospitality where prospective investors will be able to choose between building and buying a hotel in any market and will derive comfort from the presence of a larger pool of hotel buyers that can serve as an exit option at the end of the holding period. We are currently in discussions with several high net -worth individuals and funds, including a few from China, who are keenly looking at the hospitality space in India with the intention of making strategic long-term investments. The cost of capital, and subsequently required returns, for such buyers is quite low as compared to Western funds, which gives them the ability to bid aggressively for assets that meet their long-term goals. The industry will see a few such deals in the next 12-18 months and will set the path for future transactions of this nature. Investment into the hospitality sector has recently come from a new corner, namely that of the hotel brands. We are now seeing brands that have until now focused on an asset-light strategy, actually deploy their own capital in strategic deals with development companies to create portfolios of budget and mid market hotels across the country. The willingness of brands to partner in the development process and the inherent risk is indicative of their positive opinion of the future of the Indian hospitality industry. There are currently at least five domestic and international brands in the country today that are actively investing in hotel developments.
  24. 24. 24 | P a g e THE OBEROI GROUP- PROFILE The Oberoi Group, founded in 1934, operates 28 hotels and three cruisers in five countries under the luxury „Oberoi‟ and five-star „Trident‟ brands. The Group is also engaged in flight catering, airport restaurants, travel and tour services, car rentals, project management and corporate air charters. Oberoi Hotels & Resorts is synonymous the world over with providing the right blend of service, luxury and quiet efficiency. Internationally acclaimed for all-round excellence and unparalleled levels of service, Oberoi hotels and resorts have received innumerable awards and accolades. A distinctive feature of The Group‟s hotels is their highly motivated and well trained staff who provide exceptionally attentive, personalised and warm service. The Group‟s new luxury hotels have established a reputation for redefining the paradigm of luxury and excellence in service amongst leisure hotels around the world. Trident hotels are five-star hotels that have established a reputation for excellence and are acknowledged for offering quality and value. These hotels combine state of the art facilities with dependable service in a caring environment, presenting the ideal choice for business and leisure travellers. At present there are nine Trident hotels in India. These are located in Mumbai at Bandra Kurla and Nariman Point, Gurgaon (Delhi National Capital Region), Chennai, Bhubaneshwar, Cochin, Agra, Jaipur and Udaipur. The Oberoi Group also operates a Trident hotel in the Saudi Arabian city of Jeddah.
  25. 25. 25 | P a g e The last decade has witnessed the debut of new luxury Oberoi leisure hotels in India and abroad. In India, these hotels include The Oberoi Rajvilas, Jaipur; The Oberoi Amarvilas, Agra; Wildflower Hall, Shimla in the Himalayas; The Oberoi Vanyavilas, Ranthambhore; The Oberoi Cecil, Shimla and The Oberoi Udaivilas, Udaipur. Overseas, the new hotels include The Oberoi, Lombok in Indonesia, The Oberoi, Mauritius and The Oberoi, Sahl Hasheesh in Egypt. The Oberoi Zahra, Luxury Nile Cruiser, Egypt was launched in 2007. The Group‟s commitment to excellence, attention to detail and personalised service has ensured a loyal list of guests and accolades in the worldwide hospitality industry. Recognising the importance of quality training in hospitality management, The Oberoi Group established The Oberoi Centre of Learning and Development in New Delhi in 1966. Today, this institution is considered amongst the best in Asia with approximately 100 students graduating each year. The Oberoi Group is committed to employing the best environmental and ecological practices in technology, equipment and operational processes. The Group also supports philanthropic activities that range from education to assistance for the mentally and physically challenged. The Group is also a keen contributor to the conservation of nature and of cultural heritage.
  26. 26. 26 | P a g e THE OBEROI GROUP- DHARMA Conduct which is of the highest ethical standards - intellectual, financial and moral and reflects the highest levels of courtesy and consideration for others. Conduct which builds and maintains teamwork, with mutual trust as the basis of all working relationships. Conduct which puts the customer first, the Company second and the self last. Conduct, which exemplifies care for the customer through anticipation of need, attention to detail, excellence, aesthetics and style and respect for privacy, along with warmth and concern. Conduct which demonstrates a two-way communication, accepting constructive debate and dissent whilst acting fearlessly with conviction.
  27. 27. 27 | P a g e Conduct which demonstrates that people are our key asset, through respect for every employee, and leading from the front regarding performance achievements as well as individual development. Conduct which at all times safeguards the safety, security, health and environment of our customers, employees and the assets of the Company. Conduct which eschews the short-term quick fix for the long-term establishment of a healthy precedent. AWARDS AND ACCOLADES
  30. 30. 30 | P a g e THE OBEROI GRAND, KOLKATA The Oberoi Grand, fondly referred as the 'Grande Dame of Chowringhee' offers the ultimate classical residence in the City of Joy. This heritage hotel‟s neo-classical facade and grand pillared entrance mark a successful fusion of classical Victorian and traditional Indian style and reflect the city‟s colonial history. Standing stately for over 125 years, The Oberoi Grand combines classic architecture and charm with state of the art amenities and facilities, offering guests an oasis of tranquility amidst the bustling city. The hotel features elegantly appointed rooms, equipped with all modern facilities blending uniquely with the colonial architecture. The hotel is located in the main business and shopping district of Kolkata (Park Street, BBD Bag, and Chowringhee) and is in walking distance from most corporate and government offices. It is also conveniently located close to major convention centers, legislative offices, banks, Consulates, Deputy High Commissions, Chambers of Commerce and clubs. This ideal location makes the hotel a perfect base for the business and the leisure traveler. The dining options at the hotel provide a great opportunity to savor cuisines from around the globe. Recreational facilities include an outdoor swimming pool, a fitness centre and a full service Oberoi Spa.
  31. 31. 31 | P a g e The city centre location makes the hotel an ideal conference and meetings venue. The options vary from a spectacular ballroom for large conferences and smaller meeting rooms for business gatherings and seminars. A 24 hour business centre fully equipped with modern facilities includes a meeting room along with secretarial services. LOCATION AND ACCESS
  32. 32. 32 | P a g e The Oberoi Grand is the premier business hotel in Kolkata, the capital city of West Bengal, characterized by its old world charm and gracious hospitality. The hotel is centrally located in the main business and shopping district of Kolkata (Park Street, BBD Bag, Chowringhee). It is also conveniently located to all major convention centers, legislative offices, banks, Consulates and Deputy High Commissions, Chambers of Commerce and clubs. By air Kolkata airport is 22 kilometers from the hotel, a 45 minute drive by road. Kolkata International airport operates direct international flights to and from Singapore, Bangkok, Bahrain, Muscat and Amman. Kolkata is well connected to New Delhi and Mumbai with daily domestic flights operated by Jet Airways, Indigo, Spice Jet, Kingfisher and Indian Airlines. The flying time from Kolkata to Delhi is 1 hour 50 minutes and from Kolkata to Mumbai is 2 hours 30 minutes. Kolkata is also well connected by air to Chennai, Bangalore, Hyderabad, and Bhubaneshwar. By road Kolkata is connected to all major Indian cities by National Highway routes. Kolkata is also a major destination enroute to some of Eastern India‟s most popular leisure destinations such as Darjeeling, Kalimpong and Gangtok. By rail Kolkata is well connected by rail from all parts of the country. The Oberoi Grand is approximately 6 kilometers from Howrah railway station and 3 kilometers from Sealdah railway station. A super fast train, Rajdhani Express between New Delhi and Kolkata, completes the journey in 16 hours.
  33. 33. 33 | P a g e ACCOMODATIONS- A DETAILED DESCRIPTION The Oberoi Grand has 200 spacious rooms and 9 luxurious suites, spread over four floors. The rooms are spacious and elegantly appointed with plush fabrics and finely detailed classical furniture. Decorated in refined tones, with rich woods and canopied beds, the rooms and suites are areas of exclusivity. All rooms are appointed with:  International and domestic direct telephone access with data port.  Tea & coffee maker with complimentary replenishments.  Digital Versatile Disc players with a complimentary in-house selection of DVDs.  A well stocked private mini bar with a choice selection of international premium liquor.  Individual digital thermostat controlled central air-conditioning.  24 hours satellite transmission with news, entertainment and sports channels.  Interactive television.  Electronic safe in every room.  Spacious, elegant granite bathroom with premium ayurveda toiletries from KAMA.  Shaving mirror, hair dryer, electronic weighing scale, bathrobes and slippers.  Full length mirror and spacious wardrobe.
  34. 34. 34 | P a g e  Well appointed work station with a carved writing desk with inlay work.  High speed wireless internet access.  State-of-the-art electronic door locking system with safety latches and deadbolt double locks.  “Intelligent smoke detectors” and sprinkler systems in each room, as well as all areas in the hotel with an all new centralized intelligent control and detection panel. Fire exit plan/ view ports in all rooms. ROOM DESCRIPTIONS DELUXE ROOMS Classic rooms are located on the first floor of the hotel and have a view of the city. It has an area of 375 sq ft. LUXURY ROOMS Deluxe rooms are located from the hotel’s second floor upwards and have a fabulous view of the historic and traditional city. Premium rooms cover an area of 375 sq ft. PREMIER ROOMS Premier rooms spanning an area of 390-405 sq ft, have a stunning view of the central palm- fringed courtyard and pool.
  35. 35. 35 | P a g e All the suites are elegantly furnished and have luxurious bathrooms with separate shower stalls. They range from 765 sq ft to the expansive Presidential suite spanning 984 sq ft of area. CLASSIC SUITES Classic suites span an area of 765 sq ft and have a fabulous view of the hotel’s courtyard garden, as well as the pool. The classic suite has an expansive walk-in wardrobe as one of it’s key features, thus lending a feeling of space and luxury. The four-poster bed is reminiscent of the unparalleled elegance and class of the Raj era. DELUXE SUITES Deluxe suite at THE OBEROI GRAND covers an area of 874 sq ft. They have a separate seating area and bedroom, leading to increased privacy and homely feel to the suite. Both rooms have an interactive television and a mini bar. The suite has a washroom, besides its large and well appointed bathroom. The elegant four-poster bed in the bedroom adds the luxurious and elegant Victorian feel to the suite. LUXURY SUITES The expansive and plush deluxe suites are spread over 984 sq ft. All luxury suites have four balconies which overlook the stunning landscape and vistas of the central palm-fringed courtyard. The luxury suites are spacious and elegantly appointed with plush fabrics and finely detailed classical furniture. Decorated in refined tones, with rich woods and canopied beds, the luxury suites are an epitome of exclusivity.
  36. 36. 36 | P a g e FACILITIES AND GUEST SERVICES Property facilities- Fitness centre, spa, heated pool, regular pool, internet access (high speed), business centre, meeting and conference facilities, dining and guest services. THE OBEROI SPA Oberoi Spas provide a serene and truly unforgettable experience of pure pampering and relaxation in exquisitely beautiful surroundings, using holistic therapies and massages which combine the very best of Eastern and Western practices. Expert in the use of Western & traditional Eastern techniques, only highly skilled and trained therapists are handpicked for our hotels and resorts. Oberoi Spa recipes feature only the finest natural ingredients, often local to the resort and the Oberoi Group are committed to remaining true to the Asian tradition of respect for the environment. The extraordinary levels of comfort and service that guests expect from Oberoi reach a peak in the Oberoi Spas, world-acclaimed pioneers of the tropical spa experience.
  37. 37. 37 | P a g e  It is a sanctuary of peace in an environment totally conducive to relaxation.  2 therapy suites offer magnificent views of the Chowringhee and poolside. With two massage beds, stand-alone bath tub and steam & shower areas in each suite, these are ideal for couples and can be reserved for the longer spa programmes involving various combinations of cleansing scrubs, body wraps, head and body massages and bath.  The oberoi spa has also introduced ayurvedic treatments. Ayurveda is a holistic treatment using the finest ayurveda oils and herbs, combined with ancient methods to refresh the mind and detoxify the body.  Expert therapists provide a variety of professionally administered treatments and programs ranging from the best in ancient ayurveda to aromatherapy.  Holistic, non-clinical treatments are designed for rejuvenating, relaxing and pampering mind and body. The spa also contains a fully equipped gymnasium. OUTDOOR SWIMMING POOL The swimming pool is located in a palm-fringed courtyard. It is a great place to relax and soak in the sun and wonderful vistas the breath taking landscape has to offer. The pool at The Oberoi Grand is indeed an oasis in the midst of a bustling Kolkata city. The pool is 18m x 10m in dimension, and is 1.75 metres at its deepest end.
  38. 38. 38 | P a g e 24- HOUR BUSINESS CENTRE  Three conference rooms are available for rental. Rentals are on an hourly or daily basis.  Laptop computer, available on request.  The business centre is equipped with three personal computer stations, all with printers attached, as well as a colour laser-jet printer.  The business centre offers high speed internet services from all three computer workstations.  The business centre is also equipped with a photocopying machine, binding machine and facsimile services.  A current reference library is maintained in the business centre, including dictionaries, directories, general reference books and indices for international and domestic use.  Full-time secretarial aid, including shorthand and typing, can be arranged with advance notice. INTERNET Apart from internet access through the business centre workstations, all rooms and public areas of the hotel are connected through wi-fi, high speed, and broadband internet connectivity.
  39. 39. 39 | P a g e MEETINGS AND CONFERENCES The spectacular Ballroom at The Oberoi Grand is ideal for large conferences and receptions and accommodates up to 800. Three meeting rooms, including a board room, are suitable for smaller business gatherings and seminars. The hotel offers a satellite teleconferencing facility. All guest rooms feature dual line direct dialling with dataport and voicemail, and an executive workdesk. Deluxe rooms have a dedicated fax machine. AUDIO VISUAL SERVICES AVAILBLE INCLUDE:  Microphone  Collar Mike (with wire)  Cordless mike (hand held or collar)  Extra Carousel Tray  Laser Pointer  OHP with Screen (4*4)  OHP with Screen (8*6)  Slide projector with screen  Metallic OHP with screen  LCD projector with screen  Screen (4*4)  Screen (8*6)  Back projection Screen with masking  Desktop Computer with monitor  Monitor
  40. 40. 40 | P a g e  Television  VCR (multisystem)  Stereo System (Tape Deck-50 watts)  Stereo System (CD & Tape Deck-500 watts)  Audio recording per hour  Video recording per cassette  Spot Light  Spot Light halogen  Videoscope VHS Cassette  Videoscope U-Matic Cassette  Data projector for computer projection  Beta player SEATING CAPACITIES Venue Dimension (in feet) L x B x H Seating Capacity Theatre Classroom U– shape Sit Down Board Room Cocktails Ballroom 108 x 60 x 19 800 250 120 300 - 800 Burdwan Suite 41 x 25 x 12.5 75 35 35 50 30 75 Cooch Behar Suite 41 x 25 x 12.5 75 35 35 50 30 75 Board Room 16 x 20 x 12.5 - - 10 - 10 - Burdwan Coochbehar Suites 41 x 50 x 12.5 150 80 80 80 50 125
  41. 41. 41 | P a g e MEETING ROOMS LAYOUT GUEST SERVICES  24-Hour concierge services.  Avis travel desk for car rentals and air/train ticketing arrangements. Open 24 hours  In- house laundry, dry cleaning and pressing services with valet.  2 boutiques on the premises selling local objects d‟art, carpets, silver artefacts, jewellery and handcrafted memento.  Free valet parking. With a parking space that can accommodate up to 100 vehicles.
  42. 42. 42 | P a g e DINING  In room dining.  Restaurants on property- Description of Restaurant NAME FEATURE TIMINGS MENU CAPACITY La Terasse All day dining Round the clock International and Indian cuisines 76 covers Baan Thai Thai speciality restaurant 1230 hrs to 1500 hrs 1900 hrs to 2330 hrs Authentic fine Thai dining restaurant 56 covers Chowringhee bar Colonial bar 1100 hrs to 0000 hrs Fine selection of beverages, wines, liquors as well as a choice of cigars. 36 covers Poolside Poolside bar and restaurant 0900 hrs to 2100 hrs Beverages and light eats 24 covers
  43. 43. 43 | P a g e LA TERASSE The all day dining that serves international cuisine 2 hours in an airy ambience resembling an elegant French Brasserie. BAAN THAI The warmth of a traditional Thai home, offset by rich colours and artefacts which offers an authentic experience of Thai cuisine. CHOWRINGHEE BAR A sophisticated and elegant retreat, serving an impressive selection of fine wines, single malt whiskies and cigars. BELVEDERE The exclusive business club with a restaurant, bar and two private dining rooms. The ideal location for business meetings over fine dining and drinks. POOL BAR Located in the palm-fringed courtyard where one could bask in the sun while being served light meals.
  44. 44. 44 | P a g e Single (INR) Double (INR) Single (INR) Double (INR) DELUXE 375 sq ft; city view 9750 10750 Complimentary buffet breakfast 19000 20500 LUXURY 375 sq ft; city view 10750 11750 Complimentary buffet breakfast 22000 23500 PREMIERE 390-405 sq ft, garden or pool view 12750 13750 Complimentary buffet breakfast & one airport transfer 24000 25500 PREMIERE WITH BALCONY 390-405 sq ft, garden or pool view 13750 14500 Complimentary buffet breakfast & two way airport transfer 28000 29500 CLASSIC SUITE 765 sq ft; King size poster bed, teak wood flooring, dining table, a walk in wardrobe, balconies overlooking the pool and garden Complimentary buffet breakfast & two way airport transfer DELUXE SUITE 874 sq ft; King size poster bed, teak wood flooring, dining table, balconies overlooking the pool and garden and a walk in wardrobe Complimentary buffet breakfast & two way airport transfer LUXURY SUITE 984 sq ft; Four poster bed with separate living room and bedroom, dining table, a walk in wardrobe, large four feature bathroom and balconies overlooking the courtyard and pool Complimentary buffet breakfast & two way airport transfer 28500 45000 39500 65000 Room Type Specific Features Special Rate Offered Inclusions Rack Rates 19500 35000 ROOM TARIFFS
  45. 45. 45 | P a g e AWARDS AWARD AWARDED BY Top 10 Luxury Hotels in India (Ranked 2nd ) TripAdvisor, Travelers’ Choice Awards 2010 Best Hotels and Resorts in the World Forbes Traveler 400, The World’s Best Hotels and Resorts 2009 Top 10 Luxury Hotels in India (Ranked 1st ) TripAdvisor, Travelers’ Choice Awards 2009 Best Hotels and Resorts in the World Forbes Traveler 400, The World’s Best Hotels and Resorts 2008 Top 25 Conference Hotels in Asia Smart Travel Asia Poll 2007 Top Hotels in India Zagat Survey, Top International Hotels, Resorts and Spas 2005 Best Business Hotel in Asia: Nominated International Business Asia and CNBC Best Hotel in the Five Star Deluxe Category in Eastern India Ministry of Tourism, Government of West Bengal
  47. 47. 47 | P a g e DATA COLLECTION Data regarding hotel sales, which are based on MTD (month to date), YTD (year to date), forecasted sales and variance, occupancy, ARR (average room rate), RevPAR (revenue per available room), major players and customer experience, has been collected from secondary sources. INTERNAL DATA SOURCES  Monthly sales reports  Financial records  Miscellaneous reports EXTERNAL DATA SOURCES  E- Questionnaires forwarded from hotel‟s web portal.  Bussiness publications DATA COLLECTION PERIOD The research data for the aforesaid parameters has been collected over a period of 30 days, ranging from 1st December ’11 to 31st December ’11.
  48. 48. 48 | P a g e PARAMETERS AVERAGE FIGURES MONTH TO DATE ( BROUGHT TO AVG) FORECAST VARIANCE Total rooms 209 6270 Rooms sold 185 5550 5643 93 Occupancy % 88.50% 90% 1.5 ARR( Average room rate) 5970 7544 -1574 RevPAR ( Revenue per available room) 5283 6789 -1506 DATA TABULATION AND FINDINGS HOTEL PERFORMANCE The data presented shows the average approximate figures of total rooms, rooms sold, occupancy, ARR and RevPAR for a period of 30 days. Total revenue = 1104450 ARR = Total room revenue/ No. of rooms earned revenue (1104450/185 = 5970) RevPAR = ARR* Occupancy percentage (5970*88.5% = 5283) FINDINGS The above data indicates the hotel‟s performance, which is brought down to average over a period of 30 days. The MTD column exhibits the hotel room sales up to the 30th day. The forecast and the variance column try to match the hotel‟s actual and expected sales performance based on Occupancy, ARR and RevPAR.
  49. 49. 49 | P a g e 7544 6789 5970 5283 0 1000 2000 3000 4000 5000 6000 7000 8000 ARR RevPAR variance analysis Forecast Actual EXHIBIT 1: ACTUAL AND FORECASTED HOTEL SALES BASED ON ARR AND REVPAR. DEFINING ARR (AVERAGE ROOM RATE) AND REVPAR (REVENUE PER AVAILABLE ROOM) ARR (AVERAGE ROOM RATE) The number represents the average rental income per occupied room in a given time period. ARR along with the hotel‟s occupancy are the foundations for the hotel‟s financial performance. ARR can be calculated by dividing the room revenue by the number of rooms sold. ARR is one of the commonly used financial indicators in hotel industry to measure how well a hotel performs compared to its competitors and itself on yearly, half-yearly, quarterly, monthly, weekly and daily basis. It is common in the hotel industry for the ARR to gradually increase year over year bringing in more revenue. However, ARR itself is not enough to measure the performance of the hotel. One should combine ARR, occupancy and RevPAR to make a sound judgement on hotel performance.
  50. 50. 50 | P a g e REVPAR (REVENUE PER AVAILABLE ROOMS) RevPAR or revenue per available room, is a performance metric in the hotel industry, which is calculated by multiplying a hotel‟s ARR by its occupancy rate. Since it is only a measurement for a point in time ( a day, or month or year) it is most often used in comparison to competitors within a custom defined market, trading area or a self selected competitive set as defined by the hotel‟s owner or manager. Also, comparisons are usually best considered between hotels of the same type, or with target customers ( Full service, luxury, extended stay, economy). DETERMINANTS  Successful RevPAR numbers differ from market based on demand and other factors.  Best coampared across like time periods.  Best compared across similar seasonal time periods.
  51. 51. 51 | P a g e HOTELS TOTAL ROOMS OCCUPANCY ROOMS SOLD ARR (INR) The Oberoi Grand 209 88.50% 185 5970 Taj Bengal 228 84% 192 7935 ITC Sonar 239 80% 191 7564 The Park 149 90% 135 7100 209 228 239 149 185 192 191 135 0 50 100 150 200 250 300 The oberoi Grand Taj Bengal ITC Sonar The Park Total rooms Rooms sold MARKET SHARE ANALYSIS The data represents the average approximate figures of total rooms, occupancy, rooms sold and ARR of four hotels in the five star segments in the city of Kolkata for a period of 30 days. FINDINGS The given data indicates the occupancy and ARR (market share parameters) of the four leading five star hotels in city. EXHIBIT 2: TOTAL ROOMS AND ROOMS SOLD FOR THE PERIOD
  52. 52. 52 | P a g e 88.50% 84%80% 90% Occupancy The Oberoi Grand Taj Bengal ITC Sonar 4th Qtr EXHIBIT 3: COMPARISON AMONG FOUR HOTEL BRANDS BASED ON OCCUPANCY. The above exhibits shows the total rooms, rooms sold and ARR across four major hotel brands in the city (Kolkata), namely The Oberoi Grand, Taj Bengal, ITC Sonar and The park. The Park tops the list in terms of occupancy, following The Oberoi Grand, Taj Bengal and ITC Sonar.
  53. 53. 53 | P a g e THE OBEROI GRAND –SWOT ANALYSIS STRENGTHS  Oberoi brand image-symbol of supreme quality of service.  Centrally located, close to the business hub, Dalhousie  Heritage property attracts foreigners.  Spa and beauty salon.  Speciality restaurant- baan thai.  Spacious rooms  Backed by very good staffs.  Old world charm that compliments the right amount of serenity. OPPORTUNITIES  Bigger media coverage and marketing initiative.  Bigger business centre with state of art technologies.  24 hours coffee shop  Introduction of new concepts in cuisine and revamping of existing outlets.  A more lively bar.  Attractive loyalty programmes.  Need for contemporary banquet facilities  Introduction of an all round pastry house  Introduction of a theme bar(lounge jazz)
  54. 54. 54 | P a g e WEAKNESS  Location frequently affected by traffic congestion and political rallies  Distance from the rapidly growing business area-relocation of government offices and IT set ups in eastern Kolkata  Product less appealing to young clientele  Structural limitation of banquet areas: common entrance, common pre function areas for smaller halls  No open banquet areas: main attraction in wedding functions during winter months  Lack of attractive loyalty programmes  Lack of marketing initiatives-low recall value  Fewer restaurants  Restaurants lack distinctive identity  Limited facilities at the business centre  No separate kitchen for the belvedere club THREATS  Saturation of market in central and northern Kolkata hindering business growth  Science city and salt lake stadium are the preffered conventions centers  Better brand recognition of competitors threatening business opportunities through global channels  Exclusive branding of high value rooms at competition hotels  Exclusive facilities for club members-separate guest floor,dining areas and lounge  Membership to the spa and health club for non resident at competition  Heavy discount on slack season by competitors leading to pice wars  Introduction of budget hotels for the price conscious traveler  Lack of regular marketing communication as compared to the other hotels  The hawkers outside the hotels becoming a permanent problem
  55. 55. 55 | P a g e PAX (TRAVELLERS) RATING SAMPLE SIZE = 12 SEGMENTATION BASIS  Solo travellers  Couple  Business traveller  Family with young children  Family with older children PAX RESUBMIT The respondents were asked to rate the hotel on a scale of 10 based on the following arguments- value for money, location, staff performance, cleanliness, room comfort and food and dining. SOLO TRAVELLERS Respondent 1- “AMAZING SERVICE” Details: France, Dec ’11 COMMENT: I stayed one night and it was a real luxurious experience. Service was amazing. I could check in at 8am (despite official check in at 2pm), breakfast was really good. I tried their spa and this was a fantastic moment. RATING: 9 Respondent 2-“EXCELLENT HOTEL IN EVERY RESPECT” Details: United States Of America, Dec ’11 COMMENT: This is an excellent hotel in an excellent location. Staff is friendly and helpful. Everything is clean and sparkling, rooms are good and beds are comfortable, location in city makes going places reasonably easy, shopping in front of hotel and nearby. It‟s Like an oasis in the middle of a very polluted, but friendly city! RATING: 9.7
  56. 56. 56 | P a g e COUPLE Respondent 1-“LOCATION” Details: Australia, Dec ’11 COMMENT: Not so big that you get lost in it. Staff soon greets you by name and there is a very friendly and respectful feel to the place.Rooms are adequate rather than large and well serviced, wi-fi is a tad expensive, however it is a small oasis in the middle of what is a very busy location in the city. RATING: 8.3 Respondent 2: “A CLASSIC PIECE OF THE RAJ” Details: United Kingdom, Dec ’11 COMMENT: An oasis of tranquility in the heart of kolkata. top service from the moment the footman opens the door, quite, cool rooms, excellent breakfast buffet and poolside service. probably not great as a business hotel - there's only so much you can do to modernise a grand old building, some corners look old and shabby despite the attention to upkeep, but lots of character and history to compensate. the staff are clearly very well trained and attentive. RATING: 8 BUSINESS TRAVELLERS Respondent 1-“Lovely , beautiful and very friendly hotel” Details: Switzerland, Dec ’11 COMMENT: If price doesn't matter, then stay here. We enjoyed 2 full days of luxury - before travelling to the desert... A "Grand-Hotel”. Thank you for the A class treatment. RATING: 9.3 Respondent 2- “Nice classic hotel and friendly service” Details: Malaysia, Dec ’11 COMMENT: The hotel had put in place importance in security, service and cleanliness. RATING: 8.3
  57. 57. 57 | P a g e Respondent 3- “Excellent Service with total care” Details: Singapore, Dec ’11 COMMENT: The stay was great as the hotel staff were always accommodating every request and assisting any every way possible. I really enjoyed the last 3 stays at this hotel and will always look at staying at this hotel whenever I am in Kolkata. RATING: 10 Respondent 4- “The room was Classic and very nice” Details: Japan. Dec ’11 COMMENT: The hotel is as a whole very nice and I'm satisfied. The room is wide and high wall. Bath room is also clean. Amenity is well prepared. In addition, breakfast is tasty. The hotel is located in the shopping area so convenient for shopping. RATING: 8 FAMILY WITH YOUNG CHILDREN Respondent 1- “ONE of the best, Great and attentive staff” Details: Bangladesh, Dec ’11 COMMENT: Great location, staff is extremely polite and attentive. Over the years that I have stayed at the hotel, it has only become better and maintained a very high standard. RATING: 10 Respondent 2- “Fantastic hotel” Details: Singapore, Dec’11 COMMENT: Great stay, service was very good, staff were responsive and warm, rooms were great. RATING: 8.7
  58. 58. 58 | P a g e FAMILY WITH OLDER CHILDREN Respondent 1- “Very nice” Details : Australia, Dec’11 COMMENT: The suites give a feel of grandeur. The breakfast buffet was great. The prices on the room service menu were a bit high, but still worth the dime. If you want to be down town it is still the best choice. RATING: 8 Respondent 2- “Staff were very polite and helpful” Details: United Kingdom, Dec ’11 COMMENT: Airport pickup was excellent, rooms and decor have that grandeur and ambience of a different era, good and clean, good range of toiletries, service was excellent, makes you feel like a maharaja; sad though about the poverty outside it‟s like 2 very contrasting worlds, but the Oberoi is an excellent 5 star hotel. RATING: 8.7 FINDINGS OVERALL RATING = 8.8/10 is indicative of a highly biased sample. The overall rating shows how the behaviour and attitude of the respondents are skewed towards the hotel and its auxiliary services. The travellers staying at the property have highly regarded The Oberoi Grand, Kolkata on the criterions stated below,  Value for money  Location  Staff performance  Cleanliness  Room comfort  Food/dining
  59. 59. 59 | P a g e 8 8 9.6 9.2 9.5 8.5 7 7.5 8 8.5 9 9.5 10 Value for money Location Staff performance Cleanliness Room comfort Food/dining Rating/10 Rating/10 EXHIBIT 4: THE OVERALL RATING, OF THE OBEROI GRAND, KOLKATA, BASED ON THE MENTIONED PARAMETERS, ON A SCALE OF 10
  60. 60. 60 | P a g e LIMITATIONS OF THE STUDY Owing to the absence of primary data, the research was restricted to and highly dependent on secondary data source. The secondary data collection method has its own set of impediments relating to,  Limited sampling and respondent availability. Certain populations are less likely to have internet access and to respond to online questionnaires. It is also harder to draw probability samples based on e-mail addresses or website visitations.  Possible cooperation problems. Although online surveys in many fields can attain response rates equal to or slightly higher than that of traditional modes, internet users today are constantly bombarded by messages and are thus reluctant to take such surveys.  No interviewer. A lack of a trained interviewer to clarify and probe can possibly lead to less reliable data.  May result in biased sample. E-questionnaires are forwarded to selected people and the resultant sample is drawn from such population.
  62. 62. 62 | P a g e CONCLUSION My experience at the Oberoi Grand, Kolkata has been invaluable. I have exceedingly enjoyed my position and learnt a great deal about all the various panoramas of a leading five star hotel in the city. It was a splendid opportunity for me to gain some hands on experience in the field of marketing as applied in the hotel industry. Working in a team based environment, dealing with customers helped me develop new skills concerning communication, responsiveness, managing time, follow-ups, etc. The research study on ANALYSING TRENDS IN THE INDIAN HOTEL INDUSTRY WITH REGARD TO EXISTING AND PROPOSED HOTEL SALES was highly enriching. It helped me to comprehend the various aspects in the hospitality industry. Moreover the study outlined the customer responses based on certain consumer demographics which helped me to draw some conclusive references that are significant to the report itself. Furthermore such analysis and interpretation of data drew a transformational change in my perception about hotels and the industry at large.