3. The Indian Hotels Company (IHCL) IHCL + Subsidiaries = Taj Hotels Resorts and Palaces 64 hotels in 45 locations : India 15 International hotels Operational Market Segments : a) luxury b) premium c) mid-market and d) value
8. POLITICAL ECONOMIC Foreign direct investment -100% Disinvestment Taxes Eco-tourism - ‘thrust industry’ Foreign collaboration Government pressures to increase the security level, add sewage treatment plant etc. Government Promoting Tourism Government permission is no longer required for hiring foreign technicians Recent economic Slowdown effect High growth in tourism industry expected - Africa, Asia Pacific & Middle East above global average Export Promotion Capital Goods Scheme (EPCG) Not given Infrastructure Industry Status Interest rates Exchange rates Inflation rate
9. SOCIAL TECHNOLOGICAL Increased Extremism Increasing disposable income Changing life styles due to exposure to global environment. Urban middle class forms 40 per cent of the total population Computerization Global Distribution System (GDS) Provide LCD, Laptop & conference facilities Real-time access to inventory, transparency across multiple channels
11. POWER OF BUYERS Premium segment buyers less sensitive to prices More sensitive to quality offered No concentration of buyers Business customers have higher negotiating power for better prices Cost of switching – Low Power of Buyers - Moderate
12. POWER OF SUPPLIERS Property owners, developers and real estate companies, interior design & furnishings companies, architects, management & training service providers, marketing companies, industry consultants & ICT manufacturers. Low concentration/Large in numbers Switching costs are low to moderate Possibility of supplier integrating forward - Negligible Power of suppliers – Low to moderate
13. THE THREAT OF SUBSTITUTES Substitutes – other forms for leisure accommodation. eg camping facilities, RV, informal accommodation with family & friends Switching cost can range from high (RV) to low. But no specific substitute for add-ons offered such as spas, recreational facilities and quality restaurants. Threat of substitutes : Low
14. THREAT OF ENTRY Capital intensive a large-scale upfront investment in real estate, buildings, décor & furnishings expensive staff Legal and financial complexities in the purchase, leasing, and management of property necessary spending on professional services. Threat of entry : high
17. Strengths Weakness Brand Value Infrastructure Best in class services. Sales and Marketing network Dependency majorly on Indian Territory Dependency only high end Luxury Segment
18. Opportunities Threats Rapidly growing market in India, South Asia and key gateway cities in source-market destinations. Expansion in international destinations Growing demand in the budget and mid-market segments. Extending the product portfolio in luxury residences, wildlife lodges and spas. General downturn in economies Interest rates fluctuation Cheaper international airfares Growing presence of international hospitality chains
19. Hotels - Factors influencing room demand from leisure tourists Demand for hotel rooms from leisure tourists (domestic and foreign) Competitiveness of other markets, especially South-East Asia Leisure spending Promotion and distribution channels Tourist attractions Infrastructurefacilities Personal disposable income levels Visa restrictions Socio-political situation Tourist promotion Presence of GDS, tour and travel agents, and sales offices Hotel accommodation Road, rail and air connectivity GDP
20. Hotels - Factors influencing room demand from Business Travellers Demand for hotel rooms from business travellers (domestic and foreign) Infrastructure facilities Business opportunities - India Corporate performance of international (especially in the UK and US) and domestic companies Increased deregulation of certain sectors Political stability Accommodation (availability and pricing) Availability and pricing of amenities (water, telecom, power) and use of teleconferencing Road, rail and air connectivity Availability of conference, convention and exhibition facilities Marketing of India as a MICE destination Hotels (including service apartments) Guest houses (owned or leased)
21. Recommendations Focus on expansion in Africa, Asia Pacific and the Middle East as these countries are experiencing higher growth rates than the world average Promote brand “India” amongst tourists through campaigns AD campaigns with internationally known Indian face Commonwealth games in 2012 will lead to increase in demand for rooms Scope to buy the hotels disinvested by Government at prime location(centaur hotel in Mumbai, Qytab hotel , Ashoka) Lobbying for Infrastructure status
India’s hospitality industry has enjoyed robust growth over the past few years buoyed by a benign economic and political environment. Increase in domestic business and leisure travel has benefited hotels in India. Rising incomes, higher weekend trips and increased access to travel-related information over the internet have all propelled growth in hospitality. Premium segment hotels are more prominent in major business destinations in India, and are also dominant in popular tourist destinations like Goa, which attracts a lot of foreign clienteleHowever, in the second half of 2008-09, ARRs decreased due to fall in room demand on account of the global economic slowdownMarket sizeThe market size of the hotel sector has more than doubled from Rs 77.13 billion in 2003-04 to Rs 179.2 billion in 2008-09, registering an impressive CAGR of 15 per cent. During this period, the market size of 5-D/5-star hotels grew at a CAGR of 16 per cent. However, in 2008-09, the market size decreased by around 6 per cent due to decline in revenues.
