Budget on hotel industry


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Budget on hotel industry

  1. 1. Presentation onBudget 2011<br />(Service Sector - Hotel Industry)<br />
  2. 2. Introduction<br />What is Budget?<br />What is Service Sector?<br />What Service Sector includes?<br />
  3. 3. Introduction<br />What is Hotel Sector?<br />What does it includes?<br />Categorization of hotels in India:- <br /> Heritage<br /> Luxury<br /> Budget<br /> Resorts<br />
  4. 4. Types Of Hotels<br />Historic hotels<br />Unusual hotels<br />Treehouse hotels<br />Bunker hotels<br />Shoe hotels<br />
  5. 5. Cave hotelsCapsule hotelsGarden hotelsUnderwater hotels<br />
  6. 6. Important Hotel group in India<br />ITC Maurya Delhi<br />ITC Maratha Mumbai<br />Fort Radisson of Radisson group in Kolkata<br />Radisson Jass Hotel Simla<br />The TajWestend, Banglore<br />Taj Coromandel, Chennai<br />
  7. 7.
  8. 8. Careers in Hotel sector<br />The hospitality industry is a "high overhead" low gross margin industry. That means that cost containment is a huge part of the equation. <br />The most common career path in hospitality is a work from the ground up path. Start by learning operations and/or sales line positions and then work into supervisor/manager roles. You can make a decent living if you are one of two things:<br /> A) Good at closing sales, orB) Good at being efficient and getting the most productivity out of your time.<br />Other jobs that can turn into careers are:Sales - career path = Director of Sales or GMCatering - career path = Catering Manger/Catering SalesFront (and sometimes Back) Office Manager - career path: GM <br />
  9. 9. Impact of Budget 2010 on Hotel Industry<br />Foreign tourism decreased by 2.5% year to year, around 5.1 million. Room rates for the five-star hotels in Mumbai were down by 38% and In Delhi by 44%. Hence reducing Revenue per Available Room.<br />Growth rate increased by 7% in tourism due to Common Wealth Games by in second half 2010. Gradually increasing Hotel industry due to lower service tax rates.<br />
  10. 10. Impact of Budget 2010 on Hotel Industry (Contd…)<br />The improvement in FTAs is a positive sign for the hotel industry as they dominate the demand in the five-star category covering over 60%<br />Section 35AD of the Income tax Act, which provides for deduction in respect of expenditure of capital nature has been amended in regards to hotels. Improve direct tax liability.<br />
  11. 11. Impact of budget 2011 on Hotel Industry<br />Acc. to FDI policy, 100% Foreign Investment is allowed by Govt. in hotel industry.<br />Due to infrastructure development, development of roads, railways & airports has grown & will grow more.<br />Increase in tax exemption limit from Rs 160,000 to Rs 180,000 for individual tax payers.<br />Lowering of qualifying age of senior citizen from 65 to 60.<br />
  12. 12. Impact of budget 2011 on Hotel Industry(Contd…)<br />Increase of service tax by Rs 50 on domestic air travel and Rs 100 on international air travel & Rs 250 overseas journeys by economy class.<br />hotel rooms of over Rs 1,000 per day and AC restaurants serving liquor under the service tax net, amounting to an additional tax of 5% and 3% respectively.<br />A consumer will be forced to pay about 25-30% taxes on the total bill value. Given the high rate of food inflation, there will be no choice but to pass on the burden of the increased taxes on consumers<br />Focus on increasing GDP growth to 9%.<br />
  13. 13. Case Study ( Taj Hotel )<br />
  14. 14. Case facts and case details<br />History<br />Facilities provided<br />Competitors<br />Impact of budget 2011<br />
  15. 15. Impact of Budget 2011 on Taj Hotel<br />Indian Hotels stand alone in 3rd quarter revenues were 10.8% , while income for TajMahal palace, Mumbai , was at 15% yearly. <br />The occupancy rate stood at 64% in FY 2009, while Average room rates have recorded at steady growth at 7%.<br />PAT weighed down by higher tax rate but lower interest cost helped cushioned the decline to an extent.<br />
  16. 16. Impact of Budget 2011 on Taj Hotel(Contd.)<br />High inflation in 2010 – increase in RM. Opening of new TajFalaknuma palace, in Hyderabad – increase in expenses in marketing & advertisement.<br /> Decrease in profit by 4.6%. But after construction- increase in profits upto 29%.<br />Thus overall 2011 performance of Taj Hotels were up to margin.<br />
  17. 17. Conclusion<br />The budget shows a negative impact on Indian Hotels as the increase in service tax affected Indian hotels at large, which lead in decrease in growth of hotel industry.<br />
  18. 18. Bibliography<br />Available information from www.moneycontrol.com on 12th March, 2011.<br />Source of Case study available from www.indiaedunews.com on 14th March, 2011.<br />Images & other information available from www.economictimes.com on 14th March, 2011.<br />
  19. 19. Thank You<br />