1. UNIVERSITY OF MUMBAI
PROJECT REPORT ON
HOSPITALITY INDUSTRY
IN PARTIAL FULLFILMENT FOR BACHELORS OF
MANAGEMENT STUDIES
2013-14
PROJECT GUIDE
PROF.NITHYA VARGHESE
SUBMITTED BY:
GANERI RANJIT KUMAR .P
SEAT NO:
DATE OF SUBMISSION: 21st OCTOBER
SPCIALISATION IN:
OTHERS
MAHTMA EDUCATION SOCIETY‘S
PILLAI‘S COLLEGE OF ARTS, COMMERCE & SCIENCE
1

2. NEW PANVEL
MAHTMA EDUCATION SOCIETY‘S
PILLAI‘S COLLEGE OF ARTS, COMMERCE & SCIENCE
NEW PANVEL
CERTIFICATE
To whomsoever it may concern
This is to certify that the work entered in this journal is the work of
GANERI RANJIT KUMAR .P T.Y.BMS, has successfully completed a project
report on the HOSPITALITY INDUSTRY topic terms of the year 2013-2014, in
the college as laid down by the college authority
_____________
_________________
Internal Guide
BMS Co-coordinator
_______________
_________________
Principal
External Examiner
Date:
2

3. DECLARATION
I,GANERI
RANJIT
KUMAR.Pstudent
of
T.Y.BMS,
MAHTAMA
EDUCATION SOCIETY‟S PILLAI‟S COLLEGE OF ARTS, COMMERCE &
SCIENCE, hereby declare that I have completed the project report on
HOSPITALITY INDUSTRYin the academic year 2013-2014. The information
submitted by me is true & original to the best of my knowledge.
_______________
Signature
3

4. INDEX
sr.no
Particular
Page.No
executive summary
7
1 introduction & evolution
8
1.1 Hospitality industry overview
12
2 Research methodology
16
3 Conceptual framework
3.1 Hotel concept
17
3.2 Motel concept
21
3.3 Hotel marketing concept
23
3.4 Classification on basis of star
26
4 company profile
4.1 Taj group of hotel
38
4.2 growth of industry
79
4.3 innovation
85
4.4 technology of production and distribution
87
4.5 strategies & competition in industry
93
4.6 business environment
99
4.7 critical success factor
103
4.8 Organization structure of Taj
107
4.9 Service triangle of hotel industry
109
4.10 After Mumbai attack security position in hotel
111
5 Analysis of hotel industry
113
Questionnaire
120
6 limitation of study
130
7 Conclusion
131
8 Interpretations & recommendation
132
bibliography &vibliography
Annexure
4

5. ACKNOWLEDGEMENT
First and foremost, I would like to thanks our guide prof. Nithya Varghese for her guidance,
encouragement and support for all the work on this project.
I thank our guide for the project “hospitality industry” for the time she spent in analyzing my
work and providing the necessary feedback always on time, in spite of her busy schedule.
I would like to thanks my family for all the support they had given me in many ways to
encourage me to work on this project.
5

6. EXECUTIVE SUMMARY
The hospitality industry is a 3.5 trillion dollar service sector within the global economy. It is an
umbrella term for a broad variety of service industries including, but not limited to, hotels, food
service, casinos, and tourism. The hospitality industry is very diverse and global. The industry is
cyclical; dictated by the fluctuations that occur with an economy every year. Today hospitality
sector is one of the fastest growing sectors in India. It is expected to grow at the rate of 8%
between 2007 and 2016. Many international hotels including Sheraton, Hyatt, Radisson,
Meridian, Four Seasons Regent, and Marriott International are already established in the Indian
markets and are still expanding. Nowadays the travel and tourism industry is also included in
hospitality sector. The boom in travel and tourism has led to the further development of
hospitality .
6

7. CHAPTER 1.
INTRODUCTION& EVOLUTION
Significant developments in the field of transportation, sophistication in communications,
growing importance of sophisticated information technologies in the business world, engineering
of a strong foundation for industrialization and urbanization, increasing domination of corporate
sector on the national and international economies, emerging corporate culture and changing
lifestyles paved copious avenues for the development of hotel industry the world over. The
officials on deputation, the business magnets on trade promotion mission, the foreign
representative on peace mission, the domestic or foreign tourists interested in visiting a place for
pleasure or for enriching the knowledge bank, the international events etc. are some of the
important reasons for the development of hotel industry. Restaurants, cafeterias and hotels offer
food and lodging services to him/her, person/persons who develop the habit of eating and staying
out of home. This principle necessitated application of management principles in the hotel
industry and the hotel professionals realised the instrumentality of marketing principles in
managing the hotel industry.
The growing significance of managerial proficiency in the hotel industry made possible
innovation in the marketing decisions . Today, the services are planned, controlled, automated,
audited for maintaining and controlling the quality. The concept of total quality management is
7

8. found getting an important place in the marketing management of hotels. The inclusion of
modem amenities and facilities in the hotel services is made possible by the leading hotel chains
which has been opening new doors for innovation and competition. It is against this background
that the hotel companies, of late, need world class professional excellence.
The emerging positive trends in the tourism industry indicate that hotel industry is like a
reservoir from where the foreign exchange flows. This naturally draws our attention on hotel
management. In addition, the domestic tourism also indicates a positive sign of development.
Thus the emerging new developments in the socio-economic- environment open new vistas for
the development of hotel industry. Of late, the organizations engaged in the hotel business are
required to conceptualize modern marketing principles. This makes it essential that they
formulate a sound marketing mix that makes possible an optimal development of the marketing
resources and makes the process of development cost effective. Like other industries, the hotel
industry also needs to explore avenues for innovation, so that a fair blending of core and
peripheral services is made possible. It is not to be forgotten that the leading hotel companies of
the world have been intensifying research to enrich their peripheral services with the motto of
adding additional attractions to their service mix. It is against this background that we find the
service mix more flexible in nature- The latest developments in the field of promotion have
paved avenues for the introduction of innovative and aggressive promotional measures: The
advertising, publicity, sales promotion, word-of-mouth promotion, personal selling and even
telemarketing have been found used in the process of promoting the hotel business. The hotel
tariff is found drawing due attention of the policy makers. All of them have been found
attempting for making the pricing decisions motivational. The front- line-staff, receptionists,
8

9. waiters, housekeepers, sales executives are found responsible for offering the promised services
to the guests... The gap between the service-promised and services-offered is required to be
bridged over that draws our attention on the management of hotel personnel.
EVOLUTION
Hotel Industry in India has witnessed tremendous boom in recent years. Hotel
Industry is inextricably linked to the tourism industry and the growth in the Indian tourism
industry has fuelled the growth of Indian hotel industry. The thriving economy and increased
business opportunities in India have acted as a boon for Indian hotel industry. The arrival of low
cost airlines and the associated price wars have given domestic tourists a host of options. The
'Incredible India' destination campaign and the recently launched 'AtithiDevoBhavah' (ADB)
campaign have also helped in the growth of domestic and international tourism and
consequently the hotel industry.
According to a report, Hotel Industry in India currently has supply of 110,000 rooms and there
is a shortage of 150,000 rooms fuelling hotel room rates across India. According to estimates
demand is going to exceed supply by at least 100% over the next 2 years. Five-star hotels in
metro cities allot same room, more than once a day to different guests, receiving almost 24-hour
rates from both guests against 6-8 hours usage. With demand-supply disparity, hotel rates in
India are likely to rise by 25% annually and occupancy by 80%, over the next two years. This
will affect the competitiveness of India as a cost-effective tourist destination.
To overcome, this shortage Indian hotel industry is adding about 60,000 quality rooms, currently
in different stages of planning and development, which should be ready by 2012. Hotel Industry
9

10. in India is also set to get a fillip with Delhi hosting 2010 Commonwealth Games. The future
scenario of Indian hotel industry looks extremely rosy. It is expected that the budget and midmarket hotel segment will witness huge growth and expansion while the luxury segment
willcontinue to perform extremely well over the next few years.
10

11. 1.1 HOSPITALITY INDUSTRY – AN OVERVIEW
Hospitality is all about offering warmth to someone who looks for help at a strange or unfriendly
place. It refers to the process of receiving and entertaining a guest with goodwill. Hospitality in
the commercial context refers to the activity of hotels, restaurants, catering, inn, resorts or clubs
who make a vocation of treating tourists.
Helped With unique efforts by government and all other stakeholders, including hotel owners,
resort managers, tour and travel operators and employees who work in the sector , Indian
hospitality industry has gained a level of acceptance world over. It has yet to go miles for
recognition as a world leader of hospitality. Many take Indian hospitality service not for its
quality of service but India being a cheap destination for leisure tourism.
With unlimited tourism and untapped business prospects, in the coming years Indian hospitality
is seeing green pastures of growth. Availability of qualified human resources and untapped
geographical resources give great prospects to the hospitality industry. The number of tourists
coming to India is growing year after year. Likewise, internal tourism is another area with great
potentials.
The hospitality industry is a 3.5 trillion dollar service sector within the global economy. It is an
umbrella term for a broad variety of service industries including, but not limited to, hotels, food
service, casinos, and tourism. The hospitality industry is very diverse and global. The industry is
cyclical; dictated by the fluctuations that occur with an economy every year. Today hospitality
11

12. sector is one of the fastest growing sectors in India. It is expected to grow at the rate of 8%
between 2007 and 2016. Many international hotels including Sheraton, Hyatt, Radisson,
Meridien, Four Seasons Regent, and Marriott International are already established in the Indian
markets and are still expanding. Nowadays the travel and tourism industry is also included in
hospitality sector. The boom in travel and tourism has led to the further development of
hospitality industry.
In 2003-04 the hospitality industry contributed only 2% of the GDP. However, it is projected to
grow at a rate of 8.8% between 2007-16, which would place India as the second-fastest growing
tourism market in the world. This year the number of tourists visiting India is estimated to have
touched the figure of 4.4 million. With this huge figure, India is becoming the hottest tourist
destination. The arrival of foreign tourists has shown a compounded annual growth of 6 per cent
over the past 10 years. Besides, travel and tourism is the second highest foreign exchange earner
for India. Moreover, it is also estimated that the tourism sector will account for nearly 5.3 per
cent of GDP and 5.4 per cent of total employment.
Significant developments in the field of transportation, sophistication in communications,
growing importance of sophisticated information technologies in the business world, engineering
of a strong foundation for industrialization and urbanization, increasing domination of corporate
sector on the national and international economies, emerging corporate culture and changing
lifestyles paved copious avenues for the development of hotel industry the world over. The
officials on deputation, the business magnets on trade promotion mission, the foreign
representative on peace mission, the domestic or foreign tourists interested in visiting a place for
pleasure or for enriching the knowledge bank, the international events etc. are some of the
12

13. important reasons for the development of hotel industry. Restaurants, cafeterias and hotels offer
food and lodging services to him/her, person/persons who develop the habit of eating and staying
out of home. This principle necessitated application of management principles in the hotel
industry and the hotel professionals realised the instrumentality of marketing principles in
managing the hotel industry.
The growing significance of managerial proficiency in the hotel industry made possible
innovation in the marketing decisions . Today, the services are planned, controlled, automated,
audited for maintaining and controlling the quality. The concept of total quality management is
found getting an important place in the marketing management of hotels. The inclusion of
modem amenities and facilities in the hotel services is made possible by the leading hotel chains
which has been opening new doors for innovation and competition. It is against this background
that the hotel companies, of late, need world class professional excellence.
The emerging positive trends in the tourism industry indicate that hotel industry is like a
reservoir from where the foreign exchange flows. This naturally draws our attention on hotel
management. In addition, the domestic tourism also indicates a positive sign of development.
Thus the emerging new developments in the socio-economic- environment open new vistas for
the development of hotel industry. Of late, the organizations engaged in the hotel business are
required to conceptualize modern marketing principles. This makes it essential that they
formulate a sound marketing mix that makes possible an optimal development of the marketing
resources and makes the process of development cost effective. Like other industries, the hotel
industry also needs to explore avenues for innovation, so that a fair blending of core and
13

14. peripheral services ismade possible. It is not to be forgotten that the leading hotel companies of
the world have been intensifying research to enrich their peripheral services with the motto of
adding additional attractions to their service mix. It is against this background that we find the
service mix more flexible in nature- The latest developments in the field of promotion have
paved avenues for the introduction of innovative and aggressive promotional measures: The
advertising, publicity, sales promotion, word-of-mouth promotion, personal selling and even
telemarketing have been found used in the process of promoting the hotel business. The hotel
tariff is found drawing due attention of the policy makers. All of them have been found
attempting for making the pricing decisions motivational. The front- line-staff, receptionists,
waiters, housekeepers, sales executives are found responsible for offering the promised services
to the guests... The gap between the service-promised and services-offered is required to be
bridged over that draws our attention on the management of hotel personnel.
14

15. Chapter 2.Research Methodology
Primary data as well as secondary data is used for the present study
Primary Datais collected through the Questionnaire, Observation, Interviews and feedback,
from General Managers, HR Managers, Line manager , Employees (at all levels), Trainers (
Internal and External), observation of training programs.
Secondary Data is collected through previous records, data and Feedback forms, HR Manual,
Policies, Library resources: Newspapers. Business ,Magazines, Internet.
15

16. Chapter3. Conceptual frame work
3.1 HOTEL — THE CONCEPT
At the outset, we go through the concept of hotel. The common law says that, Hotel is a
place where all who conduct, themselves properly and who being able and ready to pay for their
entertainment, accommodation and other services including the boarding like a temporary home.
It is home away from home where all the modern amenities and facilities are available on a
payment basis. The aforesaid viewpoints regarding the hotel clarify that hotel is a public place
where all possible facilities are made available to a person or persons who stay. The facilities
like entertainment, food, accommodation etc- thus become the core services of a hotel.
The definition presented by Stuart McNamara says, “Primarily and fundamentally,
a hotel is an establishment which supplies boarding and lodging not engaged in inter-state
commerces or in any intra-state commerce, competitive with or affecting inter-state commerce
for so related that the regulation of one involves the control of other. It is a quasi-domestic
institution retaining from its ancient and origin certain traditions and acquiring in its modern
development, certain statutory rights and obligations to the public where all persons not qualified
by conditions or conduct are prepared to pay for their accommodation are to be received and
furnished with a room or place to sleep or occupy if such accommodations are available with
such services and attention as are incident to their use with or without contract as to duration of
visit and which conducts within the confines of its physical locations the business of supplying
personal services of individuals for profit- Incidental to such fundamental and principal business.
16

17. The hotel may furnish quarters and facilities for assemblage of people for social business or
entertainment purposes and may engage in retaining portion of its premises for shops and
businesses whose continuity (i.e., proximity) is deemed appropriate to a hotel.”
HOTEL AND ITS TYPOLOGY
Since time irremovable, there have been frequent changes in the concept and perception
of hotel. There are a number of hotels offering different types of services. The variation in
architectural facilities, the size, the facade, the facilities and amenities can't be overlooked. This
necessitates a study of its typology.
 Residential Hotel
 Commercial Hotel
 Resort Hotel
 International Hotel
 Floating Hotel
Types of Hotels:
1. Residential Hotel: The residential hotels work as apartment house, often we call them
apartment hotels. The hotels charge rent on monthly, half yearly, or yearly basis. The hotels are
generally found located in big cities and towns where no meals are served to the customers L
17

18. Initially, the residential hotels were developed in the LISA. The services offered in the
residential hotels are comparable to an average well managed home.
2. Commercial Hotel: The commercial hotels are meant for the people who visit a place of
trade and commerce or business purposes and therefore these hotels are found located at the
commercial or industrial centers. These hotels focus their attention on individual travelers and
are generally run by the owners.
3. Resort Hotel: The resort hotel's are meant for the holiday makers, tourists and for those who
need a change in the atmosphere mainly on health ground. These hotels are found located near
the sea, mountain and other areas having an attractive landscape and healthy climatic condition .
The tourists visit hotels mainly to relax. The entertainment and recreation facilities like
swimming pool, tennis courts, boating, golf course, self-riding and other indoor sports in
addition to restaurant and cafeteria, conference room, lounge, shopping arcade, entertainment
etc., become significant in the resort hotels.
4. International Hotel: The international hotels are modern luxurious hotels, classified on the
basis of international guidelines. These hotels are placed in various star categories e.g., Five-stardeluxe, five-star, four-star, three-star, two-star, one-star. The international hotels are mostly
owned by the public companies where a board of directors is constituted for its control. The
overall management is found in the hands of senior executives.
18

19. 5. Floating Hotel: The floating hotels are located on the water surface. The place are sea,
river, lake. These hotels provide all the facilities and services made available in a good hotel. In
the leading tourist generating countries of the world we find the practice of using old luxury
ships as floating hotels.
19

20. 3.2 MOTEL — THE CONCEPT
Initially the term motel was meant for local motorists and foreign tourists travelling by
road- Basically motels serve the needs and requirements of these travelers and meeting the
demand for transit accommodation. We cant also call motel a transit overnight stay. Some of the
important services offered by motels are parking, garage facilities, accommodation, restaurant
facilities- Motels are found equipped with filling stations, accessories, service of elevator to the
automobile entrance restaurants etc. Motels are found located outside the city, preferably by the
side of high ways and important road junctions. The accommodation available in a motel is more
in the category of a 'chalet facility'- Which has a dining hall with fixed menu.
Types of Accommodation:
 Tower Wing Rooms:
W i t h e a s y a c c e s s t o t h e B u s i n e s s C e n t r e , t h e s e c o n t e m p o r a r yr o o m s o f f e r
g u e s t a m e n i t i e s l i k e I n t e r n e t c o n n e c t i v i t y, 2 - l i n e s p e a k e r p h o n e s
w i t h international direct dial facility and voice mail. Mini bar, personal safe,
channel music and television with satellite programmes.
 Heritage Wing Rooms:
These rooms are renowned for their architecture and exude an aura of old-world
elegance. Each corridor in this Wing resembles an art gallery, and the design, décor and
20

21. furnishing ensure that no two rooms are alike. Guests have a choice of rooms that overlook the
city or pool or face the Gateway of India and the Arabian Sea.
 T Club:
aj
Located on the top floors of the Heritage Wing, Taj Club is designed for the
discerning business travel. Guest amenities and services include complimentary
airportl i m o u s i n e t r a n s f e r s , p r i v a t e c h e c k - i n a t t h e C l u b d e s k , i n - r o o m f a x ,
personal safe, acomplimentary bottle of wine, valet service and
c o m p l i m e n t a r y d e l u x e C o n t i n e n t a l breakfast
.Taj Club also offers guests exclusive Meeting Rooms and a Business Service Unit on
the Club Floor.
Suites:
Choose from elegantly appointed Junior Suites, Execut ive Suites,
t a s t e f u l l y decorated Large Suites, newly renovated Luxury Suites or spacious,
plush Grand LuxeSuites. The finest suites at The TajMahal are the luxuriously
appointed PresidentialS u i t e s . E a c h o f t h e s e s u i t e s i s d e c o r a t e d w i t h o r i g i n a l
p a i n t i n g s a n d a n t i q u e s t h a t transport guests into a world of regal luxury and grandeur
21

22. 3.3 HOTEL MARKETING — THE CONCEPT
The key points of difference in the hotel marketing as against other consumer products are that
once customer has spent money in hotels, he/ she has nothing substantial to show for his/her
money except the bills, as compared with buying a television or a refrigerator. Effective
marketing and dynamic selling become significant in the context of hotel marketing because
once you have not sold a seat in a restaurant or a room in a hotel, the income is lost and lost for
ever. A hotel bedroom or a restaurant seat has no shelf life, Generally, the hoteliers explain their
marketing by showing their computer booking service or the advertising campaigns for the
coming season. There is no doubt in it that these things are part and parcel of hotel marketing,
but only one aspect of the continuous circle of marketing. For marketing hotel services, it is
essential that marketing be understood fully by the executive at the top of a hotel group with total
commitment on his part to the continuous need to market, A number of experts have gone
through the concept of hotel marketing as summarised below:
Gerry Draper -"Ascertaining consumer needs, tailoring the product as closely as possible to
meet those needs, persuading the customers to satisfy his needs and finally ensuring that the
product is easily accessible when the customer wishes to purchase it."
Melvyn Greene -"The ultimate in marketing is to establish brand loyalty so that eventually
the consumer does not purchase the goods/services once, but continuously. This is achieved only
by the product following the complete process of marketing."
22

23. Tools of Sales Promotion
The following tools of sales promotion are used for all the three heads instrumental in
promoting the hotel business.
1. Brochure: It is a device to stimulate customers and motivate them to visit a hotel and avail
of the benefits offered by the management of the hotel It is a detailed publication helping hotel
companies in promoting their business. The guests, clients get detailed information from the
brochure.
2. Folder: We find folder the most commonly used sales promotion tool. In this respect, it is
essential that folders have an impressive appearance in totality. The particulars are required to be
in brief but clear. The hotels can use folders for promoting the business.
3. Packaging: We call packaging an attractive wrapper of product. When we talk about
packaging in the hotel industry, our emphasis is on the outer cover and internal layout of
brochures and leaflets.
4. Attraction leaflets: This is exclusively meant for presenting a view of the different theme
parks, museums, amusement parks, outstanding points of attraction in the hotels or so.
23

24. 5. Merchandising: It is found helpful in promoting mass-market- This tool is found
significant to restaurants and bars. The merchandising involves displaying of food stuffs and
drinks in the right location.
6. Direct Mail Materials: The sales letters are found to be a direct mail material which can
either be used alone or in combination with brochures and folders.
7. Display Materials: In the materials to be displayed at sensitive points are posters,
dispensers, exhibits etc. We can use these materials in the offices of the travel agents, tour
operators or at the places where tourists come, such as tourists spots, resorts, airports, railway
and bus stations.
8. Competition and Exhibition: We find organisation of competition and exhibition for
promoting the business.
9. Special Officer: We also find a provision for special offer for all, such as users, travel
agents, tour operators, hotel personnel. The aforesaid tools of sales promotion help hotels and
hotel companies in increasing the business.
3.4 Classification on the Basis of Star
On the basis of standard and control, we classify hotels into two parts, such as
Approved and Unapproved. The approved hotels are found of international standards where the
24

25. accommodations are made available as per the criteria laid down by the Ministry of Tourism
Since they have the stamp of official recognition, the customers trust on them. The unapproved
hotels may also offer quality services but they lack official recognition and therefore, the
customers or prospects don't believe offering of service-promised without making any distortion.
25

26. GENERAL CLASSIFICATION OF HOTEL INDUSTRY
Classifications of hotels
 On the basis of standards: Like most of the countries in world, India also has hotels
divided indifferent categories depending on their location, facilities, infrastructure and
amenities provided. All the star hotels in India are government approved with continuous
control on the quality of services offered.
 One Star Hotels The hotels with most basic facilities, small number of room‟s
:locations in the far-flung areas are grouped under One Star Hotel category. These hotels
are best when customer is looking for cheapest available accommodation option.
 Two Star Hotels:- These hotels are most available in the small cities and in
particular areas of larger cities. Catering to the backpacker tourist traffic, these hotels
provide all the basic facilities needed for general accommodation and offers lowest
prices.
26

27. One Star & Two Star:
These are located in major cities as well as in small city and other tourist destinations. Their
customers include usually the domestic tourists. Services provided by one star & two star
hotel.
Facility
Free Parking
Doctor on call
Tour Planner
Facility
Accepts Credit Cards
Travel Desk
Money Exchange
A/C and Non A/C Rooms
Conference Hall
Restaurant
Bar/Lounge
In house laundry / dry cleaning
Complimentary newspaper in lobby
 Three Star Hotels - These are mainly economy class hotels located in the bigger
:
and smaller cities and catering to the needs of budget travelers. Lesser in amenities and
facilities, these hotels are value for money and gives good accommodation and related
services on the reduced price. Services would be stripped down version of higher
categories of hotels but sufficient to fulfil customer basic needs.
27

28. Four Star Hotels: - A rung below five star hotels are Four Star Hotels, these hotels
provide all the modern amenities to the travelers with a limited budget. Quality of
services is almost as high as the five stars and above categories. These kinds of hotels are
there for the travelers with limited budget or for the places which might not get the tourist
traffic associated with larger cities.
Three Star & Four Star:
These are located in all major cities as well as tourist destinations. Their customer group
ranges from middle level business executives to leisure travelers
Services provided by three star& four star hotel
Facility
Facility
24 Hours Front Desk
Air Condition
Bar
Coffee / Tea Making Facilities
Telephone / Direct Dial
Business Centre
Currency Exchange
Conference Facilities
Doctor
Front Desk Safe Deposit Box
Gymnasium
Laundry Cleaning Service
Restaurant(s)
Security
Tour Desk
Wakeup Service
28

29.  Five Star Hotels:- The most luxurious and conveniently located hotels in India are
grouped under Five Star Deluxe Hotel categories. Five Star Deluxe in India are globally
competitive in the quality of service provided, facilities offered and accommodation
option. These are top of the line hotels located mostly in big cities. These hotels provide
all the modern facilities for accommodation and recreation matching international
standards in hospitality.
These are restricted to the four metros and some major cities like Mumbai, Bangalore ,
Hyderabad etc. The customers of these hotels are mostly foreign business and leisure
travellers, senior business executives and top government officials.
services provided by five star hotel
Facility
facility
Parking facilities
24 Hours Front Desk
Gymnasium
Baby Sitting
Laundry Cleaning Service
Bar
Swimming Pool
Business Centre
Parking - Coach/Bus
Car Rental / Car Hire
Parking / Car Park
Cocktail Lounge
Restaurant(s)
Conference Facilities
Tour Desk
Currency Exchange
Wakeup Service
Doctor
Gymnasium
Laundry Cleaning Service
29

30. Swimming Pool
Parking - Coach/Bus
Parking / Car Park
Restaurant(s)
Tour Desk
Wakeup Service
How star is given to the hotel
The most popular hotel ratings are based on two companies Mobil which rates properties in
Stars, and AAA which rates properties in Diamonds. Both of these companies publish travel
guides and use their annual ratings of properties across the world to help members distinguish
between low and high end properties.
1) One diamond
These establishments typically appeal to the budget-minded traveller. They provide essential, nofrills accommodations. They meet the basic requirements pertaining to comfort, cleanliness, and
hospitality.
2) Two diamond
These establishments appeal to the traveller seeking more than the basic accommodations. There
are modest enhancements to the overall physical attributes, design elements, and amenities of the
facility typically at a moderate price.
3) Three diamond
30

31. These establishments appeal to the traveller with comprehensive needs. Properties are
multifaceted with a distinguished style, including marked upgrades in the quality of physical
attributes, amenities, and level of comfort provided.
4) Four diamond
These establishments are upscale in all areas. Accommodations are progressively more refined
and stylish. The physical attributes reflect an obvious enhanced level of quality throughout. The
fundamental hallmarks at this level include an extensive array of amenities combined with a high
degree of hospitality, service, and attention to detail.
5) Five diamond
These establishments reflect the characteristics of the ultimate in luxury and sophistication.
Accommodations are first class. The physical attributes are extraordinary in every manner. The
fundamental hallmarks at this level are to meticulously serve and exceed all guest expectations
while maintaining an impeccable standard of excellence. Many personalized services and
amenities
enhance
an
unmatched
level
of
comfort.
The following is based on personal experience:
One thing to keep in mind is that a hotel can have everything it needs to be a 5 star or 5 diamond
property but unless it has great customer service then it will never get past a 3 star rating! The
hotels and properties that get a four star or 4 diamonds rating (or higher) excel in customer
service.
31

32. Now, the highest level of a rating is either 5 stars or 5 diamonds. The difference between a four
diamond or star and a 5 rated hotel is AGAIN the level of customer service. At a 5 star/diamond
property you are pretty much treated like royalty and well taken care of. For instance, things I
remember from the AAA guidelines are that at a five star property you personally taken to your
room by a host, they leave a gift (like chocolate or?) on your pillow, and you receive a personal
note from management thanking you for your stay. Of course there is a lot more.
There thing that based on the high level of customer service that is required of 5 star/diamond
properties, the sizes of the hotels are generally small around 200 rooms or less.
You want to put all of this into context lets use Las Vegas as an example. For the longest time
(long before hotel ratings i.e. customer service became a factor) Caesars Palace and the Golden
Nugget downtown were the most consistent 4 star AND 4 diamond properties. Their level of
customer service was top notch. The only thing preventing them from getting a 5 star rating was
that they were limited by their sheer size and numerous rooms. For a long time, other properties
found it very hard to go from a 3 rating to a 4 rating. Remember, the 3 to 4 rating is the division
where customer service comes in. Properties such as the MGM Grand found this out. They got a
4 star rating one year by Mobil but were still rated by AAA as a three diamond property. The
following year, Mobil ranked them back to a 3 star propert
 Heritage Hotels
These are characterized by lesser capital expenditure and affordability and include hotels
running in palaces, castles, forts, hunting lodges etc. The heritage hotels are further classified as:
Heritage classic
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33. A Heritage grand
B Heritage
Heritage Classic:
These include hotels built between 1920 and 1935.
Heritage Grand:
These include hotels built prior to 1920.
Heritage:
These include hotels built between 1935 and 1950.
(3) Budget Hotels:
Budget hotels especially cater to domestic travellers who favour reasonably priced
accommodations with limited luxury. These are characterized by special seasonal offers, low and
good services.
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34. Services of budget hotel
Facility
Facility
Aircodition&nonairconditionfacilites
Refrigerator
Railway picking facilities
Currency Exchange
Laundry Cleaning Service
Newsstand
Parking / Car Park
Restaurant(s)
Wakeup Service
Medical help
Unclassified:
These are low-priced hotels spread throughout the country. A low-pricing policy is their only
selling point. It accounts for about 19 % of the industry.
RESTAURANTS
These typically include fast food chains, ethnic restaurants, fine dining and coffee bars. The
major players include Barista, Mc Donald‟s, Ruby Tuesday, bercos, etc.
CONTRACT CATERING
This includes any catering business unit that is formally not a part of the hotel industry but is
closely allied to it. Some of the major players in this category include Sodexho, Compass Group,
34

35. On the basis of Nature
 Beach Resorts
Hotels Peninsular India bounded by Arabian Sea, Bay of Bengal, Indian Ocean and the
two emerald archipelagos of Lakshwadeep and Andaman and Nicobar have a long coast line of
around 7500 km, offering an amazing array of beaches, some popular, some not so well known.
Thus location of resort is the basic point of attraction for tourists.
 Wild Resorts Hotels
A wildlife tour is incomplete if one does not actually live in a forest for a few days. It means
living in a rest house or a tent the midst of the dense wilderness and waking up to the twittering
of birds.
 Government Approved Hotels
These are the hotels, which might not have applied for star categorization or small enough to find
them in the list. Many of the wildlife resorts, lodges and hostels are government approved
providing a minimum level of accommodation facilities at far off places.
 Residential Hotels
The residential hotels work as apartment house. Often we call them apartment hotels.
The hotels charge rent on monthly, half – yearly, or yearly basis. They are generally located in
big cities and towns where no meals are served to the customers. Initially, the residential hotels
were developed in the USA. The services offered here are comparable to an average well
managed home.
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36. Standard and Control
On the basis of standard and control, we classify hotels into two parts, such as Approved
and Unapproved. The approved hotels are found of international standards where the
accommodations are made available as per the criteria laid down by the Ministry of Tourism and
Civil Aviation- Since they have the stamp of official recognition, the customers trust on them.
The unapproved hotels may also offer quality services but they lack official recognition and
therefore, the customers or prospects don't believe offering of service-promised without making
any distortion.
Classification on the Basis of Official Stamp
We find a number of unapproved hotels where world class services are made available to
the tourists and even the foreign tourists prefer to stay in these hotels. Hence the point of
difference between the classified and unclassified hotels or approved or unapproved hotels is the
official stamp and recognition. We find realities in the comment, 'the unapproved hotels are clean
and those who spend money from their own pockets prefer to stay in the unapproved hotels
because
economy in operation is given due weightage. It is against this background that in the
unapproved hotels the customers get inexpensive accommodation, 4 Thus it is not right to say
that the unapproved hotels don't offer quality services. The differences are in the group of users
or guests attending the hotels. The foreign tourists in a majority of the cases prefer to stay in the
approved hotels whereas the domestic tourists in a majority of the cases prefer to stay in the
unapproved hotels.
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37. Chapter4.COMPANY PROFILE:
4.1 TAJ GROUP OF HOTELS
1.Taj history
The TajMahal Palace and Tower, built in 1903, stands on the shores of the Arabian Sea, a
resplendent tribute to the vision of Jamsetji N Tata, founder of the Tata group, who wished to
build the finest hotel that India had ever seen.
With a tradition of commitment to excellence, personal attention and guest delight, the Taj brand
succeeds in making guests feel completely at home. There is a strong focus on exceeding
customer expectations, reinventing service concepts and upgrading physical products. By
benchmarking. Itself constantly against the best in its class, this brand, the oldest in the Tata
group, has built a solid reputation in the hospitality industry.
The Taj brand, deeply rooted in traditional Indian values of hospitality and graciousness, and
committed to acquainting guests with India‟s living heritage, has evolved with time, assuming a
more contemporary avatar. Its appeal therefore cuts across all generations.With a total of 57
properties in 40 locations across India and 18 international hotels, the Taj family of hotels
encompasses iconic city hotels, grand palaces, modern business hotels, beach resorts and rustic
safari lodges. Taj Hotels is justifiably proud to belong to the Tata group, an association that
automatically elicits trust and esteem from its customers and stakeholders. The brand is a
crowning achievement in the Tata group‟s array of brands.
37

38. Ratan Tata became the Chairman of the Tata Group in 1981 after serving as Chairman
in charge of the Nelco division of the group. Tata is India's largest conglomerate and
includes the brands Tata Motors, Tata Steel, Tata Power, Indian Hotels, as well as other
brands labeled under the Tata name.
Ratan Tata was born on December 28, 1937 in Mumbai, India in one of the richest
families in the country. His great grandfather, Jamsedji Tata, was the founder of the Tata
group and passed the power and inheritance down to his family.
Tata was a good student and studied hard at the Campion School in Mumbai followed by
studies in architecture and structural engineering at Cornell University. He graduated
with his bachelors degree in 1962 and joined the Tata Group in December of that same
year. Tata's first job with the Group involved working with the Tata Steel division where
he worked with the blue-collar employees shoveling stone and working with the furnaces.
With Tata Industries, Ratan Tata was able to transform the management and vision of the
division and bring in significantly larger dividends. This renewed financial success
helped bring the Tata Group to the New York Stock Exchange and gave the company
even more international power and prestige. Ratan Tata continued to acquire different
industries for the Tata Group, eventually purchasing the steel an aluminium producer,
Corus Group as well as Jaguar and Land Rover brands from the Ford Company.
Ratan Tata lives a very private life in Mumbai, India.
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39. 2. Product profile – market analysis
Taj Hotels, Resorts and Palaces covers a wider market in the hotel industry than the other
luxury hotels in the race. They have a better product profile than the rest: i.e. They have
great management, hospitality and facilities provided by them to their customers. Some
of them are:
Launch of Knowledge Management Site
Systems and Technology
Electronic Signage
Guest Wireless Internet access
In Room Guest Entertainment Systems
The Taj Contact Centre
Project Orion, the Integrated Back Office System
Self service Kiosks
Taj Website
Outlook
Global Reach and 24 x 7 x 365 Access for our customers across the world
39

40. 3. Clint profile
Taj Hotels have a client profile consultation service provided wherein they diagnose the
clientele needs and thus, with that information they try and provide the required facilities to
their customers. Generally, Taj concentrates on the Upper class of the society who can spend
lavishly on the luxury provided.
Vision
The Taj Group of Hotels commits itself to the overall improvement of the ecological
environment, which we are all a part of.
We recognize that we are not owners but caretakers of the Planet and owe it to our children
and future generations of humankind.
It is our endeavor not only to conserve and protect but also to renew and regenerate the
environment in which we live and operate.
Our commitment encompasses all actions related to our products, services, associates,
partners, vendors and communities.
We will partner and engage with our environment through EARTH: Environmental
Awareness and Renewal at TajHotels.For us EARTH is not a program, nor a process; it is a
way of life.
40

41. EARTH
Taj Hotels Resorts and Palaces presents EARTH
~ Environment Awareness& Renewal atTaj Hotels gets Green Globe Certification ~
In an endeavour to reinstate its vision and efforts to boost sustainable tourism and integrate
environment management in all business areas, Taj Hotels Resorts and Palaces presentsEARTH
(Environment Awareness & Renewal at Taj Hotels), a project which reiterates the conscious
effort of one of Asia‟s largest and finest group of hotels to commit to energy conservation and
environmental management. EARTH has received certification from Green Globe, the only
worldwide environmental certification program for travel and tourism.
41

42. 4. Taj Values
PEOPLE DIVERSITY, INTEGRITY &
RESPECT
PASSION FOR EXCELLENCE
EXCEED EXPECTATIONS
INNOVATION
SENSE OF URGENCY &
ACCOUNTABILITY
SOCIAL RESPONSIBILITY
JOY AT WORK
People are our greatest asset and the key to our success. We respect diversity of people,
ideas, cultures and honour the value of individuals in a team. We believe in perfection to
achieve excellence.
42

43. We continuously improveprocesses to surpass global benchmarks.
We succeed by exceeding expectations of all stakeholders and protecting the interest of
our shareholders and playing by the rules.
We encourage innovation, embrace change and support growth through knowledge and
learning.
We accept responsibility and deliver on promises with a sense of urgency and agility.
We commit to improve the quality of life of the communities we serve and our concern
for the environment by returning to society what we earn
We recognize and respect each other in all interactions and set the example for our
guests, business associates and colleagues. We encourage a fair environment that
supports equal opportunity to attract, develop and retain the best talent and endeavor to
have fun too.
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44. 5. Taj promises
At the Taj Group, our commitment to service excellence is rooted in our two guiding
principles called the Four Steps of Service and the Taj People Philosophy. One of our key
priorities is to empower our people to deliver on our legacy of impeccable service.
6. Four Steps of Service:
1. A warm and sincere welcome. Use the guest name, whenever possible.
2. Fulfill guest needs and provide anticipatory service.
3. Defect free products and services.
4. Fond farewell using the guest name, whenever possible.
The following philosophy is a summary of our beliefs and values towards our employees.
Taj People Philosophy
The Taj People Philosophy displays our commitment to and belief in our people. We see
Talent Management as the most important sustainable competitive advantage in the
future.You are an important member of the Taj family. We endeavor to select, retain and
compensate the best talent in the industry. We reward and recognize quality customer care
based upon individual and team performance. We commit to providing you with
opportunities for continuous learning and development.
We abide by fair and just policies that ensure your well-being and that of your family, the
44

45. community and the environment. We commit to regular and formal channels of
communication, which nurture openness and transparency. We strongly believe that you
are the Taj.
7. Organizational Structure OfTaj
Ratan Tata (Chairman)
Raymond Bickson
(CEO & MD)
Ajoy
misra(Sales &
marketing)
Prakah
Shukla(Technolo
gy & chief info
officer)
Anil Goel
Abhijeet mukherji
(Executive dir.Finance)
(Executive dir.-hotel
operations)
Sumit
guha(Developmen
t & projects)
Sankar
parmeswaram(le
gal & company
secretary)
HN
Srinivas(Hum
an resource)
45

46. 8. Present market value
Market Share(Approx)
0.6
0.5
2.5
Taj Hotels
1.1
Oberoi Hotels
ITC Welcomgroup
Hotel Leela
1.7
Others
9. Future of Taj
Urban Sanctuaries – Luxury Weekends from the Taj
City Escapes
Island Escapes
Rejuvenate with Jiva
Christmas and New Year breaks
46

47. Some more developments in progress are:
o TAJ opens its 5th hotel in Bangalore
o Taj Coromandel presents „ANISE‟
o „No Room for the Ordinary‟ advertising campaign
o Taj Residency Bangalore unveils „Jiva‟ Spa
o „Heritage & Nature Walk‟ At The Taj West End, Bangalore
o Bhairo‟,The Stunning New Rooftop Restaurant At Taj Lake Palace, Udaipur
o Intoxicating Bhutanese Bath‟ At TajTashi, Thimphu, Bhutan
o Two More Taj Safari Lodges Will Open In 2009
o Many more developments and strategies have been introduced but sufficient
information is not available.
47

48. 10. Financial information
48

49. 49

50. 50

51. 51

52. 11. Awards & Accolades
Global Awards
Sep-2008
Taj Hotels Resorts and Palaces is proud to receive the 2008 GOLD
Magellan Award for its Brand Campaign - 'No Room for the Ordinary'
in the Advertising / Marketing Campaign Category and Print
advertising Category.
Sep-2008
Taj Hotels Resorts and Palaces is proud to receive the award for „The
Best Business Hotel Chain in India‟ by the readers in UK at the 2008
Business Traveller Awards.
Sep-2008
Taj Hotels Resorts and Palaces tops the ranking in hotels segment in
'Asia Pacific's Top 1,000 Brands' survey for 2008.
National (Indian)
Awards
Apr-2009
Jiva Spa is nominated for the award of „Best Spa Treatment – Ventoz‟
Asia Spa India Awards held on 8th April 2009 held at Delhi.
Jan-2008
Dun & Bradstreet - American Express Corporate Awards 2007 - India's
Top 500 Companies 2007 - in the "Hotels" category - The Indian
Hotels Company Ltd.
Jan-2008
Taj Hotels Resorts & Palaces - Avaya GlobalConnect Customer
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53. Responsiveness Awards 2007- “ India‟s Most Customer Responsive
Hotel “ – Category Hotels.
Regional Awards
Sep-2004
TTG Travel Awards 2004 at the Sofitel Central Plaza, Bangkok–for the
Best Local Hotel Chain.
2003
Pacific Asia Travel Writers Association (PATWA)– ITB, Berlin 2002 –
Lifetime contribution for promoting the Hospitality Industry.
2003
PATA Gold Awards 2003 (Pacific Asia Travel Association) Corporate
Environmental Programme - ECOTAJ Environmental Initiatives.
12. Categories OfTaj Hotel
TajHotels,resorts and Palacesis an international hospitality group with strong roots in
India. For over 100 years, we have built our reputation on legendary properties, unparalleled
facilities and impeccable service. We operate in the luxury, premium, mid-market and value
segments of the market through our following brands:
Taj (luxury full-service hotels, resorts and palaces) is our flagship brand for the
world‟s most discerning travelers seeking authentic experiences given that luxury is a way of life
to which they are accustomed. Spanning world-renowned landmarks, modern business hotels,
idyllic beach resorts, authentic Rajput palaces and rustic safari lodges, each Taj hotel reinterprets
53

54. the tradition of hospitality in a refreshingly modern way to create unique experiences and
lifelong memories.
Taj also encompasses a unique set of iconic properties rooted in history and tradition that deliver
truly unforgettable experiences. A collection of outstanding properties with strong heritage as
hotels or palaces which offer something more than great physical product and exceptional
service. This group is defined by the emotional and unique equity of its iconic properties that are
authentic, non- replicable with great potential to create memories and stories.
Taj Exotica is our resort and spa brand found in the most exotic and relaxing locales of the
world. The properties are defined by the privacy and intimacy they provide. The hotels are
clearly differentiated by their product philosophy and service design. They are centeredaround
high end accommodation, intimacy and an environment that allows its guest unrivalled comfort
and privacy. They are defined by aa sensibility of intimate design and by their varied and eclectic
culinary experiences, impeccable service and authentic Indian Spa sanctuaries.
Taj Safaris are wildlife lodges that allow travelers to experience the unparalleled beauty of the
Indian jungle amidst luxurious surroundings. They offer India‟s first and only wildlife luxury
lodge circuit. Taj Safaris provide guests with the ultimate, interpretive, wild life experience
based on a proven sustainable ecotourism model.
54

55. Premium Hotels (premium full-service hotels and resorts) provide a new generation
of travelers a contemporary and creative hospitality experience that matches their work-hard
play-hard lifestyles. Stylish interiors, innovative cuisine, hip bars, and a focus on technology set
these properties apart.
The Gateway Hotel (upscale/mid-market full service hotels and resorts) is a panIndia network of hotels and resorts that offers business and leisure travelers a hotel designed,
keeping the modern nomad in mind. At the Gateway Hotel, we believe in keeping things simple.
This is why, our hotels are divided into 7 simple zones- Stay, Hangout, Meet, Work, Workout,
Unwind and Explore.
As travel often means more hassle than harmony, more stress than satisfaction, modern travelers
are looking for smarter choices. Driven by our passion for perfection, we welcome our customers
to a refreshingly enjoyable and hassle-free experience, anytime, everywhere. Offering the highest
consistency in quality, service and style we set new standards and take the unwanted surprises
out of traveling. Our warm welcomes make our guests feel at home, away from home and our
crisp and courteous service empowers them to get more done with greater effectiveness and
control. And through our unrivalled network we provide service that is effortless, simple, never
overwhelming, always warm.
Ginger (economy hotels) is their revolutionary concept in hospitality for the value segment.
Intelligently designed facilities, consistency and affordability are hallmarks of this brand targeted
at travelers who value simplicity and self-service.
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56. 13. Corporate Information
Domestic Subsidiaries
1. Tifco Holdings Limited
2. KTC Hotels Limited
3. United Hotels Limited
4. Taj SATS Air Catering Limited
5. Roots Corporation Limited
6. Residency Foods & Beverages
Limited
7. Innovative Foods Limited
1.
International Subsidiaries International Hotel Management Services
Inc.
2. Taj International Hotels (H.K.) Limited
3. St. James Court Hotel Limited
4. Chieftain Corporation NV
5. IHOCO BV
6. Taj International Hotels Limited
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57. 7. Samsara Properties Limited
8. IHMS (Australia) Pty Limited
9. IHMS (Restaurants) Pty Limited
10. Apex Hotel Management Services Pte. Ltd.
11. IHMS (HK) Limited
Joint VenturesDomestic
1. Taj Madras Flight Kitchen Pvt. Ltd.
2. Taj Karnataka Hotels & Resorts Ltd.
3. Taj Kerala Hotels & Resorts Ltd.
4. Taj GVK Hotels & Resorts Limited
57

58. 5. Taj Safaris Ltd.
International
1. Taj Asia Limited
2. Taj International Hotels (South Africa) (Pty)
Ltd.
3. Taj Asia (Thailand) Ltd.
58

59. 14. Key initiative
Ginger Hotels
IHCL is in the process of rolling out its Smart Basics hotels, under the brand name
“Ginger”. The first prototype has been launched in June 2004 in Bangalore, with roll out
being planned in a number of cities and towns subsequently. These hotels will cater to the
economy or „value for money‟ segment and being predominantly domestic clientele
based, are far less prone to fluctuations than the luxury and upscale segments. In the long
run, this segment will help in derricking the current revenue stream of the company.
Brand Architecture
IHCL is in the process of clearly defining the product and service standards in order to
have consistency across properties under each brand. This will help in further
enhancingthe brand value of Taj.
Product Upgradation
IHCL continues to invest in renovation and relaunch of key / brand defining properties.
In the last financial year IHCL upgraded rooms at the TajMahal Palace & Tower,
Mumbaiand Taj West End, Bangalore The lobby and public areas of Taj Lake Palace,
Udaipur and Rambagh Palace, Jaipur were also renovated to provide a luxurious sense of
59

60. arrival. The Sea Lounge and Harbour Bar at TajMahal Palace & Tower, Mumbai was
relaunched, while a new Vietnamese restaurant 'Blue Ginger' was opened in Taj West
End, BangaloreThe renovated products and the new outlets were very well received in the
market. The renovated rooms at TajMahal Palace & Tower, Mumbai and Taj West End,
Bangalore have emerged as the price leaders in the respective cities. In the coming year
IHCL intends to open a number of F&B outlets by celebrity Chefs with international
cuisine. In the upscale segment, the properties are being relaunched to be at par with
international level upscale hotels. The rooms at Taj President, Mumbai, Taj Residency,
Bangalore, Jai Mahal Palace, Jaipur and Taj Holiday Village, Goa are being renovated
and relaunched.
Service Excellence
In the last few years IHCL has undertaken a number of steps to significantly enhance
service levels to be in line with the best in class. IHCL has constantly benchmarked itself
with the key international luxury chains and strived to raise the bar. IHCL‟s service
excellence philosophy, has at its core, delivery through our people, processes and culture.
IHCL has taken a number of steps to provide highly personalized service to the
discerning customer, including butler services in its luxury properties. In order to take
care of the entire stay experience, IHCL has also completely revamped its Concierge
services. The Centers of Excellence have been strengthened considerably to train staff to
meet the exacting standards of a truly luxury hotel. Tata Business Excellence Model
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61. (TBEM) will play a significant role in raising the bar of service provided. The TBEM has
been rolled out in all the three hotel divisions and will be rolled out to the international
properties also.
Tata Business Excellence Model (TBEM)
In order to intensify the drive for Business Excellence, IHCL conducted Internal
Assessments based on the Tata Business Excellence Model for Luxury, Leisure, Business
SBUs as well as for Taj SATS Air Catering Limited. The Luxury Division has also
applied for External Assessment, which is to be facilitated by Tata Quality Management
Services.
Based on the External Assessment (2003) feedback report and the feedback from the
Internal Assessment, action plans to improve processes which finally impact the overall
organizational effectiveness, have been drawn out and worked upon.
Some of the key initiatives deployed across key hotels of the Taj group in the year
2003-04 are:
Rollout of the Customer Feedback System (CFS)
The CFS was launched in November 2003 and has taken root in 30 hotels across Taj group. It is
the primary and sole customer feedback system of the group. Till date, the system has clocked
around 12,000 pieces of customer feedback. The feedback from all sources gets recorded and
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62. aggregated and analyzed to improve the service quality in areas of concern at each of the hotels.
Feedback is not restricted to only guest difficulties (complaints) but also consists of compliments
and suggestions. The feedback would ultimately be used for product planning as well.
IT initiatives
From a situation in 1999 where there was limited IT application, Taj group has today achieved
domestic leadership in deploying IT to leverage its competencies and is rapidly approaching
benchmarks set by international highly regarded chains. The first three phases of implementation
of the IT strategy included putting in place the physical infrastructure across the Taj Group and
getting customer relationship applications to ride on this physical infrastructure, with a view to
enhancing customer services through customer information and recognition systems and better
inventory management.
Some of the key IT initiatives being under taken by IHCL are Orion, a comprehensive back
office system, implementing Revenue Management system, Interactive TV Systems and National
Call Center.
62

63. 15. competition
A Tata company shall fully strive for the establishment and support of a competitive, open
market economy in India and abroad, and shall cooperate in efforts to promote the progressive
and judicious liberalization of trade and investment by a country. Specifically, a Tata company
shall not engage in activities that generate or support the formation of monopolies, dominant
market positions, cartels and similar unfair trade practices.
A Tata company shall market its products and services on its own merits and shall not make
unfair and misleading statements about competitors' products and services. Any collection of
competitive information shall be made only in the normal course of business and shall be
obtained only through legally permitted sources and means.
Direct Competitors:
1. Oberoi Hotels
2. Oriental Hotels
3. ITC Welcomgroup
4. Hotel Leela etc.
Potential Target market : The upper class of the society is targeted. i.e. the richer people in the
society. Their fares or tariffs are high as the luxuries provided by them are also standard and 5star. Thus, this is in context to the Indian branches of Taj Hotels.
63

64. 16. MARKETING STRATEGIES BY TAJ
Intensive Growth:-
1>Market Penetration Strategy
Taj hotels have three type of hotels:
1) Luxury Hotels
2) Business Hotels
3) Leisure Hotels
So for different need of peoples different range of hotels is there. So
it increases the Market Penetration.
2>Product Development Strategy
It launched the Ginger Hotel for current market with new product to cover the middle class
family. And right now they have 11 Ginger hotels through the country.
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65. And right now they are also going to open Ginger hotel in Jamshedpur, Mangalore, panji,
Ludhiyana, Tirupur etc.
IHCL has successfully opened the “Taj Spa” in their Mumbai located “TajMahal Palace &
Tower”. And also they are going to open their Spas in several hotels of their group.
3>Market Development Strategy
“Taj GVK Hotels & Resorts Limited” and their associates hotels group “Oriental Hotels
Limited” are planning for operating their business in Bangalore and Chandigarh so they are
going to set up properties.
And right now they are also going to open Ginger hotel in Jamshedpur , Mangalore ,panji,
Ludhiyana ,Tirupuretc
4>Diversification Strategy
Taj Hotels Resorts and Palaces has taken luxury and hospitality to the skies with TajAir.They
provide the private chartered aircraft to the business need. And they have 2000 aircraft.
TajSats is right now offering the flight catering and related services .It is operating on four metro
city in India..Taj SATS caters to over 26 international and domestic airlines, and is the
leader in the Indian flight catering market.
65

66. ITHC has formed Inditravel in 2002, and then post acquisition of 18 year old agency Stallion
Travel Services Pvt. Ltd. It has management institution.
Integrative Growth Strategy:-
“Taj Hotels Resorts and Places” has done the agreement for acquirement of the Boston based
hotels and resorts RITZCARLTON.
They have also entered in the Strategic partnership in Doha with Qatar Sports for manage the
“Taj Exotica Golf Resort and Spa”.
They have also done the marketing alliance with “Shilla” that will provide portfolio of nineteen
hotels. And among these 19 hotels 17 hotels will operate under the “Taj Luxury Hotels portfolio”
and two hotels will operate under Shilla group.
They have also done the partnership with the “Raffles” so with help of these alliances the
company will operate 29 hotels with that Raffles. So among these 29 hotels 14 Hotels will
operate under the “Luxury Taj Portfolio” and 15 hotels will operate under
the “Rafles Hotels & Resort”.
They have done the Strategic alliance with Abu-Dhabi based properties “ALDAR properties” .So
they will operate some hotels and resorts .So for that they have already taken a first step that
66

67. they are making a Resort in the “Yes Island”. Taj Hotels Resorts and Palaces has involved
alliance with Okura Hotels & Resorts.
Alliance with silversearcruise,aeuropian cruise company. Taj has taken the 10 percent stake in
“Orient Express Hotels”which is well known hotel and also it is listed in NYSE list. And for
this stake they have paid 850 crores”.
Positioning
The Taj marked out three separate entities for the Taj Group: Business, Leisure and
Luxury.Though the concept of these sub-brands had come into existence earlier, in
the mid nineties, itwas in 1999-2000, that the hotels became operationally different.
Which meant that though theheads of these three divisions sat at head office, their
„territory‟ is scattered geographically, according to which type of hotel they look after.
Segmentation Strategy
A higher emphasis was placed on the business segment as the profits are higher
(this market being less price-sensitive as compared to the luxury segment) .The group
also kept looking at new opportunities. „The action plan is more opportunities, addingto and
complementing the brand,‟ says Krishnakumar.
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68. More changes
There were other changes. Consolidation. Unprofitable ventures were hived of. The
sales andmarketing functions were separated. The HRD department modernized,
with an emphasis on performance and career and succession planning. The organisation was
made to flatter and morecompact. Moreover, a continual benchmarking against international
standards was made part and parcel of the culture of the Taj.
Advertising
It was only when the product was ready, was a major advertising campaign
developed. Earlier,advertising had been restricted to the major feeder markets: the
US, UK, Germany, Singaporeand Hong Kong. And the advertising emphasised the
hardware aspect of the hotel. The new campaign developed a specific brand identity for the
hotel.Though the Taj had high unaided recall, it launched a corporate campaign to
reinforce this newi d e n t i t y. T h e a d ( m a d e b y R e d i f f u s i o n ) s h o w s t h e
e n i g m a t i c w o m a n w h o s t a n d s f o r b o t h hospitality and efficiency. The identity was
developed after extensive research on the consumer‟sattitudes towards the Taj. Over 60 in-depth
interviews were conducted by client and agency. The parameters? Not quantity, but quality. The
things done right. The quality of check-in, the smile,the greeting or the welcome drink. The
insights gathered were analysed and a clear slot, which t h e T a j c o u l d o c c u p y w h e n
g l o b a l c o m p e t i t i o n a r r i v e d , e m e r g e d . T h i s w a s t r a n s l a t e d i n t o creatinga
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69. distinct personality of the Taj as caring, efficient and enigmatic. The line went: „She istheTaj,‟
The base line was „Nobody cares as much.‟
MARKETING MIX: THE TAJ BRAND
The brand “Taj Hotels Resorts and Palaces” comprises 58 hotels across India and 17
hotelsglobally. The hotels are grouped into 3 categories - Luxury, Leisure and Business.TheTaj
Luxury Hotels offer lavish accommodation, gourmet specialty restaurants and
bars,fitness centres and spas and well-equipped business and banquet facilities. Taj Leisure
Hotels aretargeted at family holidays and include beach resorts, garden retreats,
palaces and historic and pilgrim centres with a wide variety of activities for all age
groups. Taj Business Hotels offer contemporary business facilities and modern
conveniences and are located in the heart of India‟skey commercial cities and towns.
17. Market Segmentation
Hotels in India are broadly classified into 7 categories (five star deluxe, five-star, four star,
three star, two star, and one-star and heritage hotels) by the Ministry of Tourism,
Government of India, based on the general features and facilities offered. The ratings are
reviewed every five years. As of December 2005 (latest available figure) there are following
number and category of hotels.
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70. Star Category
No. of Hotels
No. of Rooms
5-star Deluxe
82
18764
5-star
92
11332
4-star
132
9401
3-star
704
31039
2-star
587
19031
1-star
212
695
Heritage
83
2216
To be
50
5127
Total
1934
103973
Source: Ministry of Tourism, Government of India
The table excludes hotels in the unorganized sector that have a significant
presence across the country and cater primarily to economy tourists. Premium and Luxury
Segment this segment comprises the high-end 5-star deluxe and 5-star hotels, which mainly
cater to the business and up market foreign leisure travelers and offer a high quality and
range of services. The segment accounted for 29per cent of the total hotel rooms in the
country in December 2005.
Mid-Market Segment
This segment comprises 3 and 4 star hotels, which cater to the average foreign
and domestic leisure travelers. This segment also caters to the middle level business
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71. travelers since it offers most of the essential services of luxury hotels without the high costs
since the tax component of this segment is lower compared with the premium segment.
Budget Segment
These comprise 1 and 2 star hotels referred to as ‗Budget Hotels‘. These
categories do not offer as many facilities as the other segments but provide inexpensive
accommodation to the highly price-conscious segment of the domestic and foreign leisure
travelers.
Heritage Hotels
In the past four decades, certain architecturally distinctive properties such as
palaces and Forts, built prior to 1950, have been converted into hotels. The Ministry of
Tourism has classified these hotels as heritage hotels.
Others
At any point in time, applications for classification are usually pending with the
Ministry of Tourism because of which such properties remain unclassified. The number of
hotel rooms pending classification has declined from historical 15-20per cent to 5per cent
of the total rooms available in the recent past.
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72. 2 Market Strategies
Branding
During the 1980s, the hotel industry saw an explosion of new brands, , Market
segmentation has served as one of the most powerful drivers in the creation of more and
more branded products a trend that became a popular marketing concept in the 198Os and
remains so today. Seen as a vehicle for growth by a number of hotel companies that tapped
a virtually limitless supply of capital in those years. Large hotel chains assumed that they
could create new markets by establishing niche products in a variety of segments. With the
benefit of hindsight, however, some hotel chains that started out in a mid-market segment
have tried to move up-market by creating new brand concepts to do so. As hotel companies
fine-tune their identities, reposition their products and promote growth through aggressive
franchising programs.
Technology
In the hospitality industry, as in all arenas of commerce, technology represents one of the
strongest forces for change, while having had a significant impact on brand marketing.
Hotel reservation systems have been shifting from voice to electronic Global Distribution
Systems and are now on the verge of consumer access via the Internet. The increasing role
played by the Internet should slowly affect booking patterns in the future as inexpensive
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73. consumer access to hotel product becomes available. This, of course, has potential
implications for the benefits associated with the branding of hospitality products..
3 Market practices
PRICING STRATEGIES
One of the single greatest challenges facing independent hotels today is pricing.
Pricing the inventory effectively can lead to profitability and helps lay the foundation for
long term success. But, pricing the inventory ineffectively can lead to disaster. During the
last decade; two simultaneous factors impacted the market place and customer buying
practices: (1) the dramatic drop in demand (2) and the widespread use of the Internet for
booking rooms. Capitalizing on this situation, third party Internet companies seized the
opportunity to grow their businesses. Hotels were eager to work with them, and customers
were eager to use them as confidence and security in buying goods and services on-line
increased.
Rack Rates: Without any affiliations to warrant discounts, the Rack Rated
customer paid the published rate, which was the highest rate.
Consortia Rates:This was the same customer who booked through a travel agent
using the GDS and received a 5%-10% discount off Rack Rates.
Corporate Rates: Having met the hotel‘s qualifying criteria, such as volume,
businesses were guaranteed discounted rates.
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74. Group Rates: With a block of rooms, rates varied based on time of year and the
nature of the group.
Weekend Rates: Individual leisure travelers, usually within a drive distance to
the hotel.
Promotional rates:These rates were originally used sparingly and used as a
means to stimulate business by using discounted rates to anyone, regardless of
affiliation.
18. SWOT Analysis
Strength
The group has enormous power and strengths, which makes it the best and competitive, some of
them are:
 It consists of 57 properties in 40 locations across India and 18 international hotels.
 Its stylish variety of hotels like; Taj exotica, Taj safari, The gateway hotels, Ginger
hotels, Jivas spa etc.
 Its effective and efficient management techniques and staff.
 Its brand name.
 The presence of Taj Hotels, Resorts and Palaces in various countries like United
Kingdom, France, Germany, Italy, Dubai, Singapore, Australia, Japan, Russia and the
United States of America.
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75.  Securing management contracts at Palm Island, Jumeirah in Dubai, Saraya Islands in Ras
Al Khaimah, Aldar Group in Abu Dhabi, UAE Langkawi in Malaysia and Thimpu in
Bhutan.
 The various initiatives taken like; rollout of Customer Feedback System, Tata Business
Excellence Model, IT initiatives, Ginger hotels etc.
Weakness
Taj hotels being such a big brand, has a lot of advantages but every big company faces
some odds and so does Taj. Some of its weakness;
 Its hard to maintain such a huge chain of subsidiaries and there are more chances
of mishaps in management.
 Its huge competitors like Oberoi, Leela, Oriental, ITC etc are also providing same
facilities and thus it becomes a weakness for Taj hotels.
 Its very costly for the Indians to afford the tariffs and service charges set by Taj
hotels. Thus, they loose a major part of their market share.
 They need a lot of investment.
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76.  As Taj hotels is a popular group, it is always in the eyes of the terrorists, as taj has
already faced such an incident. Therefore, it proves to be a weakness some times,
to be so popular.
Opportunities
The Group is poised strategically to take advantage of the following situation:
 In the backdrop of a healthy economy having its positive fallouts on the Tourism Sector
leading to rapid growth in markets in India, South Asia and key gateway cities in sourcemarket destinations.
 Rapid expansion in both International and Domestic destinations, with top-of-the-line
Luxury, Leisure and Business properties.
 Meeting growing demand in the budget and mid-market segments.
 Extending the product portfolio into related offerings viz. luxury residences, wildlife
lodges and health spas.
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77. Threats
The threats identified by the Group are related mainly to the markets in which the Group
operates and general factors related to the tourism industry. Significant among these are:
 Cheaper international airfares, increasing affordability of travel to International destinations,
especially South East Asia, Europe and Australia.
 Growing presence of international hospitality chains competing in the Luxury and Business
segments, to meet excess demand situation.
 Appreciating Indian Rupee vis-à-vis the US Dollar, resulting in lower realisation on foreign
exchange earnings.
 Slowdown of international demand resulting in reduction of revenues.
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78. 4.2GROWTH OF THE INDUSTRY
1 Rate of Growth
According to a report, Hotel Industry in India currently has supply of
10,000 rooms and there is a shortage of 150,000 rooms fuelling hotel room rates across
India. According to estimates demand is going to exceed supply by at least 100% over
the next 2 years. Five-star hotels in metro cities allot same room, more than once a day
to different guests, receiving almost 24-hour rates from both guests against 6-8 hours
usage. With demand-supply disparity, hotel rates in India are likely to rise by 25%
annually and occupancy by 80%, over the next two years. This will affect the
competitiveness of India as a cost-effective tourist destination. To overcome, this
shortage Indian hotel industry is adding about 60,000 quality rooms, currently in
different stages of planning and development, which should be ready by 2012. Hotel
Industry in India is also set to get a fillip with Delhi hosting 2010 Commonwealth
Games. The future scenario of Indian hotel industry looks extremely rosy. It is expected
that the budget and mid-market hotel segment will witness huge growth and expansion
while the luxury segment will continue to perform extremely well over the next few
years.
The hotel industry in India is going through an interesting phase. One of the
major reasons for the increase in demand for hotel rooms in the country is the boom in
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79. the overall economy and high growth in sectors like information technology, telecom,
retail and real estate.
Rising stock market and new business opportunities are also attracting hordes
of foreign investors and international corporate travelers to look for business
opportunities in the country. The arrival of low cost airlines and the associated price
wars have given domestic tourists a host of options. The opening up of the aviation
industry in India has led the way for exciting opportunities for the hotel industry as it
relies on airlines to transport 80% of international arrivals.
Moreover, the government‘s decision to substantially upgrade 28 regional
airports in smaller towns and privatization and expansion of Delhi and Mumbai airport
will improve the business prospects of hotel industry in India. Substantial investment in
tourism infrastructure is essential for Indian hotel industry to achieve its potential.
The upgrading of national highway connecting various parts of India has opened new
avenues for the development of budget hotels here. The Government of India‘s Incredible
India destination campaign and the AtithiDevoBhavah campaign have also helped the
growth of domestic and international tourism and consequently the hotel industry.
In order to increase the stock of hotel rooms, the Federation of Hotel and
Restaurant Associations of India suggested to the government that the floor area ration of
the existing hotels should be increased. This was a couple of years before and will help
create additional rooms in the existing properties and ease the burden of shortage of hotel
rooms in the country. The proposal is yet to be implemented.
2 Pattern of Growth (Seasonal & cyclic)
79

80. Pattern of growth in hotel industry is both seasonal and cyclical as hotel
industry is inter related and based on the tourism industry. As the industry is related and
run on the demand based on the location in some regions like historical places and business
centers (ex: Delhi, Hyderabad, Tirupathi, etc) the demand for the hotels are cyclical and
for few places the demand is seasonal. Seasonal demand is depend on the climate and
location (ex: beaches in India are mostly visited in summer because of climate and
vacations)
3 Growth Determinants
Location
Location is a critical consideration because if affects hotels ability to draw
customers. It is important that hotel location be visible, accessible, convenient and
attractive to market. Surrounding land uses are important for all types of lodging
operations. Aesthetics of the area, noise, safety and other factors should be considered.
Commercial Locations
By location along major highways or in business or industrial districts, hotels
and motels benefit from high visibility and proximity to generators of room night demand.
Local colleges, hospitals, attractions, services and entertainment are examples of ―room
night‖ demand generators.
Resort Locations
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81. Hotels and motels in resort areas generate most of their business form leisure
travelers who see the lodging facility and surrounds area as their ―destination.‖ Access and
visibility, while important, are secondary to the quality of the facility, services, amenities,
and nearby attractions.
Local Market Area
A lodging facility must be located in a market area that attracts overnight
visitors.
Business Climate
Hotels and motels that primarily serve business travelers usually rely on the
strength of the local business community.
Tourism Activity
Hotels and motels in resort areas typically rely on local attractions to bring
in customers. Attractions can include both natural and man-made places of interest.
Business Travelers:
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82. Business travelers represent a large portion of lodging demand in many
market areas. They include people traveling on business representing commercial,
industrial and governmental organizations. Peak business demand is usually experienced
Monday through Thursday nights.
Leisure Travelers:
Leisure travelers may visit an area for a vacation, to attend sporting or
social events, to shop, or to visit friends and relatives. They might be staying over simply
because they are traveling to other destinations. Leisure travelers may be individuals,
couples, families, or small groups. Travelers visiting hospitals and universities are typically
included in this market segment. Leisure room demand is often seasonal. In larger, more
urban market areas, leisure room demand may be limited to weekends, summer months
and holiday periods.
Other Travelers:
Various lodging customers cannot be classified under the categories of
business, leisure, or group. These travelers may include construction workers, truckers,
utility crews and others.
IMPACT OF RECESSION ON INDUSTRY
82

83.  The state of turmoil in global financial markets has generated new concerns for the
hospitality industry.
 Existing hotels in India are also likely to benefit from the improved performance of the
non-room sources of income, namely Food & Beverage (including banquet operations),
Spa, Corporate Club memberships and other ancillary services.
 India is expected to see Asia's biggest drop in corporate travel spending, falling 25%
this year compared to 2008.
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84. 4.3 INNOVATION
Service Innovation
Hotel industry is continuously using the concept of technology to develop its image
and
occupancy ratio. Though the hotel industry is a service industry it is continuously
innovating the way the services are provided. Many hotels have a category of rooms which
are different in the space and facilities each one having their own specialties and range of
price. Hoteliers are now running their business according to the taste and preferences of the
customers continuous feedback from the customers are helping the management to innovate
in the services provided by the. Few hotels are providing an services in their unique way to
get into moonlight. Offering special services respecting the customer’s traditions and customs
and providing the service in their way is new innovation to attract the customers.
Technological Innovation
The advent of the Internet has opened up many avenues for the hotel industry,
most importantly the ability to book clients. Most if not all of the hotel chains offer some sort
of online reservation enabling the hotel management and staff to focus their efforts in a
variety of different places. It is reported that 25 percent of all reservations are made online
making it a key tool in room occupancy fullfilment. In addition to room booking, most hotel
chains today utilize the Internet by offering online deals and major advertising campaigns.
Electronic advertisement accompanied with the ability to make reservations online has made
the Internet tremendously valuable. Adapting to e-commerce transitions such as the
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85. implementation multi-purpose computer software are necessary to cater to the clientele of
the next generation. A higher understanding of market needs will ensure a larger portion of
it.
Information processing management is another key element that has contributed to
hotel industry success. Understanding and acting on the needs of clientele will lure travellers
away from competitors. Again, most if not all hotel chains today are utilizing some sort of
customer pattern tracking. Complete client pleasure is dependent upon what you can offer
differently from the other guy. The colour of the sheets, the position of an ice machine, the
softness of toilet paper; targeting the very core needs of clientele means they will return to
what they are comfortable with.
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86. 4.4 TECHNOLOGY OF PRODUCTION AND DISTRIBUTION
1 Cost structure
SOURCE OF FINANCE
The source of finance available to a hotel development is similar to those
available to real estate developers of others kind of project. The following are usual method
of rising finance for the hotel Industries:1. Share capital
2. Preference share capital
3. Equity share capital
4. Borrowed capital
5. Debenture
6. Mortgage
7. Loan from commercial bank
8. Loan from financial institution
9. Trade debt- credit guaranteed by supplier
10. Inter company loans
11. Provision for taxation
12. Public fixed deposit
13. IPO
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87. Hotel industries displays an investment characteristic with Distinguishes it
for other industries. The industry can be classified as one among those which are highly
capital intensive. Most of the Hotel represented by land, building, furniture furnishing and
Equipment. A study of the balance sheet of the leading hotel companies shows that bulk
capital is 90%.
A hotel project requires money under the following heads:
1. Cost of land and building
2. Cost of civil works
3. Cost of electrics installation and fixtures
4. Cost of sanitary work and fixtures
5. Cost of furniture fixture and fitting
6. Cost of carpet
7. Cost of providing facilities like air-conditioning, boilers, water treatment plant,
filtration plant, water pump, drainage system.
8. Cost of providing swimming pool, land scaping, land development,
9. Shopping arcade.
10. Cost of kitchen ware.
11. Cost of manpower
12. Misllinious cost
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88. 2 Economies of Scale
The hotel industry enjoys the economies of scale based on the occupancy
rate. When the occupancy rate is high the hotels enjoy the economies of labour and fixed
cost is distributed over large number of rooms effecting in the increase of the revenue and
the various other costs like maintenance will remain same whatever the occupancy, if the
occupancy is high the expenses are distributed occupied rooms resulting in the increase of
revenue. Other than the savings in cost many hotels charge 24hours rent on rooms used for
night halts (i.e. is for 8 to 10 hours) thus enjoying the chance to rent same room to other
customers for 24 hours.
3 Economies of Scope
Opportunities for the Indian hotel sector continue to be in the budget and midmarket segment. Anticipation for huge growth and expansion, in the next year or two. The
luxury segment is set to perform extremely well over the next few years until the supplydemand gap is bridged.
New opportunities lie in the extended stay segment, which many potential developers are
currently shying away from. . Agra, while having seen highest improvement, has still a
long way to go (citywide occupancy 47%). There also some unfinished hotel projects in
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89. Agra, which will continue to put pressure on the city‘s performance. As regards Jaipur, the
recent announcement by a major IT company to set up a base outside Jaipur, as well as the
state government‘s initiative to promote IT-related activity in the city, means that Jaipur
can look forward to some additional room night demand from the business segment. These
developments in the leisure segment including the strong performance in Goa leads to
believe that the leisure segment is clearly benefiting from the increase in foreign tourist
arrivals and growth in domestic travel.
Hotels in metro cities, with an average rate of Rs 2,600-3,000, and hotels in nonmetro cities, with an average rate of Rs 1,800-2,400, are likely to experience rapid growth
in demand in the next year or two. Cities to watch out for, in terms of development
opportunity, are Pune, Goa, and certain pockets in major cities like Delhi (west) and
Mumbai (mill lands).
4 Labour
Department of Hotels that are available for guest 24 X 7:-
Hotel Industry Kitchen/ Food Production: Kitchen & food production is a
department of hotel that responsible for food . Even hotels having Coffee Shop provides 24
hour services to the guest.
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90. Hotel Industry Engineering:- If any problems come in room, bulb fuse, A/C not
working , then need to contact Hotel Engineers, they are also available 24 hours.
Hotel Industry Front desk:- Front desk is 1st impression on guest, if guest like this
section then only he will go for other option like restaurant, laundry, etc. Front desk
consists of young and energetic staff who is always (24 x 7) be there to help guest, they are
also responsible for Business Centre, Internet Access. Front office desk responsible for
making C-Form for Foreigner Clients, providing safety lockers to the guest.Taking
Reservation by Telephone, E-Mails, and Fax from the guest. Also providing guest Money
Exchange Services.
Hotel Industry Housekeeping:- Housekeeping are available 24 X 7 for guest, making
their bedroom, bathroom, etc. Providing guest Laundry services also do day to day room
cleaning for guests.
Hotel Industry Food & Beverage Service:- They include providing guest the
services whether in rooms, Restaurants or Banquets, or in Conference rooms.
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91. Hotel Industry Travel Desk:- They are responsible for arranging day to day travels
for the guest. They also do the ticket confirmation work, and also provides the information
for sightseeing to the guests.
Gym/ Health Club/ Sports:- Medium and large hotels are providing Gyms, Swimming
Pool, Health Club, Beauty Parlor, Saloon, games like Billiards, Pool, etc facilities to their
guests. Most of the Hotels are providing these facilities complimentary with the rooms.
Parking/ Shops: - Few Star hotels providing big parking space, shops in the restaurant
itself for the guest conveyance, so that they can get the things in hotel itself.
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92. 4.5 STRATEGIES AND COMPETITION IN THE INDUSTRY
1 Internal Rivalry
The degrees of internal rivalry consist of competitors in the hotel industry that
differentiates their strengths, cost, product offering, and positioning within the industry. In
the hotel industry there is a lot of competition that takes place between different providers.
Each company finds their strengths and does everything in their power to be acknowledged
by the customer. Once they uncover how they can serve their consumers better than
leading competitors they position themselves in the industry that better serves the
consumers.
2 Porters Five Forces Model
BARGAINING POWER Of SUPPLIERS
The term 'suppliers' comprises all sources for inputs that are needed in order to provide
goods or services.
The high class hotels are operating by few hotel chains like-TAJ,EIH,ITC&THE
LEELA PALACE so they have a control over the industry.
There are no substitutes for spas and five star hotels.
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93. The hotels customers are fragmented, so they have to reduce their bargaining power
to attract the customers.
The Taj, ITC&Oberoi are having various rates and tariffs. Because they are having
their own brand image.
The hotel chains are operating different services like Spas, Boatels, Resorts, City
Centers, Heritage HOTELS, etc.
BARGAINING POWER OF CUSTOMERS
Similarly, the bargaining power of customers determines how much customers can
impose pressure on margins and volumes.
The hotel industry is one of the most invested in its fixed assets. So they are trying
to recover their amount quickly.
The suppliers are providing better information about them to attract the
customers‘ .Here the buyers are highly informed.
If the hotel price changes are moderate, the Customers have low margins and are
price-sensitive.
Some unseasoned timings the hotels are offering discounts and incentives to reduce
the bargaining power of buyers.
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94. THREAT OF NEW ENTRANTS
The competition in an industry will be the higher; the easier it is for other
companies to enter this industry. In such a situation, new entrants could change major
determinants of the market environment (e.g. market shares, prices, customer loyalty) at
any time. There is always a latent pressure for reaction and adjustment for existing players
in this industry.
The foreign hotel chains are tied up with Indian hotels to reduce the initial cost and
using the latter‘s brand name.
Brand loyalty of customers like TAJ, ITC, and LEELA PALACE affects the new
entrants.
Access to raw materials and Distribution channels are controlled by Existing
players like TAJ, ITC, and LEELA PALACE.
The cost of land in India is high at 50% of total project cost as against 15% abroad.
This acts as a major deterrent to the Indian hotel industry.
In India the expenditure tax, luxury tax and sales tax inflate the hotel bill by over
30%. Effective tax in the South East Asian countries works out to only 4-5%.
THREAT OF SUBSTITUTES
A threat from substitutes exists if there are alternative products with lower prices of
better performance parameters for the same purpose. They could potentially attract a
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95. significant proportion of market volume and hence reduce the potential sales volume for
existing players. This category also relates to complementary products.
Brand loyalty of customers (TAJ, ITC, LEELA PALACE, etc,) is dominating the
substitutes.
The hotel relationship with customer and costs also the reasons to switching to
substitutes.
The price variation of same class hotel services from various brands is one of the
reasons to choose a substitute.
The present demand and supply of hotel rooms is one of the reasons to choose a
substitute.
More fixed cost and switching costs affects the business.
COMPETATIVE POWER OF RIVALRY PLAYERS
This force describes the intensity of competition between existing players
(companies) in an industry. High competitive pressure results in pressure on prices,
margins, and hence, on profitability for every single company in the industry.
The top competitors in hotel industry are having the same services like five star,
spas, boatels and motels, heritage hotels and palaces.
The healthy competition among the all players is helping to increase the industry
growth.
Intense in metro cities, slowly picking up in secondary cities
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96. challenges to hotel industry
1. Shortage of skilled employees:
One of the greatest challenges plaguing the hospitality industry is the unavailability of quality
workforce in different skill levels. The hospitality industry has failed to retain good
professionals.
2.Retaining quality workforce:
Retention of the workforce through training and development in the hotel industry is a problem
and attrition levels are too high. One of the reasons for this is unattractive wage packages.
Though there is boom in the service sector, most of the hotel management graduates are joining.
Other sector like retail and aviation.
3. Shortage of rooms:
The hotel industry is facing heavy shortage of rooms. It is estimated that the current requirement
is of 1, 50,000 rooms. Though the new investment plan would add 53,000 rooms by 2011, the
shortage will still persist.
4. Intense competition and image of India:
The industry is witnessing heightened competition with the arrival of new players, new products
and new systems. The competition from neighboring countries and negative perceptions about
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97. Indian tourism product constrains the growth of tourism. The image of India as a country overrun
by poverty, political instability, safety concerns and diseases also harms the tourism industry.
5. Customer expectations:
As India is emerging as a destination on the global travel map, expectations of
customers are rising. The companies have to focus on Customer loyalty and repeat
purchase.
6. Manual back-end:
Though most reputed chains have IT enabled systems for property management, reservations,
etc., almost all the data which actually make the company work are filled in manual log books or
are Simply not tracked.
7. Human resource development:
Some of the services required in the tourism and hotel industries are highly personalized, and no
amount of automation can substitute for personal service providers. India is focusing more on
white collar jobs than blue collar jobs. The shortage of blue collar employees will pose various
threats to the industry.
97