Hotel industry in India & the Taj group

Hospitality Industry
INDIAN HOTELS COMPANY LIMITED (IHCL)
Presented by: Group 5-Indian Institute of Management Rohtak,PGP06
© 2016 Anant Kumar, Abhay Kulkarni, Saurabh Kapoor, Shivansh Dahiya, Bhargav Kumar. All rights reserved.

Our Team
Abhay Kulkarni
Anant Kumar
Bhargav Maddila
Saurabh Kapoor
Shivansh Dahiya

Industry Analysis
Hospitality
industry
Food &
Beverage
Accommodation Travel & Tourism
• Hospitality industry is a broad industry comprising of sub industries like tourism
industry, accommodation/lodging, restaurant, travel industry etc
• All these sub industries are highly intertwined.

Characteristics of the industry
Fragmented
• Large number of
organized as well as
small unorganized
players
• Taj, Oberoi, ITC, Oyo
etc.
Seasonal demand
• Encounter huge
seasonality in
demands like demand
is generally low in
monsoon months
• Gradually the trend is
changing
Diversity in prices and
services offered
• Like our country this
industry also has huge
diversity, in prices as
well as services
offered
• From Rs.500 to rs.
1,00,000 tariff hotels

Classification of hotels
• Hotels in India are classified
according to a scheme for
classification of operational hotels by
the Ministry of Tourism
• Classified hotels enjoy some benefits
like tax incentives, interest subsidies
etc.
• Getting classified is a hectic task with
a lot of paper work involved,
regulations to follow etc., thus a huge
chunk of the industry is still not
classified

Porter’s 5 forces analysis

PESTEL Analysis
Political Factors
• Political instability can effect tourism as well as Hotel industry e.g. Jammu & Kashmir, North-Eastern states
• Frequent change of governments at state or central level affect policies and regulations
Economical
Factors
• GDP growth of the country attracts foreign investments as well as tourists boosting the industry
• Rise in Disposable Income due to rise in per capita income of the country
Social Factors
• Language is one crucial factor and with huge English speaking population, Indian hospitality industry has
an edge
• Festivals & other cultural celebrations generate huge revenues for this industry e.g. Holi, Kumbh mela etc.

PESTEL (Cont.)
Technological
Factors
• IT has enabled people to book their hotels without travel agents, they can even have a virtual tour
• Medical tourism: India is becoming more and more popular for being an cheap but world class
quality destination for medical treatments
Ecological Factors
• Government initiatives like ‘Project tiger’, ‘Go Green’ creates a positive image of the country and
promotes wildlife tourism and hotels industry
• Wildlife and National parks
Legal Factors
• Legal clearances required are a barrier for new entrants
• Tax benefits: Sometimes government gives tax exemptions at a certain location to develop the
tourism in that area/state which helps in the development of the industry.

Strategic segmentation & positioning
Segmentation Targeting Positioning
Taj Hotels
 high end luxury hotel
 Tariff starts Rs. 10000 to rs.
102000 per day
 Demographic (on the basis of
occupation and income)
 Geographic
 Psychographic
 High end, ultra rich individuals
 Diplomats, celebrities, top level
executives
 A luxury brand with heritage
Vivanta
 upscale premium hotel
 Tariff from Rs. 5000 to rs. 33500
per day
occupation and income)
 Geographic
 Psychographic
 Comparatively younger but rich
individuals
 Positioning as very upscale
brand
 “Discover”
 Positioning through print ads
Gateway
 medium range hotel
 Tariffs go from Rs.5000 to
Rs.16000 for one day
income)
 Geographic
 Higher middle class income
group
 “Smart & informal”
 Positioned as smart mid market
Ginger
 budget hotel
 Tariff starts from Rs. 1700 for
one day
 Demographic (Income based)
 Geographic
 Middle class youth  Economical with comfort and
technology

Company overview
Organized into 6 Brands
Headquartered at Oxford House in Mumbai
Revenue ~ Rs 2000 Cr 13000 employees
Opened its first Five Star Hotel in 1974
108 hotels in India 17 Hotels outside India
TATA Group Subsidiary
Founded in 1903 Founder: Jamshetji Tata

SWOT ANALYSIS

DIVERSIFICATION STRATEGIES
 Gone for both related and unrelated diversification
 Expanded into Air catering, Spa Operations, Yachts and Yachts
 Taj Air
 Taj SATS
 Spas
 Taj Safari
 Taj Khazana

FINANCIALS
 Revenue currently stands at 2135 Cr.
 Revenue has been consistently increasing at around 7%
 Suffered loss of 82.02 Cr in the last financial year
 Market leader in Hospitality Industry with market capitalization of 9,318.96
crore.

Competencies
Endeavour to select, retain and compensate the best talent in the industry
Reward and
recognize quality
customer care
based upon
individual and team
performance
Commit to provide
opportunities for
continuous learning
and development
Abide by fair and just policies that ensure your well-being
Commit to regular
and formal channels
of communication
Strongly believe that
you are the Taj
Fulfil guest needs and provide anticipatory service
Defect free products and services
Fond farewell using the guest name,
whenever possible

Competencies & Resources
Resources
Competencies
Competencies
• Brand image in India
• Diverse business models
• Financially strong parent group
• Global reach
• Strong loyalty programs to retain
customers
• strong corporate purchase chain- less
raw material cost
• Asset light policy- Revenue Stability

Competencies & Resources
Advantage of alliances and joint ventures
Superior guest servicing
Tangible Resources- Site and Location
Managerial vision and Judgement
Intangible Resources- Positioning and Brand Strength

SKILls
An amazing customer
relationship management
Strict compliance to SOPs
A timely acquisition of
major competitors like
Starwood group and The
Pierre
Arrangements made for
golf and tennis:
Recreational Advantage
“No room for the Ordinary”
Full equipped business
centre and safe deposit
lockers
Affiliation from
international accreditation
body, making it certified for
foreign visitors
Use of all modes of
communication
Provide in house baby
sitting and wake up calls
A very Hospitable stay to All

The Indian Hotels Impetus
4S
SWAGAT
SUVIDHA
SAFAI
SARAL

Opportunity Horizon
Future Markets
Growth
• Hotel Industry is expecting 9-11% revenue growth in 2015-2016
Expansion
• Planning to move from “Mono Brand” to “Sun and Planets Model” to
better serve different segments
Tie Ups
• Conscious in purchases after stumbling in high value properties
• Tied up with American Express in loyalty program

Opportunity Horizon(Cont.)
Mergers and
Expansion
Plans
Tie ups with
airlines and
cruise lines
Keen about
huge new
launches in
India
Hosting
renowned
guests-
MarketingContinue
with “room
for more”
campaign
Concentrating
more on “Taj
Holidays”- resort
destinations for
domestic
travellers
Concentrate
more on
Ginger Hotels

Opportunity Horizon(Cont.)
Plan to have 200 hotels
globally by the end of five
years
Looking for 450 crore
expenditure on 33 new hotels
in near future
Continue to invest in West
Bengal
To raise 1000 cr by issuing
debentures
Corporate
Ambitions

Sense of purpose
CULTURE OF SERVING
GUESTS: Following the
traditional Indian
Approach
Shared sense
of purpose :
Ownership to
the Employees
What never
change is –
“relationship
with the guest”

Direct from the leaders
Committed to improving
the quality of life of the
communities we serve by
striving for leadership and
global competitiveness in
the business sectors

Hotel industry in India & the Taj group

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