Indian Hotel Industry - Emerging Concepts


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An Interesting presentation on the emerging concepts in the Indian Hotel Industry - November 2008

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Indian Hotel Industry - Emerging Concepts

  1. 1. EMERGING CONCEPTS IN INDIAN HOSPITALITY INDUSTRY Presented By : CA Utpal Parekh Sr. Vice President (Finance & Operations) Panoramic Universal Ltd.
  2. 2. “ HOSPITALITY” <ul><li>Since the evolution of mankind. </li></ul><ul><li>Defined as “Atithi Devo Bhavah” in ancient Vedas. </li></ul><ul><li>Hospitality means 'care for strangers‘. </li></ul><ul><li>Offering warmth to someone who looks for help at a strange or unfriendly place. </li></ul><ul><li>The hospitality industry covers a diverse range of establishments : includes hotels, motels, restaurants, bars, ships, airlines and railways. </li></ul><ul><li>It has become a huge industry and drives economies across the globe. </li></ul>
  3. 3. HOSPITALITY INDUSTRY <ul><li>The hospitality industry is a 3.5 trillion dollar service sector within the global economy . </li></ul><ul><li>Expected to grow at the rate of 8% between 2008 and 2016. </li></ul><ul><li>Many international hotel brands including Sheraton, Hyatt, Radisson, Meridien, Four Seasons Regent, and Marriott International are already established in the Indian markets and are still expanding. </li></ul><ul><li>Nowadays the travel and tourism industry is also included in hospitality sector </li></ul><ul><li>The boom in travel and tourism has led to the further development of hospitality industry. </li></ul>
  4. 4. SWOT ANALYSIS 1. Rising Income 2. Open sky benefits 1. Fluctuations in international tourist arrival 2. Increasing Competition 1. Poor Support infrastructure 2. Slow implementation 3. Susceptible to political events 1. Natural & Cultural diversity 2. Demand-Supply Gap 3. Government Support 4. Increase in the market share STRENGTHS WEAKNESSES OPPORTUNITIES THREATS
  5. 5. TRENDS IN HOSPITALITY SECTOR <ul><li>Low Cost Carriers </li></ul><ul><li>Budget Hotels </li></ul><ul><li>Service Apartments </li></ul><ul><li>Technology </li></ul><ul><li>Loyalty Travel </li></ul><ul><li>Rising disposable income levels </li></ul>
  6. 6. CHALLENGES <ul><li>Shortage of skilled employees </li></ul><ul><li>Retaining quality work force </li></ul><ul><li>Shortage of rooms </li></ul><ul><li>Intense competition and creating brand ‘India’. </li></ul><ul><li>Customer expectations </li></ul><ul><li>Manual back-end </li></ul><ul><li>Human resource development </li></ul><ul><li>Government policies; industry status; limited tax benefits. </li></ul><ul><li>Large part of the industry is in unorganized sector. </li></ul>
  7. 7. CLASSIFICATION OF HOTELS <ul><li>The hotels in India can be </li></ul><ul><li>broadly classified into the </li></ul><ul><li>following segments: </li></ul><ul><li>Star rated Hotels </li></ul><ul><li>Heritage Hotels </li></ul><ul><li>Budget Hotels </li></ul><ul><li>Unclassified Hotels </li></ul>
  8. 8. CLASSIFICATION OF HOTELS <ul><li>Star Rated Hotels: </li></ul><ul><li>They form 30% of the industry size </li></ul><ul><li>These are mainly situated in the business districts of metro cities </li></ul><ul><li>Cater to business travelers and foreign tourists. </li></ul><ul><li>The star categories are as follow: </li></ul><ul><li>- Five star deluxe - Five star - Four star - Three star - Two star - One star </li></ul>
  9. 9. CLASSIFICATION OF HOTELS <ul><li>Heritage Hotel: </li></ul><ul><li>These are characterized by lesser capital expenditure. </li></ul><ul><li>Include hotels running in palaces, castles, forts, hunting lodges etc. </li></ul><ul><li>The heritage hotels are further classified as: </li></ul><ul><li>- Heritage classic (built between 1920-35) </li></ul><ul><li>- Heritage Grand (Built prior to 1920) </li></ul><ul><li>- Heritage (Built between 1935 & 1950) </li></ul>
  10. 10. CLASSIFICATION OF HOTELS <ul><li>Budget Hotel: </li></ul><ul><li>They’re usually preferred by domestic travelers seeking economical accommodation. </li></ul><ul><li>These are reasonably priced, offer limited luxury, seasonal discounts and decent services. </li></ul><ul><li>Increased demand and healthy occupancy has fueled the growth of budget hotels in a short time. </li></ul><ul><li>Some new entrants in this segment include UK’s Dawnay Day and Whitbread Premier Travel Inn, Shangri-la, Country inns and suites, Courtyard by Marriott, Hometel by Sarovar, Kamfotel by Kamat and ‘United 21’ by Panoramic Universal Ltd. </li></ul>
  11. 11. CLASSIFICATION OF HOTELS <ul><li>Unclassified Hotel: </li></ul><ul><li>They’re motels spread across the country. </li></ul><ul><li>They form 19% of the industry size. </li></ul><ul><li>USP- Low prices & remote location availability. </li></ul>
  12. 12. Emerging Concepts
  13. 13. SPA <ul><li>What is a Spa? </li></ul><ul><li>Was a name of a city in Belgium. </li></ul><ul><li>The city had abundance of medicated hot water springs & mineral water springs. </li></ul><ul><li>Spa- ‘Salus per aquae’(Latin Phrase) </li></ul><ul><li>Spa – Health through Water. </li></ul><ul><li>Since ancient times, a spa helps in healing, rejuvenation and relaxation. </li></ul>
  14. 14. TYPES OF SPA <ul><li>Destination SPA: </li></ul><ul><li>A short term residential/ lodging facility. </li></ul><ul><li>The primary purpose of guiding individual spa-goers to develop healthy habits. </li></ul><ul><li>The program includes spa services, physical fitness activities, wellness education, healthy cuisine and special interest programming. </li></ul><ul><li>Guests reside and participate in the program at a destination spa instead of just visiting for a treatment or pure vacation. </li></ul>
  15. 15. TYPES OF SPA <ul><li>Resort Spa: </li></ul><ul><li>Are basically spas in resort settings. </li></ul><ul><li>Allows you to combine a variety of recreational activities with your spa experience </li></ul><ul><li>Spa vacation resorts feature spa treatments and services while offering such activities as golf, tennis, horseback riding, skiing, and water sports. </li></ul><ul><li>Evenings allow guests to enjoy resort pastimes such as dancing and live entertainment. </li></ul><ul><li>Many resort spas have children's programs that are completely separate from their parents. </li></ul>
  16. 16. TYPES OF SPA <ul><li>Urban Spa: </li></ul><ul><li>Also known as City Hotel </li></ul><ul><li>gives the road warrior that much relaxation to prepare them for another strenuous business day. </li></ul><ul><li>Expect to find services such as steam rooms, saunas, pools, exercise equipment. </li></ul><ul><li>Fitness classes may be offered. </li></ul><ul><li>Urban spas will be found in metropolitan hotels. </li></ul>
  17. 17. TYPES OF SPA <ul><li>Ayurveda Spa: </li></ul><ul><li>It has more well being oriented treatments with a lot of herbal products used in keeping with the ancient science of Ayurveda. </li></ul><ul><li>Treatment for ailments like Arthritis, Paralysis, Obesity, Sinusitis, Premature ageing and general Health are offered. </li></ul><ul><li>For Instance, Kairali Ayurvedic Health Resorts, The Coconut Groove and Somatheeram Ayurvedic Beach Resort. </li></ul>
  18. 18. TYPES OF SPA <ul><li>Medi Spa: </li></ul><ul><li>Medical spas will feature traditional and complementary medical services supervised or administered by medical professionals </li></ul><ul><li>These are more cosmetic makeover oriented through invasive methods like surgeries. </li></ul><ul><li>The spa's specialty may be diagnoses and testing, preventive care, cosmetic procedures, or some a combination </li></ul><ul><li>Modern technology is also used for various beauty and skin related enhancement. </li></ul>
  19. 19. TYPES OF SPA <ul><li>Other types: </li></ul><ul><li>Chocolate Spa </li></ul><ul><li>Wine Spa </li></ul><ul><li>Green Tea Spa </li></ul><ul><li>Coffee Spa </li></ul><ul><li>Super Luxury Spa </li></ul>
  20. 20. CHALLANGES <ul><li>India, an amateur market </li></ul><ul><li>Lack of skilled manpower </li></ul><ul><li>Lack of eminent institutes generating manpower </li></ul><ul><li>Spas considered only by elite category </li></ul><ul><li>Need to include as part of wellness tourism which has huge potential </li></ul>
  21. 21. Residential Hotels/ Service Apartments <ul><li>Individuals can rent apartments & opt for service offered by Hotel. </li></ul><ul><li>An opportunity to invest in property on Sale & lease back basis. </li></ul><ul><li>Basically for long stay guest. </li></ul><ul><li>DLF with Hilton group is coming with a 200 rooms with 80 villas residential hotel in Goa. </li></ul><ul><li>Leela Group is coimg out with a Service Apartment in Gurgaon with 90 apartments. </li></ul>
  22. 22. Destination Resort <ul><li>Does not need to be near a destination like a town, historic site, theme park etc. </li></ul><ul><li>Offers all the facilities so that guests need not go outside. </li></ul><ul><li>The facilities would be of higher quality than expected if one were to stay in a hotel. </li></ul><ul><li>Four Seasons developing a destination resort in Puthenkayal, Kerala with 75 villas & 20 luxury private residences. </li></ul>
  23. 23. ECOTELS <ul><li>These are environmentally-friendly properties with programs to save water and energy and reduce solid waste. </li></ul><ul><li>The architecture of hotels is aimed at saving energy. </li></ul><ul><li>Organizations like the &quot;Green Hotels Association” bring together hotels interested in environmental issues </li></ul><ul><li>All ECOTEL-certified hotels are inspected annually by environmental experts from Hospitality Valuation Services (HVS) International, a global ISO-certified body. </li></ul>
  24. 24. ECOTELS <ul><li>To get an ECOTEL certification, a hotel must adhere to at least two of the `five globes’ </li></ul><ul><ul><li>Energy efficiency </li></ul></ul><ul><ul><li>Water conservation </li></ul></ul><ul><ul><li>Employee education & Community involvement </li></ul></ul><ul><ul><li>Solid waste management </li></ul></ul><ul><ul><li>Environmental commitment. </li></ul></ul>
  25. 25. AIRPORT HOTEL <ul><li>A hotel near the airport. </li></ul><ul><li>Targeted customers are travelling businessmen. </li></ul><ul><li>Saves time, money & effort, as well as completes work of the people on time. </li></ul><ul><li>Location is the key criterion for a hotel near an airport. </li></ul><ul><li>Recently new airport hotels have come up in Bengluru & Hyderabad. </li></ul>
  26. 26. Condo Hotels <ul><li>Also known as a hotel-condo or a Condotel </li></ul><ul><li>Is a building used as both Condominium and a Hotel. </li></ul><ul><li>Operated like a luxury hotel. </li></ul><ul><li>These hotels have condominium units which allow someone to own a full-service vacation home. </li></ul><ul><li>The units can be rented out, if not used. </li></ul>
  27. 27. TIMESHARE <ul><li>Timeshare offers holidaymakers the ability to buy rights of occupancy in a property, typically in multiples of one week, for either a set period or in perpetuity. </li></ul><ul><li>Is a popular choice for persons who wish to secure a long-term commitment to a particulars location. </li></ul><ul><li>Usually, the timeshare agreement is made for improved property, such as a vacation home or a particular unit in a condominium complex. </li></ul>
  28. 28. TYPES OF TIMSHARE <ul><li>Deeded Contract: </li></ul><ul><li>The use of the resort is usually divided into week long increments. </li></ul><ul><li>Sold as fractional ownership and are real property . </li></ul><ul><li>As with any other piece of real estate the owner may use or rent his or her week, give it away, leave it to his or her heirs or sell the week to another prospective buyer. </li></ul><ul><li>This form of ownership can offer additional security to the owner as a form of physical ownership </li></ul>
  29. 29. TYPES OF TIMSHARE <ul><li>Right to use contracts: </li></ul><ul><li>Grants the right to use the resort for a specific number of years. </li></ul><ul><li>Care should be taken with this form of ownership as the right to use often takes the form of 'club membership' or right to use the reservation system. </li></ul><ul><li>Where the reservation system is owned by a Company the right of use may be lost with the demise of the controlling Company. </li></ul>
  30. 30. TYPES OF TIMSHARE <ul><li>Vacation Club: </li></ul><ul><li>Its an organization which own units in multiple resorts in different locations . </li></ul><ul><li>They are sold both as deeded or right to use </li></ul><ul><li>club members may reserve vacation time at any of the owned resort units based on availability </li></ul><ul><li>It caters to wide range of economic backgrounds and income levels </li></ul>
  31. 31. TYPES OF TIMSHARE <ul><li>Fixed Week Ownership: </li></ul><ul><li>The resort will have a calendar enumerating the weeks . </li></ul><ul><li>An owner may own a deed to use a unit for a single specified week . </li></ul><ul><li>For example, week 26 normally includes the Fourth of July Holiday, week 51 – Christmas. </li></ul><ul><li>If an owner owned Week 26 at a resort he or she could use that week every year. </li></ul>
  32. 32. TYPES OF TIMSHARE <ul><li>Floating: </li></ul><ul><li>The ownership will be specific on how many weeks the owner owns and from which weeks the owner may select for the owner's stay. </li></ul><ul><li>An Example, the owner may request any week during the summer season generally weeks 22 through 36. </li></ul><ul><li>Some floating contracts exclude major holidays so they may be sold as fixed weeks. </li></ul>
  33. 33. TYPES OF TIMSHARE <ul><li>Rotating: </li></ul><ul><li>The units are sold on rotating basis. </li></ul><ul><li>It attempts to give all owners a chance for the best weeks. </li></ul><ul><li>The weeks are rotated forward or backward through the calendar </li></ul><ul><li>one year the owner may have use of week 25, then week 26 the next year and then week 27 the year after that. </li></ul><ul><li>This method does give each owner a fair opportunity for prime weeks but it is not flexible. </li></ul>
  34. 34. TYPES OF TIMSHARE <ul><li>Points Programs: </li></ul><ul><li>Points programs annually give the owner an amount of points equal to the level of ownership . </li></ul><ul><li>These points can then be used to make travel arrangements within the resort group. </li></ul><ul><li>The number of points required to stay at the resort will vary based on a points chart. </li></ul><ul><li>The points chart will allow for factors such as : </li></ul><ul><li>The popularity of the resort; </li></ul><ul><li>The size of the accommodations; </li></ul><ul><li>The number of nights; </li></ul><ul><li>The popularity of the season; </li></ul><ul><li>and the specific nights requested. </li></ul>
  35. 35. Mixed Used Project <ul><li>It is a hotel which is a part of a larger project encompassing other revenue generating assets. </li></ul><ul><li>E.g. : A hotel with a recreation club Or a Commercial Complex. </li></ul><ul><li>The company recovers majority of the project cost in the initial year itself. </li></ul><ul><li>Panoramic Universal Ltd. is coming out with a mixed used project at Jaipur. </li></ul><ul><li>Mall Hotels is an example of Mixed Use Project </li></ul>
  36. 36. MODULAR HOTELS <ul><li>Its not just hotel but a movable property & not a temporary structure. </li></ul><ul><li>Approach to develop hotels in much faster way compared to traditional brick & cement process. </li></ul><ul><li>Involves assembling hotel room at factory level & transported to hotel site in containers. </li></ul><ul><li>A hotelier can save up to 40% of project cost. </li></ul><ul><li>Construction time of over just 6 weeks after the plinth work is done. </li></ul><ul><li>Excess rooms can be dismantled in case of over supply </li></ul><ul><li>Same can be transferred to other location to bridged demand supply gap. </li></ul>
  38. 38. AGRICULTURAL TOURISM <ul><li>Looking to unwindand get back to nature, but with a bit of comfort . </li></ul><ul><li>It ranges from a stud-farm stay to a dairy farm, bee farm, rabbit farm and even a full-agriculture farm holiday </li></ul><ul><li>These vacations offer the experience of living on a farm with a certain level of activity </li></ul>
  39. 39. Agricultural tourist destinations <ul><li>Destiny : </li></ul><ul><li>A Littlearth Group offering, Destiny which is located in Ooty </li></ul><ul><li>It is probably the largest, full-fledged farm stay in the country. </li></ul><ul><li>It is run on a professional level, with activities like agriculture, dairy and horse breeding fishing and trekking are popular </li></ul>
  40. 40. Agricultural tourist destinations <ul><li>Divarose : </li></ul><ul><li>Located in the in the Terai region of Uttranchal </li></ul><ul><li>Farm guests can milk the cows and wash the buffalos </li></ul><ul><li>People are encouraged to swim in the tube well </li></ul><ul><li>Learn to grind wheat, pick vegetables and cut sugarcane </li></ul>
  41. 41. Agricultural tourist destinations <ul><li>Emerald Isle, The Heritage Villa : </li></ul><ul><li>Located in the backwaters of Alleppey, Kerala </li></ul><ul><li>Emerald Isle is an 150 years old ancestral home on an island </li></ul><ul><li>Its activities include fishing and cycling </li></ul>
  43. 43. ICE HOTEL, SWEDEN <ul><li>Ice Hotel of Sweden is the original and the world's first ice hotel made of 6,000 square feet of ice and snow. </li></ul><ul><li>This hotel only exists from December to April every year since 1990 </li></ul><ul><li>At an average temperature of about 17 degrees Fahrenheit, the hotel beds are also specially made of ice and snow </li></ul><ul><li>It has 80 rooms including suites, a church and a bar called the Absolute Icebar. </li></ul>
  44. 44. Gamirasu Cave Hotel, Turkey <ul><li>The cave was originally inhabited by the Christian monks in the Byzantine era for more than 5,000 years. </li></ul><ul><li>The volcanic rock insulates the cave, keeping the temperature naturally comfortable. </li></ul><ul><li>Opened in 1999, the restored cave hotel has a total of 18 rooms. </li></ul>
  45. 45. Jules Undersea Lodge, Key Largo, Florida <ul><li>It claims to be the world's first underwater hotel, 21 feet below the sea </li></ul><ul><li>It was originally built in the 1970s as a research lab off the coast of Puerto Rico </li></ul><ul><li>It was only opened to public in 1986. </li></ul><ul><li>The only access to the hotel is by diving for 21 feet underwater. </li></ul><ul><li>. Each room is equipped with a kitchenette, shower and window (for underwater viewing), </li></ul>
  46. 46. Old Jail Mount, Mount Gambier, Australia <ul><li>This old jail house was transformed into a lodging aimed at budget travelers and backpackers. </li></ul><ul><li>Guests will get the experience of being locked up during the night, pay legal fees, court appearance, eat in mess hall, sleep next to toilet. </li></ul>
  47. 47. Woodpecker Hotel, Vasteras, Sweden <ul><li>This is a tree house built on a 130 year old oak tree located in the Vaserparken park. </li></ul><ul><li>At 13 meters above ground, the only access to the tree house is by a rope ladder. </li></ul><ul><li>Even though small, the tree house is furnished with all the basic amenities. </li></ul><ul><li>As this is the only tree house in that area, early booking is necessary. </li></ul>
  48. 48. Al Maha Desert Resort, United Arab Emirates <ul><li>This luxurious hotel has received world recognition for its architecture. </li></ul><ul><li>It comprises 40 Bedouin-tent shaped villas and two suites. </li></ul><ul><li>The resort has a full spa complex with a large pool and gym. </li></ul><ul><li>Each room is equipped with air-conditioning, a giant bed and a luxurious bathroom. </li></ul>
  49. 49. Capsule Inn, Tokyo, Japan <ul><li>This is more like a capsule than a standard hotel room. </li></ul><ul><li>These capsules are made of reinforced plastics. </li></ul><ul><li>Each capsule has all the basic amenities such as TV, radio, alarm clock and lightings. </li></ul><ul><li>The Inn also provides lounge and also shared bathrooms </li></ul>
  50. 50. Aman Resort <ul><li>First resort at Phuket named ‘Amanpuri’. </li></ul><ul><li>Amanresorts is believed to have one of the highest average daily rates in the lodging industry (2008 - US$705) </li></ul><ul><li>Min room rate starts with US$ 565 and max is US$ 4,800. </li></ul><ul><li>Each resort is characterised by a small number of rooms (typically less than 55) </li></ul><ul><li>Also characteristic are a high staff count (typically 4 to 1) </li></ul><ul><li>Currently they are having 17 properties all over world out of which 3 are in India. </li></ul>
  51. 51. Palazzo Versace <ul><li>Opened in September 2000. </li></ul><ul><li>It is the world's only Versace Hotel, combining Renaissance beauty in a most captivating location. </li></ul><ul><li>Palazzo Versace is the evolution of the Versace lifestyle, a place of Renaissance splendour and elegance. </li></ul><ul><li>The concept extends the luxury couture brand to the life style, interior and activities of the resort. </li></ul><ul><li>Vaulted ceilings are hand-detailed in gold, an antique chandelier lights the grand foyer. </li></ul><ul><li>The rooms are accentuated by warm timber tones and rich fabric colours which are combined with a refined and discerning eye. </li></ul>
  52. 52. Palazzo Versace <ul><li>Features: </li></ul><ul><ul><li>205 hotel rooms </li></ul></ul><ul><ul><li>72 condominiums </li></ul></ul><ul><ul><li>Series of swimming pools </li></ul></ul><ul><ul><li>3 restaurants </li></ul></ul><ul><ul><li>A pool bar </li></ul></ul><ul><ul><li>Spa </li></ul></ul><ul><ul><li>Exclusive marina </li></ul></ul><ul><li>The room rate varies from min US$ 292 till max of US$ 725. </li></ul><ul><li>The luxury hotel has received over 40 awards for its service, restaurants, and spa facilities, including the prestigious Australian Tourism Awards. </li></ul>