The Indian Hospitality Report

The Indian Hospitality Industry Tourism Hospitality in India is based on the Sanskrit adage ‘Atithi Devo Bhava’ or ‘guest is god’. The concept was adapted by the Ministry of Tourism, Government of India which aims at creating awareness about rich variety of tourism in India. India is currently ranked 12th in the Asia Pacific region and 68th overall in the list of the world’s attractive destinations, according to the Travel and Tourism Competitiveness Report 2011 by the World Economic Forum (WEF).

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India is well known for its natural resources (ranked 8th) and cultural resources (24th) with many World Heritage sites, both natural and cultural; rich fauna, many fairs and exhibitions and strong creative industries. India also has quite good air transport (ranked 39th), particularly given the country’s stage of development, and reasonable ground transport infrastructure (ranked 43rd), reports The Travel and Tourism Competitiveness Report 2011 by World Economic Forum 2011. Investment in travel and tourism in India is expected to reach US$ 34. 7 billion in 2010 and US$ 109. 3 billion by 2020. Contribution to the economy

The hotel and tourism industry’s contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2. 35 billion from April 2000 to February 2011, according to the Department of Industrial Policy and Promotion (DIPP). India’s hotel pipeline is the second largest in the Asia-Pacific region according to Jan Smits, Regional Managing Director, InterContinental Hotels Group (IHG) Asia Australasia. He projected the Indian hospitality industry to grow at a rate of 8. 8 per cent during 2007-16, making the country as the second-fastest growing tourism market in the world.

The domestic hospitality sector is expected to see investments of over US$ 11 billion by 2012, with 40 international brands making their presence in the country in the next few years. According to the Tourism Satellite Accounting (TSA) research, released by World Travel and Tourism Council (WTTC) and its research partner Oxford Economics in March 2011: * The direct contribution of travel and tourism to GDP is expected to grow by 8. 1per cent per annum (pa) to US$ 76. 65 billion (2 per cent of GDP) for 2011-2021 period, while the total contribution is expected to be US$ 82. 1 billion in 2011 (4. 5 per cent of GDP). It is forecasted to rise by 8. 8 per cent pa for 2011-21, accounting for 4. 9 per cent of GDP. * Travel and tourism is expected to generate 24. 93 million jobs directly in 2011 (5 per cent of total employment). This includes employment by hotels, travel agents, airlines and other passenger transportation services. By 2021 industry will account for 30. 44 million jobs directly, an increase of 5. 51 million (22. 1 per cent) over the next ten years. * The industry is expected to attract capital investment of US$ 27. 67 billion rising by 8. per cent pa to US$ 63. 47 billion. * Visitor exports are expected to total US$ 15. 23 billion in 2011, rising to US$ 30. 18 billion in 2021. Foreign Tourist Arrivals The important highlights regarding foreign tourist arrivals (FTAs) and foreign exchange earnings (FEE) from tourism in India during the month of March 2011 are as follows: * FTAs during the month of March 2011 was 5,07,000 as compared to FTAs of 4,72,000 during the month of March 2010. A growth rate of 7. 4 per cent in March 2011 was recorded. * FTAs during the period January-March 2011 were 1. 3 million with a growth of 11. 1 per cent, as compared to the FTAs of 1. 56 million with a growth of 10. 6 per cent during January-March 2010. * FEE in during the month of March 2011 were recorded at US$ 1227 million as compared to FEE of US$ 1,209 million during the month of March 2010. The growth rate has registered 1. 5 per cent in FEE in March 2011 over March 2010. * FEE from tourism during January-March 2011 were US$ 4,184 million with a growth of 8. 4 per cent as compared to US$ 3,858 million over the corresponding period in 2010. Government Initiatives/ Policy

The Government has allowed 100 per cent foreign investment under the automatic route in the hotel and tourism related industry, according to the Consolidated FDI Policy, released by DIPP, Ministry of Commerce and Industry, Government of India. The terms hotel includes restaurants, beach resorts and other tourism complexes providing accommodation and /or catering and food facilities to tourists. The term tourism related industry includes: * Travel agencies, tour operating agencies and tourist transport operating agencies * Units providing facilities for cultural, adventure and ildlife experience to tourists * Surface, air and water transport facilities for tourists * Convention/seminar units and organisations The Government of India has announced a scheme of granting Tourist Visa on Arrival (T-VoA) for the citizens of Finland, Japan, Luxembourg, New Zealand and Singapore. The scheme is valid for citizens of the above mentioned countries planning to visit India on single entry strictly for the purpose of tourism and for a short period of upto a maximum of 30 days. During 2010, a total number of 6,549 Visa on Arrivals (VoA) were issued under VoA Scheme.

The tourism master plan, the first for Karnataka, envisages initiatives to attract private investment ranging from US$ 2. 2 billion to US$ 4. 4 billion in the next three to five years. The plan is prepared based on the Vision 2020 document prepared and adopted by the Karnataka State Planning Board. The master plan is aimed at making Karnataka the number one destination for tourism in the country by 2020, according to Mr G Janardhan Reddy, Minister for Tourism and Infrastructure Development. The Union Ministry of Tourism has included Medical Tourism under the Marketing Development Assistance (MDA) Scheme.

The Ministry of Tourism has sanctioned US$ 27,742 as MDA to 10 Medical Tourism Service Providers during current year, as per the press release by Press Information Bureau (PIB) dated November 15, 2010. The Ministry of Tourism has sanctioned 781 projects in 34 States/ Union Territories (UTs) in the country amounting to US$ 511. 82 million during the last three years up to June 2010, as per a press release dated October 18, 2010. Medical Tourism In India, medical tourism is a sunrise sector valued at more than US$ 310 million. Currently, India receives more than 100,000 foreign patients a year.

The Confederation of Indian Industry (CII) expects the sector to grow to US$ 2 billion by 2012. Medical tourism in India has emerged as the fastest growing segment of tourism industry. India’s share in the global medical tourism industry is expected to reach around 3 per cent by the end of 2013, as per a new market research report Booming Medical Tourism in India by RNCOS. The report also highlighted that medical tourism is expected to generate revenue worth US$ 3 billion by 2013, growing at a CAGR of around 26 per cent during 2011–2013.

The number of medical tourists is anticipated to grow at a CAGR of over 19 per cent during the forecast period to reach 1. 3 million by 2013. There are over 3,371 hospitals and around 754,985 registered practitioners catering to the needs of traditional Indian healthcare. Indian hotels are also entering the wellness services market by collaborating with professional organisations in a range of wellness fields and offering spas and ayurvedic massages. Wellness tourism a sub-set of medical tourism comprises of Ayurveda treatment, spa therapy, yoga and meditation.

A niche segment, it draws high-end inbound tourists. Kerala is the most popular wellness destination in India, but other states are also emerging in this segment. There is a huge demand for wellness treatments, especially Ayurvedic and herbal Ayurveda The BCG Group plans to build a multidisciplinary health facility, BCG Healthsquare in Palarivattam in Kochi, Kerala, by August 2011. The company’s long-term plan is to set a 750,000 square feet health village with an estimated cost of US$ 88. 91 million. Hospitality The Indian hospitality industry is projected to grow at a rate of 8. per cent during 2007-16, placing India as the second-fastest growing tourism market in the world. The Indian hotel room market for 10 metros is estimated to expand at a CAGR of 17 per cent to US$ 2. 66 billion during 2010-13, according to a study by Knight Frank India. In terms of the number of rooms sought per day, the hospitality sector is estimated to grow at a CAGR of 10. 3 per cent. * Lebua Hotels & Resorts, a Thailand-headquartered luxury hospitality chain, with properties in Bangkok and New Zealand, plans to enter India.

The chain further plans to take the management contract route – at managing hotels in India and giving them its brand name. * Hotel chain operator, Royal Orchid Hotels Ltd has invested about US$ 67. 95 million to open six new properties across India by December to add to its chain of 16. The new properties would result in an addition of about 900 rooms and the total room tally would go up to about 2,200 by December 2011, as mentioned by Keshav Baljee, President, at the Hotel Investment Conference, South Asia. InterContinental Hotels Group, the world’s top hotelier, has signed a joint venture (JV) partnership with Duet India Hotels Group to develop its Holiday Inn Express brand in the Indian market. InterContinental will make a multi-year investment of US$ 30 million in the JV to develop 19 new Holiday Inn Express hotels across India. InterContinental currently has 12 hotels in India. * Marriott plans to open 30 hotels in India by 2013. * Royal Orchid Hotels Ltd has announced its entry into Hospet, near the 500 year old world heritage site of Hampi.

The Royal Orchid Central Kireeti is the first branded hotel servicing the UNESCO world heritage site of Hampi. * East India Hotels (EIH), which runs the Oberoi hotels, is actively looking to expand in Europe and intends to open three out of its next five hotels outside India even as it continues to see opportunities in the domestic market. FINANCIAL ANALYSIS: INTER FIRM COMPARISON: Sl. NO. | Particulars| Indian Hotels| EIH| Mahindra Holidays| Hotel Leela| ITDC| 1| Net Sales Growth Rate| -9. 03| -12. 89| 19. 26| -4. 89| -13. 44| 2| Operating Profit Margin (%)| 25. 81| 16. 11| 32. 69| 31. 25| -13. 4| 3| Net Profit Margin (%)| 9. 94| 6. 3| 22. 83| 8. 87| -4. 78| 4| Current Ratio| 1. 73| 1. 33| 3. 11| 0. 72| 1. 68| 5| Quick Ratio| 1. 57| 1. 25| 3. 37| 0. 86| 1. 52| 6| TOL/TNW| 1. 40| 1. 24| 2. 86| 1. 40| 0. 98| 7| Debt Equity Ratio| 0. 98| 0. 89| 1. 86| 3. 48| 1. 04| 8| Interest Cover| 1. 95| 1. 88| 156. 54| 4. 02| -37,854. 56| 9| Debtors Turnover Ratio| 85. 91| 25. 75| 157. 95| 62. 76| 31. 37| 10| Inventory Turnover Ratio| 13. 19| 8. 09| 0. 84| 12. 39| 3. 49| Turnover: The turnover of the hospitality industry has been showing a downward trend because of the global economic conditions.

The downturn has been suffered for the past two years. Indian hotels has had a tough year with decrease average room rate and occupancy. Same was the case with Oberoi Hotels, Leela Hotels and ITDC. Recession has not only affected their Indian businesses but also their foreign subsidiaries have faced a slow turnover. The only company to increase its turnover is Club Mahindra Holidays because it majorly caters to domestic travellers and recession has not affected the Indian economy the same way as in UK and USA. They have added more than 24000 members in FY10.

Profitability: The profitability of the industry is high but due to the global downturn the profitability ratios of these companies have come down. Indian hotels profits are 40% lower than previous year due to increase in depreciation, interest and low turnover. EIH and Hotel Leela’s profits have lowered down by 66% and 20% respectively because of the same reasons. ITDC has suffered a loss due to increase in wage cost on top of the above mentioned reasons. Club Mahindra holidays have increased their net profit by 36. % compared to last fiscal year with an increase seen in the number of members during the second half of the fiscal year with the Indian economy stabilizing. Liquidity: Leverage: ABOUT THE COMPANY: The Indian Hotels Company Limited (IHCL) and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces and is recognised as one of Asia’s largest and finest hotel company. Incorporated by the founder of the Tata Group, Mr. Jamsetji N. Tata, the company opened its first property, The Taj Mahal Palace Hotel, Bombay in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003.

Taj Hotels Resorts and Palaces comprises 66 hotels in 42 locations across India with an additional 16 international hotels in the Maldives, Malaysia, Australia, UK, USA, Bhutan, Sri Lanka, Africa and the Middle East. Spanning the length and breadth of the country, gracing important industrial towns and cities, beaches, hill stations, historical and pilgrim centres and wildlife destinations, each Taj hotel offers the luxury of service, the apogee of Indian hospitality, vantage locations, modern amenities and business facilities. IHCL operate in the luxury, premium, mid-market and value segments of the market through the following:

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 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 centered around high end accommodation, intimacy and an environment that allows its guest unrivalled comfort and privacy. They are defined by a 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.

Vivanta by Taj Hotels & Resorts span options for the work-hard-play-hard traveller across metropolitan cities, other commercially important centres as well as some of the best-loved vacation spots. Stylish & sophisticated, Vivanta by Taj delivers premium hotel experiences with imagination, energy & efficiency. It’s the flavour of contemporary luxury, laced with cool informality and the charming Taj hospitality. Created for the cosmopolitan global traveller and bon vivant, Vivanta by Taj Hotels & Resorts create experiences that will amuse, invigorate & inspire you. Vivanta revels in a spirit that presents the normal with an nexpected twist. Experiences which make you pause & appreciate the hidden beauty in life! It challenges your expectations of a hotel and unfolds multiple layers of delight. Innovative cuisine concepts, the smart use of technology & the challenge to constantly engage, energize and relax you all add up to make Vivanta by Taj the new signature in hospitality. The Gateway Hotel (upscale/mid-market full service hotels and resorts) is a pan-India 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 IHCL’s 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.

Taj Hotels Resorts and Palaces is committed to replicate its domestic success onto international shores with plans to build an international network of luxury hotels, which will provide an exemplary product-service combination and in the process create a global brand. The current international portfolio includes luxury resorts in the Indian Ocean, business and resort destinations in the Middle East and Africa, serviced apartments in the UK, the first hotel in Australia and three a top-end luxury hotels in the US.

Throughout the Company’s expansion, its mandate has been twofold: to infuse a sense of Indian heritage and culture within each diverse property, while also anticipating the needs and desires of the sophisticated traveller. Over the years, the Taj has won international acclaim for its quality hotels and its excellence in business facilities, services, cuisine and interiors. The Taj strengthened its presence in the Indian Ocean rim with the Exotica Brand. The Taj Exotica was evolved as part of Taj Hotels Resorts and Palaces intent to position it as a brand that is clearly differentiated by its product philosophy and service design.

The Taj Exotica Resort and Spa, in Maldives is centered on high-end accommodation, intimacy and an environment that allows its guest’s unrivalled comfort and privacy. Taj Hotels further expanded its global footprint by 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 most significant additions to the portfolio have been The Pierre, the iconic landmark hotel on New York’s Fifth Avenue, Taj Boston and Blue, Sydney.

The presence of Taj Hotels Resorts and Palaces internationally has been developed through a network of Taj regional sales and PR offices in the United Kingdom, France, Germany, Italy, Dubai, Singapore, Australia, Japan, Russia and the United States of America. At the Taj Hotels Resorts and Palaces luxurious living and fine dining find common ground. Whether it is introducing exotic world cuisines to India or taking authentic Indian fare to the world, the Taj Hotels Resorts and Palaces is renowned for the eclectic culinary experiences it brings to its guests.

Through a vast repertoire of award-winning restaurants, legendary recipes from royal kitchens and celebrated food festivals, the Taj has pioneered innovation in fine dining across the world. Taj Hotels also promise a whole new experience of tranquillity and total ‘wellness’, through Jiva Spas a unique concept, which brings together the wisdom and heritage of the Asian and Indian Philosophy of Wellness and Well-being. Rooted in ancient Indian healing knowledge, Jiva Spas derive inspiration and spirit from the holistic concept of living.

There is a rich basket of fresh and unique experiences under the Jiva Spa umbrella of offering, Yoga and Meditation, mastered and disseminated by accomplished practitioners, authentic Ayurveda, and unique Taj signature treatments. Royal traditions of wellness in service experiences, holistic treatments involving body therapies, enlivening and meaningful rituals and ceremonies and unique natural products blended by hand, come together to offer a truly calming experience.

IHCL operates Taj Air, a luxury private jet operation with state-of-the-art Falcon 2000 aircrafts designed by Dassault Aviation, France; and Taj Yachts, two 3-bedroom luxury yachts which can be used by guests in Mumbai and Kochi, in Kerala. IHCL also operates Taj Sats Air Catering Ltd. , the largest airline catering service in South Asia, as a joint venture with Singapore Airport Terminal Services, a subsidiary of Singapore Airlines. Additionally, it operates the Indian Institute of Hotel Management, Aurangabad since 1993.

The institute offers a three-year diploma, designed with the help of international faculty and has affiliations with several American and European programmes. BOARD OF DIRECTORS: Executive Name| Designation| R K Krishna Kumar| Vice Chairman| Anil P Goel| Executive Director| K B Dadiseth| Director| Jagdish Capoor| Director| Nadir Godrej| Director| BOARD OF DIRECTORS: Non-Executive Name| Designation| Ratan N Tata| Chairman / Chair Person| Raymond N Bickson| Managing Director| Abhijit Mukerji| Executive Director| Deepak Parekh| Director| Shapoor Mistry| Director| Arnavaz Aga| Director| FINANCIAL ANALYSIS:

Particulars| 2006| 2007| 2008| 2009| 2010| Net Sales Growth Rate| 23. 43| 42. 46| 14. 24| -8. 21| -9. 03| Operating Profit Margin(%)| 29. 53| 36. 82| 40. 12| 30. 18| 25. 81| Net Profit Margin(%)| 16. 07| 19. 98| 20. 62| 13. 49| 9. 94| Current Ratio| 2. 37| 1. 29| 1. 33| 2. 28| 1. 73| Quick Ratio| 2. 39| 1. 43| 1. 81| 2. 4| 1. 57| TOL/TNW| 0. 32| 0. 52| 0. 56| 0. 58| 0. 98| Debt Equity Ratio| 0. 32| 0. 53| 0. 56| 0. 58| 0. 98| Interest Cover| 7. 16| 5. 56| 6. 79| 4. 16| 1. 95| Inventory Turnover Ratio| 44. 22| 55. 57| 99. 75| 77. 31| 85. 91| Debtors Turnover Ratio| 14. 4| 14. 94| 13. 29| 13. 49| 13. 9| ABOUT THE COMPANY: The Oberoi Group, founded in 1934, operates 28 hotels and three cruisers in five countries under the luxury ‘Oberoi’ and five-star ‘Trident’ brands. The Group is also engaged in flight catering, airport restaurants, travel and tour services, car rentals, project management and corporate air charters. Oberoi Hotels & Resorts is synonymous the world over with providing the right blend of service, luxury and quiet efficiency. Internationally acclaimed for all-round excellence and unparalleled levels of service, Oberoi hotels and resorts have received innumerable awards and accolades.

A distinctive feature of The Group’s hotels is their highly motivated and well trained staff who provide exceptionally attentive, personalised and warm service. The Group’s new luxury hotels have established a reputation for redefining the paradigm of luxury and excellence in service amongst leisure hotels around the world. Trident hotels are five-star hotels that have established a reputation for excellence and are acknowledged for offering quality and value. These hotels combine state of the art facilities with dependable service in a caring environment, presenting the ideal choice for business and leisure travellers.

At present there are nine Trident hotels in India. These are located in Mumbai at Bandra Kurla and Nariman Point, Gurgaon (Delhi National Capital Region), Chennai, Bhubaneshwar, Cochin, Agra, Jaipur and Udaipur. The Oberoi Group also operates a Trident hotel in the Saudi Arabian city of Jeddah. The last decade has witnessed the debut of new luxury Oberoi leisure hotels in India and abroad. In India, these hotels include The Oberoi Rajvilas, Jaipur; The Oberoi Amarvilas, Agra; Wildflower Hall, Shimla in the Himalayas; The Oberoi Vanyavilas, Ranthambhore; The

Oberoi Cecil, Shimla and The Oberoi Udaivilas, Udaipur. Overseas, the new hotels include The Oberoi, Lombok in Indonesia, The Oberoi, Mauritius and The Oberoi, Sahl Hasheesh in Egypt. The Oberoi Zahra, Luxury Nile Cruiser, Egypt was launched in 2007. The Group’s commitment to excellence, attention to detail and personalised service has ensured a loyal list of guests and accolades in the worldwide hospitality industry. Recognising the importance of quality training in hospitality management, The Oberoi Group established The Oberoi Centre of Learning and Development in New Delhi in 1966.

Today, this institution is considered amongst the best in Asia with approximately 100 students graduating each year. The Oberoi Group is committed to employing the best environmental and ecological practices in technology, equipment and operational processes. The Group also supports philanthropic activities that range from education to assistance for the mentally and physically challenged. The Group is also a keen contributor to the conservation of nature and of cultural heritage. BOARD OF DIRECTORS: Name| Designation| P R S Oberoi| Chairman & CEO| Vikram Oberoi| Joint Managing Director & COO|

S K Dasgupta| Director| Rajan Raheja| Director| S S Mukherji| Vice Chairman| Arjun Oberoi| Joint Managing Director & CPO| Anil Nehru| Director| L Ganesh| Director| FINANCIAL ANALYSIS: Particulars| 2006| 2007| 2008| 2009| 2010| Net Sales Growth Rate| 21. 34| 24. 14| 15. 01| -17. 71| -12. 89| Operating Profit Margin(%)| 33. 66| 36. 72| 38. 14| 25. 92| 16. 11| Net Profit Margin(%)| 23. 5| 20. 14| 18. 89| 17. 46| 6. 3| Current Ratio| 1. 17| 1. 04| 0. 69| 1. 24| 1. 33| Quick Ratio| 1. 05| 1. 01| 0. 88| 1. 14| 1. 25| TOL/TNW| 0. 68| 0. 67| 0. 62| 0. 72| 0. 89| Debt Equity Ratio| 0. 89| 0. 85| 0. 76| 0. 6| 0. 89| Interest Cover| 3| 3. 59| 5. 79| 3. 19| 1. 88| Inventory Turnover Ratio| 18. 55| 32. 8| –| –| 25. 75| Debtors Turnover Ratio| 10. 44| 10. 06| 10. 02| 8. 6| 8. 09| STRENGTHS •Strategy: established differentiation strategy. •Structure: flat, decentralized structure. •Skills: diverse range of service skills within management and staff. •Style: strong, participative culture. •Staff: specialized and experienced staff who are motivated and highly skilled. A well trained team who are proud of their hotel and respect and promote the brand values. •Shared Values: clear and well communicated. Brand Strength: brand values well represented engendering brand loyalty amongst existing and new guests. •Reputation: a strong reputation within the local market and corporate and travel trade markets for reliability, exemplary service and quality. WEAKNESSES • Strategy: differentiation strategy needs to be more clearly communicated externally, within local and national markets •Systems: formal systems result from the detail oriented work and environment. Interdepartmental communications could be improved. •Staff: seasonal turnover requires ongoing training and orientation of new staff. Facilities: certain rooms require renovation and upgrade as regards technical equipment, such as high speed Internet access and laptop links ABOUT THE COMPANY: Mahindra Holidays & Resorts India Ltd. , (MHRIL) is a part of the Infrastructure & Realty Sector of the Mahindra Group and brings to the industry values such as Reliability, Trust and Customer Satisfaction. Started in 1996, the company’s flagship brand ‘Club Mahindra Holidays’, today has a fast growing customer base of over 100,000 members and 27 beautiful resorts at some of the most exotic locations in India and abroad.

Over the last decade, MHRIL has established itself as a market leader in the family holidays business. The company has followed a two pronged strategy – rapidly increasing its bouquet of resorts to provide more variety in holidaying options and enhancing its service levels to its members to provide delight at every point of interaction. All MHRIL resorts are totally geared to cater to a variety of holiday needs and experiences in all areas of operation, from housekeeping to food & beverage to holiday activities. Creating and managing the holiday experience is a core strength.

BOARD OF DIRECTORS: Name| Designation| A K Nanda| Chairman & Non-Exe. Director| Uday Y Phadke| Director| Vineet Nayyar| Director| Rama Bijapurkar| Director| Rajiv Sawhney| Addnl. Director & Mng. Director| Ramesh Ramanathan| Managing Director| Cyrus J Guzder| Director| Rohit Khattar| Director| Sridar A Iyengar| Director| FINANCIAL ANALYSIS: Particulars| 2006| 2007| 2008| 2009| 2010| Net Sales Growth Rate| 28. 54| 52. 11| 51. 84| 11. 43| 19. 26| Operating Profit Margin(%)| 26. 78| 30. 95| 34. 1| 26. 63| 32. 69| Net Profit Margin(%)| 13. 29| 17. 35| 21. 6| 18. 87| 22. 83| Current Ratio| 2. 25| 3. 29| 3. 33| 3. 05| 3. 11| Quick Ratio| 3. 19| 3. 76| 4. 6| 4. 04| 3. 37| TOL/TNW| 5. 40| 4. 20| 3. 52| 3. 34| 1. 86| Debt Equity Ratio| 5. 4| 4. 2| 3. 53| 3. 34| 1. 86| Interest Cover| 19. 29| 52. 41| 147. 35| 31. 92| 156. 54| Inventory Turnover Ratio| 175. 08| 130. 17| 102. 1| 75. 03| 157. 95| Debtors Turnover Ratio| 1. 36| 1. 27| 1. 13| 0. 89| 0. 84| STRENGTHS: * Brand: The brand Mahindra has done wonders for the company as people have trusted to invest and become members because of the trusted parentage brand. Financial Status: The financials of the company is improving YoY because of the different business model they have come up with to cater to the domestic travellers. WEAKNESSES Club Mahindra holidays has a very dissatisfied group of customers due to the following reasons: * Remote Locations: The resorts are located in remote locations which are far away from the happening areas or the main tourist spots. The transport facility provided is very expensive. * Pricing: The pricing of services hasn’t been done in the best feasible way instead they are more towards the higher side and the members are dissatisfied. Peak Season Rush: There is a lot of rush in the peak season and the team is incapable of handling this high demand. * Unmet Promises: While giving membership high promises are made by the sales person but those are never met in reality which leaves its members discontented and unhappy. ABOUT THE COMPANY: The Leela Palaces, Hotels and Resorts is an expanding chain of some of the finest five star luxury resorts and business hotels in India. It is also one of the best-run corporates in India. Hotel Leelaventure Ltd. operates The Leela Palaces, Hotels & Resorts in New Delhi, Mumbai, Bangalore, Gurgaon – Delhi N.

C. R. , Udaipur, Goa and Kovalam. Located in key business and leisure destinations, and charting a pan India presence in the near future, The Leela Palaces, Hotels & Resorts are a blend of aesthetic sensibility, modern amenities and truly reflect the essence of India. New hotels will soon open in Chennai in 2011, and subsequently in Agra and Lake Ashtamudi in Kerala. The group has marketing alliances with Germany based Kempinski (Hoteliers since 1897); US based Preferred Hotel Group and are members of Global Hotel Alliance based in Geneva, Switzerland. BOARD OF

DIRECTORS: Name| Designation| C P Krishnan Nair| Non Executive Chairman| Dinesh Nair| Joint Managing Director| Madhu Nair| Director| M Narasimham| Director| Vijay Amritraj| Director| K U Mada| Director| C K Kutty| Director| Krishna Deshika| Director & CFO| Vivek Nair| Vice Chairman & Mng. Director| Venu Krishnan| Deputy Managing Director| Anna Malhotra| Director| P C D Nambiar| Director| Anil Harish| Director| R Venkatachalam| Director| A K Dasgupta| Director| Indur Kirpalani| Non. Exe. Independent Director| FINANCIAL ANALYSIS: Particulars| 2006| 2007| 2008| 2009| 2010|

Net Sales Growth Rate| 21. 43| 16. 49| 35. 11| -12. 12| -4. 89| Operating Profit Margin(%)| 49. 82| 49. 92| 46. 13| 35. 73| 31. 25| Net Profit Margin(%)| 21. 14| 31. 43| 25. 65| 25. 28| 8. 87| Current Ratio| 2. 4| 1. 1| 1. 7| 0. 8| 0. 72| Quick Ratio| 2. 79| 1. 02| 1. 82| 0. 82| 0. 86| TOL/TNW| 1. 28| 1. 06| 2. 19| 1. 26| 1. 40| Debt Equity Ratio| 1. 93| 1. 39| 2. 84| 3. 49| 3. 48| Interest Cover| 4. 53| 5. 89| 7. 38| 8. 53| 4. 02| Inventory Turnover Ratio| 13. 03| 74. 47| 76. 78| 59. 78| 62. 76| Debtors Turnover Ratio| 14. 76| 12. 36| 13. 59| 12. | 12. 39| STRENGTHS: * Location : All the hotels of Leela group are located in strategic place, in terms of scenic beauties, transport ,historical importance. * Architecture: Most of the hotels architecture of Leela represents the traditional Indian culture. Leela Bengaluru and Udaipur was transformed palaces into hotel, Bengaluru & Goa’s main building architecture and ambience showcases the inspiration of vijaynagar dynasty. * Standards: It offers it guests the leisure of international standards. Every details of guests luxury is being looked after. Status: It only operates luxury hotels in India, no other categories of hotels are not in its product line, thus brand Leela offers a status to their guests. * Alliances: Hotels have marketing alliances with Germany based Hotels, the oldest luxury hotel group, US-based Preferred Hotel Group and are members of Global Hotel Alliance based in Geneva, Switzerland. WEAKNESSES: * Only operates as luxury chain: Leela group of hotels only operates in luxury hotel market, so the revenue remain untouched which could have earned from other categories of hotels. Operates only in a particular part of India: Leela Hotels are basically located in southern or western part of India. North western, eastern, north eastern part of India is still to explore. * Absence in international market: Leela group of hotels only operates in India; it will take long time to consider it as a international brand. * Higher attrition rate of employees: Employees of Leela group of Hotels are not satisfied with their jobs, resulting the attrition rate very high, thus it is leaving a drawback towards the commitment of making Leela as a world class hotel .

ABOUT THE COMPANY: ITDC came into existence in October 1966 and has been the prime mover in the progressive development, promotion and expansion of tourism in the country. Broadly, the main objectives of the Corporation are: * To construct, take over and manage existing hotels and market hotels, Beach Resorts, Travellers’ Lodges/Restaurants; * To provide transport, entertainment, shopping and conventional services; * To produce, distribute, tourist publicity material; To render consultancy-cum-managerial services in India and abroad; * To carry on the business as Full-Fledged Money Changers (FFMC), restricted money changers etc; and * To provide innovating, dependable and value for money solutions to the needs of tourism development and engineering industry including providing consultancy and project implementation. The Corporation is running hotels, restaurants at various places for tourists, besides providing transport facilities.

In addition, the Corporation is engaged in production, distribution and sale of tourist publicity literature and providing entertainment and duty free shopping facilities to the tourists. The Corporation has diversified into new avenues/innovative services like Full-Fledged Money Changer (FFMC) services, engineering related consultancy services etc. The Ashok Institute of Hospitality & Tourism Management of the Corporation imparts training and education in the field of tourism and hospitality.

Presently, ITDC has a network of eight Ashok Group of Hotels, six Joint Venture Hotels, 2 Restaurants (including one Airport Restaurant), 12 Transport Units, one Tourist Service Station, 37 Duty Free Shops at International as well as Domestic Customs Airports, one Tax Free outlet and two Sound & Light Shows. Besides, ITDC is also managing a hotel at Bharatpur and a restaurant at Kosi on behalf of the Department of Tourism. In addition, it is also managing catering services at Western Court, Vigyan Bhawan, Hyderabad House and National Media Press Centre at Shastri Bhawan, New Delhi.

BOARD OF DIRECTORS: Name| Designation| Lalit K Panwar| Chairman and Managing director| Pradeep Kumar Agarwal| Director (Finance)| Anand Kumar| Director| Dipali Khanna| Director| FINANCIAL ANALYSIS: Particulars| 2006| 2007| 2008| 2009| 2010| Net Sales Growth Rate| 9. 06| 7. 89| 10. 27| -0. 81| -13. 44| Operating Profit Margin(%)| 9. 06| 7. 89| 10. 27| -0. 81| -13. 44| Net Profit Margin(%)| 12. 34| 8. 15| 9. 4| 6. 18| -4. 78| Current Ratio| 1. 56| 1. 4| 1. 71| 2| 1. 68| Quick Ratio| 1. 31| 1. 3| 1. 63| 1. 88| 1. 52| TOL/TNW| 1. 23| 1. 6| 1. 16| 0. 80| 0. 98| Interest Cover| 608. 15| 15,224. 76| 4,644. 09| 1,511. 76| -37,854. 56| Inventory Turnover Ratio| 8. 76| 310. 99| 208. 59| 49. 54| 31. 37| Debtors Turnover Ratio| 8. 63| 6. 41| 3. 53| 3. 61| 3. 49| STRENGTHS: WEAKNESSES: CHALLENGES FACED BY THE INDIAN HOSPITALITY 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 sectors 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. . 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 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 purchases. 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. The Road Ahead The demand for travel and tourism is expected to reach US$ 431. 7 billion by 2020. Ministry of Tourism has sanctioned 169 rural tourism sites in 28 States/Union Territories (UTs). The scheme of rural tourism was started by the Ministry in 2002-03 with the objective of showcasing rural life, art, culture and heritage at rural locations and in villages, which have core competence in art and craft, handloom, and textiles as also an asset base in the natural environment.

Moreover, the Ministry has initiated several measures to promote Medical and Health Tourism which includes promotion in overseas markets and production of publicity materials like brochure, CDs and films etc. and their distribution in target markets. A workshop on promotion of Wellness Tourism was organised in New Delhi in association with Department of AYUSH, Government of India and National Board for Accreditation of Hospitals and Healthcare Services on February 15, 2011.

In order to promote tourism in the South Asian region, Mr Subodh Kant Sahay, Union Minister for Tourism has called for more cooperation amongst the countries. Inaugurating the 18th South Asia Travel and Tour Expo (SATTE) 2011 in New Delhi, Mr Sahay said it is the opportune time for all tourism organisations and stake holders in the region to get together and address issues that are common and relevant for the growth of tourism in the region.

SATTE plays an important role in showcasing the tourism potential of the South Asian region and provides a platform for tourism stakeholders in the region to interact with buyers from across the world with the objective of promoting tourism to the region. 32 countries are participating in the SATTE in 2011. Ministry of Tourism aims to create a comprehensive and coordinated framework for promoting golf tourism in India, capitalising on the existing work that is being carried out, and building upon the strength of India’s position as the fastest growing free market economy.

References: http://www. ibef. org/industry/tourismhospitality. aspx http://www. naukrihub. com/india/hospitality/overview/challenges/ http://www. tajhotels. com/abouttaj/companyinformation/default. htm http://www. theashokgroup. com/itdc. html http://www. theleela. com/corporate-information. html https://www. theleela. com/introduction-history. html http://www. oberoihotels. com/about_us/group_profile. asp http://www. clubmahindra. com/aboutus. asp http://www. scribd. com/doc/49381187/Leela-venture-Ltd

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