Cbs Project

7/31/2019 Cbs Project

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Submitted To:

PULKIT AGARWAL (JIML-11.124)

RAJAT SAHANI (JIML-11-129)

SADAF SIDDIQUI (JIML-11-137)

SHAHZEB NUSRAT (JIML-11-138)

SANJEEV KUMAR (JIML-11-141)

RASHMI PANDEY (JIML-11-FS-043)


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Perseverance, inspiration and motivation have always played a key role in the

success of any venture. So hereby, it is our pleasure to record thanks and gratitude

to the people involved.

Firstly, we thank Prof. VV RATNA, for his continuous support in the project.

Ratna Sir was always there to listen and to advice us. He is responsible for involving

us in the project on Indian Hotel Industry in the first place. He showed us

different ways to approach a research problem and the need to be persistent to

accomplish any goal. Without his encouragement and constant guidance we would

not have been able to finish the project. He was always there to meet and talk

about any query.

Last, but not least, we would like to thank all class mates and hostel mates who

supported us throughout the project.


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The hotel industry that exists today can be traced back to 3000B.C. where the earliest inns were homes with rooms provided for travellers.

The modern era of the hotel industry saw its beginnings in 1794 New Yorkwhere the first ever hotel was built.

Stock companies invested in hotels seeking profit from property valueappreciation and room occupancy revenue.

The success of this industry has largely to do with two factors, location& innovative integration

The Strategic placement and product differentiation has been successfactors.

The word hotel is derived from the French htel (coming from hte meaning

host), which referred to a French version of a townhouse or any other buildingseeing frequent visitors, rather than a place offering accommodation.

The provision of basic accommodation, in times past, consistingonly of a room with a bed, a cupboard, a small table and a washstand has

largelybeen replaced by rooms with modern facilities, including en-suite

bathrooms and air conditioning or climate control.

Additional common features found in hotel

rooms are a telephone, an alarm clock, a television, and Internet

connectivity,snack foods and drinks may be supplied in a mini-bar etc.

Hotel Industry in India has witnessed tremendous boom inrecent years. Hotel Industry is inextricably linked to the growth in tourism 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 therecently launched 'Atithi Devo Bhavah' (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 hassupply 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 least100% over the next 2 years.

The future scenario of Indian hotel industrylooks extremely rosy.

It is expected that the budget and mid-market hotel segment


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willwitness huge growth and expansion while the luxury segment will continue

to perform extremely well over the next few years.


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Taj Group

Inter ContinentalLe Meridien Group of HotelsOberoi Group of HotelsThe Park Group of HotelsWelcome Heritage Group of HotelsITC Welcome group of Hotels


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Generally located in the heart of city within a shortdistance from business center, shopping arcade. Rates are

normally high due to their location

advantages. They have high traffic on weekdays and the occupancy is

generally high.

They are located primarily on highways, they provide

lodging to highwaytravellers and also provide ample parking

space. The length of stay is usually

overnight.

They are located in suburban areas, it

generally have high traffic on weekend. It is ideal for budget

travellers. In this type of hotel rates are moderately low.

These hotels are set up near by the airport.

They have transitguestwho stay over between flights.

They are also termed as health resort or beach hill

resort and so depending on their position and location. They cater

a person who wants to relax, enjoy themselves at hill station. Most

resort work to full capacity during peakseason. Sales and revenue

fluctuate from season to season.

As name implies these hotels are established on

luxury liners or ship. It is located on river, sea or big lakes. In

cruise ships, rooms are generallysmall and all furniture is fixed

down. It has long stay guest.

A house boat hotels is referred as boatels. The shikaras of

Kashmir and kettuvallam of kerala are houseboats in India which

offers luxurious accommodation to travelers.

These novel variants are hotel on wheel. Our very own

"palace on wheels" and "Deccan Odessey" are trains providing a

luxurious hotel atmosphere. Their interior is done like hotel room.


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They are normally used by small group of travelers.

The main yardstick for the categorization of hotel is by size the

number of rooms available in the hotel.

hotel with 100 rooms and less may be termed as small hotels.

: hotel which has 100-300 rooms is known as

medium sized hotel.

hotel which have more than 300 rooms are termed

as large hotels. Mega hotels: are those hotels with more than 1000

rooms.

these are the groups that have hotels in much number

of locations in India and international venues.

Hotels may be classified into economy, and luxury hotels on the

basis of the level ofservice they offer.

These hotels meet the basic need

of the guest by providing comfortable and clean room for a

comfortable stay.

: It is suite hotel that offers small

living room with appropriate

furniture and small bed room with king sized bed.

These offer world class service providing restaurant

and lounges,concierge service, meeting rooms, dining facilities.

Bath linen is provided to the guest and is replaced accordingly.

These guest rooms contains furnishing, artwork etc. prime market

for these hotels are celebrities, business executives and highranking political figures. Example: Hyatt Regency, New Delhi

Hotel can be classified into transient, residential and semi

residential hotels dependingon the stay of a guest.


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: These are the hotel where guest stays for a day

or even less, they are usually five star hotels. The occupancy

rate is usually very high. These hotels are situated near airport.

These are the hotel where guest can stay for a

minimum period of one month and up to a year. The rent can be paid

on monthly or quarterly basis. They provide sitting room, bed roomand kitchenette.

: These hotels incorporate features of both

transient and residential hotel.

Depending on theme hotel may be classified into Heritage hotels,

Ecotels, Boutique hotels and Spas.

In this hotel a guest is graciously welcomed,

offered room thathave their own history, serve traditional

cuisine and are entertained by folk

artist. These hotels put their best efforts to give the glimpse of

their region. Example: Jai Mahal palace in Jaipur.

these are environment friendly hotels these hotel use eco

friendly items in the room. Example: Orchid Mumbai is Asia first

and most popular five star E cotels.

This hotel provides exceptional accommodation, furniture

in athemed and stylish manner and caters to corporate travellers. Example:

In India the park Bangalore is a boutique hotel. is a resort which

provide therapeutic bath and massage along with other features of luxury

hotels in India Ananda spa in Himalaya are the most popular Spa.

: They are situated in the heart of the city in

busy commercial areas so as to get good and high business. They

cater mostly businessmen.


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Hotel Industry in Indiacurrently has supply of 10,000 rooms and thereis a shortage of 150,000 rooms fuelling hotel room rates acrossIndia. According to estimates demand is going to exceed supply by atleast 100% over the next 2 years. Five-star hotels in metro cities allotsame room, more than once a day to different guests, receiving almost

24-hour rates from both guests against 6-8 hours usage. With demand-supplydisparity, hotel rates in India are likely to rise by 25% annuallyand occupancy by 80%, over the next two years. This will affect thecompetitiveness of India as a cost-effective tourist destination. Toovercome, this shortage Indian hotel industry is adding about60,000 quality rooms, currently in different stages ofplanning anddevelopment, which should be ready by 2012. Hotel Industry in India isalso set to get a fillip with Delhi hosting 2010 Commonwealth Games.The future scenario of Indian hotel industry looks extremely rosy. Itis expected that the budget and mid-market hotel segment will witnesshuge growth and expansion while the luxury segment will continue toperform extremely well over the next fewyears.

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 countryis the boom in the overall economy and high growth in sectors like informationtechnology, telecom, retail and real estate. Rising stock market and new businessopportunities are also attracting hordes of foreign investors and internationalcorporate travelers tolook for business opportunities in the country. The arrival of low costairlines and the associated price wars have given domestic tourists a host ofoptions. The opening up of the aviation industry in India has led the way forexcitingopportunities for the hotel industry as it relies on airlines to transport 80%of international arrivals.Moreover, the governments decision to substantiallyupgrade 28 regional airports in smaller towns and privatization and expansionof Delhi and Mumbai airport will improve the business prospects of hotelindustry in India. Substantial investment in tourism infrastructure isessential for Indian hotel industry to achieve its potential. The upgrading ofnational highway connecting various parts ofIndia has opened new avenues for thedevelopment of budget hotels here. The Government of Indias Incredible Indiadestination campaign and the Atithi Devo Bhavah campaign have also helped thegrowth of domestic and international tourism and consequently the hotel industry.

In order to increase the stock of hotel rooms, the Federationof Hotel and Restaurant Associations of India suggested to thegovernment that the floor area ration of the existing hotels should beincreased. This was a couple of years before and will help createadditional rooms in the existing properties and ease the burden ofshortage of hotel rooms in the country. The proposal is yet tobe implemented.


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Pattern of growth in hotel industry is both seasonal and cyclical as hotel

industry is inter related and basedonthe 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 demandis seasonal. Seasonal demand is depend on the climate and location (ex:

beaches in India are mostly visited in summer because of climate and

vacations)

One of the single greatest challenges facing independent

hotels today is pricing. Pricing the inventory effectively can lead toprofitability and helps lay the foundation for long term success. But, pricingthe inventory ineffectively can lead to disaster. During the last decade; twosimultaneous factors impacted the market place and customer buying practices:(1) the dramatic drop in demand(2) and the widespread use of the Internet for bookingrooms.Capitalizing on this situation, third party Internet companies seized theopportunity to grow their businesses. Hotels were eager to work with them, andcustomers were eager to use them as confidence and security in buying goods andservices on-line increased.

: Without any affiliations to warrant discounts, theRack Rated customer paid the published rate, which was the highestrate.

: This was the same customer who booked

through a travel agent using the GDS and received a 5%-10% discountoff Rack Rates.

Having met the hotels qualifying criteria, suchas volume, businesses were guaranteed discounted rates.

With a block of rooms, rates varied based on time of yearand the nature of the group.

: Individual leisure travellers, usually within a drivedistance to the hotel.

: These rates were originally used sparingly andused as a means to stimulate business by using discounted rates toanyone, regardless of affiliation.

Hotel industry is continuously using the concept of technologyto develop its image and occupancy ratio. Though the hotel industryis a service industry it is continuously innovating the way the servicesare provided. Many hotels have a category of rooms which aredifferent in the space and facilities each one having their ownspecialties and range of price.


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Hoteliers are nowrunning their business according to the taste andpreferences of the customers continuous feed back from the customersare helping the management to innovate in the services provided by the.Few hotels are providing an services in their uniqueway to get intomoonlight. Offering special services respecting the customer straditions and customs and providing the service in their way is newinnovation to attract the customers.

The advent of the Internet has opened up many avenues forthe hotel industry, most importantly the ability to book clients.Most if not all of the hotel chains offer some sort of onlinereservation enabling the hotel management and staff to focus theirefforts in a variety of different places. Itis reported that 25 percentof all reservations are made online making it a key tool in roomoccupancy fulfilment . In addition to room booking, most hotelchainstoday utilize the Internet by offering online deals and majoradvertisingcampaigns. Electronic advertisement accompanied with theability to make reservations online has made the Internet tremendously

valuable. Adapting to e-commerce transitions such as the implementationmulti-purpose computer software are necessary to cater to the clienteleof the next generation. A higher understanding of market needs willensure a larger portion of it. Information processing management isanother key element that has contributed to hotel industry success.Understanding and acting on the needs ofclientele will lure travellers away from competitors. Again, most ifnot all hotel chains today are utilizing some sort of customer patterntracking. Complete clientpleasure is dependent upon what you canoffer differently from the other guy. The colour of the sheets, theposition of an ice machine, the softness of toilet paper; targeting the

very core needs of clientele means they will return to what they arecomfortable with.

Indian hotel industry sees oligopolistic competition with large no ofplayers in the market. To sustain this, firms attempt to convert theseinto either differentiated products or services so to attract customerstowards continual modification in the levels of the product or servicesand attempt to create differentiation or augmenting service valueadditions.

In order to improve structure, hotel industry provides followingservices/products:

:- If any problems come in room, bulbfuse, A/C notworking , then need to contact Hotel Engineers, they arealso available 24 hours.

:- Front desk is 1st impression on guest,if guest like this section then only he will go for other option likerestaurant, laundry, etc. Front desk consists of young and energeticstaff who is always (24 x 7) be there to help guest, they are also


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responsible for Business Centre, Internet Access. Front office deskresponsible for making C-Form for Foreigner Clients, providingsafetylockers to the guest. Taking Reservation by Telephone, E-Mails, andFax from the guest. Also providing guest Money Exchange Services.Housekeeping are available 24 X 7 for guest, makingtheir bedroom,

bathroom, etc. Providing guest Laundry services also do day to dayroom cleaning for guests.

:- They include providingguest the serviceswhether in rooms, Restaurants or Banquets, or inConference rooms.

They are responsible for arranging dayto day travels for the guest. They also do the ticket confirmation

work, and also provides the information for sightseeing to the guests.

Medium and large hotels are providingGyms, SwimmingPool, Health Club, Beauty Parlor, Saloon, gameslike Billiards, Pool, etc facilities to their guests. Most of theHotels are providing these facilities complimentary with therooms.

Few Star hotels providing big parking space, shops in therestaurant itself for the guest conveyance, so that they can get thethings in hotel itself.

The degrees of internal rivalry consist of competitors in the hotelindustry thatdifferentiates their strengths, cost, product offering,and positioning within the industry. In the hotel industry there is alot of competition that takes place between different providers. Eachcompany finds their strengths and does everything in their power to beacknowledged by the customer. Once they uncover how they can serve

their consumers better than leading competitors they positionthemselves in the industry that better serves the consumers.


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Nature of demand Growth potential Technological advancement Entry & exit barriers Market segmentation

During the 1980s, the hotel industry saw an explosion of newbrands, , Market segmentation has served as one of the most powerfuldrivers in the creation of more and more branded products a trend thatbecame a popular marketing concept in the 198Os and remains so today.Seen as a vehicle for growth by a number of hotel companies thattapped a virtually limitless supply of capital in those years. Large hotelchains assumed that they could create new markets byestablishing niche

products in a variety of segments. With the benefit ofhindsight,however, some hotel chains that started out in a mid-market segmenthave tried to move up-market by creating new brand concepts to do so.As hotel companies fine-tune their identities, reposition their productsand promote growth through aggressive franchising programs.

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 ofIndia, based on the general features and facilities offered.

This segment comprises 3 and 4 star hotels, which cater to theaverage foreign and domestic leisure travellers. This segment also caters to themiddle level business travellers since it offers most of the essential servicesofluxury hotels without the high costs since the tax component of this segmentis lower compared with the premium segment.

These comprise 1 and 2 star hotels referred to as BudgetHotels. Thesecategories do not offer as many facilities as the other segments but provide

inexpensive accommodation to the highly price-conscious segment of the domesticand foreign leisure travellers.

In the past four decades, certain architecturally distinctive propertiessuch as palaces and Forts, built prior to 1950, have been converted into hotels.The Ministry of Tourism has classified these hotels as heritage hotels.


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At any point in time, applications for classification are usuallypending with the Ministry of Tourism because of which such properties remainun classified. The number of hotel rooms pending classification hasdeclined from historical 15-20per cent to 5per cent of the totalrooms available in the recentpast.

The hotel industry enjoys the economies of scale basedon the occupancy rate. When the occupancy rate is high the hotels enjoy theeconomies of labour and fixed cost is distributed over large number of roomseffecting in the increase of the revenue and the various other costs likemaintenance will remain same whatever the occupancy,if the occupancy is high the expenses are distributed occupied roomsresulting in the increase of revenue. Other than the savings in cost manyhotels charge 24hours rent on rooms used for night halts (i.e. is for 8 to10 hours) thus enjoying the chance to rent same room to othercustomers for 24 hours.

Opportunities for the Indian hotel sector continue to be in thebudget and mid-market segment. Anticipation for huge growth andexpansion, in the next year or two. The luxury segment is set toperform extremely well over the next few years until the supply-demand gap is bridged.

New opportunities lie in the extended stay segment, which manypotential developers are currently shying away from. . Agra, whilehaving seen highest improvement, has still a long way to go (citywideoccupancy 47%). There also some unfinished hotel projects in Agra,

which will continue to put pressure on the citys performance. As

regards Jaipur, the recent announcement by a major IT company to setup a base outside Jaipur, as well as the state governmentsinitiative to promote IT-related activity in the city, means thatJaipur can lookforward to some additional room night demand fromthe business segment. These developments in the leisure segmentincluding the strong performance in Goa leads to believe that theleisure segment is clearly benefiting from the increase in foreigntourist arrivals and growth in domestic travel.

Hotels in metro cities, with an average rate of Rs 2,600-3,000, andhotels in non-metro cities, with an average rate of Rs 1,800-2,400,are likely to experience rapid growth in demand in the next year ortwo. Cities to watch out for, in terms of development opportunity, arePune, Goa, and certain pockets in major cities like Delhi (west) and

Mumbai (mill lands).


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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&THELEELA PALACE so they have a control over the industry.There are no substitutes for spas and five star hotels.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.

Similarly, the bargaining power of customers determines howmuch customers can impose pressure on margins and volumes.The hotel industry is one of the most invested in its fixed assets. So theyare trying to recover their amount quickly.The suppliers are providing better information about them to attract thecustomers .Here the buyers are highly informed.If the hotel price changes are moderate, the Customers have low marginsand are price-sensitive.Some unseasoned timings the hotels are offering discounts and incentives toreduce the bargaining power of buyers.

The competition in an industry will be the higher; the easier itis for other companies to enter this industry. In such a situation, new entrantscould change major determinants of the market environment (e.g. market shares,prices, customer loyalty) at any time. There is always a latent pressure forreaction and adjustment for existing players in this industry. The foreign hotel chains are tied up with Indian hotels toreduce the initial cost and using the latters brand name.Brand loyalty of customers like TAJ, ITC, and LEELA PALACE affects the newentrants.

Access to raw materials and Distribution channels are controlled by Existingplayers like TAJ, ITC, and LEELA PALACE.The cost of land in India is high at 50% of total project cost asagainst15% abroad. This acts as a major deterrent to the Indianhotel industry. In India the expenditure tax, luxury tax and sales tax inflatethe hotel bill by over 30%.


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A threat from substitutes exists if there are alternative products with

lower prices of better performance parameters for the same purpose. They couldpotentially attract a significant proportion of market volume andhence reduce the potential sales volume for existing players. Thiscategory also relates tocomplementary products.Brand loyalty of customers (TAJ, ITC, LEELA PALACE, etc,) is dominating

thesubstitutes.The hotel relationship with customer and costs also the reasons to switchingto substitutes.The price variation of same class hotel services from various brands is oneof the reasons to choose a substitute.The present demand and supply of hotel rooms is one of the reasons tochoosea substitute.More fixed cost and switching costs affects the business.

This force describes the intensity of competition betweenexisting players (companies) in an industry. High competitivepressure results in pressure on prices, margins, and hence, onprofitability for every single company in the industry.The top competitors in hotel industry are having the same services like fivestar, spas, boatels and motels, heritage hotels and palaces.The healthy competition among the all players is helping to increase theindustry growth.Intense in metro cities, slowly picking up in secondary cities


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Rules and laws are apart of citizens everyday life. We haveto abide bycertain rules and regulations in order to remain insociety. This goes for corporations as well. All corporations haveto face some sort of rules and regulations. Although eachcorporation has to face rules and regulations, each industry facesdifferent rules and regulations. Of course, it would only makesense to believe that all regulations are negative for corporationsbecause ittakes away from the bottom line.

However, there can be positive affects of the regulations. Forexample, a ruling in favor of anti-trust laws will take away from themonopolistic company, but at the same time, the barriers of entry willbecome easy leaving opportunity for other companies to increasetheir bottom line. An analysis of the hotel industryhas revealed that there are environmental, labor, and food & safetyregulations aswell as regulations for merging, which must be lookedat before entering into the industry.

Environment is one aspect the government will always have theireye on, and they will introduce laws that will protect theenvironment. Such laws will need to be looked at as a player in thehotel industry. Hotels are could be liable for clean up ofcontamination and other corrective action under various laws,ordinances and regulations relating to environmental matters. Such lawsreferringto keeping the environment in good shape can be quite costly to hotelsin the industry. In Europe, North America, Australia and New Zealand,such prosecutions can now result in heavy financial penalties,considerable clean-up costs or in worst instances, jail sentences

Another political factor that can impose a concern for a memberin the hotel industry is the laws regarding labor. For instance, thereare laws thatgovern minimum wage. Although this might not seem to be

a concern, but anytime you are forced to pay a wage not in plans, whichare taking away bottom line. Another law that can be quite costly istreatment of employees. For example, there are laws that preventdiscrimination, and sexual harassment. If a hotel companyviolatesthese laws, it can lead to severe lawsuits, and at the same time thehotel will be slicing their revenues. The labour laws are prettystrait forward, but must be obeyed in order to keep on going profits.

Social cultural factors are a big issue to look into for hotelindustrybecause it deals with a lot of consumers who have differentdemographic, ethnic, cultural backgrounds. By satisfying each consumers or

generalizing the way to hospitalize, hotel industry can have chance to expandmore.


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In order for a hotel to prevent obsolescence andremaintechnologically advanced, the hotel must be up to date with all the latesttechnological changes that are taking place that might have an impact on theindustry. As it moves through the twenty-first century, it is evident, thatthere is a strong focus on technology.

Today, the Internet is increasingly being used. Consumersareshopping on the Internet, from music to travel and anything one can think of.For the hotel industry, they need to take this into consideration. The reasonis that if hotels dont have a well developed website, they will possibly loosepotential consumers. Not only do they need to alternate their distributionchannels of information, they also need to advertise aggressively on theInternet. Discussing in further detail of what the computer has brought isusing it for organizing the hotel operation. The day of having everything onpaper is obsolete. So, in order for ahotel to have a competitive advantage, theyneed to have a very high tech information system.

While the computer is changing the way hotels in the industry canoffer information to their potential consumers and the way a hotel organizestheir operations, materials supplied to the hotel are starting to become

obsolete. For example, in most hotels, you will still find stereos, VCRs, andregular televisions. However, things have changed in the way people access music,movies, and of course T.V. Todays society, individuals have moved away fromthose bigboxes and adopted the use of digital technology. So, for a hotel topreventobsolescence the must change from the suppliers that are supplying them

with stereos, VCRs, and regular TVs and look for suppliers that will offerthem ipods, DVDs, and digital HDTV for room use. Moving in this direction

will make the hotel much more attractive, thus the revenues will increase.The final technological factor that needs to be looked at is the

rising costs ofenergy. These are uncontrollable costs, thus the only thing thatcan be done to limit the impact of these increasing costs is for hotels tomanage the use of energy efficiently. A strategy of how to manage it would beone thing; however, a hotel must also look at the alternatives of energy that

are coming into the world. For example, with high-energy costs some businessesare thinking innovation. Solar Cities will be the successes of the 21st century.

Environment is something we as human beings come in contactwith everyday. The condition of the environment will often guidedecisions. For instance, if itis really smoggy outside, the chances ofgoing for a hike or to an amusement parkare very small. So, it wouldonly make sense as a member of an industry that islooking to increase the demand of consumers to fully understand whatenvironmental factors for their industry might impose an impact on

the customers decision.For example, during hurricane season, the customer decision

to stay in a hotel on the east coast is not as likely as it was beforethese natural disasters. Global warming is another ecological factorcalls for concern. The ozone is slowlybeing exhausted by human actionswhile leaving the earth degrees warmer. The uncertain climate can havea direct impact on hotels that are in areas of skiresorts. However, even though this is a definite concern, it should bea concern for long term planning the time frame for such effects ismore likely to happen in the future. A way that could allow this not


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to be an impact for other hotels is to build a strong image in theconsumers mind. Such image would come from being eco-efficient byimproving resources to prevent pollution.

A very wide variety of hotels is present in the country.There are international players in the market such as Taj and Oberoi &International ChainsA manpower cost in the Indian hotel industry is one of the lowest in theworld.India offers a readymade tourist destination with the resourcesNatural and cultural diversityDemand-supply gapGovernment support

The cost of land in India is high at 50% of total project cost as against15% abroad.The hotel industry in India is heavily staffed.High tax structure in the industry makes the industry worse off than itsinternational.Only 97,000 hotel rooms are available in India today.Only limited value added servicesSlow implementation

Demand between the national and the inbound tourists can be easily manageddue to difference in the period of holidays.In the long-term the hotel industry in India has latent potential forgrowth.Unique experience in heritage hotels.Rising income.

Guest houses replace the hotels.Political turbulence in the area reduces tourist traffic and thus thebusiness of the hotelsChanging trends in the west demand similar changes in IndiaThe economic conditions of a country have a direct impact on the earnings inhotel industry.Lack of training man power in the hotel industry.Fluctuations in international tourist arrivals.Increasing competition


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The hotel industry in India having a tremendous opportunity in thefuture because of increasing trends in the tourism industry and governmentpromoting the "Incredible India" campaign and other tourism promotion

measures. The hotel industry in India is mix of many brand internationallyestablished hotels having the scope to attract shares in the brand hotels whichwill help to expand the industry and the innovations in the industry ishelpingthe hotels to retain the customers with them. Though the industry ishavingopportunities in future it is suffering with the cost of land which iscosting 50% of the total cost and the taxes are main drawbacks for theindustry. Industry is opening gates for the foreign investment which is a goodsign for the industry and industry is working toward the fulfillment of thedemand and supply gap.

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