HOSPITALITY INDUSTRY IN INDIA

HOSPITALITY INDUSTRY Star Rated Hotels Heritage Hotels Hotels Hotel Industry Budget Hotels Facility Hotels Restaurants Resorts Casual Dining Fine Dining Tourism Coffee Bars Travel and Tourism Industry Fast Food Hotel Chains Travel

CURRENT MARKET SITUATION

• Indian hospitality industry is Facing a mismatch between the Demand and Supply of rooms. • The demand is high and is only expected to rise in future • Indian hotel brands are making their presence felt globally. The Taj hotels, resorts & palaces and Oberoi hotels & resorts are leading Examples.

. In India, people are breaking away from traditional methods and Lifestyles. (thanks to high income). This changed mindset is creating a huge demand for hotels that Provide quality at affordable rates Example: Fortune park hotels ltd, a Subsidiary of ITC ltd at 46 properties (out of which 25 are up and running) Across 38 cities.

• The concept of hotels in malls is also flourishing • The concept of hotels in malls is also flourishing. Budget hotels in malls which offer shopping experience with entertainment facilities under one roof are eliciting attention from various hospitality players. An upcoming Five-star hotel in east end mall in Ghaziabad is one such example.

REASONS FOR MORE DEMAND

Hotel industry depends largely upon the foreign tourists arrivals further classified into Business Travelers and Leisure travelers (both domestic and International) • The buoyant domestic growth has resulted in the growth of business travel to India. (high income changed mindsets) • India has now discovered the power of marketing and with campaigns like ‘Incredible India’ and various large scale regional and global events Like the upcoming commonwealth games, Asian games and the recent Indian premiere league builds interest about the nation and is attracting more domestic as well as international Leisure travelers.

There is a huge amount allotted for2010 commonwealth Games • The policies and incentives provided to the hotel industry is acting as a catalyst for its growth. The centre and states are also working out a model to increase hotel capacity. There is a huge amount allotted for2010 commonwealth Games

INVESTMENTS

NEED FOR INVESTMENT • Increase in no. Of foreign travelers. • Emphasized focus on tourism by Government. • commonwealth games in Delhi

To overcome the shortage Indian hotel industry is adding about 60,000 quality rooms, currently in different stages of Planning and development, which should be ready by 2012. Government has approved 300 hotel projects which indeed shows what the industry is up to. A lot of real estate developers are also investing into the business to bridge the demand-supply gap. INTERNAL INVESTMENTS

• Berggruen holdings India, a subsidiary of New York-based investment company Berggruen holdings, has announced that it is seed-funding a non-luxury hotel chain in India. • private equity firm Warburg Pincus has picked up around 27 % stake in Delhi-based mid-price hotel chain, Lemon tree, for $60.2 million • Starwoods, hilton, intercontinental have significant growth plans for India EXTERNAL INVESTMENTS

THE ENGINE OF GROWTH TOURISM

• According to a research released by world travel & tourism Council, India’s travel & tourism is expected to generate Us$ 275.5 billion by 2018. As reported by MAFOI management consultants around 40 International hotel chains are expected to invest in the Indian Hotel market by 2011. This includes Hilton, Accor, Mariott

Foreign Tourist Arrivals (Nos.) Foreign Tourist Arrivals (FTAs) to India till December 2008 and comparative figures of 2006 and 2007 Foreign Tourist Arrivals (Nos) Month Foreign Tourist Arrivals (Nos.) Percentage Change 2006 2007 2008 2007/2006 2008/2007 January 459489 535631 591337 16.6% 10.4% February 439090 501692 561393 14.3% 11.9% March 391009 472494 541478 20.8% 14.6% April 309208 350550 384203 13.4% 9.6% May 255008 277017 300840 8.6% June 278370 310364 340159 11.5% July 337332 399866 429456 18.5% 7.4% August 304387 358446 391423 17.8% 9.2% September 297891 301892 330874 1.3% October 391399 444564 452566 13.6% 1.8% November 442413 532428 521247 20.3% -2.1% December 541571 596560 521990 10.2% -12.5% Total 4447167 5081504 5366966 5.6%

HOTEL SEGMENTATION

Star Rated Hotels 5 Star Deluxe 5 Star Heritage Hotels 4 Star 3 Star Budget Hotels 2 Star 1 Star Facility Hotels Business Hotels Air Port Hotels Resorts Honey moon Hotels Motels Unclassified Guest Houses Lodge

CHALLENGES TO FACE

Shortage of skilled employees Retaining quality workforce Challenges for the Industry Shortage of Rooms Manual Back end Lack of adequate infrastructure

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