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Transcript of Final IA Presentation
INDUSTRY ANALYTICS REPORT ON
HOTEL INDUSTRYSubmitted To:
Prof. Samik Shome
Submitted by: Group 7, Finance - A
Mohit R Suchdev (09PG267)Badal H Jain (09PG426)Srinivasa M J (09PG174)Priya Richhariya (09PG398)Akanksha Yadav (09PG363)
AgendaGeneral overture of the Hotel Industry
Global Scenario
Indian Scenario
Detailed Industry Analysis– SWOT Analysis– PEST Analysis– Michael Porter’s Five Forces– Barriers in the Industry– Industry Practices– Industry performances
Company Analysis– Ratio Analysis & Interpretation
Future Prospects in India
Conclusions & Findings
A general overture of the Hotel Industry Hotels are amongst the most visible and important aspects of a
country's infrastructure.
Hotel industry is also inextricably linked to the tourism industry and its
growth has added impetus and zest to the hotel industry.
• Objectives of the study: - To study the hotel Industry globally.
- To study the Indian hotel Industry.
- To look at the future prospects of the Indian hotel industry.
- To analyze factors driving the Indian hospitality industry.
Global Scenario
The demand for the Hotels is decided by
international and domestic tourism.
With the number of tourists expected to rise to
the extent of 10 million by the turn of the
decade, the industry is extrapolated to see a
boom.
A counter argument is that, the influences like
economic recession seen in the consumption,
production, profit, investment etc. can be
counterproductive.
Indian Scenario The Indian Hotel Industry is exclusively
audacious enterprise.
the Investment environment is also very
crucial as the political instability and acts
of terrorism within the sovereign
boundaries of the nation affect the growth
trajectory.
The events like the IPL can also accelerate
the development, though in a regionally
imbalanced way (National Capital Region).
Challenges faced by Indian Hotel Industry
• Shortage of skilled employees• Retaining quality workforce• Shortage of rooms• Intense competition & image of India• Customer expectations• Manual back-end• Human resource development• Construction costs• Lack of proper career path
Detailed Industry Analysis Research Methodology(Qualitative)
SWOT AnalysisStrengths: Rich Culture and heritage.
Government Support.Weakness:
Poor Infrastructure.Opportunities:
Open Sky Benefits.New Business Opportunities.
Threats: Increasing Competition.
PEST Analysis:• Political Factors:
o Law and Regulationo Administrativeo Judicialo Lobbying
• Economic Factors:o Economic Factors that have an impact on the decision of the
customers.• Socio-Cultural Factors:
o Deals with consumers having different demographic, ethnic & cultural backgrounds
• Technological Factors:o Deals with sophisticated technological advances & regular up
gradation.
Barriers In the Industry
• Foreign Languages
• Service Expectation
• Menu and Diet
• Education and Support for
Diversity
• Government Regulation,
License & Approval Process.
Industry Practices• Pricing
An overload of customers calling for a mismatch in the demand and
supply levels of hotel rooms in the country causes the prices of the
even cheaply available rooms increase.o Economic Conditiono Occupationo Location
• Promotion
The main promotional activities provided for this industry is from
the government, aiming to increase the foreign exchange earnings
Company Profile• Hotel Leela Venture Ltd
Market Capitalization Rs.1450. 75 Cr (2009)
Net Profit Rs. 145.23 Cr (March 2009)
• Asian Hotels Ltd (AHL)
Market Capitalization Rs. 857.052 Cr (Sept. 2009)
Net Profit Rs. 81.61 Cr (March 2009)
• East India Hotels Ltd (EIH)
Market Capitalization Rs. 4821.50 Cr (March 2009).
Net Profit Rs.172.34 Cr (March 2009).
Company Profile
• Bharat Hotels Ltd
Market Capitalization Rs. 568 Cr (March 2009).
Net Profit Rs. 139.74Cr (March 2009).
• Indian Hotels Company Limited (IHCL)
Market Capitalization Rs.5544.86 Cr(Sept 25, 2009).
Net Profit Rs.250.4 Cr (Mar 2009)
RATIO ANALYSISSales Growth Rate
Mar/09 Mar/08 Mar/07 Mar/060.00
200.00
400.00
600.00
800.00
1,000.00
1,200.00
1,400.00
1,600.00
1,800.00
indian hoteleihasianleelabharat
• Current Ratio
2009 2008 2007 2006 20050.00
0.50
1.00
1.50
2.00
2.50
Indian HotelEIHAsian HotelHotel Leela VentureBharat
• Debt Equity Ratio
2009 2008 2007 2006 20050.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Indian HotelEIHAsian HotelHotel Leela VentureBharat
• Profitability Ratio
Mar/09 Mar/08 Mar/07 Mar/06 Mar/050
0.05
0.1
0.15
0.2
0.25
0.3
0.35
indian hoteleihasianleelabharat
• Return on Assets
Mar/09 Mar/08 Mar/07 Mar/06 Mar/050
0.05
0.1
0.15
0.2
0.25
0.3
indian hoteleihasianleelabharat
• Interest Coverage Ratio
Mar-09 Mar-08 Mar-07 Mar-06 Mar-050
2
4
6
8
10
12
14
Indian Hotel EIH Asian Hotel Hotel Leela Venture Bharat
• Fixed Assets Turnover
2009 2008 2007 2006 20050
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
Indian HotelsEast India Hotels Asian HotelsHotel Leela VenturesBharat Hotels
• Inventory Turnover
2009 2008 2007 2006 20050.00
10.00
20.00
30.00
40.00
50.00
60.00
Indian HotelEIHAsian HotelHotel Leela VentureBharat
Future in India• Room rates are most likely to rise 25% annually.
• Occupancy rate to increase by 80%.
• An addition of 60,000 rooms in different stages.
• Man power requirements in India to increase from 11 Mn to 15 Mn.
• Approx 300 projects are in the pipeline to hit India.
• Entry of international brands through joint ventures and tie-ups is
likely to enhance the service levels and will narrow demand-supply
gap of rooms.
Conclusions & Findings• Because of the seasonal trend in the hotel industry, hotels
are never used to their full capacity.
• Very difficult to maintain profits.
• Out of the reach of the Huge Indian middle class which are
yet upgrading themselves in terms of disposable incomes.
• With more projects in the pipeline the industry slash down
their prices.
• This helps the hotels to draw themselves out of seasonal
trend trap.
• Major factors driving the growth are sensitivity to business
cycles and adverse political and social events (including
terrorist attacks), high rate of tax, high land price,
bureaucracy, and poor infrastructure.
References
• http://www.naukrihub.com/india/hospitality/• http://www.businessworld.in/• http://business.mapsofindia.com/india-industry/• http://www.itopc.org/travel-trade/• www.google.com• www.wikipedia.org
Databases & Sources• An Overview of Hospitality Industry – Article Investors Guide• Hotel Industry reiterates demand• Literature Review on ITDC• Saudi Hotel Sector Set For Growth • Indian Hospitality Industry has become an attractive investment destination• Hotel Industry Needs Real Green Change - MapChange 2010 • Capital line• Corporate websites• Annual Reports of various Pharmaceutical firms• Hotel Industry Journals & Magazines (Hospitality Outlook, Hoteliers Asso-cham, Panache maker
& ITC hotel ling)