“MACRO ANALYSIS OF INADIAN HOTEL INDUSTRY”...

“MACRO ANALYSIS OF INADIAN HOTEL INDUSTRY”

Management Research Project -I

Submitted

In the partial fulfillment of the Degree of

Master of Business Administration

Semester-III By

Name Exam No. Dabhi Yogendrasinh T 13044311018 Raval Bhoomi S 13044311121 Sojitra Ajay A. 13044311131 Vaghela Hemantsang V 13044311142 Vyas Mayur M 13044311146 Zala Shaktisinh P. 13044311148

Under the Guidance of:

Prof. (Dr.) Mahendra Sharma

Prof. & Head,

V. M. Patel Institute of Management.

&

Dr. Harsha Jariwala

Dr. Abhishek Parikh

Faculty Members

V. M. Patel Institute of Management.

Submitted To:

V. M. Patel Institute of Management,

Ganpat University,

Kherva.

(December, 2014)

CERTIFICATE BY THE GUIDE

This is to certify that the contents of this report entitled “Macro Analysis Of Inadian Hotel Industry”

by Dabhi Yogendrasinh, Raval Bhoomi, Sojitar Ajay, Vaghela Hemantsang, Vyas Mayur, Zala

shaktisinh submitted to V. M. Patel Institute of Management for the Award of Master of Business

Administration (MBA Semester -III) is original research work carried out by them under my

supervision.

This report has not been submitted either partly or fully to any other University or Institute for award

of any degree or diploma.

Prof. (Dr.) Mahendra Sharma, Professor & Head, V. M. Patel Institute Of Management, Ganpat University. Kherva. Date : Place :

CANDIDATE’S STATEMENT

We hereby declare that the work incorporated in this report entitled “Macro Analysis Of Inadian Hotel

Industry” in partial fulfillment of the requirements for the award of Master of Business Administration

(Semester - III) is the outcome of original study undertaken by me and it has not been submitted

earlier to any other University or Institution for the award of any Degree or Diploma.

Dabhi Yogendrasinh T 13044311018

Raval Bhoomi S 13044311121

Sojitra Ajay A. 13044311131

Vaghela Hemantsang V 13044311142

Vyas Mayur M 13044311146

Zala Shaktisinh P. 13044311148

Date: 08/12/2014

Place: kherva ,Ganpat university

PREFACE

Practical study plays a vital role in the field of education. It has been introduced for the student to get

practical knowledge along with theoretical knowledge only bookish knowledge is not right way of

learning anything especially for the management students. How management principals are

implemented in business can only be known through practical study, students can be very well aware

about industrial environment like problems, opportunity, different situation etc. this helps the student

to have better understanding and also give them a chance to show their skills and ability.

The principal concern of this report is to reveal my learning of practical business scenario. In writing

this report I have drawn vast amount of the information from various senior people and simultaneously

supplemented by various other people, annual reports, letters, journals etc.

Here, I am presenting a project on the different concept that I saw, fill and experience, while the work

on the project report. I have tried my level best to do the proper justification with my work in this

project.







ACKNOWLEDGEMENT

It was really difficult for me to complete the management research project without getting co-

operation of certain people. In other words there are so many external people who directly or indirectly

help me in my management research project.

First of all, I am very grateful to our collage H.O.D. Prof. MAHENRA SHARMA for his able

leadership and our project Report who providing their valuable time and guideline to me regarding the

management Research project report.

I am also thankful to Dr.HarshaJariwala and Dr. Abhishek Parikh who gives guideline our group to do

management research report in their college and helped me by giving all the required information for a

period . I am also thankful to my friends who help me and guide me.







CONTENTS

Sr. No Particular Page No.

Certificate by the guide II

Candidate’s statement III

Preface IV

Acknowledgement V

1 Introduction Of The Industry 1

1.1 Hotel/Hospitality Industry In India 2

1.2 History Of Hotel Industry 2

1.3 Major Sectors Of Hotel Industry Of India 5

1.4 Role In India’s Development 6

2 Major Players Of The Industry 12

2.1 Bharat Hotels Ltd Industry 13

2.2 Asian Hotels (North) Ltd Industry 16

2.3 Hotel Leela Venture Ltd Industry 19

2.4 Indian Hotels Co Ltd Industry 22

2.5 Eih Ltd Industry 28

3 Strategic Analysis 33

3.1 Pest Analysis 34

3.2 Group Mapping 37

3.3 Competitive Profile Matrix 38

3.4 Efe Matrix 40

3.5 SWOT Analysis 41

3.6 Bcg Metrix 42

3.7 Porter’s Five Force Analysis 44

3.8 Space Matrix 49

4 Financial Analysis 51

4.1 Trade Analysis 52

4.2 Ratio Analysis 59

5 Conclusion & Finding 65

6 B-Plan Of Hotel Industries 68

7 Bibliography 78

8 Annexure 79

1

CHAPTER-1

AN OVERVIEW OF THE HOTEL INDUSTRY

2

1.1 HOTEL/HOSPITALITY INDUSTRY IN INDIA:

Travel and tourism is the largest service industry in India. This industry provides heritage,

cultural, medical, business and sports tourism. It is expected that the tourism sector’s

contribution to the country’s gross domestic product (GDP) will grow at the rate of 7.8 per cent

yearly in the period 2013–2023.

The Indian tourism sector has been flourishing in recent years due to the improved connectivity

to and from the country. Also, better lodging facilities at the tourist destinations has been a factor

which has contributed to increased Foreign Tourist Arrivals (FTA).

The policies and changes implemented by the Government of India has also been instrumental in

providing the necessary boost to the Indian tourism and hospitality industry and attracting more

and more foreign tourists every year.

1.2 HISTORY OF HOTEL INDUSTRY:

While successive dynasties of kings and kingdoms came and went the institution of Hindu

kingship itself remained constant, providing an autocratic, paternalistic but essentially

benevolent authority under which many varieties of Indian culture flourished throughout the

subcontinent.

The India Princes were the diamonds, emeralds, rubies and pearls that invested the imperial

crowns of both the Mughals and the British with glitter and sparkle. Proud guardians of an

ancient inheritance steeped in history, they gave India splendour and romance on a scale that was

unrivalled in the twentieth century and which will never reoccur.

The word Raja, with its original Sanskrit meaning of both 'one who rules' and 'one whose duty is

to please', was taken very seriously by the rulers.

Many of Kings represented the finest qualities of rulership and manhood-their impartiality, sense

of fair play, even-handed justice, truthfulness and high morals were exemplary. They were great

patrons of arts, music and learning. Many were fine horsemen, sportsmen and lovers of forests.

Some were deeply religious and god-fearing and the people adored and worshiped them.

3

In the years following the abolition of princely rule, several members of the order have continued

to play a prominent role in various fields of enterprise. A few, like Rajmata Vijayaraje Scindia of

Gwalior and her son, Madhavrao, are still actively involved in politics. Some, like the late

Maharaja of Baroda set up and ran successful industries, while others like Divyabhanusinh of

Mansa and Pushpendra Sinh of Lunawada, distinguished themselves as managers in the

corporate world.

Many former Princes felt committed to reviving the arts and crafts formerly patronised in their

states. The Rajmata of Jaipur revitalised the renowned blue pottery of Jaipur whilst the late Raja

of Sawantwadi converted the Durbar Hall of his palace into a workshop to revive the dying art of

lacquerware furniture and traditional ganjifa playing cards for which his state was famous.

Richard and Sally Holkar set up a weavers' co-operative in the palace in Maheshwar to breathe

new life into the town's dormant textile industry, whereas the Nawabzada of Palanpur has run a

successful arts and crafts boutique in Bombay for several years. The Maharawal of Pratapgarh

motivates members of the one family that has had the monopoly in crafting exquisite theva

jewelry, which employs the technique of intricately patterned gold filigree on coloured glass.

Bapa Dhrangadhara is occupied in restoring rate, antique shawls while his brother. Sidhharaj

Sinhji, has established a crafts center in the palace at Dhrangadhara to revive the art of silver and

stone furniture. Schools of classical music known as gharanas, such as those established by the

royal courts of Jaipur, Gwalior, Patiala, Baroda, Kapurthala, Rampur, Maihar and Indore, still

flourish.

Other achievements include distinguished careers in the Civil and Foreign Services and in the

field of sports-particularly cricket, riding, polo and trap-shooting. Former royal hunting grounds

have become national sanctuaries and parks; these include Bharatpur, Siriska, Ranthambore,

Shivpuri, Gir, Periyar, Rangathittoo, Bandipur, Dachigam and Jaldapara. Royal menageries and

aviaries were set up as zoological parks as in Hyderabad, Baroda, Junagadh, Gwalior, Mysore,

Jaipur, Kotah, Jodhpur, Bikaner and Uadipur.

Many palaces are crumbling today but others like those in Suket, Bikaner, Rampur, Indore,

Jodhpur, Jaipur, Udaipur and Patiala have become repositories of culture in the form of museums

and libraries. Some palaces now function as Government offices, including those at Indore,

4

Patiala, Palanpur of Pratapgarh. A large number, like those in Udaipur, Jaipur, Jodhpur, Mysore,

Bikaner, Gwalior, Benares, Kotah, Bhavnagar, Wankaner and Jaisalmer, have been converted

into popular palaces hotels and guest houses.

Over the last decade business opportunities in India had intensified and elevated room rates

occupancy levels in India. Even budget hotels are charging USD 250 per day. 'Hotel Industry in

India' success story is only second to China in Asia Pacific. The World Travel and Tourism

Council, says that India ranks 18th in business travel and will be among the top 5 very soon.

India's big success stories includes the new model for development and growth; a model that is

uniquely made.

Indian Hotel Industry's room rates are most likely to rise 25% annually and occupancy to rise by

80%, over the next two years. 'Hotel Industry in India is gaining its competitiveness as a cost

effective destination. The 'Hotel Industry' is likely to add about 60,000 quality rooms, currently

in different stages of planning and development which would be ready by 2012.

MNC Hotel Industry giants are initiating for Joint Ventures to earn their share of pie in the race.

The Indian Government has approved 300 hotel projects, where half are for the luxury range.

Analysts says that the manpower required by the hotel industry has increased from 7 million in

2002 to 15 million in 2010. More and more IT Professionals are moving into the Metro cities as

the USD 23 billion software services sector pushing into the Indian economy. Indian Hotel

Industry is set up to grow by 15% a year. In 2010 as the Delhi capital city of India hosted the

Commonwealth Games there were more than 50 international budget hotel chains moving into

India. One of the major reasons for the increase in demand for hotel rooms in the country is due

to the boom of information technology, telecom, retail and real estate. India's increasing stock

market and new business opportunities are always been attractive foreign investors and corporate

travelers to look for business opportunities in the country. From 167 countries, today India has

finally made its mark on the world travel map. 1

1 http://en.wikipedia.org/wiki/History_of_hotel

5

1.3 MAJOR SECTORS OF HOTEL INDUSTRY OF INDIA:

The basic division in India according to the location is as follows:

1.3.1 Heritage Hotels:

These types of hotels reflect the old glory and grandeur of India, they are mostly the old havelis

and mansions of ancient times which have been turned into Heritage Hotels, these provide

tourists with an opportunity to experience royal pleasure in traditional ambiance. They mostly

concentrate in the princely states of Rajasthan, Delhi, and Madhya Pradesh.

1.3.2 Luxury Hotels:

These Hotels are equipped with world class infrastructural amenities, they offer the tourists with

a fine lodging and dining experience. They extend a warm welcome to the customers catering

primarily to the upper class executives.

1.3.3 Budget Hotels:

These kinds of Hotels are like home away from home, they accommodate customers from upper

middle and middle class. Mostly named as Economy Class Hotel, Business Hotels and Discount

Hotels, the Budget Hotels supports the modern infrastructural facilities for a comfortable and

pleasant stay.

1.3.4 Resorts:

Resort hotels in India are mostly found in hill stations and sea side tourist destinations. These are

located amidst natural scenic beauty, they are the ideal place to enjoy some valuable time with

family and friends or in solitude. 2

2 www.setupmy hotel.com

http://www.setupmy/

6

1.4 ROLE IN INDIA’S DEVELOPMENT:

Indian Hotel Industry holds a special place in the international world of hospitality. India is

culturally the country which would be very well having the most diverse places in the world. It

serves as the vivid kaleidoscope of landscapes, magnificent historical sites and royal cities, misty

mountain retreats, colorful people, rich cultures, and festivities. Luxurious, hot and cold, chaotic

and tranquil, ancient and modern - India's soothing extremes rarely fail to leave a lasting

impression. In India Hospitality is a long running tradition. Whether it might be the majestic

Himalayas and the stark deserts of Rajasthan, or the beautiful beaches and lush tropical forests,

to idyllic villages and bustling cities, Indian land offers unique opportunities for every individual

preference.

Today the accommodation options throughout India have become extremely diverse and unique

from home stays and tribal huts to stunning heritage mansions and maharaja palaces. It could be

From Kashmir to Kanyakumari, from Gujarat to Assam; there are different cultures, languages,

life styles, and cuisines. This variety has reflected and increased by the many forms of

accommodations, ranging from the simplicity of local guest houses to the government bungalows

to the opulent luxury of royal palaces and five star deluxe hotel suites.

In recent years the Indian government has taken several steps to boost travel & tourism which

have benefited the hotel industry in the country. The initiatives by the Government include the

abolishment of the inland air travel tax of 15% to 8%, reduction in excise duty on aviation

turbine fuel and removal of a number of restrictions on outbound chartered flights, including

those relating to frequency and size of aircraft.

Indian Hotel Industry has the best staff for hotels unlike employees in East Asian hotels who are

charming and gracious, Indian staff is also grooming themselves to take initiative and discretion

of decisions on the spot. Most are better educated and speak better English than their East Asian

counterparts. Indian hotel industry is to be proud of as it has much to be so. The real success

story of the Indian Hotel Industry was due to the fact that it took on the global chains on its own

terms and it won.

7

Indian Hotel Industry has been booming business and has also given a boast to tourism business

in the country. Radisson Hotels India, Taj Group of Hotels, Park Group of Hotels and ITC Hotels

are some of the known hotels in the hotel industry that are famous for unique amenities and

superb accommodation arrangements.

Tourism development, for obvious reasons, was not a priority area for independent India. For the

first few decades, agriculture, irrigation and industrialisation were high on the agenda for

planners and political leadership. In the absence of high tourist activity or inbound travellers,

guest accommodation in India comprised mainly of guest houses, way-side tourist retreats and

Government bungalows. The few luxury properties from the Taj, the Oberoi and the Ashok were

concentrated in metro cities like Delhi, Mumbai, Chennai and Kolkata. These hotels catered

primarily to Government guests or foreign dignitaries.

The first Taj hotel, Taj Mahal Hotel Mumbai, was established by Jamshetji Nusserwanji Tata in

1903, and Rai Bahadur Oberoi acquired his first property in Chennai in 1934. However, these

brands remained in isolated pockets of India for many years even after independence. According

to Rajindera Kumar, Director, Ambassador Hotel New Delhi and President, Hotel & Restaurant

Association of North India (HRANI), the Indian hotel business has been viewed as a trade in the

unorganised sector for decades after independence. “Our ‘sarais’, inns, and ‘dharamshalas’ were

run on primitive and old methods,” says Kumar.

Expressing similar views, Virender S Dutta, Chairman, Hospitality Management Support

Service, a professional-turned-corporate leader in the industry, commented, “When I joined the

industry in the early ’60s, there were no significant hotel chains in India.” All hotels were owned

and managed by individual entrepreneurs, with little or no professional training in hotel

management. The management team was either trained overseas or just young men from affluent

families with a flair for good living.”

8

Milestones:

1903: Jamsetji Tata opens first hotel in Mumbai

1934: Rai Bahadur Oberoi acquires first property in Chennai

1965: International brand, Intercontinental hotel group forays into India in partnership with the

Oberoi group. Opens first hotel in Delhi, Oberoi Intercontinental

1966: Government of India sets up ITDC

1971: Hotel Corporation of India is established

1975: ITC enters the hotel business

2001: Government allows 100 per cent FDI in the hotel sector. 3

There are also the ITC Maurya Delhi, ITC Maratha Mumbai, and Fort Radisson of Radisson

Group in Kolkata, Radisson Jass Hotel Shimla, The Taj Westend, Bangalore, Taj Coromandel,

Chennai. The major cities like Bangalore, Hyderabad, Chennai, Gurgaon, Pune and the suburbs

of Mumbai are the areas most attractive for the international investment and as expected these

are the cities with the largest development pipelines. Combined these cities account for 89 of the

161 projects in the pipeline and 16,734 guestrooms, which is 68% of the rooms in India's total

pipeline.

Foreign exchange earnings from tourism in India:

Total foreign exchange earnings from tourism grew to US$ 18.1 billion in 2013.

Direct contribution of tourism and hospitality to GDP:

The tourism and hospitality sector’s direct contribution to GDP totalled US$ 37.3 billion in 2013.

3 www.ibef.org/industry/tourism-hospitality-india.aspx

9

Market Size:

The tourism and hospitality sector is among the top 10 sectors in India to attract the highest

foreign direct investment (FDI). In the period April 2000 – August 2014, this sector attracted

around US$ 7,441 million of FDI, according to the Department of Industrial Policy and

Promotion (DIPP).

A high and positive growth of 12.5 per cent was registered in foreign tourist visits (FTVs) to

north-eastern states of India during 2012 from 2011, which further rose by more than 100 per

cent to register a growth of 27.9 per cent during 2013 from 2012. Among these north-eastern

states, Manipur recorded the highest FTVs followed by Arunachal Pradesh and then Tripura.

FTAs in India witnessed a growth of 12.9 per cent in the period July 2013 – July 2014, according

to data received from Ministry of Tourism, Government of India. The FTAs during the period

January–July 2014 stood at 4.11 million as compared to 3.87 million during the corresponding

period of 2013, registering a growth of 4.4 per cent. USA contributed the highest number to

foreign arrivals in India followed by Bangladesh and the UK.

Foreign exchange earnings (FEE) during January–July 2014 stood at US$ 11.055 billion as

compared to US$ 10.85 billion during the same period last year. FEE during July, 2014 stood at

Rs 10,336 crore (US$ 1.68 billion) compared to Rs 8,620 crore (US$ 1.41 billion) in July, 2013.

10

Investments:

With the rise in the number of global tourists and realising India’s potential, many companies

have invested in the tourism and hospitality sector. Some of the recent investments in this sector

are as follows:

• MakeMyTrip Ltd plans to set up a US$ 15 million innovation fund to support early-stage

travel companies, with a special focus on mobile and IP-based companies. This is an

inorganic growth strategy by which they are pursuing M&A opportunities in the travel

technology space.

• Peppermint Hospitality has aggregated close to 2,200 operational hotel rooms across the

country with the acquisition of Bengaluru-based Boutique Hotel Management & Marketing

Services Ltd, which has 60 hotels in its portfolio. Peppermint Hospitality has five operational

hotels and is present in overseas markets of Florence, Italy and the UK that are operated

through the management contract route.

• IFC has invested US$ 21 million in SAMHI Hotels through compulsorily convertible

debentures. This is IFC's first investment in the hotel sector in India. SAMHI has seven

operational hotels in Greater Noida, Ahmedabad, Bengaluru, Hyderabad and Pune.

• Bengaluru-based Embassy Group plans to invest Rs 1,500 crore (US$ 245.13 million) for the

expansion of its hospitality business in India. The Embassy Group is also in the process of

buying out the property on which the Four Seasons hotel is located, entailing an investment of

Rs 600 crore (US$ 98.06 million).

11

REFERENCE:

http://en.wikipedia.org/wiki/History_of_hotel

www.setupmy hotel.com

www.ibef.org/industry/tourism-hospitality-india.aspx

http://www.setupmy/

12

CHAPTER: 2

MAJOR PLAYERS OF THE HOTEL INDUSTRY

13

MAJOR PLAYERS OF HOTEL INDUSTRY:

2.1 BHARAT HOTELS LTD INDUSTRY:

Business Group Lalit Suri

Sector Hotels & Restaurants

Incorporation Year 1981

Incorporation Date -

Chairman Jyotsna Suri

Managing Director Jyotsna Suri

Company Secretary B Chandra Sekhara Reddy

Auditor S R Batliboi & Associates

Registered Office Barakhamba Lane,

Connaught Place,

New Delhi, 110001, New Delhi

Telephone 91-11-44447777

Fax 91-11-44441234

E-mail [email protected]

Website http://www.thelalit.com

Face Value (Rs) 10

BSE Code 508984

BSE Group B

NSE Code BHARATHOT

Bloomberg -

Reuters BHTL.BO

ISIN Demat INE466A01015

Market Lot 1

Listing Not Listed

Financial Year End 03

Book Closure Month Aug/Sep

AGM Month Sep

mailto:[email protected]

http://www.thelalit.com/

14

NIC Activity Hotel & restaurant services

NIC_CODE 55

Tot.Employees

Registrar's Name & Address Karvy Computershare Pvt Ltd , Plot No 17-24 , Vittal

Rao Nagar , Madhapur , Hyderabad-500081 .

91-040-44655185/4465

91-040-23420814/2342

Bharat Hotels Limited was incorporated in 1981. It is known as Indias largest privately owned

hotel company and also the fastest growing hospitality group. Headquartered in New Delhi, the

company started its first hotel in 1988 - a 457 room 5-star deluxe hotel under the dynamic

leadership of Founder Chairman Mr Lalit Suri, who had spearheaded the Group's unprecedented

expansion plans.

This complex has two prestigious commercial offerings, The World Trade Centre and World

Trade Tower. All hotels were operated under the brand of The Grand Hotels, Palaces & Resorts

till November 19, 2008, when the company re-branded as The LaLiT' for its top line hotels,

under The LaLiT Suri Hospitality Group. At Present, which has seventeen luxurious hotels, 3600

rooms in the five-star deluxe segment - Nine Operating hotels and eight under development.

The company has also been associated with internationally renowned hospitality groups like

Holiday Inn Hotels (opening Asia-Pacific's first Crowne Plaza Hotel), The Hilton Hotels and

InterContinental Hotels Group - IHG.

The experience gained from these international companies, has been consolidated into its unique

service offerings - which provide Limitless Hospitality' with a distinctive Indian feel. Today, not

only does Bharat Hotels have an enviable bouquet of destination properties in India but now

exports its expertise overseas (with projects under development in Dubai and Thailand).

The Growth of Bharat Hotels Ltd: Bharat Hotels second property started in 1998 with the

opening of the 115-room the Grand Palace' in Srinagar, which is a spectacular heritage hotel and

the former residence of the Maharajas. On November 30, 2001, the company signed a deal to

15

operate and manage the 186-room, Hotel Ashok in Bangalore on a management contract from

ITDC, under approval of the CCD (Cabinet Committee on Disinvestment, Government of India).

The hotel now wears a contemporary new look and is know as The LaLiT Ashok Bangalore. In

early 2002, Bharat Hotels successfully bid for two more ITDC properties - The 55-room Laxmi

Vilas Palace in Udaipur, which now operates as The LaLiT Laxmi Vilas Palace Udaipur, along

with the 47-room property in the temple town of Khajuraho, Madhya Pradesh - The LaLiT

Temple View Khajuraho, which has also been completely renovated as a top line boutique

hotel.

In 2003, two hotels were opened, as new builds - in Mumbai and Goa. The 255 all suites' super

luxury resort, with its very own golf course - The LaLiT Golf & Spa Resort Goa and the 368

room The LaLiT Mumbai, in India's commercial capital Mumbai, which boasts of Asia's largest

atrium lobby.In November 2005, the Company successfully bid for the prestigious 168-year-old

Great Eastern Kolkata'. Built in 1840, during the Britsh Era - is presently under careful

restoration and will re-open shortly as - The LaLiT Great Eastern Kolkata.

In April, 2007, work commenced on the company's properties in Jaipur and Bekal. The LaLiT

Resort & Spa Bekal is operational since May 2010, while projects Chandigarh, Ahmedabad and

Noida are developing on schedule. On May 02, 2007, Bharat Hotels announced its first overseas

project - The LaLiT Grand Fort Dubai, in collaboration with Nakheel of UAE; the ground

breaking ceremony for which has taken place on October 26, 2008. In early 2008 - an existing

resort was taken over in Koh Samui (Thailand). The resort is presently undergoing a complete

renovation, and expected to open for guests over the next year.

In September 2008 Bharat Hotels Limited also announced properties in Amritsar and

Dehradoon. Bharat Hotels added another feather in its cap in 2010 by being the first hotel

company to launch a 5 Star Deluxe hotel in God's Own Country - Kerala. The Group's eighth

hotel The LaLiT Spa and Resort Bekal is a 44 room property - a top of the line luxury beach

resort set up on 26 acres of virgin stretch of northern Kerala in the lap of Arabian Sea. 4

4 http://www.thelalit.com


16

2.2 ASIAN HOTELS (NORTH) LTD INDUSTRY:

Business Group Jatia



Incorporation Date 13-Nov-1980

Chairman Shiv Kumar Jatia

Managing Director Shiv Kumar Jatia

Company Secretary Dinesh K Jain

Auditor Mohinder Puri & Company

Registered Office Bhikaji Cama Place,

Mahatma Gandhi Marg,

New Delhi, 110607, New Delhi

Telephone 91-11-66771225/66771226

Fax 91-11-26791033


Website http://www.asianhotelsnorth.com

Face Value (Rs) 10

BSE Code 500023

BSE Group B

NSE Code ASIANHOTNR

Bloomberg AHOT IN

Reuters ASHT.BO


Market Lot 1

Listing Mumbai,NSE


Book Closure Month Sep

AGM Month Sep

NIC Activity Hotels and Restaurants


http://www.asianhotelsnorth.com/

17

NIC_CODE 55101

Tot.Employees 769

Registrar's Name &

Address

Karvy Computershare Pvt Ltd , Plot No 17-24 , Vittal Rao

Nagar , Madhapur , Hyderabad-500081 .

91-040-44655185/4465

91-040-23420814/2342

Asian Hotels (North) Ltd is one of the leading player in the Indian hospitality industry operating

a chain of deluxe category hotels under the brand Hyatt Regency Hotels. The company presently

operates one five-star deluxe hotel in Delhi with the name Hyatt Regency Delhi. Hyatt Regency

New Delhi is located at Bhikaji Cama Place and is a 5-Star Deluxe Hotel. The hotel has 508

rooms and suites and is well equipped with High Speed Internet, Swimming Pool, Fitness

Centre, Business Centre, Boutiques, Salon and Restaurants offering a wide variety of dining

options.

Asian Hotels (North) Ltd was incorporated in the year 1980 as Asian Hotels Ltd and was

promoted by R S Saraf, R K Jatia, Chaman Lal Gupta, 3 Non-resident Indians together with

Sushil Gupta and Shiv Jatia, their Indian Associates. The company set up their first-grade room

facilities for guests during the Asian Games in the year 1982. The hotel started full- fledged

commercial operation in the year 1983. In December 9, 2002, the company incorporated a

subsidiary company, namely GJS Hotels Ltd. In order to have their presence in other

geographical location, they commissioned two new five star deluxe hotel category in the name

Hyatt Regency Kolkata and Hyatt Regency Mumbai.

The former commenced full fledged operations in January 1, 2003 and the later in April 1, 2003.

During the financial year 2007-08, the company acquired three wholly owned subsidiaries,

namely Chillwinds Hotels Ltd, Vardhman Hotels Ltd and Aria Hotels and Consultancy Services

Pvt Ltd. The company also entered into other business segment namely power generation and

installed two Wind Turbine Generators on March 27, 2008 and March 31, 2008 respectively.

During the year 2008-09, the company acquired additional interest in Regency Convention

Centre and Hotels Ltd, an erstwhile associate company, thus making the said company as a

subsidiary company.The promoters of the company are constituted in three major groups since

18

the inception of the company. They are the Jatia Group, the Gupta Group and the Saraf Group. In

due course of time, each of the three groups has acquired independent interests in the hospitality

industry. To avoid any potential conflict of interest amongst the three groups inter-se and the

other shareholders of the company, the promoters agreed on restructuring of the company by

way of scheme of arrangement. The company entered into a scheme of arrangement and de-

merger with Vardhman Hotels Ltd (now known as Asian Hotels (East) Ltd) and Chillwinds

Hotels Ltd (now known as Asian Hotels (West) Ltd) which became effective on February 11,

2010.

Pursuant to the scheme of arrangement and de-merger, the assets and liabilities of Mumbai

Undertaking and Kolkata Undertaking respectively were de-merged, transferred and vested with

Chillwinds Hotels Ltd and Vardhman Hotels Ltd and the company retained the residual assets

which mainly consisted of Hyatt Regency Delhi Hotel. Also, the company changed their name

from Asian Hotels Ltd to Asian Hotels (North) Ltd with effect from February 16, 2010.

Pursuant to the scheme of arrangement and de-merger, each of the promoter groups, namely the

Jatia Group, the Gupta Group and the Saraf Group respectively acquired independent control of

Asian Hotels (North) Ltd, Asian Hotels (West) Ltd and Asian Hotels (East) Ltd. Consequently,

the Jatia Group controls over 59% shares in the company. The company plans of making a foray

into 'Serviced Apartments' and has commenced construction of a new building/ complex, which

is expected to be completed during the financial year 2011-12, with a built-up area of

approximately 14000 sq mtrs, housed in a separate stand-alone tower.

The company also plans to renew and expand their existing facilities at Hyatt Regency Delhi.

Such renovation and expansion shall be carried in two phases spanning over the years 2010 to

2013, for operational expediency and to avoid inconvenience to the guests during peak season.

The first phase includes expansion of existing facilities by adding 24 bays and a multi-cuisine

restaurant, and up-gradation of fitness center and renovation of existing suites, which is expected

to be over by March 31, 2012. 5

.

5 http://www.asianhotelsnorth.com


19

2.3 HOTEL LEELA VENTURE LTD INDUSTRY:

Business Group Indian Private



Incorporation Date 20-Mar-1981

Chairman Vivek Nair

Managing Director Vivek Nair

Company Secretary Dinesh Kalani

Auditor Picardo & Co

Registered Office The Leela, Sahar,

Mumbai, 400059, Maharashtra

Telephone 91-22-66911234

Fax 91-22-66911212


Website http://www.theleela.com

Face Value (Rs) 2

BSE Code 500193

BSE Group B

NSE Code HOTELEELA

Bloomberg LELA IN

Reuters HTLE.BO


Market Lot 1

Listing MCX-SX,Mumbai,NSE,Singapore


Book Closure Month Sep

AGM Month Sep

NIC Activity Hotel & restaurant services

NIC_CODE 55


http://www.theleela.com/

20

Tot.Employees 3727

Registrar's Name & Address

Sharepro Services India P Ltd, Samhita Complex, Plot

No 13 AB, Saki Naka Andheri(E), Mumbai-400072.

91-22-67720300/400

91-22-28591568

Hotel Leela Venture Ltd is one of the leading players in the Indian hospitality industry. The

company operates in both, the leisure and business sectors. The Leela palaces and resorts include

a chain of five star luxury hotels and resorts. The company properties include The Leela

Kempinski in Mumbai, The Leela Palace in Goa, The Leela Palace Kempinski in Bangalore and

The Leela Kovalam in Kerala. The company became a popular name in the hospitality industry

in India due to their high quality of service to their customers.

The Leela Kempinski in Mumbai is one of the best deluxe hotels of 5-star rating in India. The

Hotel is spread over an area of 11 acres and has 396 rooms. The Leela Palace in Goa is a luxury

resort and has around 152 rooms. The Hotel is spread over an area of 75 acres and boasts of a 12-

hole golf course. The Leela Palace Kempinski in Bangalore is located near shopping, cultural,

and business centers. The Hotel has 358 rooms, a business center, a royal club, and a fitness and

pool center. The Leela Kovalam in Kerala is the biggest beach side resort in the state.

Hotel Leela Venture Ltd was incorporated in the year 1981. The company entered into

collaboration with Penta Hotels in UK to set up and operate 5-star hotels, which was

subsequently transferred to Kempinski Hotels, a European chain of 5-star deluxe hotels, owned

by Lufthansa, the German Airline. In the year 1986, the company set up their first 5-star deluxe

hotel namely Leela Penta, in Mumbai. The hotel was renamed as Leela Kempinski in the year

1988, following the change in their marketing and sales tie-up.

During the year 1993-94, the company commissioned 60 new rooms at the Leela Beach Resort

and set up a mini golf course of 6 holes. During the year 1995-96, the company entered into

management agreements with Four Seasons Hotel, Canada, for the management of the

company's hotels and resorts at Mumbai, Goa and Bangalore. The Leela Palace in Goa started

21

their operation in September 1998. During the year 1998-99, the company entered into sales and

marketing agreement with the Kempinski Group for The Leela Palace, Goa.

During the year 2002-03, Leela Hotels Ltd, a wholly owned subsidiary company merged with the

company and during the year 2004-05, another wholly owned subsidiary company, Vision Hotels

& resorts Ltd merged with the company. During the year 2005-06, the company acquired the

Kovalam Beach Resort Hotel located in the pristine and scenic Kovalam Beach with 194 rooms.

The Hotel after acquisition was renamed as The Leela Kovalam Beach, Kerala.

During the year 2006-07, the company sold Leela Business Park to their associate company

Rockfort Estate Developers Pvt Ltd for an aggregate amount of Rs 139.7 crore. Also, they

acquired land at Adyar Beach, Chennai, Banjara Hills, Hyderabad and Yerwada, Pune for setting

up new hotels. Kovalam Hotels Ltd, a subsidiary company was amalgamated with the company

with effect from December 4, 2007. During the year 2007-08, the company entered into strategic

relationship with Global Hotel Alliance to enhance the global reach of sales and marketing

network. Also, they made a tied up with ESPA of London, one of the leading SPA management

companies in the world, to manage their SPAs across all their properties.

The company entered into an alliance with Preferred Hotels during the year. This will give the

company a greater recognition in USA and other parts of the world as Preferred Hotels are

renowned for up market and luxury hotels in the world.The project in Gurgaon, Delhi with 319

rooms and 9 service residences is under progress and the project is expected to de ready for

operation during the financial year 2008-09. The Leela Business Park, a world class Business

Park at MRC Nagar in Chennai is under construction and is expected to be operational during the

year financial year 2008-09.

The company is constructing The Leela Palace at Udaipur in order to enter the Rajasthan market

is at an advanced stage of completion. The resort is expected to open in January 2009. The Leela

Palace hotel at MRC Nagar in Chennai is under construction and is expected to have a soft

opening by September 2009. The Leela Palace at New Delhi, is located in the prestigious

diplomatic enclave of Chanakyapuri, New Delhi is under construction6.

6 http://www.theleela.com


22

2.4 INDIAN HOTELS CO LTD INDUSTRY:

Business Group Tata



Incorporation Date 1-Apr-1902

Chairman Cyrus P Mistry

Managing Director Rakesh K Sarna

Company Secretary Beejal Desai

Auditor Deloitte Haskins & Sells LLP/PKF Sridhar & Santhan

Registered Office Mandlik House,

Mandlik Road,

Mumbai, 400001, Maharashtra

Telephone 91-22-66395515

Fax 91-22-22027442


Website http://www.tajhotels.com

Face Value (Rs) 1

BSE Code 500850

BSE Group A

NSE Code INDHOTEL

Bloomberg IH IN

Reuters IHTL.BO


Market Lot 1

Listing London,MCX-SX,Mumbai,NSE


Book Closure Month Aug

AGM Month Aug

NIC Activity Hotels and Restaurants

NIC_CODE 55101


http://www.tajhotels.com/

23

Tot.Employees 10018

Registrar's Name & Address Indian Hotels Ltd, Share Department, Mandlik

House, Mandlik Road, Mumbai 400001.

Indian Hotels Company Ltd (IHCL) and their subsidiaries are collectively known as Taj Hotels

Resorts and Palaces and are recognized as one of Asia's largest and finest hotel company. The

company together with their subsidiaries and their jointly controlled entities is engaged in the

business of hoteliering with the exception of two jointly controlled entities, which are engaged in

the business of air catering. The other areas of business include ready to eat/ready to cook foods

business.

The company's subsidiaries include TIFCO Holdings Ltd, KTC Hotels Ltd, United Hotels Ltd,

Roots Corporation Ltd, Taj SATS Air Catering Ltd, Residency Foods & Beverages Ltd,

Innovative Foods Ltd, Taj International Hotels (H.K.) Ltd, Chieftain Corporation NV, IHOCO

BV, St. James Court Hotels Ltd, Taj International Hotels Ltd, International Hotel Management

Services Inc, IHMS (Australia) Pty Ltd and Apex Hotel Management Services (Pte) Ltd. The

company's jointly controlled entities include IHMS Hotels (SA) (Proprietary) Ltd, Taj Karnataka

Hotels & Resorts Ltd and Taj GVK Hotels & Resorts Ltd. Indian Hotels Company Ltd was

incorporated in the year 1902. In the year 1903, the company opened their first hotel, The Taj

Mahal Palace & Tower, Mumbai.

The company then undertook major expansion of The Taj Mahal Palace & Tower, Mumbai by

constructing an adjacent tower block and increasing the number of rooms from 225 to 565

rooms. With the completion of its initial public offering in the early 1970s, the company began a

long term programme of geographic expansion and development of new tourist destinations in

India which led to their emergence as a leading hotel chain in India. From the 1970s to the

present day, the Taj Group has played an important role in launching several of India's key

tourist destinations, working in close association with the Indian Government.

The company was active in converting former royal palaces in India into world class luxury

hotels such as the Taj Lake Palace in Udaipur, the Rambagh Palace in Jaipur and Umaid Bhawan

Palace in Jodhpur. In the year 1974, the Taj Group opened India's first international five star

24

deluxe beach resort, the Fort Aguada Beach Resort in Goa. Also, they opened five-star deluxe

hotel Taj Coromandel in Chennai. In the year 1977, they acquired an equity interest and

operating contract for the Taj President, a business hotel in Mumbai. In the year 1978, they

opened the Taj Mahal Hotel in Delhi. In the year 1980, the Taj Group took their first step

internationally by opening their first hotel outside India, the Taj Sheba Hotel in Sana'a, Yemen.

Also, they acquired interests in the Crown Plaza - James Court, London and 51 Buckingham

Gate Luxury Suites and Apartments in London.

In the year 1984, the Taj Group acquired under a license agreement each of The Taj West End,

Bangalore, Taj Connemara, Chennai and Savoy Hotel, Ooty. In the year 1989, the company

opened the five-star deluxe hotel, Taj Bengal in Kolkata. With this opening, the Taj Group

became the only hotel chain with a presence in the five major metropolitan cities of Mumbai,

Delhi, Kolkatta, Bangalore and Chennai. In the year 1990, the company set up Taj Kerala Hotels

& Resorts Ltd along with the Kerala Tourism Development Corporation. In the year 1998, they

opened the Taj Exotica Bentota which strengthened the Taj Group's market position in Sri

Lanka. In the year 2000, the company entered into a partnership with the GVK Reddy Group to

set up Taj GVK Hotels and Resorts Ltd and thereby obtained a prominent position in the market

in the southern business city of Hyderabad, holding three hotels and a major share of the market.

In the year 2001, the company took on the management contract of Taj Palace Hotel, Dubai, and

established themselves as an up-market hotel in the Middle East region. In September 2002, the

company acquired equity interest in the former Regent Hotel in Bandra which gave the Taj

Group access to the midtown and North Mumbai market. The hotel has since been renamed as

the Taj Lands End, Mumbai. In October 2002, the company obtained licenses to manage and

operate two leisure hotels, the Rawal-Kot, Jaisalmer and Usha Kiran Palace, Gwalior.

In the year 2003, the company celebrated the centenary of the opening of their Flagship hotel, the

Taj Mahal Palace & Tower, Mumbai. In the year 2004, they opened Wellington Mews, their first

luxury serviced apartment in Mumbai. Also, they launched the first of its 'value-for-money'

hotels in Bangalore branded 'Ginger', which has 11 hotels in various locations in India and is

owned through their wholly owned subsidiary.

25

In the year 2005, the company acquired on lease The Pierre, a renowned hotel in New York City,

to enter the luxury end of the developed hotel markets internationally. The company entered into

a management contract for Taj Exotica in Palm Island Jumeirah in Dubai to expand their existing

presence in the United Arab Emirates. The company enhanced their position as an operator of

converted palaces by entering into a management contract for Umaid Bhawan Palace, Jodhpur in

the princely state of Rajasthan in India.

In February 2006, the company, through a subsidiary, acquired the erstwhile 'W' hotel in Sydney,

Australia and renamed it as 'Blue, Woolloomooloo Bay'. In October 2006, as per the scheme of

arrangement, Indian Resorts Hotel Ltd, Gateway Hotels and Getaway Resorts Ltd, Kuteeram

Resorts Pvt Ltd, Asia Pacific Hotels Ltd and Taj Lands End Ltd were amalgamated with the

company. In the year 2007, the company acquired Ritz Carlton in Boston and Taj Campton Place

in San Francisco to expand their presence in the US market. They commenced operation of their

second wildlife lodge at Baghvan, Pench.

In the year 2008, the company partnered with Saraya Islands to Operate Taj Exotica Hotel in Ras

Al Khaimah, United Arab Emirates. They joined hands with Tashi Group to create the new

benchmark for premium hotels in Bhutan - Taj Tashi Bhutan. The company and ALDAR Hotels

and Hospitality entered an exclusive agreement involving a number of hotel projects. The first

hotel to be developed by ALDAR Hotels and Hospitality under the agreement is a five-star, 500

room luxury resort hotel which will be in a spectacular waterfront location on ALDAR's mega

entertainment destination, YAS Island. During the year, the company launched The Jiva Spa

Boat at Taj Lake Palace, Udaipur.

The Gateway Hotel Athwa Lines Surat added a new block of rooms to take up their inventory to

208 making it the largest hotel in Gujarat. It also launched three brand new restaurants - 'Flow'

the all day dining restaurant, 'Spice' an Indian specialty restaurant and 'T3' a Tea lounge and Deli.

They unveiled a new world-class premium hotel in Chennai - Taj Mount Road. In December 21,

2008, The Taj Mahal Palace & Tower reopened the rooms in the The Taj Mahal Tower.

During the year 2009-10, the company added seven new hotels in the Taj portfolio which

included Vivanta by Taj at Panaji, Goa and The Gateway Hotel, Jodhpur apart from the 5 Ginger

hotels at Durg, Guwahati, Pune, Jamshedpur and Surat. Vivanta by Taj Coral Reef, Maldives and

26

The Pierre, New York were also reopened during the year after extensive renovations. The

inventory of the Taj Group now stands at 103 hotels with 12243 rooms.

On the international front, Taj Cape Town, South Africa was soft opened in February, 2010 with

an inventory of 166 rooms. The company added another significant hotel to their Luxury

portfolio, with the opening of the TAJ Cape Town and Banjar Tola, Kanha. These hotels are

owned by the associate companies and are under a management contract with the company.

During the year, the company acquired the erstwhile 'Sea Rock' hotel at Bandra Bandstand,

Mumbai. The company acquired land on lease from the Government of Andaman & Nicobar

Islands to set up the first 5-Star Luxury resort on Havelock Island. Also, the company through

one of their associate companies entered into a lease agreement with the Punjab Government for

a land parcel in Amritsar to develop a Vivanta by Taj hotel. The company through their

subsidiary, invested into developing a 'Vivanta by Taj' resort at Coorg. The company also

entered into management contracts for several properties in India which will commence

operation over the next few years. New Management contracts have been signed for a Vivanta by

Taj resort in Srinagar and for Gateway hotels in Bhandup (Mumbai), Shirdi (Near Nashik) and

Ludhiana.

During the year 2010-11, the fully restored heritage block of the Taj Mahal Palace, Mumbai

reopened its doors to guests on August 15, 2010. The spectacular Falaknuma Palace, another

signifi cant addition to the company's Palaces portfolio was opened in November, 2010. Four

new Ginger hotels at Manesar, Chennai, East Delhi and Indore commenced operations during the

year. The company ventured into new geographies by entering into management contracts in

Mexico and British Virgin Islands for development of high end Luxury Resorts with 100 and 206

keys respectively. The company also signed a management contract for establishing a Taj

Luxury Hotel in Marrakech, Morocco, which is expected to open by the last quarter of 2011.

The company continued their thrust on flagging properties under the 'Gateway' brand in

prominent economic, commercial and industrial centres of India by signing management

contracts for hotels in Chandigarh, Ludhiana and Kolhapur. The company also signed

management contracts in leisure destinations such as Shimla and Rishikesh for a Gateway and

27

Vivanta by Taj resort respectively. Furthermore, the company entered into MOUs for Gateway

Hotels in Chiplun, Maharashtra and in Faridabad, NCR.

The company invested through one of their subsidiaries in 'Vivanta by Taj' resort at Coorg,

which is scheduled to open by end of 2011. The resort shall be operated by the company on a

management contract basis. Of the 64 room expansion of Vivanta by Taj Fisherman's Cove hotel

in Chennai, 48 rooms are currently operational and work on the balance 16 rooms is in progress.

Vivanta by Taj hotels in Coimbatore and Hyderabad being developed by the company's

associates are expected to open during the current financial year. 7

7http://www.tajhotels.com


28

2.5 EIH LTD INDUSTRY:

Business Group Oberoi



Incorporation Date 26-May-1949

Chairman P R S Oberoi

Managing Director Vikram Oberoi

Company Secretary S N Sridhar

Auditor Ray & Ray

Registered Office 4 Mangoe Lane,

Kolkata, 700001, West Bengal

Telephone 91-33-22486751

Fax 91-33-22486785

E-mail [email protected]/[email protected]

Website http://www.eihltd.com

Face Value (Rs) 2

BSE Code 500840

BSE Group B

NSE Code EIHOTEL

Bloomberg EIH IN

Reuters EIHO.BO


Market Lot 1

Listing Kolkata,London,MCX-SX,Mumbai,NSE


Book Closure Month Jul/Aug

AGM Month Aug

NIC Activity Hotels and Restaurant services

NIC_CODE 55101

Tot.Employees 9851

mailto:[email protected]/[email protected]

http://www.eihltd.com/

29

Registrar's Name & Address EIH Ltd, 4 Mangoe Lane, Kolkata - 700001.

91-33-2486751/248675

91-33-2485300

EIH Ltd, the flagship company of Oberoi group is one of the largest chains of hotels in India.

The company is in the business of luxury hotels, restaurant, management contracts and travel and

tours. Their services include airline catering, management of restaurants and airport bars, travel

and tour services, car rentals, project management and corporate air charters. They operate hotels

under the brand name Oberoi and Trident. The hotels owned and managed by the company are

The Oberoi, Mumbai; The Oberoi Udaivilas, Udaipur;

The Oberoi, New Delhi; The Oberoi, Bangalore; The Oberoi Grand, Kolkata; The Oberoi

Vanyavilas, Ranthambhore; Trident, Nariman Point, Mumbai, and Trident, Bandra Kurla,

Mumbai. Other business units owned and managed by the company include Motor Vessel

Vrinda, Cochin (a luxury cruiser); Oberoi Airport Services, Mumbai, Delhi, Chennai, Kolkata,

Cochin, Bangalore; Business Aircraft Charters and luxury car hire.

EIH Ltd was incorporated on May 26, 1949 as a public limited company with the name East

India Hotels Ltd. Initially, the company was in the business of lessee and operator of The Oberoi

Palace Hotel in Srinagar, Kashmir. In the year 1956, the equity shares of the company were fist

listed on BSE. In the year 1965, they built their first hotel, The Oberoi Intercontinental, now

known as The Oberoi, New Delhi. In September 9, 1968, The Associated Hotels of India Ltd and

Hotels (1938) Pvt Ltd were amalgamated with the company pursuant to which the company

acquired five hotels including, The Oberoi Grand in Kolkata, The Maidens Hotel in Delhi and

The Oberoi Cecil, Shimla.

In 1973, the company commenced operations at the Oberoi Towers in Mumbai and subsequently

expanded their operations from the five star deluxe segment to 'Trident' branded hotels which

were targeted at business and leisure customers seeking high-quality service at more affordable

prices. In the year 1986, the company forayed into the airport services business by entering into a

ten year contract with the International Airport's Authority to operate all the snack bars and

restaurants at the domestic and international terminals in Mumbai.

30

In November 1996, the company changed their name from East India Hotels Ltd to EIH Ltd. In

January 1997, the company opened an international luxury resort namely, The Oberoi Lombok in

Indonesia. In April 1997, they opened the luxury resort hotel in the Himalayas.

During the year 2001-02, Mumtaz Hotel Ltd became the subsidiary company, which owns the 5-

Star luxury hotel 'Amarvilas', an Oberoi Resort at Agra. Also, the company opened Vanyavilas,

an Oberoi Resort at Ranthambhore during the year.

During the year 2002-03, the company commenced their flight catering operations in Chennai

after acquiring the business from EIH Associated Hotels Ltd. The hotel 'Udaivilas' in Udaipur

was opened on August 15, 2002. The company renamed 'Vilas' hotels as The Oberoi Rajvilas,

The Oberoi Amarvilas and The Oberoi Udaivilas with effect from October 1, 2003. Re-naming

was done in order to remove the misconception from mind of customers that the Vilas hotels

were separate from the Oberoi brand. In November 2003, the company launched Motor Vessel

Vrinda, a luxury Crusier in the backwaters of Kerala.

In March 2004, the company signed an agreement with Hilton International to co brand their

Trident hotels in India. The Oberoi Towers, Mumbai was re-branded Hilton Towers and the

Trident in Jaipur, Udaipur, Agra, Chennai, Cochin, Bhubaneshwar and Gurgaon were re-branded

as Trident Hilton with effect from April 1, 2004.

During the year 2004-05, the company opened two new restaurants namely, 'threesixty degree'

and 'Travertino' at The Oberoi, New Delhi. They also opened a new restaurant namely, 'Tiffin' at

The Oberoi, Mumbai. During the year 2005-06, they commenced their Flight Service Operations

at Bangalore to cater to increased flights to that city. The company transferred Oberoi Cecil in

Shimla and Trident Hilton in Bhubaneshwar to EIH Associated Hotels Ltd with effect from April

1, 2006.

During the year 2007-08, the company completed the process of amalgamation of the company's

wholly owned subsidiary, Rajgarh Palace Hotel and Resorts Ltd. Oberoi Hotels & Resorts was

rated the leading luxury hotel brand in Asia in a Travel agents' poll at the World Travel Awards,

2007. Trident Hotels was rated the best first class hotel brand in India at the Galileo-Express

Travel World Awards, 2007. The company terminated the strategic marketing and co-branding

alliance with leading global hotel chain Hilton International Co with effect form April 1, 2008.

31

The company signed Management Contracts through their foreign subsidiary for two The Oberoi

Luxury Hotels in Abu Dhabi and one in Oman.

During the year 2008-09, the company signed the Management Contracts for setting up and

operating Flight Kitchens at Cochin and Calicut Airports. Balamurie Island Resort Pvt Ltd has

ceased to be a joint venture company. In December 21, 2008, The Trident, Nariman Point was

restored and reopened for business. In December 1, 2009, the company opened the 440 key

Trident at Bandra Kurla, Mumbai, which has three speciality restaurants, each with their own

distinctive cuisine and ambience. The Oberoi, Mumbai which was closed after substantial

damage following the terror attacks on November 26, 2008 reopened on April 24, 2010.

In June 30, 2010, EIH International Ltd, a wholly owned subsidiary of the company, completed

the acquisition of the 45.85% equity interest of Amex Investment Ltd, in their international

hotels Joint Venture Company EIH Holdings Ltd, for USD 45 million. With this acquisition EIH

Holdings Ltd, became wholly owned subsidiary of EIH International Ltd. Also, EIH Holdings

Ltd signed a Management Contract for a hotel at Scorpio Bay, Greece and a second Oberoi hotel

in Mauritius. In August 30, 2010, some shareholders of the company, namely Oberoi Hotels Pvt

Ltd, Aravali Polymers LLP and Prithvi Raj Singh Oberoi sold 5,54,70,303 shares, representing

approximately 14.12% of the share capital of the company to Reliance Industries Investment and

Holding Pvt Ltd at a cost of Rs 1021 crore.

The company has completed the Oberoi Luxury Hotel at Gurgaon, which is scheduled to open

during the year 2011. The 103 key Trident Hotel at Dehradun is under construction and is

expected to open in the spring of 2012. The company's new flight kitchen at Mauritius, Delhi,

Cochin and Calicut are expected to be commissioned during the financial year 2010-11.

The company's 229 key Oberoi Hotel at Cyber City, Hyderabad and 323 key Trident Hotel are

under construction. The construction of the 252 key Oberoi hotel in Dubai located at Business

Bay is progressing and is expected to begin operations in the last quarter of 2011. The company

has commenced planning on the Oberoi hotels in Abu Dhabi and Oman and The Oberoi,

Marrakech, Morocco. 8

8 http://www.eihltd.com


32

REFERENCE

http://www.thelalit.com

http://www.asianhotelsnorth.com

http://www.theleela.com

http://www.tajhotels.com

http://www.eihltd.com






33

CHAPTER: 3

STRATEGIC ANALYSIS OF INDUSTRY

34

3.1 PEST ANALYSIS:

Political:- Due to the possible impacts on the Environment from the operations of a hotel, there

is a need to comply with Environment related regulations.

The political environment is an area that business organisations need to monitor constantly as

politics can be very unpredictable and influential at times. (Palmer, A. Hartley, B. 2006, P7-8)

This is because governments have the power to introduce legislation and regulations that may

have a profound effect on organisations. Whilst the UK is a relatively free market, the

government will still keep a close on what is going on in the private sector to ensure that

businesses are functioning within the best interests of the country.

1) Foreign direct investment 100%

2) Disinvestment

3) Taxes

4) Eco-tourism-‘thrust industry’

5) Foreign collaboration

6) Government pressure to increase security level, add sewage treatment

plant etc

7) Government promoting tourism

8) Government permission is no longer required for hiring foreign

technicians

Economic:- Both hotel stays and spa treatments essentially appeal to one's discretionary income,

thus a growth in discretionary income would become favourable to an organization such as

Solberri.

The competition for an organization such as Solberri need not necessarily come from similar

hotels/spa facilities only, it could even arise from other sources such as other competing forms of

expenditure for one's discretionary income. Eg: a new suite of furniture

Due to the seasonal nature of demand, revenues and room occupancy can vary significantly

during peak and non-peak periods.

35

As hotels generally provide free food and lodging especially at the operational level, their

salaries are not that attractive compared with that of certain other industries. This may make it

difficult to attract employees for such positions.

Due to the non-essential nature of this type of service to a potential customer, this would be one

of the first areas that would be cut back at a time of recession or economic downturn.

The higher end of the hotels ( Eg: ‘Premier' category at Solberri ) would essentially target the

higher end of the market which is a relatively smaller group where high margins can be earned.

The ownership models of hotels have witnessed some new realities in recent years.( Eg:

individuals/investors owning hotel rooms, sell and leaseback, moving towards managing the

hotel as opposed to owning them.

1) Recent economic slowdown effect

2) High growth in tourism industry

3) Export promotion goods scheme(EPCG)

4) Not given infrastructure industry status

5) Interest rates

6) Exchange rates

7) Inflation rates

Social:- The patronizing of spas can be seen as a lifestyle change which is growing among

certain sections of the middle class as well as the upper class.

As hotels benefit from holidaying the extent to which people take holidays and their ability to get

off from work for such holidays will have a direct bearing on the demand experienced by an

organization such as Solberri.

As hotels consume a large amount of resources such as water, soap, detergents as well as cause a

fair amount of pollution (from water, leftover food, use of strong detergents),there exists a fair

amount of pressure to be ‘green' especially by Environmental pressure groups.

36

The supply of lower level staff is seen as being directly related to seasonal unemployment in the

region.

As traveling for a holiday is seen as non-essential travel. Some may opt not to engage in leisure

travel especially where air travel is involved.

1) Increased extremism

2) Increasing disposable income

3) Changing life style due to exposure to global environment

4) Urban middle class forms 40 per cent of total population

Technical:- The hotel industry is seen as utilizing an increasing amount of technology with a

view of achieving greater customer satisfaction. Eg: Ritz Carlton's customer information

management.(CRM)

It can be seen that customers, even potential customers extensively use online information

sources including reviews and comments by previous customers when making their own choice

about holidays and places to visit.

The use of technology and other advanced techniques can be useful in managing the

consumption of resources such as water and electricity which are resources that are extensively

used in this industry. Eg: Power Factor Corrections, recycling water

The increasing use of IT/IS can help in improving the information available for management

decision making which will also allow the organization to better plan its future activities and

events.

1) Computerization

2) Global distribution system (GDS)

3) Provide LCD, laptops and conference facilities

4) Real-time access to inventory, transparency across multiple channels

37

3.2 GROUP MAPING:

A strategic group consists of those industry members with similar competitive approaches and

positions in the market. Hotels in the same strategy group can resemble one another in any of

several ways. They may have comparable product- line breadth, sell in the same price quality

range, emphasize the same distribution channel, use essentially the same product attribute to

appeal to similar type of buyers, depend on identical technological approaches, or offer buyers

similar services and technical assistance.

1800

1600

1400

1200

1000

800

600

400

200

00

1 2 3 4 5 6 7 8 9 10 11

PRODUCT RANG

The above graph showing the group maping of various company in paper industry. Eih Ltd and

Bharat Hotel are more competitor to each other the reason is company sales and product rang is

nearest. The Indian Hotels Co ltd company competitor is Eih Ltd. So the group maping helps to

identify the nearest competitor.

Asian Hotels

Hotel Leela Venture Ltd

Indian Hotels Co Ltd

Eih Ltd Bharat Hotel

38

3.4 CPM (COMPETITIVE PROFILE MATRIX):

“The Competitive Profile Matrix (CPM) is a tool that compares the firm and its rivals and

reveals their relative strengths and weaknesses.”

Critical Success Factor EIH BHART INDIAN ltd Weight Rating Score Rating Score Ratin

g Score

Brand reputation 0.13 2 0.26 3 0.39 1 0.13 Level of product integration

0.08 4 0.32 3 0.24 1 0.08

Range of products 0.05 3 0.15 1 0.05 2 0.10 Successful new introductions

0.04 3 0.12 3 0.12 3 0.12

Market Share 0.14 2 0.28 4 0.56 4 0.56 Sales per employee 0.08 1 0.08 2 0.16 3 0.24 Low cost structure 0.05 1 0.05 3 0.15 4 0.20 Variety of distribution channels

0.07 4 0.28 2 0.14 2 0.14

Customer retention 0.02 2 0.04 4 0.08 1 0.02 Superior IT capabilities 0.11 3 0.33 4 0.44 4 0.44 Strong online presence 0.15 3 0.45 3 0.45 4 0.60 Successful promotions 0.08 1 0.08 2 0.16 1 0.08 Total 1.00 - 2.44 - 2.94 - 2.71

39

WEIGHT:

Each critical success factor should be assigned a weight ranging from 0.0 (low importance) to

1.0 (high importance). The number indicates how important the factor is in succeeding in the

industry. If there were no weights assigned, all factors would be equally important, which is an

impossible scenario in the real world. The sum of all the weights must equal 1.0. Separate factors

should not be given too much emphasis (assigning a weight of 0.3 or more) because the success

in an industry is rarely determined by one or few factors. In our first example, the most

significant factors are ‘strong online presence’ (0.15), ‘market share’ (0.14), ‘brand reputation’

(0.13).

RATING:

The ratings in CPM refer to how well hotels are doing in each area. They range from 4 to 1,

where 4 means a major strength, 3 – minor strength, 2 – minor weakness and 1 – major

weakness. Ratings, as well as weights, are assigned subjectively to each hotel, but the process

can be done easier through benchmarking. Benchmarking reveals how well companies are doing

compared to each other or industry’s average. Just remember that firms can be assigned equal

ratings for the same factor. For example, if EIH, BHARAT and INDIAN LTD, have the market

share of 25%, 27% & 28% accordingly, they would all receive the rating of 4 rather than

receiving ratings 2, 3 & 4.

SCORE & TOTAL SCORE:

The score is the result of weight multiplied by rating. Each hotel receives a score on each factor.

Total score is simply the sum of all individual score for the hotel. The firm that receives the

highest total score is relatively stronger than its competitors. In our example, the strongest

performer in the market should be Bharat hotels (2.94 points).

40

3.3 EFE MATRIX (THE EXTERNAL FACTOR EVALUATION):-

Key Success Factors

Weight Rate Score

OPPORTUNITIES Fragmented Market 0.12 4 0.48 Financial Leverage 0.11 3 0.33 Online Market 0.16 2 0.32 Innovation 0.07 4 0.28 New Services 0.05 4 0.20

New Technology 0.07 2 0.14 THREATS Bad Economy 0.11 1 0.11 Volatile Currencies 0.08 2 0.16 International competitors 0.04 1 0.04 Mature Markets 0.07 2 0.14 Intense Competition 0.06 2 0.12 Govt Regulations 0.06 1 0.06 TOTAL 1.00 3.09

EFE Matrix Score of is 2.66 which is higher than the bench mark of 2.50

41

3.4 SWOT ANALYSIS:

3.4.1 STRENGTHS:

The first step to a SWOT analysis of hotel industry in India will be identifying its strengths.

There are more than 1000 classified hotels with a room availability of around 97,000 rooms

which can easily cope with the demand of tourists. Furthermore, there are also a number of

international names in the market which meet the needs of international tourists on their visit to

India. In addition, there are many tourist attractions and the cost of labor is low in comparison

with the rest of the world, thus, providing better margins for hotel owners and higher growth

potential in the industry.

3.4.2 WEAKNESSES:

Next in line is assessing the weaknesses. One major restraint to the hotel industry of India is the

cost of land, which is as high as 50% of the total project cost, against a low 15% abroad. The

country also has a higher tax structure as compared to other countries which inflates the hotel

expense a great deal. Furthermore, the services offered by some hotels are limited and not

comparable to world standards.

3.4.3 OPPORTUNITIES:

The third strategic element to a SWOT analysis of hotel industry in India is the opportunities.

The country boasts a number of attractions and has unmatchable diverse topography making it an

ideal destination for tourists. As a result, the number of inbound tourists is expected to increase

at a quick rate, further pushing the demand for hotels. Additionally, the demand for both national

and inbound tourists can easily be managed as the peak season. For international tourists, arrival

is between September and March, while most national tourists prefer to wait until school

holidays, which are during the summer months.

3.4.4 THREATS:

Where there are opportunities, you will also find threats. Several hotels in India are being

replaced by guesthouses, thus, adversely affecting the hotel industry. Political unrest in the

http://pestleanalysis.com/category/swot-analysis/

42

country also plays its part in reducing tourist traffic and consequently affects business of the

hospitality industry. The country’s economic condition has a direct impact on the earnings of

hotels. As a result, the staff might not be trained well enough to meet international standards.

3.5 BCG METRIX (The Boston Consulting Group):

The BCG Matrix graphically portrays differences among divisions in terms of relative market

share position and industry growth rate. The BCG Matrix allows a multidivisional organization

to manage its portfolio of businesses by examining the relative market share position and the

industry growth rate of each division relative to all other divisions in the organization. Relative

market share position is defined as the ratio of a division's own market share in a particular

industry to the market share held by the largest rival firm in that industry.

43

3.5.1 QUESTION MARKS:

Divisions in Quadrant I have a low relative market share position, yet compete in a high-growth

industry. Generally these firms' cash needs are high and their cash generation is low. These

businesses are called Question Marks because the organization must decide whether to

strengthen them by pursuing an intensive strategy (market penetration, market development, or

product development) or to sell them.

3.5.2 STARS:

Quadrant businesses (often called Stars) represent the organization's best long-run opportunities

for growth and profitability. Divisions with a high relative market share and a high industry

growth rate should receive substantial investment to maintain or strengthen their dominant

positions. Forward, backward, and horizontal integration; market penetration; market

development; product development; and joint ventures are appropriate strategies for these

divisions to consider.

3.5.3 CASH COWS:

Divisions positioned in Quadrant III have a high relative market share position but compete in a

low- growth industry. Called Cash Cows because they generate cash in excess of their needs,

they often are milked. Many of today's Cash Cows were yesterday's Stars. Cash Cow divisions

should be managed to maintain their strong position for as long as possible. Product

development or concentric diversification may be attractive strategies for strong Cash Cows.

However, as a Cash Cow division becomes weak, retrenchment or divestiture can become more

appropriate.

3.5.4 DOGS:

Quadrant IV divisions of the organization have a low relative market share position and compete

in a slow- or no-market-growth industry; they are Dogs in the firm's portfolio. Because of their

weak internal and external position, these businesses often are liquidated, divested, or trimmed

down through retrenchment. When a division first becomes a Dog, retrenchment can be the best

strategy to pursue because many Dogs have bounced back, after strenuous asset and cost

reduction, to become viable, profitable divisions.

44

3.6 PORTER FIVE FORCES MODEL:

3.6.1 THREAT OF NEW ENTRANTS – BARRIER TO ENTRY:

According to Michael Porter (1980), threat of new entrants are determined by barriers to entry

which include economies of scale which include size and scope of operations required to achieve

viable cost structure; product differentiation, switching costs and customer loyalty created by

quality, reliability and brand image; capital requirements which involve size of cash and

financial resources required to establish and run a business; cost disadvantages independent of

scale as opposed to advantages held by existing competitors such as location, patents and

experience; access to distribution channels which include means to reach customers; government

policy such as licensing, subsidies or tax incentives; and expected retaliation from existing

competitors which are determined by current rivalry, history of vigorous retaliation and strengths

of incumbents.

The Hotel Industry on a global basis is characterized by high capital costs and a high proportion

of fixed costs to total costs. There are considerable economies of scale in the local Hotel

Industry. The high capital costs require that from the outset the hotel project must be managed to

achieve the most costeffective use of resources applied to construction, furnishing and

equipment, pre-operational expenses and finance. The optimum size for a hotel in metropolitan

cities is around 500 rooms. It may also be a marketing advantage to belong to a “chain of hotels”

to benefit from brand image or loyalty.

Hotels must also aim to fill their rooms as profitably as possible, both through room occupancy

levels and the relative tariffs applied. The two crucial factors that enable hotels to differentiate

themselves are good location for the relative target market and quality of service. This latter

issue is dependent upon good management and trained and motivated staff. The Hotel Industry in

most metropolitan cities in the world provides considerable opportunity to cross-sell profitable

products such as Food and Beverage. Tariffs are determined according to the level of

differentiation achieved through location, management, staff and guest ratios and any other

miscellaneous factors such as the quality of architecture or decoration.

A hotel operator will need either to sell the hotel project before completion or to acquire hotel

management expertise by a management agreement or some form of acquisition. The industry

generally exhibits high product differentiation in this respect. Capital requirements for hotel

45

projects are high. Hotels cannot be easily traded, but must be retained on a long-term basis for

investment purposes. The industry is subject to considerable cost advantages or disadvantages

independent of size. The success of a hotel project is very sensitive to location, management and

the quality and experience of staff.

The growth of the Hotel Industry in most metropolitan cities is limited by the availability of

suitable locations. Access to distribution channels can be a problem, but this factor can be

mitigated by a connection with an international hotel chain. Government policy in most

metropolitan cities, in itself, is not hostile to new hotels. Likely reaction from existing

competitors is likely to be quite acute, but varies according to the particular market segment and

strategic group. The industry exhibits high entry barriers restricting new entrants, particularly

because of the combined factors of economies of scale and high capital cost of entry, together

with the limited supply of suitable locations.

3.6.2 THREATS OF SUBSTITUTE PRODUCTS:

Michael Porter (1980) indicated that substitute products can be existing or potential products and

services which are able to perform the same function. Substitute products can reduce costs,

and/or provide better quality performance and better value which very often the result of

technological innovation.

The Hotel Industry in all major cities is not threatened by substitute products except that in times

of recession domestic travel might replace international or overseas travel and certain

destinations replace more expensive ones on cost grounds. In theory, substitute products perform

same function, reduce costs, and/or provide higher quality performance with better service due to

technological advancement (Porter, 1980). In the “lower” strategic groups for tourist traffic,

hostels, motels and staying with relatives might replace cheaper hotels. This market is either low-

income or cost-conscious, but in any event, it is quite price-sensitive.

A hotel operator in anywhere can compete on a low cost basis in a niche segment. It can also

compete on the basis of a modern, comfortable but not luxurious hotel situated in a popular and

convenient location appearing to offer good value to the cost-conscious visitors. Whether this

strategy is sustainable in the long term is uncertain, given that in an area with good

communications and costconscious travelers may be prepared to suffer slight inconvenience for

cost savings. The importance of location to the target market may be over-rated. The hotel

46

operator may not be able to rely solely on location to retain its market share in a situation of

oversupply and consequently intense rivalry.

There is no major threat of substitute products specific to a hotel’s product and service. A hotel

will be subject to powerful buyers only if its marketing strategy concentrates on attracting tour

groups, provided no oversupply for the hotel’s target market develops. A hotel may not appear to

be particularly vulnerable to intense rivalry because of the fragmented nature of the competition

in its strategic group and the potential growth rate of its target market. In the “upper” strategic

groups, for example, those particularly catering for business traveler, or the upper middle aged

and old aged bracket, there is little opportunity for substitute products. Substitute products are

not a major present or likely threat to Hotel Industry as a whole.

3.6.3 BARGAINING POWER OF SUPPLIERS:

Porter (1980) emphasized that suppliers to an industry may be powerful if they are more

concentrated than their customers and their customers do not command a significant share of

their business because their customers do not represent a potential long-term or major

relationship, for example, one-off or small customers versus regular or bulk buyers. Or their

customers face differentiated products and services or high switching costs. A customer may be

reluctant to change a supplier if such change would face extra one-time switching expenditure.

Also if such change entails a perceived deterioration in the quality, image or quality of the

supplier’s product which will adversely affect the customer’s service. Suppliers have more

bargaining power if their product is an important input in the industry success. The supplier’s

input is crucial to the success of the customer’s product and service such as local tourist

operators, thereby lowering the customer’s price sensitivity.

There is a great demand for enhanced global information and booking capabilities in the

hospitality industry (Kotler et al., 1998, pp.761). However, the only supplier which might

exercise power over any company would be labor and experienced trained personnel, which is in

great demand in the Hotel Industry all over the world. In relation to other industries, hotels are

not significantly subject to the bargaining power of their suppliers and suffer low levels of

indirect pressure on their competitiveness from this source. For a sustainable business strategy

over the long term a hotel will have to maintain a permanent cost advantage over potential

47

competitors in higher strategic groups, say in the four or even five star categories hotels, as well

as further differentiating itself within its own strategic group.

3.6.4 BARGAINING POWER OF BUYERS:

Porter (1980) mentioned that the buyers of goods and services from an industry may be powerful

if they are more concentrated than the players in the industry and are able to force down prices as

well as reduce the industry’s margin. They can purchase from the industry in large volumes, thus

forcing down prices, or increase costs through demand for higher quality products and services.

If the products and services purchased by buyers lack differentiation or switching costs, they can

easily find acceptable alternative sources of supply. Buyers can pose a threat of backward

integration as large group of buyers can acquire the supply source. If the industry’s input is not

crucial to the success of the buyer’s product and service, price sensitivity thus increased. Buyers

have the incentive to be powerful if purchases from the industry represent a significant

proportion of their total costs. Buyers will earn low margins and are price sensitive if they cannot

pass on cost increases easily, or absorb them due to low profit margins. This can happen to a lot

of in-bound tour operators or travel agencies in most metropolitan cities.

Certain buyer groups exercise bargaining power as a result of their concentration or bulk

purchases of hotel rooms. These groups would include tour operators, domestic or international

airlines and large customers, such as convention organizers. This factor is more acute in the

lower tier strategic groups which cater more to travel groups than the independent leisure or

business traveler. Differentiation is a significant factor in respect of the business travelers and for

certain categories of independent leisure travelers, but it declines in importance in the strategic

groups catering to budget leisure travelers and groups.

Users of hotels are not likely to buy them, with the possible exception of airlines, because of the

high level of investment required. Even many international hotel chain companies themselves

function as operators or managers instead of owners. There is, therefore, only a minor threat of

backward integration. With regard to business travel, buyers will tend not to be price-sensitive if

the purchase of a hotel room represents only an insignificant item relative to the underlying

business transaction. Otherwise, large scale buyers of hotel rooms for business purposes will

tend to “shop around” for special rates. Buyers of hotel rooms are often, as a group, rather

fragmented on a worldwide basis.

48

Where buyer groups become more concentrated, for example, tour groups, the prevalence of low

profit margins will tend to raise the buyer group’s price-sensitivity. In this context a hotel’s

choice of buyer group becomes crucial and hotels which target tour groups or other categories of

concentrated buyers will be more subject to the bargaining power of buyers. Within that class its

strategic group is further defined by its target market, namely, medium-pocket in the upper age

bracket. Purchases of hotel rooms are important to certain categories of leisure traveler, and to

most categories of business traveler.

The bargaining power of buyers varies significantly within the industry, depending upon a

hotel’s target buyer group, but this factor becomes acute in a situation of oversupply or where

buyers of hotel rooms are concentrated.

3.6.5 RELAVIRY AMONG EXISTING FIRMS:

Porter (1980) reiterated that intensity of rivalry is dependent on number and size of direct

competitors as numerous and/or equally balanced competitors may lead to intense competition.

This is because business growth sought is greater than rate of growth of the industry. The rivalry

for market share becomes intense when product differentiation and switching costs are low.

Rivalry becomes more intense in fixed costs particularly in high preservation/carrying cost

industries such as the Hotel Industry in most metropolitan cities. There are strong pressures to

sell capacity by price-cutting except weekends and holiday seasons. Capacity augmentation

exists as large additions to capacity can disrupt the demand and supply balance and leads to

intense rivalry. Exit barriers happen due to economic, strategic and economic factors which

retain competitors in an industry. Despite low or negative profitability and diversity, companies

and industries may have different origins, goals and strategies and an overlap in target customers.

49

3.7 SPACE MATRIX:-

Financial Strength Rating Environmental Stability

Rating

Return on Asset 3 Inflation Rate -4 Leverage/Debt 2 Technological

Changes -3

Net Income 3 Competitive Pressure -4 Earnings Per Share 4 Barriers of Entry -2 Net Profit Margin 2 SBP Policy -3 Total 14 Total -16 Industry Strength Rating Competitive

Advantage Rating

Growth Potential 3 Market Share -1 Financial Stability 3 Service Quality -2 Ease of Entry in the industry

3 Customer Loyalty -4

Resource Utilization 5 Technological Knowledge

-2

Profit Potential 2 Online Network/ATMS

-4

Total 16 Total -13

ES Average is -16 ÷ 5 = -3.20

IS Average is + 16 ÷ = 3.10

CA Average is -13 ÷5=-2.6

FS Average is 14 ÷ 4 = 2.8

Directional Vector Coordinates:-

x-axis: IS + CA = 3.10-2.60 = 0.50

y-axis: FS + ES = 2.8-3.20 = -0.40

50

FS

6

5

4

3

2

1

CA IS

-8 -7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7 8

-2

-3

-4

-5

-6

ES

The directional vector may appear in the conservative quadrant (upper- left quadrant) of the SPACE Matrix, which implies that staying close to the company's basic competencies and not taking excessive risks should be the recommended strategy. Conservative strategies most often include market penetration, market development, product development, and concentric diversification for example. Defensive strategies include retrenchment, divestiture, liquidation, and concentric diversification. Finally, the directional vector may be located in the lower-right or competitive quadrant of the SPACE Matrix, indicating competitive strategies would be most appropriate. Competitive strategies include backward, forward, and horizontal integration; market penetration; market development; product development; and joint venture, to name but a few. Understanding all of these potential options can be a complicated and time consuming undertaking. If you need a SPACE Matrix produced for your organization or for a business research project just contact China Doll Publishing or follow the link for more explanations regarding custom writing services .

DEFENCIVE

CONSERVATIVE AGGRESSIVE

COMPETITIVE

51

CHAPTER-4

FINANCIAL ANALYSIS

52

4.1 TRADE ANALYSIS:

[1] TOTAL INCOME:-

The Industry has a fluctuating flow of income over the 5 years. The industry has been able to

improve its sell much but not able in 2012-13. After 2010-11 the income increase in Hotel Leela

Venture Ltd and Indian Hotels Co Ltd at decreasing rate. But Asian Hotels income continues

increase. This is a good sign for the industry having such a reputed name in the market. Also it

affects the earnings of shareholders.

0

200

400

600

800

1000

1200

2013-14 2012-13 2011-12 2010-11 2009-10

TOTAL INCOME

TOTAL INCOME

Year 2013-14 2012-13 2011-12 2010-11 2009-10 Asian Hotels 293.22 266.72 276.66 242.50 145.65 Bharat Hotel 487.80 419.30 403.12 412.83 413.96 Hotel Leela 768.17 654.70 588.44 509.54 478.38 Eih Ltd 1,291.34 1,177.28 1,173.36 1,175.52 907.27 Indian Hotels Co Ltd

1,977.33 1,924.79 1,912.21 1,765.14 1,592.39

Total 4817.86 4442.79 4353.79 4105.53 3537.65 AVG 963.572 888.558 870.758 821.106 707.53

53

[2] EXPENCES:-

Year 2013-14 2012-13 2011-12 2010-11 2009-10

Asian Hotels 216.72 157.98 163.78 157.85 93.03

Bharat Hotel 353.79 328.93 285.98 288.32 311.72

Hotel Leela

Venture Ltd 573.24 532.05 141.60 334.15 324.93

Eih Ltd 1,006.72 959.69 870.84 847.40 649.78

Indian Hotels

Co Ltd 2,277.15 1,904.36 1,420.28 1,276.44 1,093.98

Total 4427.62 3883.01 2882.48 2904.16 2473.44

AVG 885.524 776.602 576.496 580.832 494.688

Above graph show the industry fluctuating of expenses over the 5 year. The industry has not able

to decrease their expenses. The expenses of last 5 years is continually increase. In 2011-12 Hotel

Leela Venture Ltd total expenses decrease and than after increase.

0100200300400500600700800900

1000

2013-14 2012-13 2011-12 2010-11 2009-10

TOTAL EXPENCE

TOTAL EXPENCE

54

[3] OPERATING PROFIT:

Year 2013-14 2012-13 2011-12 2010-11 2009-10

Asian Hotels 76.50 108.73 112.88 84.65 52.62

Bharat Hotel 134.01 90.37 117.15 124.51 102.24

Hotel Leela

Venture Ltd 194.94 122.64 446.84 175.39 153.45

Eih Ltd 284.61 217.59 302.52 328.12 257.49

Indian Hotels

Co Ltd -299.82 20.43 491.93 488.70 498.41

Total 390.24 559.76 1471.32 1201.37 1064.21

AVG 78.048 111.952 294.264 240.274 212.842

Above graph show the industry different year operating profit over the 5 year. The graph show

the first 3 year operating profit continually increase. The industry show, they have achieved good

market share over the first 3 year. But the year of the 2012-13 the industry operating profit was

decrease the reason is Asian Hotels, Hotel Leela Venture Ltd and Indian Hotels Co Ltd operating

profit is decrease.

0

50

100

150

200

250

300

350

2013-14 2012-13 2011-12 2010-11 2009-10

OPRATING PROFIT

OPRATING PROFIT

55

[ 4 ] PBDT:

Year 2013-14 2012-13 2011-12 2010-11 2009-10

Asian Hotels 3.08 56.41 65.98 54.68 41.10

Bharat Hotel 39.44 7.88 48.35 70.38 69.52

Hotel Leela

Venture Ltd -306.69 -282.70 125.59 119.31 128.98

Eih Ltd 243.96 172.58 248.11 172.93 156.61

Indian Hotels

Co Ltd -398.64 -84.77 343.82 329.85 321.39

Total -418.85 -130.6 831.85 747.15 717.6

AVG -83.77 -26.12 166.37 149.43 143.52

Above graph show the industry fluctuating of PBDT over the 5 year. The industry has able to

improve their PBDT in 2011-12 but than after PBDT not improve in 2012 and 2013 . The first 3

year industry has increase PBDT But suddenly in the year of 2011-12 the trend was downfall.

Because in the year 2011-12 and 2012-13 the two company Hotel Leela Venture Ltd, Indian

Hotels Co Ltd suddenly down their PBDT.

-100

-50

0

50

100

150

200

2013-14 2012-13 2011-12 2010-11 2009-10

PBDT

PBDT

56

[5] TOTAL SHARE CAPITAL:-

Year 2013-14 2012-13 2011-12 2010-11 2009-10

Asian Hotels 19.45 24.35 24.35 24.35 22.61

Bharat Hotel 75.99 75.99 75.99 75.99 75.99

Hotel Leela

Venture Ltd 90.32 83.73 77.57 77.56 75.56

Eih Ltd 114.31 114.31 114.31 114.31 78.59

Indian Hotels

Co Ltd 80.75 80.75 75.95 75.95 72.35

Total 380.82 379.13 368.17 368.16 325.1

AVG 76.164 75.826 73.634 73.632 65.02

Above graph show the industry fluctuating of Total share capital over the 5 year. In first three

year the total share capital of the industry is near to not equal, but in 2011-12 the share capital is

decrease the reason is Asian Hotels share capital is decrease. This is not a good sign for the

industry having such a reputed name in the market. Also it affects the industry volume and profit.

5860626466687072747678

2013-14 2012-13 2011-12 2010-11 2009-10

SHARE CAPITAL

SHARE CAPITAL

57

[6] TOTAL LIABILITY:

Year 2013-14 2012-13 2011-12 2010-11 2009-10

Asian Hotels 1,709.57 1,658.06 1,544.81 1,414.90 950.35

Bharat Hotel 2,057.45 1,895.46 1,871.73 1,756.36 1,644.79

Hotel Leela

Venture Ltd 5,816.15 5,923.20 5,797.89 5,999.29 4,932.80

Eih Ltd 2,947.38 3,028.90 2,933.96 3,447.57 2,676.63

Indian Hotels

Co Ltd 6,042.87 6,579.09 6,715.26 6,179.84 5,361.46

Total 18573.42 19084.71 18863.65 18797.96 15566.03

Avg 3714.684 3816.942 3772.73 3759.592 3113.206

Above graph show that the industry total liability continually over the 5 year. The industry

liability is continues increase in all 5 year the reason is all four company increase the liability

but in a year 2010-11 Bharat Hotel and Seshasayee Paper & Hotel Leela Venture Ltd the total

liability is decrease.

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2013-14 2012-13 2011-12 2010-11 2009-10

total loability

total loability

58

[7] TOTAL INVESTMENT:

Year 2013-14 2012-13 2011-12 2010-11 2009-10

Asian Hotels 556.61 107.96 104.66 391.06 0.00

Bharat Hotel 126.06 206.30 206.30 206.30 206.29

Hotel Leela

Venture Ltd 46.24 46.24 146.34 46.14 46.14

Eih Ltd 703.95 705.73 628.05 605.14 378.24

Indian Hotels

Co Ltd 2,761.64 3,369.14 3,622.19 3,026.78 3,458.44

total 4194.5 4435.37 4707.54 4275.42 4089.11

AVG 838.9 887.074 941.508 855.084 817.822

At the initial level the industry is very poor in making investments at the year 2011 -12 industry

sold its investments but in 2013-14 and 2009-10 industry had done good business And the year

2011-12 and 2012-13 industry had decrease their investment the reason is Hotel Leela Venture

Ltd and Asian Hotels sold his investment. 9

9 www.capitalline.com

740760780800820840860880900920940960

2013-14 2012-13 2011-12 2010-11 2009-10

total investment

total investment

59

4.2 RATIO ANALYSIS:-

4.2.1 DEBT /EQUITY:-

A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.

DEBT /EQUITY= TOTAL LIABILITIES SHAREHOLDERS EQUITY

Year 2013-14 2012-13 2011-12 2010-11 2009-10 Asian Hotels 1.28 1.06 0.98 0.61 0.26 Bharat Hotel 1.14 1.08 0.92 0.82 0.69 Hotel Leela Venture Ltd 13.63 6.31 4.51 3.89 3.28 Eih Ltd 0.14 0.14 0.23 0.59 0.97 Indian Hotels Co Ltd 0.87 0.78 0.76 0.85 0.78 Total 16.19 8.59 6.64 5.91 5.2 AVG 3.238 1.718 1.328 1.182 1.04

A measure of an industry financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the industry is using to finance its assets. Above graph show the industry debt equity ratio was increase in the year of the 2013-14 and the decrease in year 2009-10 and 2010-11 the reaso1n is Eih Ltd & Indian Hotels Co Ltd the ratio is decrease. it is good position in the market.

0

0.5

1

1.5

2

2.5

3

3.5

2013-14 2012-13 2011-12 2010-11 2009-10

Debt-Equity Ratio

Debt-Equity Ratio

60

4.2.2 CURRENT RATIO:-

It is a measure of general liquidity and is most widely used to make the analysis for short term financial position or liquidity of a firm. It is calculated by dividing the total of the current assets by total of the current liabilities.

CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITY

Year 2013-14 2012-13 2011-12 2010-11 2009-10 Asian Hotels 0.19 0.17 0.16 0.3 0.76 Bharat Hotel 0.61 0.51 0.52 1 1.59 Hotel Leela Venture Ltd 0.13 0.15 0.27 0.56 0.93 Eih Ltd 0.41 0.43 0.86 1.07 1.1 Indian Hotels Co Ltd 0.4 0.39 0.31 0.58 1.13 Total 1.34 1.26 1.81 2.93 4.38 AVG 0.268 0.252 0.362 0.586 0.876

The current ratio is a financial ratio that measures whether or not a industry has enough resources to pay its debts over the next 12 months. It compares a firm's current assets to its current liabilities. Above graph show the current ratio in the year of 2009-10 was 0.87 and suddenly next four year falls down the reason is Bharat Hotel, Eih Ltd and Indian Hotels Co Ltd decrease the ratio continues. It means the industry next four year current assets and current liability was decrease.

0

0.2

0.4

0.6

0.8

1

2013-14 2012-13 2011-12 2010-11 2009-10

CURRENT RATIO

CURRENT RATIO

61

4.2.3 FIXED ASSEST:-

A financial ratio of net sales to fixed assets. The fixed-asset turnover ratio measures a company's ability to generate net sales from fixed-asset investments - specifically property, plant and equipment (PP&E) - net of depreciation. A higher fixed-asset turnover ratio shows that the company has been more effective in using the investment in fixed assets to generate revenues.

Fixes Assest = Total Sales Total fixes assest

Year 2013-14 2012-13 2011-12 2010-11 2009-10 Asian Hotels 0.23 0.24 0.26 0.28 0.35 Bharat Hotel 0.33 0.32 0.34 0.41 0.46 Hotel Leela Venture Ltd 0.13 0.13 0.15 0.15 0.16 Eih Ltd 0.47 0.45 0.46 0.44 0.4 Indian Hotels Co Ltd 0.67 0.66 0.67 0.67 0.62 Total 1.16 1.14 1.21 1.28 1.37 AVG 0.232 0.228 0.242 0.256 0.274

Financial analyst considers the fixed assets as an important measure of profitability. fixed assets measures the profit available to the total assets holders on a per share basis. That is the amount that they can get on every assets. The fixed assets has increase rapidly from 2009-10 to 2010-11. In 2009-10 it was highest at 0.274 and it has decreased to in 2011-12 and 2012-13. This lower ratio will not attract investors. This ratio shows that company fails to increase assets in 2011-12 and 2012-13.

0

0.05

0.1

0.15

0.2

0.25

0.3

2013-14 2012-13 2011-12 2010-11 2009-10

FIXED ASSEST

FIXED ASSEST

62

4.2.4 INVENTORY:-

Inventory turnover is the ratio of cost of goods sold by a business to its average inventory during a given accounting period. It is an activity ratio measuring the number of times per period, a business sells and replaces its entire batch of inventory again.

INVENTORY TURNOVER RATIO = COST OF GOODS SOLD AVERAGE INVENTORY

Year 2013-14 2012-13 2011-12 2010-11 2009-10 Asian Hotels 36.64 36.33 35.99 37.36 39.35 Bharat Hotel 30.32 27.13 24.72 30.35 36.31 Hotel Leela Venture Ltd 49.13 48 50.51 53.06 42 Eih Ltd 33.33 33.72 33.44 32.25 25.62 Indian Hotels Co Ltd 49.13 48 50.51 53.06 42 Total 149.42 145.18 144.66 153.02 143.28 AVG 29.884 29.036 28.932 30.604 28.656

A ratio showing how many times a inventory is sold and replaced over a period. Here the graph show the higher inventory turnover ratio is 30.64 in the year of the 2010-11 the reason is the all four company inventory turnover ratio is increase. It means the industry inventory is more sold and replaced over a period. But in 2011-12 and 2012-13 is decrease the reason is and Hotel Leela Venture Ltd ratio is decrease.

27.5

28

28.5

29

29.5

30

30.5

31

2013-14 2012-13 2011-12 2010-11 2009-10

INVENTORY

INVENTORY

63

4.2.5 DEBTOR TURNOVER RATIO

Debtors Turnover ratio is a test of the liquidity of the firm. This ratio establishes the relationship between net credit sales and accounts receivables. The objective of this ratio is to determine the efficiency with which the debtors are being managed. It suggests the number of time the amount of credit sale is collected during the year.

DEBTOR TURNOVER RATIO = NET SALES DEBTOR

Year 2013-14 2012-13 2011-12 2010-11 2009-10 Asian Hotels 21.56 18.94 20.18 23.52 19.42 Bharat Hotel 13.49 14.47 14.61 17.03 20.56 Hotel Leela Venture Ltd 11.02 11.45 11.41 11 12.94 Eih Ltd 7.16 7.2 8.37 9.14 8.09 Indian Hotels Co Ltd 15.46 15 15.81 14.84 13.19 Total 53.23 52.06 54.57 60.69 61.01 AVG 10.646 10.412 10.914 12.138 12.202

Debtor turnover ratio or accounts receivable turnover ratio indicates the velocity of debt

collection of an industry. In simple words it indicates the number of times average debtors

(receivable) are turned over during a year. The graph show debtor turnover ratio in the year

2012-13 is decrease the reason is Bharat Hotel ratio is decrease. It is the benefit of the industry.

9.5

10

10.5

11

11.5

12

12.5

2013-14 2012-13 2011-12 2010-11 2009-10

DEBTORS

DEBTORS

64

But in 2009-10 the ratio is increase the reason is all four company debtor turnover ratio is

increase. 10

10 www.capitalline.com

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CHAPTER-5

FINDING & CONCLUSION

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FINDING:-

Only three hotel resorts incorporated environmentally friendly operations into their strategy

Environmentally friendly practices such as energy saving water consumption and waste

management were incorporate to a certain degree where economics saving were present.

Main challenges in operating environmentally friendly where lack of knowledge, investment,

needed and time consuming.

Main advantage in operating environmentally friendly where cost saving in certain areas and

benefits to destination.

Only one hotel resort covered many areas of environmentally friendly operations, including

training.

Environmentally friendly operations were used minimal in marketing.

68.1 percent of tourist indicated preference of eco- labeled hotel resort how’re, it was least

importance factor when choosing accommodation, the contractions show the importance of

matching other attributes such as location, appearance, service and facilities.

56.2 percent of tourist indicated willingness to pay premium for eco- labeled hotel resort.

People with higher level of education indicated more interest in eco- labeled hotel resorts.

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CONCLUSION

“Service to man is service to God”. As the proverb says the hotel owners and the managers provide good service to their customers, which in turn will increase the profitability of the hotels.

In the hotel industry, service quality, as an extremely subjective category, is crucial to the

satisfaction of the customers. If they increase the quality of service it will attract more customers

at the same time they can expand the business, and it will lead to more employment

opportunities.

To sum-up, this thesis attempts to clarify the SERVQUAL model and not only provides the

managers with a clear picture of the quality of the services provided, but also helps the hotel

owners to discover the needs, tastes, preferences and expectations of the guests. It also lists out

various facilities provided by the hotels to their customers and also various services mixes

provided. We can say that it helps managers in setting the standards for the provision of services

in the hospitality industry.

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CHAPTER-6

B-PLAN

69

6.1 INTRODUCTION

Royal Rajputana Hotel & Resort offers luxury accommodation and associated amenities to local, regional, national and international tourists and travelers. For business travelers we offer a wide range of facilities such as conference and meeting rooms and exhibition space, including all necessary conferencing equipment and security.

6.2 OBJECTIVE:-

The objectives of the Royal Rajputana Hotel & Resort for the first three years of operation

include:

• Exceeding customer's expectations for luxury apres ski accommodations.

• Maintaining an 90% occupancy rate during the peak periods.

• Assembling an experienced and effective staff.

6.3 VISION

The planned hotel can look forward to a promising future, because of the experienced staff, our careful planning, the potential of the targeted market segments, and skills training program. Our pre-market research has shown the intended market to have plenty of room for a hotel such as Foundations intends to run. The management style is flexible, progressive and energetic. Enthusiasm of the management as well as the employees will greatly stimulate the envisioned growth

6.4 MISSION

Royal Rajputana Hotel & Resort offer high quality and high value products and services to the customers and also tries to improve consumer life.

6.5 PERSONNEL PLAN

The personnel needed for Royal Rajputana Hotel & Resort are the following:

• Manager. • Assistant manager. • Lodge staff (7). • Food store staff (3). • Ski rental/clothing store (3). • Maintenance staff (3). • Cleaning staff (4).

70

6.6 COMPANY PROFILE:

COMPANY NAME Royal Rajputana Hotel & Resort

COMPANY’S ADDRESS Head office at Maunt Abu

Near Nakki Talav

Rajsthan. 362-001

OWNERS OF THE COMPAN Vaghela Hemant (20% Share)

Zala shaktisinh (20% Share)

Dabhi Yogendrasinh (15% Share)

SojitrabAjay (15% Share)

Vyas Mayur (15% Share)

Raval Bhoomi (15% Share

THERE BASIC QUALIFICATION All partners having MBA degree with

specialization on (Marketing, Finance, and

H.R.)

TOTAL INVESTMENT 10,000,000

MAIN PRODUCT OFFERED Luxury Facilities

TYPES OF INDUSTRY Hotel industry

6.7 PROCESS/STEPS FOR STARTING BUSINESS

To check our market potentiality.

Location selection

Physical set up (office/furniture etc.)

Purchasing of materials.

Applying local govt. (municipal) for registration.

Starting Business

6.8 LIST OF DOCUMENTS/FORMALITIES REQUIRED TO DO BUSINESS

Partnership deed (MoA / AoA ).

License from Govt. (shop registered under municipality).

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PAN number for business.

“Gumasta-dhara” certificate.

Opening of bank account.

Telephone/Fax connection (land line)

6.9 PRODUCTS

Royal Rajputana Hotel & Resort will offer customers 12 two-bedroom units, fully-equipped kitchens, laundry facilities and stone fireplaces. Royal Rajputana Hotel & Resort will offer a common-area outdoor hot tub as well as the following services on-site:

• Food store • Ski rental/clothing shop • Front desk service

6.10 MARKET SEGMENTATION

Our customers can be broadly divided into two groups:

• Skiers. Royal Rajputana Hotel & Resort area is quickly becoming one of the best ski resorts in the Mount Abu. The resort is located 36 miles is easily accessible.

• Summer Visitors. During the summer months, Royal Rajputana Hotel & Resort area is a beautiful wilderness retreat with over 50 hiking trails and other outdoor recreational activities.

6.11 SALES STRATEGY

Royal Rajputana Hotel & Resort sales strategy is to harness the existing booking system that has been critical to the success of all of the area's lodges and inns. Room rates will range from Rs1000-1200 per night in peak season. In the off season prices will range from Rs600-800 per night.

6.12 MARKETING STRATEGY

Royal Rajputana Hotel & Resort area has its own website and advertising/promotion program that promotes the area's lodging. Currently, 70% of the area's visitors use the website to identify lodging and service options.

Royal Rajputana Hotel & Resort is positioned as a new upscale facility that is focused on the high- income visitors to Resort. The area's lodges and inns receive approximately 80% of their guests from the Royal Rajputana Hotel & Resort booking system. Since the total number of room units are few with the area's lodges and inns, these lodging units fill up quickly.

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In addition, Royal Rajputana Hotel & Resort will be highlighted in a promotional in the December issue of Ski Magazine.

6.13 COST OF PROJECT

The estimated project cost under various heads has been worked out for New Project like furniture & fixture, various electric items like machinery, etc

SR.NO PARTICULARS AMOUNT

1 Site on Rent 300,000

2 Computer 72,000

3 Furniture 800,000

4 Machinery & Equipments 45,15,000

5 Raw material expenses 12,83,000

6 Marketing and Sales

Promotion Expenses

200,000

7 Staff Salary 600,000

8 Other Expenses 300,000

TOTAL 8,070,000

CASH ON HAND 1,930,000

COST OF PROJECT 10,000,000

6.14 SOURCE OF FINANCE

PARTICULARS AMOUNT

Promoters Contribution

Vaghela Hemantsang 20,00,000

Zala Shaktisinh 20,00,000

Dabhi Yogendrasinh 10,50,000

Sojitra Ajay 10,50,000

Vyas Mayur 10,50,000

Raval Bhoomi 10,50,00

TOTAL 1,00,00,000

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6.15 PROJECTED SALES:

Year 1 Year 2 Year 3

Sales 430,000 560,000 600,000

Rooms 121,000 140,000 180,000

Food 132,000 145,000 160,000

Ski Rentals 58,000 70,000 82,000

Clothing 430,000 560,000 600,000

TOTAL 741,000 915,000 1,022,000

6.16 PROFIT AND LOSS:


Sales 741,000 915,000 1,022,000

Direct Cost of Sales 83,200 101,000 128,000

Other Production

Expenses 0 0 0

Total Cost of Sales 83,200 101,000 128,000

Gross Margin 657,800 814,000 894,000

Gross Margin % 88.77% 88.96% 87.48%

Expenses

Payroll 382,000 414,000 438,000

Sales and Marketing

and Other Expenses 60,000 80,000 100,000

Depreciation 14,280 14,280 14,280

Leased Equipment 0 0 0

Utilities 26,000 26,000 26,000

Insurance 24,000 24,000 24,000

Lease 0 0 0

Payroll Taxes 57,300 62,100 65,700

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Other 0 0 0

Total Operating

Expenses 563,580 620,380 667,980

Profit Before Interest

and Taxes 94,220 193,620 226,020

EBITDA 108,500 207,900 240,300

Interest Expense 33,375 30,500 27,500

Taxes Incurred 18,254 48,936 59,556

Net Profit 42,592 114,184 138,964

Net Profit/Sales 5.75% 12.48% 13.60%

6.17 PROJECTED BALANCE SHEET


Assets

Cash 31,437 118,555 165,584

Other Current Assets 14,000 32,000 53,000

Total Current Assets 45,437 150,555 218,584

Long-term Assets 350,000 370,000 430,000

Accumulated

Depreciation 14,280 28,560 42,840

Total Long-term

Assets 335,720 341,440 387,160

Total Assets 381,157 491,995 605,744

Liabilities and

Capital

Accounts Payable 3,965 30,619 35,405

Current Borrowing 0 0 0

Other Current

Liabilities 0 0 0

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Subtotal Current

Liabilities 3,965 30,619 35,405

Long-term Liabilities 320,000 290,000 260,000

Total Liabilities 323,965 320,619 295,405

Paid- in Capital 200,000 200,000 200,000

Retained Earnings (185,400) (142,809) (28,625)

Earnings 42,592 114,184 138,964

Total Capital 57,192 171,376 310,340

Total Liabilities and

Capital 381,157 491,995 605,744

Net Worth 57,192 171,376 310,340

6.18 PROJECTED CASH FLOW:


Cash Received

Cash from

Operations

Cash Sales 741,000 915,000 1,022,000

Subtotal Cash from

Operations 741,000 915,000 1,022,000

Additional Cash

Received

Sales Tax, VAT,

HST/GST Received 0 0 0

New Current

Borrowing 0 0 0

New Other

Liabilities (interest-

free)

0 0 0

New Long-term 0 0 0

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Liabilities

Sales of Other

Current Assets 0 0 0

Sales of Long-term

Assets 0 0 0

New Investment

Received 0 0 0

Subtotal Cash

Received 741,000 915,000 1,022,000

Expenditures Year 1 Year 2 Year 3

Expenditures from

Operations

Cash Spending 382,000 414,000 438,000

Bill Payments 298,163 345,882 425,971

Subtotal Spent on

Operations 680,163 759,882 863,971

Additional Cash

Spent

Sales Tax, VAT,

HST/GST Paid Out 0 0 0

Principal Repayment

of Current

Borrowing

0 0 0

Other Liabilities

Principal Repayment 0 0 0

Long-term Liabilities

Principal Repayment 30,000 30,000 30,000

Purchase Other

Current Assets 14,000 18,000 21,000

Purchase Long-term 0 20,000 60,000

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Assets

Dividends 0 0 0

Subtotal Cash Spent 724,163 827,882 974,971

Net Cash Flow 16,837 87,118 47,029

Cash Balance 31,437 118,555 165,584

Cash Received 741,000 915,000 1,022,000

6.19 BUSINESS RATIOS:

Business ratios for the years of this plan are shown below. Industry profile ratios based on the

Standard Industrial Classification (SIC) code 7011, Hotels and Motels, are shown for

comparison.

Year 1 Year 2 Year 3 Industry Profile

Total Current

Assets 11.92% 30.60% 36.09% 32.00%

Total Liabilities 85.00% 65.17% 48.77% 54.00%

Profit Before

Interest and

Taxes

12.72% 21.16% 22.12% 2.50%

Net Working

Capital $41,472 $119,936 $183,180 NA

Gross Margin 88.77% 88.96% 87.48% 0.00%

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CHAPTER :7 BIBLIOGRAPHY

LINK

http://en.wikipedia.org/wiki/History_of_hotel

www.setupmy hotel.com

www.ibef.org/industry/tourism-hospitality-india.aspx

WEB SITE.

www.capitaline.com

www.moneycontrol.com

http://www.thelalit.com

http://www.asianhotelsnorth.com

http://www.theleela.com

http://www.tajhotels.com

http://www.eihltd.com

BOOKS NAME

Arthur A. Thompson, A. J. Strickland, John E Gamble, Arun K. Jain (2009). Crafting

And Executing Strategy. New Dehli: Prentice – Tata McGraw-Hill Publishing Company

Limited.

Aswathapa 9th Edition.Business environment.New Dehli: Prentice- McGraw-Hill

Publication.

http://www.setupmy/

http://www.ibef.org/industry/tourism-hospitality-india.aspx

http://www.capitaline.com/






79

CHAPTER-8 ANNEXURY

(1) ASIAN HOTELS (NORTH) LTD INDUSTRY:

Mar 14 Mar 13 Mar 12 Mar 11 Mar 10

SOURCES OF FUNDS :

Share Capital + 19.45 24.35 24.35 24.35 22.61

Reserves Total + 783.26 848.94 822.37 790.70 770.59

Equity Share Warrants 0.00 0.00 0.00 0.00 0.00

Equity Application Money 0.00 0.00 0.00 0.00 0.00

Total Shareholders Funds 802.71 873.29 846.72 815.05 793.20

Secured Loans + 848.39 738.35 655.56 560.44 151.33

Unsecured Loans + 51.50 17.04 7.00 28.75 0.00

Shop Security Deposits 0.00 0.00 0.00 0.00 5.82

Total Debt 899.89 755.39 662.56 589.19 157.15

Other Liabilities 6.97 29.38 35.53 10.66 0.00

Total Liabilities 1,709.57 1,658.06 1,544.81 1,414.90 950.35

APPLICATION OF FUNDS :

Gross Block + 1,294.33 1,086.01 1,074.44 1,058.60 1,052.51

Less: Accumulated Depreciation + 108.52 102.58 91.21 81.37 72.96

Less:Impairment of Assets 0.00 0.00 0.00 0.00 0.00

Net Block + 1,185.81 983.43 983.23 977.23 979.55

Lease Adjustment 0.00 0.00 0.00 0.00 0.00

Capital Work in Progress+ 67.11 269.69 200.20 133.75 9.90

Investments + 556.61 107.96 104.66 391.06 0.00

Current Assets, Loans & Advances

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Inventories + 6.11 6.34 5.56 7.00 5.88

Sundry Debtors + 9.97 11.19 11.63 10.77 9.69

Cash and Bank+ 35.51 2.89 3.37 3.30 7.23

Loans and Advances + 17.07 38.66 8.93 17.67 27.65

Total Current Assets 68.66 59.08 29.49 38.74 50.45

Less : Current Liabilities and Provisions

Current Liabilities + 220.09 243.57 201.35 130.00 68.85

Provisions + 7.91 6.51 12.35 7.05 13.71

Total Current Liabilities 228.00 250.08 213.70 137.05 82.56

Net Current Assets -159.34 -191.00 -184.21 -98.31 -32.11

Miscellaneous Expenses not written off + 0.00 0.00 0.00 0.00 0.00

Deferred Tax Assets 9.25 10.57 10.79 11.12 11.72

Deferred Tax Liability 32.85 19.94 18.84 18.67 18.71

Net Deferred Tax -23.60 -9.37 -8.05 -7.55 -6.99

Other Assets 82.99 497.36 448.98 18.72 0.00

Total Assets 1,709.57 1,658.07 1,544.81 1,414.90 950.35

Contingent Liabilities+ 4.96 4.90 5.00 5.30 5.08

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(2) BHARAT HOTELS LTD INDUSTRY:


SOURCES OF FUNDS :

Share Capital + 75.99 75.99 75.99 75.99 75.99

Reserves Total + 1,034.85 941.21 991.49 990.44 982.14



Total Shareholders Funds 1,110.84 1,017.20 1,067.48 1,066.43 1,058.13

Secured Loans + 735.22 633.81 578.62 568.87 462.73

Unsecured Loans + 150.09 185.37 164.60 55.46 123.93


Total Debt 885.31 819.18 743.22 624.33 586.66


Total Liabilities 2,057.45 1,895.46 1,871.73 1,756.36 1,644.79


Gross Block + 1,612.91 1,594.96 1,349.22 1,320.55 1,150.23



Net Block + 1,320.97 1,314.05 1,108.73 1,116.88 979.81



Investments + 126.06 206.30 206.30 206.30 206.29


Inventories + 14.77 13.39 14.22 13.45 11.18

Sundry Debtors + 35.18 28.13 23.62 23.19 20.70

Cash and Bank+ 61.91 61.85 72.42 104.15 173.55

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Provisions + 12.44 12.71 11.86 14.65 19.16


Net Current Assets 117.33 85.81 57.68 96.69 289.75




Net Deferred Tax -75.83 -87.78 -81.59 -79.51 -64.14

Other Assets 429.93 272.21 327.11 263.95 0.00

Total Assets 2,057.44 1,895.45 1,871.73 1,756.36 1,644.79


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(3) HOTEL LEELA VENTURE LTD INDUSTRY:


SOURCES OF FUNDS :

Share Capital + 90.32 83.73 77.57 77.56 75.56

Reserves Total + 744.71 1,138.88 1,513.07 2,025.31 1,978.58



Total Shareholders Funds 870.03 1,222.61 1,590.64 2,102.87 2,054.14

Secured Loans + 4,905.02 4,604.30 3,762.80 3,317.40 2,353.48

Unsecured Loans + 0.00 55.00 412.83 485.74 525.18


Total Debt 4,905.02 4,659.30 4,175.63 3,803.14 2,878.66




Gross Block + 6,346.24 6,282.61 5,039.08 4,588.61 4,145.53



Net Block + 5,533.13 5,599.36 4,473.04 4,069.03 3,668.67


Capital Work in Progress+ 158.17 166.03 1,103.97 1,551.66 1,264.56

Investments + 46.24 46.24 146.34 46.14 46.14


Inventories + 64.00 71.34 59.85 54.38 43.43

Sundry Debtors + 71.59 58.84 53.78 46.44 37.90

Cash and Bank+ 27.68 35.43 16.41 56.26 13.48

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Provisions + 5.15 5.14 102.71 21.06 128.64


Net Current Assets -197.52 -88.05 -117.48 72.95 86.15




Net Deferred Tax -72.43 -122.53 -145.63 -147.96 -132.72

Other Assets 348.56 322.14 337.65 407.47 0.00

Total Assets 5,816.15 5,923.19 5,797.89 5,999.29 4,932.80


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(4) EIH LTD INDUSTRY:


SOURCES OF FUNDS :

Share Capital + 114.31 114.31 114.31 114.31 78.59

Reserves Total + 2,533.27 2,510.61 2,520.84 2,473.48 1,338.50




Secured Loans + 192.65 347.86 200.41 534.86 1,174.54

Unsecured Loans + 90.00 40.00 78.70 300.00 85.00


Total Debt 282.65 387.86 279.11 834.86 1,259.54




Gross Block + 2,864.44 2,825.83 2,646.42 2,624.33 2,486.09



Net Block + 2,068.08 2,116.68 2,015.24 2,060.95 1,998.04



Investments + 703.95 705.73 628.05 605.14 378.24


Inventories + 39.75 34.12 33.12 33.67 30.06

Sundry Debtors + 170.12 173.56 141.17 125.65 99.22

Cash and Bank+ 16.46 20.36 11.96 594.28 13.77

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Provisions + 72.23 61.73 75.69 63.77 66.94


Net Current Assets -9.05 18.91 -19.03 550.33 258.73




Net Deferred Tax -192.46 -173.88 -163.17 -149.90 -132.84

Other Assets 331.19 321.49 313.41 279.90 0.00

Total Assets 2,947.39 3,028.91 2,933.96 3,447.57 2,676.63


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(5) INDIAN HOTELS CO LTD INDUSTRY:


SOURCES OF FUNDS :

Share Capital + 80.75 80.75 75.95 75.95 72.35

Reserves Total + 2,613.09 3,226.90 3,176.70 3,028.59 2,616.87




Secured Loans + 859.34 910.00 971.18 461.24 1,752.77

Unsecured Loans + 1,831.26 1,612.27 1,708.20 1,900.24 897.78


Total Debt 2,690.60 2,522.27 2,679.38 2,361.48 2,672.24




Gross Block + 2,910.27 2,861.65 2,830.66 2,605.18 2,408.32

Less: Accumulated Depreciation + 1,212.86 1,105.19 985.30 872.83 837.81


Net Block + 1,697.41 1,756.46 1,838.75 1,725.74 1,561.26



Investments + 2,761.64 3,369.14 3,622.19 3,026.78 3,458.44


Inventories + 40.18 38.37 39.79 31.83 31.25

Sundry Debtors + 124.41 125.22 124.83 103.96 121.62

Cash and Bank+ 43.17 48.96 22.93 90.41 447.12

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Total Current Assets 316.02 337.18 298.92 366.30 1,038.11



Provisions + 185.26 144.30 131.22 141.99 700.74

Total Current Liabilities 616.34 550.80 552.79 512.62 1,097.73

Net Current Assets -300.32 -213.62 -253.87 -146.32 -59.62




Net Deferred Tax -107.16 -95.50 -95.93 -27.78 30.79

Other Assets 1,559.42 1,453.38 1,374.51 1,265.36 0.00

Total Assets 6,042.87 6,579.09 6,715.26 6,179.84 5,361.46

Contingent Liabilities+ 1,072.13 957.42 910.56 698.03 552.94

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