The hotel industry in India is valued at approximately $25 billion and is growing at an average rate of 32% annually. There is currently demand for 150,000 hotel rooms but only 110,000 rooms available. The occupancy rates for hotels have been increasing with the average rate in the September quarter reaching 56.5% compared to 53.2% the previous year. The main segments that contribute to hotel revenue are room sales at 70% and food and beverage at approximately 30%. The major players in the Indian hotel industry are Indian Hotels Company, ITC Hotels, Oberoi Hotels, and Taj Hotels.

1. THE HOTEL INDUSTRY
..BY..
1.SIDHANT SIROHI
2.PALAK VOHRA
3.ABHISHEK PANJA
4.JASMEEN KAUR

2. Total size of Hotel industry is USD 24-25 Billion
Average Growth Rate = 32%
According to World Tourism Organization, International
tourist inflow in India would be 10 million
Total requirements 14.8 million people for the hotel industry.
INDUSTRY SNEAK-PEAK
https://www.equitymaster.com/research-it/sector-info/hotels/Hotels-Sector-Analysis-Report.asp

3. Total no of rooms are 110,000 and required are 150,000.
In total 1800+ hotels in India.
The traffic incoming is calculated through occupancy rate,
which is calculated on daily basis.
Average room occupancy rate in Sept quarter, traditionally lowest
period of biz for hotels in the year - stood at 56.5%, up from 53.2%.
http://tourism.gov.in/TourismDivision/HotelList.aspx?Name=Hotels%20and%20Restaurants&HCID=5

4. The room rate of a hotel is not a fixed figure, while it
depends upon the RevPAR of the hotel and average
daily rate as set weekly or monthly by the authorities.
Industry’s main business is through room sales,
accounts to 70% of the total revenue generated by
the various operations in a hotel.
The hotel is run by four core departments namely,
Front office, Housekeeping, Food and Beverage
Services and Food Production.
http://blog.chateaugranville.com/2014/08/28/a-look-into-hotel-departments-and-their-functions/

5. F & B Support, Kitchen Stewarding, Purchase
Department, Human Resource, Finance, Sales &
Marketing and Training Department are the support
departments for smooth functioning of these
departments.
Conference rooms, Banquets & Halls, Restaurants
and Bars are some other facilities offered by the
industry

6. Classification of hotels is done on the basis
of:
• location (City Center, Sub-Urban, Floating,
Rotel etc.)
• Level of service (Economy, Mild and
Luxury)
• Property size ( Medium, Large, Mega,
Chain)
• Based on Theme, Target Market, Stay
http://setupmyhotel.com/about-hotel-industry/classification-of-hotels-by-there-type.htm

7. OVERVIEW - MARKET SIZE, GROWTH
TRENDS & FUTURE PROJECTIONS
• The Indian hotels market worth was estimated at around US$ 25 billion (by end of
2014)
• Share of ‘premium segment’ in the overall hotel market (2013)- US$ 5.8 Billion.
• Major Players Indian Hotels- Leela Ventures, ITC Hotels, Oberoi Hotels, Taj ,
Marriot.
Supply vs Demand (Rooms) :
• Current Supply- About 110,000 rooms
• Current Demand- About 150,000 rooms
Source: HVS & Technopak retail consultancy
Market Size:

8. GROWTH TRENDS
Estimated Growth of Indian Hotel industry:
 CAGR (2005-08) = 9% to CAGR (2015) =of 15% expected.
 Tourism Demand in India to grow above 8% annually till 2019 , highest in
history - says World Travel & Tourism Council (WTTC)
 The market is estimated to reach US$ 30 billion by 2015.- due to
economic stability & robust growth.

9. AVERAGE OCCUPANCY & RATE PER ROOM (HELPS
YOU ANALYSE THE RELATIVITY BETWEEN OR & ARR )
• 2005-2008: The hotels industry is cyclical and takes lag time to respond to economi
fluctuations. The industry witnessed a real improve from 2005 and peaked in 2008.
• 2009-010: The industry witnessed turbulent times giving the global economic crisis
and local terrorist attacks. This was reflected in lower occupancy rates and rate per room.
• 2010-11: Started to show signs of recovery. Occupancy rate reached 68% & ARR of Rs
6.800
54%
56%
58%
60%
62%
64%
66%
68%
70%
72%
74%
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Occupancy Rate % - Source HVS
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2005-06 2006-07 2007-08 2008-092009-10 2010-11
Average Room Rate in Rs – Source HVS

10. 17.5
14.4
13.1
-3.1
2.2
15 15 15 15 15
10.5
12.75
14.9
17.1 16.6 17
19.6
22.5
25.8
29.67
34.1205
-5
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010 2011e 2012e 2013e 2014e 2015e
Annual Growth Rate % Size of Hotels Market in US billion
ANNUAL GROWTH RATE% VS MARKET SIZE OF INDIAN HOTELS
Source: HVS -2010 data : (AGR in %) (Market size in USD billions)

11. GROWTH TRENDS OF “OBEROI” HOTELS
YEAR
work done why to note
2009 Reopening of “Trident” hotel at Bandra
Kurla, Mumbai.
Revival of the security
2010 Construction of “The Oberoi”, Gurgaon New Premium Segment
2011 “Trident” hotel at the new Bangalore
International Airport.
Patch up with the Airline industry
2012 New Flight Kitchens at Cochin and
Calicut commenced
Catering services approach
2013 The second phase of Trident , consisting
of 167 keys, was completed
Revival of the glory
MAJOR FINANCIAL HIGHLIGHTS:
 reported 10.2 % growth in revenue to Rs 271.16 crore(Q4 2013) compared with Rs
246.03 crore in (Q1 2013)

12. FUTURE EXPANSIONS
Short term :
 In 2.5 years – 750 additional rooms to be added, under Trident group
 Collaborations with airlines for service sector.(catering)
 10 new premium segment hotels to come up in Tier 2 & Tier 3 cities.
Long Term:
 Acquisition of real estates

13. MARKET SEGMENTATION-OVERALL
Source: Ministry of Tourism, Govt. of India

14. TARGETING-OVERALL
Source: Ministry of Tourism , Govt. of India

15. SEGMENTATION (ON THE BASIS OF
BRAND) -OBEROI
Brands Type
The Oberoi TOP – Premium- deluxe
Trident Premium
Maiden’s & Clarke’s Heritage class
Source: FHRAI

16. CUSTOMER SEGMENTION OF OBEROI
CORPORATE CLIENT BUISNESSMAN TOURIST(INDIAN)
TOURIST(FOREIGNER)
HONEYMOON
COUPLES
SPORTS
TEAM,CELEBRITYS
LOCAL RESIDENTS
Source: HVS

17. ANALYSIS OF CUSTOMER SEGMENT
Source: Federation of Hotel & Restaurant Associations of India, 2013

18. POSITIONING STRATEGY
 The Oberoi Hotels is positioned as a five star plus, business traveler's
hotel, strategically located and offering a high level of personal service.
 Theirfocus is on offering theirguests added value and differentiating
ourselves in theirlevels of personal service. They provide a quality hotel
experience where guests are valued, respected andtheir business is truly
appreciated.

19. CUSTOMER BUYING BEHAVIOUR
Source: HVS & Technopak consultancy services
Type of the
Customer
Nature How they are
targeted
Hotels to satisfy
Regular Corporate
clients&
businessmen
Special offers
and
discounts are
given to attract
the segment and
also tie ups with
many MNCs.
The Oberio &
Trident
Occasional Foreign tourists &
honeymoon
couples
Special
packages&
special room
service & leisure
Maiden’s &
Clarke’s
Once in blue-
moon
Mainly lower
middle class who
cannot afford
Weekly offers Both

20. Force describing the intensity of competition between existing
players in an industry.
Source- http://www.academia.edu/6837412/Corporate_Strategy_-_Indian_Hotels_Company

21. BARGAINING POWER OF SUPPLIERS
(Moderate)
1. Oberoi hotel chains are operating different services like
spas, Boatels, Resorts, City Centers, Heritage Hotels, etc.
2. Different Rates and Tariffs - Brand Image.
3. Agreements with big brands- Britannia, Parle, Pepsi,
Black-Label (huge intake onetime)
4. Negotiation on sale/usage of the particular brand’s
product.
5. Rise & Falling of Fuel Prices.
SOURCE - https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategyessay.php
http://www.indiahospitalityreview.com/interviews/next-48-months-we-would-have-43-more-hotels-india-
taking-us-almost-200-hotels-and-20000-r

22. THREATS OF NEW ENTRANTS
• New hotels - Leela, Radison , Hyatt, ITC Grand Maratha.
• Ecotel , Novotal
• Location – Close setup to the airports –enjoying tax benefits.
• Global hotel Groups Entry
• International Passengers – Lack of five star rooms.
• 11 new cruise vessels launched –Luxury Cruise Market
https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy

23. Bargaining Power of Customers
– (Low)
 Global Tourists
 Medical Tourists
 Industrialist People
 Better Quality
 More Services
Threats of Substitute Products
• Threat high = New Class ; Low
otherwise.
• Customers Need (low cost)
• Cruises
http://business.rediff.com/special/2010/oct/11/spec-indian-hotels-four-brand-strategy-for-success.htm
http://www.ukessays.com/essays/tourism/porter-five-forces-model-of-oberoi-hotels-tourism-essay.php
Competitive Rivalry
High density of new cruise liners (Port
Reservation)
Contemporary style

24. 1. Hotels- heavily regulated by both central and state
governments including but not limited to approvals,
licenses, sanctions.
2. Procedural changes making land available for hotel
construction(India identified 32 villages to become
tourists hubs).
3. 100% FDI allowance.
4. Change in Government regulations – changes within
the industry.
(change in tax laws Gas Price
Hotel Tourists
Source – Ministry Of Tourism - INDIA

25. FACTORS AFFECTING HOTEL INDUSTRY
Economic Factors -
Medical Tourism
Adventure Tourism
Wildlife Tourism
Pilgrimage Tourism
Eco Tourism
Culture Tourism.
Socio – Cultural Factors
Aviation Industry –
Customers
Private players
Increased no. of airports.
Mnc’s –
Increased domestic demand for finished goods.
Ad Campaign– ATTITHI DEVO BHAVA
INCREDIBLEINDIA
Terrorism
International Events conducted in India.
Political Situation
 http://www.scribd.com/doc/26045363/Indian-Hotel-Industry-Analysis
 http://www.academia.edu/6837412/Corporate_Strategy_-_Indian_Hotels_Company

26.  FDI has been permitted up to 100% under the
automatic route
 Total FDI inflow in hospitality sector between
2000 -10 amounted to USD 2.17 bn
 For foreign technology agreements, automatic
approval is granted if:
 Up to 3% of the capital cost of the project is
proposed to be paid for technical consultancy
services
 Up to 3% of the net turnover is payable for
franchising and marketing/publicity fees
 Up to 10% of gross operating profit is payable
for management fees, including incentives
fees.
Foreign direct investment (FDI)
Regulatory and
FDI policies in
Indian
hospitality
sector
Tax Holiday available for hotels
Approval of a hotel project
 A tax rebate equal to 100% of the profit and gain for the first 5 consecutive years to an hotel in specified areas, if such hotel /
convention centre is constructed and has started operations before 31st July, 2010
 A tax rebate equal to 100% of the profit and gain for the first 5 consecutive years to an hotel located in the specified district
having a World Heritage Site and has started functioning before 31st March, 2013
 Finance Bill 2009, which has proposed to abolish Fringe Benefit Tax with effect from 1st April 2009 has become major
advantage to the Hospitality industry
 As of Dec 2010, government has given nod to
single window clearance for hospitality industry
 The Ministry of Tourism approves hotels at
project stage based on documentation. Project
approval is given to a 1, 2, 3, 4, 5 Star Hotels and
Heritage Basic Category
 The Hotels have to apply for classification under
5 Star Deluxe/ Heritage Classic/ Heritage Grand
 category if they fulfill the prescribed norms within
3 months of commencing operation
 Project approval will be valid for 5 years

27. CRITICAL SUCCESS FACTORS OF OBEROI HOTELS
 Technology related:-Used of advance technology in hotel premises.
 Manufacturing- related:- High utilization of fixed assets.
 Quality control know-how.
 Serving customer according to their specification.
 Distribution-related:- Presence of hotel chain at various places.
 A strong network.
 Marketing related:- Breadth of product line and product selection.
 Personalized customer services.
 A well-known and well-respected brand name.
http://www.ukessays.com/essays/tourism/porter-five-forces-model-of-taj-hotels-tourism-essay.php#ixzz3K9gowaaR
https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy

28. 8.6
9.4
5.7
1.2
3.4
0
1
2
3
4
5
6
7
8
9
10
Marriott Hilton Taj Hyatt Oberoi
MARKET SHARE
Percentage
http://www.hospitalitynet.org/news/4059749.html

29. STRENGTHS
Differentiation
Strategy
Service skills
Effective
communication
Reputation
Brand strength
WEAKNESS
Training and
Orientation of
New Staff.
System
Strategy
OPPORTUNITIES
Product and
Services
Expansion.
Innovation.
Asset
Leverage.
Financial
Markets.
THREATS
Competition.
Economic
Slowdown.
External
Changes.
http://www.scribd.com/doc/53670718/Marketing-Plan-of-Oberoi-Hotels

30. STRENGTHS
Global Leader.
Unhampered by
Hotel Ownership.
Focused Pipeline
Development.
Strong Internet
Presence.
IT Solutions.
WEAKNESS
Domestic Market
Force.
Luxury Brands.
Courtyard Brand.
Lack of a Low
Cost Lifestyle
Brand.
Uncertainty
Around the
Launch of Edition.
http://www.siimt.com/work/models/siimt/Resource/1098/Marriot_World.pdf

31. STRENGTHS
Second Largest
Hotel Chain in
the Global Hotel
Market.
Diversified
Portfolio.
Focused Pipeline
Development.
Loyalty
Programme.
WEAKNESS
Domestic Market
Forces.
Expensive Real
Estate.
Single Owner.
Late International
Expansion.
http://www.siimt.com/work/models/siimt/Resource/1098/Hilton.pdf

32. STRENGHTS
High Brand
Salience or
Image.
Iconic Stature.
Early
Expansion.
Strategic
Location.
WEAKNESS
Confused
Customer
Perception.
Limited market
share.
Hotel security
Complex
Ownership
Structure.
http://www.managementparadise.com/sayed123/documents/18347/swot-analysis-of-taj-hotels/

33. STRENGHTS
Strong Brand
Name
Loyal
Customers
Customers
Service.
WEAKNESS
High
Dependence
on the US
Market.
Exposing
Business to
Concentration
Risk
http://connection.ebscohost.com/c/articles/89712734/hyatt-hotels-corporation-swot-analysis

34. CHANNELS OF DISTRIBUTION
 GDS (Global Distribution System)
 Common examples are Sabre, Amadeus, Opera
 Account of contribution 10%
1. High Rate
2. High Cancellations
3. Credit card commissions
 OTA (Online Travel Agencies)
 Common examples are Travelocity, Expedia.com, Hotels.com,
Lodging.com
 Account of contribution 30%
1. International reach
2. RevPAR Maximization
3. Highest Cost
http://www.marketingtimes.com/2012/10/managing-
distribution-channels-effectively/

35.  Wholesalers (Travel Agents & Agencies)
 Common examples are Local agents, travel agencies
 Account of contribution 40%
1. High Conversion
2. High rates
3. Agents Training
4. Overhead
 Hotels Website (Direct Booking through)
 Common examples are oberoihotels.com, taj.com
 Account of contribution 20%
1. Lowest cost
2. Exact Booking
3. Web Maintenance
4. SEO
http://www.marketingtimes.com/2012/10/managing-
distribution-channels-effectively/

36. http://www.ibef.org/industry/tourism-hospitality-india.aspx

37. http://www.travelbizmonitor.com/fhrai-indian-hotel-industry-survey-201213-23379

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