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INTRODUCTION
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HOSPITALITY INDUSTRY – AN OVERVIEW

Hospitality is all about offering warmth to someone who looks for help at a strange or
unfriendly place. It refers to the process of receiving and entertaining a guest with goodwill.
Hospitality in the commercial context refers to the activity of hotels, restaurants, catering,
inn, resorts or clubs who make a vocation of treating tourists.
Helped With unique efforts by government and all other stakeholders, including hotel
owners, resort managers, tour and travel operators and employees who work in the sector,
Indian hospitality industry has gained a level of acceptance world over. It has yet to go miles
for recognition as a world leader of hospitality. Many take Indian hospitality service not for
its quality of service but India being a cheap destination for leisure tourism.
With unlimited tourism and untapped business prospects, in the coming years Indian
hospitality is seeing green pastures of growth. Availability of qualified human resources and
untapped geographical resources give great prospects to the hospitality industry. The number
of tourists coming to India is growing year after year. Likewise, internal tourism is another
area with great potentials.
The hospitality industry is a 3.5 trillion dollar service sector within the global economy. It is
an umbrella term for a broad variety of service industries including, but not limited to,
hotels, food service, casinos, and tourism. The hospitality industry is very diverse and global.
The industry is cyclical; dictated by the fluctuations that occur with an economy every year.
Today hospitality sector is one of the fastest growing sectors in India. It is expected to grow
at the rate of 8% between 2007 and 2016. Many international hotels including Sheraton,
Hyatt, Radisson, Meridien, Four Seasons Regent, and Marriott International are already
established in the Indian markets and are still expanding. Nowadays the travel and tourism
industry is also included in hospitality sector. The boom in travel and tourism has led to the
further development of hospitality industry.
In 2003-04 the hospitality industry contributed only 2% of the GDP. However, it is projected
to grow at a rate of 8.8% between 2007-16, which would place India as the second-fastest
growing tourism market in the world. This year the number of tourists visiting India is
estimated to have touched the figure of 4.4 million. With this huge figure, India is becoming
the hottest tourist destination. The arrival of foreign tourists has shown a compounded
annual growth of 6 per cent over the past 10 years. Besides, travel and tourism is the second
highest foreign exchange earner for India. Moreover, it is also estimated that the tourism
sector will account for nearly 5.3 per cent of GDP and 5.4 per cent of total employment
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EVOLUTION
Hotel Industry in India has witnessed tremendous boom in recent years. Hotel Industry is
inextricably linked to the tourism industry and the growth in the Indian tourism industry has
fuelled the growth of Indian hotel industry. The thriving economy and increased business
opportunities in India have acted as a boon for Indian hotel industry.

The arrival of low cost airlines and the associated price wars have given 2 domestic tourists a
host of options. The 'Incredible India' destination campaign and the recently launched 'Atithi
Devo Bhavah' (ADB) campaign have also helped in the growth of domestic and international
tourism and consequently the hotel industry.

According to a report, Hotel Industry in India currently has supply of 110,000 rooms and
there is a shortage of 150,000 rooms fuelling hotel room rates across India. According to
estimates demand is going to exceed supply by at least 100% over the next 2 years. Five-star
hotels in metro cities allot same room, more than once a day to different guests, receiving
almost 24-hour rates from both guests against 6-8 hours usage. With demand-supply
disparity, hotel rates in India are likely to rise by 25% annually and occupancy by 80%, over
the next two years. This will affect the competitiveness of India as a cost-effective tourist
destination. To overcome, this shortage Indian hotel industry is adding about 60,000 quality
rooms, currently in different stages of planning and development, which should be ready by
2012. Hotel Industry in India is also set to get a fillip with Delhi hosting 2010
Commonwealth Games. The future scenario of Indian hotel industry looks extremely rosy. It
is expected that the budget and mid-market hotel segment will witness huge growth and
expansion while the luxury segment will continue to perform extremely well over the next
few years.
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Scope of industry
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After the liberalization of its economy, India witnessed significant growth in its middle class
and disposable economy. This had a direct impact on the country’s hospitality industry
which contributes over 7 per cent to the GDP of India. Considered to be a sunrise industry,
the hospitality sector is expected to touch $460 billion by 2028. Moreover, India has
witnessed considerable growth in foreign visitors since the 2000s. All these reasons have
enabled the country to become the seventh-largest tourism economy in the world. In this
article, we will explore almost everything about the hospitality and tourism industry in India.

‘Hospitality’ as ‘the friendly and generous reception and entertainment of guests, visitors, or
strangers’. Juxtaposing what hospitality stands with the tradition that Indians have been
following since the ancient times, you will find hospitality in almost every sphere of the
country. It was always there in the very essence of India, but the idea of hospitality as a
commercial industry in this capitalist world was minimally present even until the early
2000s.

At present, the hospitality industry in India is considered a ‘sunrise industry’ which means it
has a huge scope in the near future. It is considered as one of the most profitable industries
which also accounts for over 8.78 per cent of the total workforce, creating almost 15 million
jobs in the past five years. The sector attracts a major chunk of foreign direct investment
inflow along with the most important means of foreign exchange for the country.

In India, the hospitality industry is categorized broadly into:

 Lodging
 Food and Beverages
 Transportations
 Theme parks and amusement parks
 Other related fields

Within these categorizations, there are further sub-categorizations. For instance, the lodging
industry is further classified based on location, level of service and themes. Moreover,
several organizations within the hospitality industry offer services such as food along with
accommodation and transportation.

Lodging
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Lodging in India includes the hotel category along with motels and resorts as well.
Hotels in India are categorized into two categories —the star category hotels and heritage
category hotels. The star category hotel is further divided into 5 Star Deluxe, 5 Star with
Alcohol Service, 5 Star without Alcohol Service, 4 Star with Alcohol Service, 4 Star without
Alcohol Service, 3 Star, 2 Star, and 1 Star. The Heritage category hotels are divided into —
the Heritage Grand, Heritage Classic with Alcohol Service, Heritage Classic without Alcohol
Service and Heritage Basic.
By 2023, the overall hotel industry in India is expected to reach over Rs 1,200 billion. In the
past few years, the occupancy rate of the major hotels has increased at least two folds. The
hotel industry is growing at about 7 per cent per annum and many experts believe that it may
fall short of meeting the long term demands of the thriving market.
In recent years, another category emerged within the hospitality industry in India – the
serviced apartment sector. These apartments usually include two to three fully-furnished
bedrooms with all the modern equipment such as washing machines, refrigerators,
microwave oven, housekeeping, etc. Even after providing several services, these serviced
apartments offer 30-35 per cent tariffs to the business class than the 5-star hotels for longer
stays.

Top players in the hotel industry 2022

1. Hyatt Hotels Corporation

2. Marriot International India Pvt Ltd
3. Radisson Blu Hotels
4. Taj Hotels, Resorts & Palaces
5. The Oberoi Group
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6. The Park Hotels

7. ITC Group
8. Lalit Hotels
9. The Leela Palace

Food and Beverages

The food and beverage category is further divided into two sub-categories —organized and
unorganized. It is difficult to track unorganized food and beverages category which forms
about 65-70 per cent of the total market and the organized one comprises of the rest of the
30-35 per cent market.
The organized sector is regulated by the state authorities on quality control and they are
known for their standardized. An unorganized sector, on the other hand, lacks a structured
supply chain, business plans, and quality control.
Within the organized category – casual and fine dining and quick services restaurants
(QSRs) form over 80 per cent followed by pubs, bars, clubs, lounge (PBCL) and cafes &
bakery occupying the rest of the market. Moreover, the food and beverage sector is expected
to grow at 10.4 per cent annually and is likely to reach Rs 5.5 trillion by 2022.
India is home to one of the largest millennial population in the world. Consequently, it has
resulted in the opening up of a number of bars and cafes, nightclubs and tea and coffee
shops. Apart from the tourist destinations and markets, areas around corporate hubs,
universities, colleges, and institutions offer immense opportunities for the food and drinks
sector.

Transportations
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Transportation in the tourism industry is the first step in the tourism business, starting from
taking the tourists from the place of origin to the destination. There have been instances
where transport accessibility has proven to transform a place into a global attraction of
tourism. In contrast, there are examples of places with rich culture, heritage, and natural
resources, which have failed to develop due to bad transport accessibility.
The backbone of the country’s economy, roads have proven to be a catalyst in the
development of tourism in India. Traveling to some roads in the country can leave some of
the most beautiful life experiences on your mind. India, at present, has the second largest
road network in the world at around 4,320,000 kilo meters. Almost all the major cities and
tourist destinations are well interconnected by roads. Along with the government bus
facilities, you can find a number of private bus transporters providing quality services to
reach one destination to another. Recently, the online car rentals (Ola, Uber, etc.) and self-
drive (Zoom car, Revv, etc.) car options have opened up an immense opportunity for the
transportation sector in the Indian hospitality industry.
Following China, Indian Railways are the second-longest railways in Asia. Traveling in
Railways in India is considerably economic, which has helped the peripheries develop into
attractive tourist places. Each and every corner of the country is well connected with the
railways. The government is also running several tourist purpose trains across the country
which have been popular amongst foreign as well as Indian tourists. Maharaja Express,
Palace on Wheels, Golden Chariot, Shimla and Darjeeling toy trains, etc are some of the
prominent examples of world-class tourist trains.
Over the past few decades, airways have also contributed a lot to the development of tourism
in India through both international and domestic processes. Although, all the major cities and
tourist destinations in India have their own airport and are well connected with air. Seaways
in India, unfortunately, haven’t developed on the levels so that it could be exploited for
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tourism purposes in India. Several reports suggest that sea transportation has lots of
potentials to boost the hospitality industry in India. Recent government actions such as
opening up of the Ro-Ro ferry service between Ghogha and Dahej in Gujarat are an example
of that.

Theme Parks and Amusement Parks

Theme parks are also known as amusement parks. Although, there’s only an airline
difference between the two, they are often used interchangeably. They both feature a group
of attractions such as various games and rides, including water rides, flat rides, carnival
rides, and different kinds of slides, food and a lot more. In addition, theme parks are
designed around a ‘unique’ theme. In the recent two decades, India has witnessed significant
growth in amusement rides.
As per the recent data, it has witnessed a 17.5 per cent annual growth with revenue around
Rs 17 billion. The sector also employees around 80,000 people across India. Amusement and
theme parks have proved to swell up tourism across the world, with India being no
exception. In India, the government is providing strong regulatory support – from providing
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various tax benefits to the necessary infrastructure – almost everything that is required. Often
ignored, it has proved to be a catalyst in the development of the hospitality industry in India.
Several surveys show that visiting theme parks is one of the most preferred outdoor activities
across several metro cities in India, which indicates that the future of the sector is bright.
Apart from this, theme parks boost the local economy where they are located. While the
government creates infrastructure for the amusement parks, the locality is equally benefited
out of it. Newly created employments enhance the quality of the livelihood of the locals.
They also create an opportunity for opening up of local businesses such as restaurants,
transportations, retails, etc.

Top players in the sector

1. Adlabs Imagica, Pune

2. Essel World, Mumbai
3. Wonderla, Bangalore
4. Queens Land, Chennai
5. Ramoji Film City, Hyderabad
6. Kingdom of Dreams, Delhi

India, known for its ancient tradition of Atithi Devo Bhava or ‘guest is god’ has been hosting
foreigners for ages. From Kashmir to Kanyakumari and from Guhar Moti to Kibithu, the
country offers an immense opportunity to the hospitality industry. From beautiful snow-
capped mountains to desserts, from plateaus to ocean beaches, the hospitality industry in
India is indeed an enriched one.
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Outlook and
growth
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India Hospitality Market Analysis

The hospitality industry in India has been scoring a moderate growth number from the past
few years and has great potential to score an even greater number in the future. The nation
which is rich in culture and diversity has been attracting a large number of tourists from all
over the globe. India has also been recognized as a destination for spiritual tourism for
international and domestic tourists. India is showing continuous growth in position moving
from 65th in 2013 to 34th position in 2019 in the World Economic Forum's travel and
tourism competitiveness index. On the other side, the consistently growing middle class,
rising levels of their disposable income, increasing interest among millennials to travel in
their home country are a few major reasons that are making the domestic travel industry a
profitable one. To attract the millennials ventures like Airbnb, Oyo rooms have changed
hospitality scenarios on a global level and are offering price-sensitive stays in most of the
prime locations with flexible check-in and check-out options to attract the increasing number
of travellers.

The hospitality and tourism industry has been witnessing a healthy growth number and
accounted for 7.5% of the GDP. India is a part of the top 100 clubs on Ease of Doing
Business (EoDB) and ranks 1st in the greenfield FDI ranking globally and to strengthen the
cruise tourism sector, the Government of India (GoI) has selected Chennai, Goa, Kochi,
Mangalore, and Mumbai ports to develop them as cruise tourism hubs. These terminals will
have facilities like hospitality, retail, shopping, and restaurants.

Less than three million foreign tourists visited India in 2020, a dip of around 75 per cent as
compared to the previous year, due to travel restrictions imposed to control the coronavirus
pandemic. "To incentivize stakeholders in the tourism industry, the guidelines for the scheme
of Market Development Assistance (MDA) for providing financial support to stakeholders
for the promotion of domestic tourism have been modified to enhance the scope and reach of
the scheme, to provide maximum benefits to the stakeholders. In addition, promotional
activities have been incorporated including online promotions and the extent of financial
assistance permissible has been enhanced.

Due to the COVID-19 pandemic, India’s hotel sector is one of the worst-hit segments of the
economy, contracted by 47% in April-June 2020, as per data released by the National
Statistical Office (NSO) on August 31, 2020. The hotel industry, in May 2020, experienced
an occupancy decline of 77% over the same time last year. The domestic hospitality
industry, which has been severely affected by the COVID-19 related disruptions, is likely to
witness a decline of over 65% in 2021.
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India Hospitality Industry Segmentation

A complete background analysis of the Hospitality Industry in India, which includes an
assessment of the industry associations, overall economy, and emerging market trends by
segments, significant changes in the market dynamics, and market overview is covered in the
report. The Hospitality industry in India is segmented by Type into Chain Hotels and
Independent Hotels, and by Segment into Service Apartments, Budget and Economy Hotels,
Mid and Upper Mid Scale Hotels, and Luxury Hotels.

Rising Number of International Tourists are Driving the Market

India has been registering a growing number of foreign tourists year on year. The nation’s
cultural bases, diversity in traditions, and food choices are making it a heritage-rich nation
along with several other factors. In 2017, India received more than 10 million foreign
tourists for the first time, registering 14% growth over the previous year 2016 and which is
almost double the number it received in the years 2009 and 2010. Travel and Tourism
Competitiveness Index ranked India 34 out of 136 countries in 2019 and in the category of
price competitiveness, India’s tourism sector stood at 10th position out of 136 countries
which means India is an affordable tour option to most international travellers the developed
nations.

The domestic hospitality industry is looking to 'fly' in 2023 cashing in on India's G20
presidency, having received the 'oxygen' to run in 2022 after being crippled in the past two
years by the pandemic.

Domestic travel, especially the leisure segment, gave wind to the industry this year and is
expected to continue into the next. Industry players believe that as international arrivals are
also likely to pick up even further, the outlook for 2023 is buoyant.

However, for travellers, room tariffs are likely to remain high going forward, with a demand-
supply mismatch continuing in the hospitality sector.

"I think it's really safe to say that we have overcome the real difficult period. I don't think
any one of us can deny that it was really difficult, in all terms -- occupancies, daily average
rates and revenue per available room (during the pandemic)," Hotel Association of India
Vice President KB Kachru told PTI.
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"But, I'm really happy to state that post-COVID, we have really bounced back. Our
occupancy rates, average rates and the bottom line is all looking up," Kachru, who is also the
Chairman Emeritus and Principal Advisor of South Asia Radisson Hotel Group, further said.

As per industry estimates, recovering from the impact of COVID-19 by the third quarter of
2022-23, the hospitality industry had touched the occupancy of 70 per cent, while the
average daily rates had moved up to Rs 7,260 as compared to Rs 6,540 in the same period in
FY20.

Also, the revenue per available room had increased to Rs 5,085 against Rs 4,499 in
Q3FY20.

Mahindra Holidays & Resorts India Ltd (MHRIL) Managing Director and CEO Kavinder
Singh said, "I will say (that) in 2022, the hospitality industry finally got the oxygen that it
deserved in terms of the number of people coming into the hotels, resorts and cities".

A "clearly unlock year" after the omicron wave of COVID-19 in January and February, he
said the feeling of getting unlocked, the feeling of getting unshackled in life and the ability to
breathe free sums up the year that's passing by.

In 2021, industry players had slowly started walking, Singh said, adding "then, in 2022, we
started running, and 2023 is the time to fly".

"The big trend that we noticed was that the leisure occupancies were higher, as well as the
ARR (average room rate) have been higher, RevPAR (revenue per available room) of leisure
players were higher than the city players. This is something that is now becoming a trend
that people are willing to pay more for leisure accommodation...," he added.

InterGlobe Hotels Head – Asset Management, Manoj Agarwal said that while easing of
COVID-19 restrictions, domestic travel and strong leisure travel demand have been
instrumental in the recovery of the sector, resumption of international flights and a gradual
return of corporate travel have also played a role.
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"The industry is now thriving on domestic demand and gradual increase in international
travel is expected to add further growth to it," he added.

Apeejay Surrendra Park Hotels Ltd Managing Director Vijay Dewan said the demand for
FY23 is "up 15 per cent compared to pre-pandemic levels and is expected to remain in
double drifts over the next 3-5 years".

"In addition to this, there is a supply-side mismatch, which will drive average room rates up
in the coming years," he added.

On the bright spot for 2023, Kachru said there would be a big boost not just from wedding
ceremonies and long weekend getaways but also from "repositioning of India during G20,
where we are hosting delegates across the country".

India's G20 Presidency, he said, "would give us a great boost. Countries participating in G20,
all the key people are visiting India and they're going to different places. We have to actually
make them our ambassadors, who will project India and who will be talking about India".

Federation of Hotel & Restaurant Associations of India (FHRAI) Secretary General Jaison
Chacko also said it is a "great opportunity for the tourism and hospitality industry", and in
anticipation of its spillover benefits, the government must also reactivate the Champion
Sector in Services Scheme (CSSS) to give a boost to the MICE tourism in the country.

"After two years of absolute stalling, this has come as a golden opportunity for the tourism
and hospitality industry. This is the time that the government should go full throttle to
promote tourism under the Incredible India banner," he added.

India took over the presidency of G20 in December. During India's year-long leadership of
the block of countries that "account for more than 80 per cent of world GDP, 75 per cent of
global trade, and 60 per cent of the global population", the country is expected to host a
series of events and meetings.

It is estimated that in 2023, more than 200 meetings involving officials and civil society
from these countries will be organised in India across 50 cities. As many as 30 heads of state
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and government from the G20 nations, and those invited, are expected to participate in the
summit.

Dewan agreed that the G20 will add to the high performance in FY23-24 of the industry,
which is "expected to grow at a minimum of 15 per cent this year and then at a CAGR of 10
per cent over the next decade".

In 2023, Agarwal said, "We believe inbound travel, MICE and in-person meeting, which had
been subdued this year, would witness a significant growth, which will further strengthen the
path to healthy ADR (average daily rate) recovery".

Top hotels in India

TAJ GROUP OF HOTELS

A) HISTORY OF TAJ HOTEL

The Taj Mahal Palace and Tower, built in 1903, stands on the shores of the Arabian Sea, a
resplendent tribute to the vision of Jamsetji N Tata, founder of the Tata group, who wished
to build the finest hotel that India had ever seen.

With a tradition of commitment to excellence, personal attention and guest delight, the Taj
brand succeeds in making guests feel completely at home. There is a strong focus on
exceeding customer expectations, reinventing service concepts and upgrading physical
products. By benchmarking Itself constantly against the best in its class, this brand, the
oldest in the Tata group, has built a solid reputation in the hospitality industry.

The Taj brand, deeply rooted in traditional Indian values of hospitality and graciousness, and
committed to acquainting guests with India’s living heritage, has evolved with time,
assuming a more contemporary avatar. Its appeal therefore cuts across all generations.

With a total of 57 properties in 40 locations across India and 18 international hotels, the Taj
family of hotels encompasses iconic city hotels, grand palaces, modern business hotels,
beach resorts and rustic safari lodges.
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Taj Hotels is justifiably proud to belong to the Tata group, an association that automatically
elicits trust and esteem from its customers and stakeholders. The brand is a crowning
achievement in the Tata group’s array of brands.

RATAN TATA

Ratan Tata became the Chairman of the Tata Group in 1981 after serving as Chairman in
charge of the Nelco division of the group. Tata is India's largest conglomerate and includes
the brands Tata Motors, Tata Steel, Tata Power, Indian Hotels, as well as other brands
labeled under the Tata name.

Ratan Tata was born on December 28, 1937 in Mumbai, India in one of the richest families
in the country. His great grandfather, Jamsedji Tata, was the founder of the Tata group and
passed the power and inheritance down to his family.

Tata was a good student and studied hard at the Campion School in Mumbai followed by
studies in architecture and structural engineering at Cornell University. He graduated with
his bachelors degree in 1962 and joined the Tata Group in December of that same year.
Tata's first job with the Group involved working with the Tata Steel division where he
worked with the blue-collar employees shoveling stone and working with the furnaces.

With Tata Industries, Ratan Tata was able to transform the management and vision of the
division and bring in significantly larger dividends. This renewed financial success helped
bring the Tata Group to the New York Stock Exchange and gave the company even more
international power and prestige. Ratan Tata continued to acquire different industries for the
Tata Group, eventually purchasing the steel an aluminum producer, Corus Group as well as
Jaguar and Land Rover brands from the Ford Company.
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Ratan Tata lives a very private life in Mumbai, India.

B) PRODUCT PROFILE

Taj Hotels, Resorts and Palaces covers a wider market in the hotel industry than the other
luxury hotels in the race. They have a better product profile than the rest: i.e. They have great
management, hospitality and facilities provided by them to their customers. Some of them
are:

• Launch of Knowledge Management Site

• Systems and Technology

• Electronic Signage • Guest Wireless Internet access

• In Room Guest Entertainment Systems

• The Taj Contact Centre

• Project Orion, the Integrated Back Office System

• Self service Kiosks

• Taj Website • Outlook

• Global Reach and 24 x 7 x 365 Access for our customers across the world.

CLIENT PROFILE
Taj Hotels have a client profile consultation service provided wherein they diagnose the
clientele needs and thus, with that information they try and provide the required facilities to
their customers. Generally, Taj concentrates on the Upper class of the society who can spend
lavishly on the luxury provided.

VISION
The Taj Group of Hotels commits itself to the overall improvement of the ecological
environment, which we are all a part of. We recognize that we are not owners but caretakers
of the Planet and owe it to our children and future generations of humankind. It is our
endeavor not only to conserve and protect but also to renew and regenerate the environment
in which we live and operate. Our commitment encompasses all actions related to our
products, services, associates, partners, vendors and communities.
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We will partner and engage with our environment through EARTH: Environmental
Awareness and Renewal at Taj Hotels. For us EARTH is not a program, nor a process; it is a
way of life.

In an endeavour to reinstate its vision and efforts to boost sustainable tourism and integrate
environment management in all business areas, Taj Hotels Resorts and Palaces presents
EARTH (Environment Awareness & Renewal at Taj Hotels), a project which reiterates the
conscious effort of one of Asia’s largest and finest group of hotels to commit to energy

conservation and environmental management. EARTH has received certification from Green
Globe, the only worldwide environmental certification program for travel and tourism.

TAJ VALUES
PEOPLE DIVERSITY, INTEGRITY & RESPECT

PASSION FOR EXCELLENCE

EXCEED EXPECTATIONS

INNOVATION SENSE OF URGENCY & ACCOUNTABILITY

SOCIAL RESPONSIBILITY

JOY AT WORK
People are our greatest asset and the key to our success. We respect diversity of people,
ideas, cultures and honor the value of individuals in a team.

We believe in perfection to achieve excellence. We continuously improve processes to

surpass global benchmarks.

We succeed by exceeding expectations of all stakeholders and protecting the interest of our
shareholders and playing by the rules.

We encourage innovation, embrace change and support growth through knowledge and
learning. We accept responsibility and deliver on promises with a sense of urgency and
agility.

We commit to improve the quality of life of the communities we serve and our concern for
the environment by returning to society what we earn We recognize and respect each other in
all interactions and set the example for our guests, business associates and colleagues.

We encourage a fair environment that supports equal opportunity to attract, develop and
retain the best talent and endeavor to have fun too.
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TAJ PROMISES

At the Taj Group, commitment to service excellence is rooted in our two guiding principles
called the Four Steps of Service and the Taj People Philosophy. One of our key priorities is
to empower our people to deliver on our legacy of impeccable service.

Four Steps of Service:

1. A warm and sincere welcome. Use the guest name, whenever possible.

2. Fulfill guest needs and provide anticipatory service.

3. Defect free products and services.

4. Fond farewell using the guest name, whenever possible.

Taj People Philosophy

The Taj People Philosophy displays our commitment to and belief in our people. We see
Talent Management as the most important sustainable competitive advantage in the future.

 You are an important member of the Taj family.

 We endeavour to select, retain and compensate the best talent in the industry.
 We reward and recognize quality customer care based upon individual and team
performance.
 We commit to providing you with opportunities for continuous learning and
development.
 We abide by fair and just policies that ensure your well-being and that of your family,
the community and the environment.
 We commit to regular and formal channels of communication, which nurture openness
and transparency.
 We strongly believe that you are the Taj.
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OBEROI GROUP OF HOTELS

Introduction
The Oberoi Group, founded in 1934, operates 27 hotels and three cruisers in five countries
under the luxury ‘Oberoi’ and five-star ‘Trident’ brands. The Group is also engaged in flight
catering, airport restaurants, travel and tour services, car rentals, project management and
corporate air charters.

‘Oberoi Hotels & Resorts’ is synonymous the world over for providing the right blend of
service, luxury and quiet efficiency. Internationally recognised for all-round excellence and
unparalleled levels of service, ‘Oberoi Hotels & Resorts’ has received innumerable awards
and accolades.
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A distinctive feature of The Group’s hotels is their highly motivated and well trained staff
that provides the kind of attentive, personalised and warm service that is rare today. The
Group’s new luxury hotels have established a reputation for redefining the paradigm of
luxury and excellence in service amongst leisure hotels around the world.

Trident hotels are five-star hotels that have established a reputation for excellence and are
acknowledged for offering quality and value. These hotels combine state of the art facilities
with dependable service in a caring environment, making them the ideal choice for business
and leisure travellers. Presently there are eight Trident hotels in India located in Mumbai,
Gurgaon (Delhi National Capital Region), Chennai, Bhubaneshwar, Cochin, Agra, Jaipur
and Udaipur. Trident, Bandra Kurla, Mumbai is scheduled to open in 2009. The Oberoi
Group also operates a Trident hotel in the Saudi Arabian city of Jeddah.

The last decade has witnessed the debut of new luxury Oberoi leisure hotels in India and
abroad. In India, these hotels include The Oberoi Rajvilas, Jaipur; The Oberoi Amarvilas,
Agra; Wildflower Hall, Shimla in the Himalayas; The Oberoi Vanyavilas, Ranthambhore;
The Oberoi Cecil, Shimla and The Oberoi Udaivilas, Udaipur. Overseas, the new hotels
include The Oberoi, Lombok in Indonesia, The Oberoi, Mauritius and The Oberoi, Sahl
Hasheesh in Egypt. The Oberoi Zahra, Luxury Nile Cruiser, Egypt was launched in
2007.The Group’s commitment to excellence, attention to detail and personalised service has
ensured a loyal list of guests and accolades in the worldwide hospitality industry.

Recognising the importance of quality training in hospitality management, The Oberoi

Group established The Oberoi Centre of Learning and Development in New Delhi in 1966.
The Group is committed to employing the best environmental and ecological practices in
technology, equipment and operational processes. The Oberoi Group also supports
philanthropic activities that range from education to assistance for the mentally and
physically challenged. The Group is also a keen contributor to the conservation of nature and
of cultural heritage.
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Rai Bahadur Mohan Singh Oberoi Founder Chairman, EIH Limited (1898

Early Life

Rai Bahadur Mohan Singh Oberoi was born on 15th August, 1898 in erstwhile undivided
Punjab, which is now in Pakistan. He was only six months old when his father died. Success
and fortune did not, therefore, come easily to him. Initiative, resourcefulness and hard work,
combined with the capability to face and overcome the most overwhelming odds can best
characterise this phenomenal entrepreneur.

Mohan Singh completed his primary education in Rawalpindi and moved to Lahore for his
Bachelor's degree. Shortly thereafter, to flee the ravages of a virulent plague, he went to seek
his fortune in Shimla, the summer capital of British India. Arriving penniless, he found a job
at a monthly salary of INR 50, as the front desk clerk at the Cecil Hotel. Today, The Oberoi
Group owns the hotel The Oberoi Cecil where the young Mohan Singh found his metier.

The diligence, enthusiasm and intelligence displayed by Mohan Singh impressed Mr. Grove,
the manager of the hotel. A quick learner, Mohan Singh did not restrict his efforts to
fulfilling the job description of a desk clerk but sought and shouldered additional
responsibilities. A few years later, when a Mr. Clarke acquired a small hotel he asked Mr.
Oberoi to assist him. It was here, at Clarkes Hotel, that Mohan Singh gained first hand
experience in all aspects of operating a hotel.

Budding Entrepreneur

In 1934, Mr. Oberoi acquired his first property, The Clarkes Hotel, from his mentor by
mortgaging his wife's jewellery and all his assets. Four years later, he signed a lease to take
over operations of the five hundred rooms Grand Hotel in Calcutta that was on sale
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following a cholera epidemic. With his customary confidence and sheer determination to
succeed, he was able to convert this hotel into a highly profitable business venture.

Over several years, Mr. Oberoi had purchased shares in Associated Hotels of India (AHI),
which owned Cecil and Corstophans hotels in Shimla, Maidens and Imperial hotels in Delhi
and a hotel each in Lahore, Murree, Rawalpindi and Peshawar. In 1943, Mr. Oberoi acquired
controlling interest in AHI. He thus became the first Indian to run the country's largest and
finest hotel chain. In the tumultuous years just prior to Indian independence, Mr. Oberoi met
and intimately interacted with the would-be leaders of Free India, all of whom were, at one
time or other, guests at his hotels.

International Pioneer

Having consolidated his early ventures, Mr. Oberoi became the first Indian hotelier to enter
into an agreement with an internationally renowned hotel chain, to open the first modem,
five-star hotel in the country. The Oberoi Inter Continental, in New Delhi opened in
1965.The I-Con, as it became popularly known, offered facilities that no other hotel in the
country matched and was India's first luxury hotel.

This achievement was enhanced with the opening of the 35-storey Oberoi Sheraton in
Bombay, in 1973. Mr. Oberoi was the first Indian to work in association with international
chains to woo international travellers to India. This led to a heavy influx of international
travellers and foreign occupancy soared to an average of 85%. This enabled The Oberoi
Hotels to significantly contribute to India's foreign exchange earnings.

Another pioneering landmark was the establishment in 1966 of the prestigious Oberoi
School of Hotel Management, recognised by the International Hotel Association in Paris.
Considered India's premier institute, the school is now known as The Oberoi Centre of
Learning and Development and continues to provide high quality professional training in
hospitality management.

Other notable firsts were the decision to employ women in his hotels and to establish a chain
of ancillary industries producing and supplying items like consumables and stationery to
ensure the highest quality. The Oberoi Group was also the first to start flight catering
operations in India, in 1959. The Oberoi Flight Services, located in New Delhi, Mumbai,
Cochin and Chennai, provide in-flight meals of international quality to reputed airlines.

Mr. Oberoi realised that the hotel and hospitality business is greatly dependent on travel
agents, a vital element in the distribution chain. Therefore, he decided to establish his own
travel agency. Mercury Travels, part of The Oberoi Group, ranks amongst the leading travel
agencies in India. With vision and imagination, Mr. Oberoi converted old and dilapidated
palaces, historical monuments and buildings into magnificent hotels such as The Oberoi
Grand in Calcutta, the historic Mena House in Cairo and The Windsor in Australia. It was, in
fact, in the face of severe opposition that the State Government of Victoria awarded Mr.
Oberoi the lease of The Windsor, a heritage building in Melbourne. He personally supervised
the restoration of the hotel to its original grandeur and later acquired it. The Oberoi Cecil in
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Shimla, built in the early 20th century, reopened in April 1997 after extensive and
meticulous renovation.

Awards and Honours

in 1943, Mr. Oberoi was conferred the title of Rai Bahadur by the British Government in
recognition of his services to the Crown. Thereafter, Mr. Oberoi won acclaim and received
several national and international awards including admission to the Hall of Fame by the
American Society of Travel Agents (ASTA) and Man of The World award by the
International Hotel Association (IHA), New York. He was presented the Order of The
Republic, First Class by the President of Egypt. He got an Honorary Doctorate of Business
Administration from the International Management Centre, Buckingham, UK. Newsweek
named him one of the Elite Winners of 1978. The PHDCCI Millennium award in 2000 was
presented in recognition of his entrepreneurial and business success. In 2001, the
Government of India accorded him the Padma Bhushan.

Globalisation of The Oberoi Group

To place The Oberoi Group on the world map, Mr. Oberoi exported management expertise
to Australia, Egypt and Singapore, where The Oberoi Group took charge of the management
of existing luxury hotels. The success of Oberoi Hotels & Resorts overseas, in the face of
global competition, greatly enhanced the image of The Group.

Today, Oberoi Hotels & Resorts in fudonesia, Egypt, Mauritius, Saudi Arabia and India add
value and distinction to their host countries.

Foundations of the Future

Under Mr. Oberoi’s dynamic leadership, The Oberoi Group introduced its second brand of
hotels, 'Trident'. Trident hotels are five-star hotels that have established a reputation for
excellence and are acknowledged for offering quality and value. These hotels combine state
of the art facilities with dependable service in a caring environment, making them the ideal
choice for business and leisure travellers. Presently there are eight Trident hotels in India
located in Mumbai, Gurgaon (Delhi National Capital Region), Chennai, Bhubaneshwar,
Cochin, Agra, Jaipur and Udaipur. Trident, Bandra Kurla, Mumbai is scheduled to open in
2009. The Oberoi Group also operates a Trident hotel in the Saudi Arabian city of Jeddah.

In the luxury category, The Group opened The Oberoi Rajvilas, Jaipur; The Oberoi Cecil,
Shimla; The Oberoi Udaivilas, Udaipur; The Oberoi Vanyavilas, Ranthambhore; The Oberoi
Amarvilas, Agra; Wildflower Hall, Shimla in the Himalayas; The Oberoi, Lombok,
Indonesia; The Oberoi, Sahl Hasheesh, Egypt and The Oberoi, Mauritius and The Oberoi
Zahra, Luxury Nile Cruiser, Egypt.

The Group employs more than 12,000 people worldwide and operates 27 hotels and three
cruisers in five countries.
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Mr. Oberoi’s achievements and successes did not, however, take from his simplicity and old
fashioned charm. He retained, until his death in May 2002 at the age of 103, a unique
humility. He was fond of saying, “I have been able to accept the challenge and make good.
There is comfort in knowing that whatever little I have achieved has also helped to raise the
prestige of my country.”

Mr. P.R.S. Oberoi (Chairman and CEO), EIH Limited

Mr. P.R.S. Oberoi is the Chairman and Chief Executive Officer of EIH Limited, the flagship
company of The Oberoi Group. He is also the Chairman of Oberoi Hotels Private Limited,
the major shareholder of EIH Limited. Popularly known as “Biki”, Mr. Oberoi is the son of
late Rai Bahadur M.S. Oberoi, the founder of The Oberoi Group.

Mr. P.R.S. Oberoi was educated in India, the United Kingdom and in Switzerland.

In addition to providing leadership for the management of luxury hotels in several countries,
Mr. Oberoi has been instrumental in pioneering the development of the new Oberoi hotels
and resorts. The “Oberoi” brand has come to represent fine luxury hotels.

Mr. Oberoi is credited with placing Oberoi hotels on the international luxury travellers’ map
with the opening of several new luxury hotels in important locations, thus redefining
architectural and design standards in luxury hospitality. A key aspect of this is the
development of hotels that reflect their environment.

It is Mr. Oberoi’s firm belief that people are the most valuable asset of any organisation.
Recognising the importance of quality in hospitality management, Mr. Oberoi established
‘The Oberoi Centre of Learning and Development’ at New Delhi in 1966. Today, this
institution is considered amongst the best in Asia.

As a member of the World Wide Fund for Nature, Mr. Oberoi is committed to the
conservation of the environment.

Above all, Mr. Oberoi is aware of the need to constantly promote quality in every segment of
the hospitality industry. Under his leadership, Oberoi Hotels and Resorts have received
numerous international awards.

In 2001, His Majesty King Mohammed VI of Morocco personally awarded Mr. Oberoi the
Grand Officer of the Alalaoui Wissam, which is one of the highest awards in Morocco. The
award was conferred in recognition of Mr. Oberoi’s contribution to tourism and to Indo-
Moroccan relations.

In recognition of his exceptional leadership and vision, the 6th International Hotels
Investment Forum in Berlin honoured Mr. Oberoi with the prestigious Lifetime Achievement
Award in March 2003.

In January 2004, Mr. Oberoi was conferred a Special Award by the Department of Tourism,
Government of India, in recognition of his contribution to the tourism sector. The letter from
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the Department stated, “Due to your entrepreneurial skills and visionary leadership, The
Oberoi Group has risen to a global brand, renowned for its high standards of service and
excellence”.

In October 2005, the Hotel Investment Conference Asia Pacific (HICAP), which is the
preeminent gathering of hotel investors, investment bankers and leading industry
professionals in the region, honoured Mr. Oberoi with the Lifetime Achievement Award at
its annual Conference in Hong Kong. This award was given in recognition of Mr. Oberoi’s
contribution to the hospitality industry and his pioneering leadership in making The Oberoi
Group a global brand by taking the concept of luxury to a new paradigm.

Mr. Oberoi was also conferred the Lifetime Achievement Award at the CNBC TV 18 India
Business Leader Awards 2007 for building a world-class hotel chain that caters to both
luxury and business travellers and for shaping the hospitality industry of the country. India
Business Leader Awards, the Indian Edition of Asia Business Leader Awards, define and
celebrate vision, the spirit of achievement and excellence in business leadership.

In January 2008, Mr. Oberoi was awarded the Padma Vibhushan, India’s second highest
civilian honour, in recognition of his exceptional service to the country.

Mr. Oberoi received the Lifetime Achievement Award at the South Asia Travel & Tourism
Exchange (SATTE) and the 4th Hotel Investment Conference – South Asia (HICSA) in
April 2008. In August 2008, Mr. Oberoi was presented with the Lifetime Achievement
Award at the Business world-NID (National School of Design) Design Brilliance Awards.
These awards honour new levels of excellence in design.

Mr. Oberoi received the Outstanding Business Leader Award from the Associated Chambers
of Commerce and Industry (ASSOCHAM) and Society of Indian Law Firms in September
2008. This award was presented in recognition of Mr. Oberoi’s leadership in establishing
high standards of excellence which has won The Oberoi Group international acclaim.

In November 2008, Mr. Oberoi was conferred the Lifetime Achievement Award at the Ernst
& Young Entrepreneur of the Year Awards for redefining design standards in luxury hotels.

Business India magazine adjudged Mr. Oberoi the Businessman of the Year 2008. Mr.
Oberoi received this award for building a world-class premium hospitality brand.

Mr. Oberoi was honoured with the first Hall of Fame Award at the Hotel Investment Forum
India (HIFI) in February 2009. The HIFI Hall of Fame Award is presented to an individual
who exemplifies outstanding business practices, leadership and achievement, both
professionally and personally.

Mission & Vision

Our Guests
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We are committed to meeting and exceeding the expectations of our guests through our
unremitting dedication to every aspect of service.

Our People

We are committed to the growth, development and welfare of our people upon whom we
rely to make this happen.

Our Distinctiveness

Together, we shall continue the Oberoi tradition of pioneering in the hospitality industry,
striving for unsurpassed excellence in high-potential locations all the way from the Middle
East to Asia-Pacific.

Our Shareholders

As a result, we will create extraordinary value for our stakeholders.

Vision
• We see an organization which aims at leadership in the hospitality industry by
understanding its guests, and designing and delivering products and services which enable it
to exceed their expectations. We will always demonstrate care for our customers through
anticipation of their needs, attention to detail, distinctive excellence, warmth and concern.

• We see a lean, responsive organization where decision making is encouraged at each level
and which accepts change. It is committed and responsive to its guests and other
stakeholders.

• We see a multi-skilled workforce, which consists of team players who have pride of
ownership, translating organizational vision into reality.

• We see an organization where people are nurtured through permanent learning and skill
improvement, and are respected, heard and encouraged to do their best. Oberoi is recognized
as best practice for training and developing its people.

• We see a more multinational workforce which has been exposed to different cultures,
problems and situations and can use its experiences to enrich the local employees whether in
India or overseas.

• We see the world dotted with hotels of The Oberoi Group, in strategic commercial and
resort locations.

• We see user-friendly technology enhancing value for our customers and helping our
personnel by making information more accessible.
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• We see an organization which is conscious of its role in the community, supporting social
needs and ensuring employment from within the local community.

• We see an organization which is committed to the environment, using natural products and
recycling items, thus ensuring proper use of diminishing natural resources.

ITC HOTELS LIMITED

COMPANY PROFILE - ITC HOTELS LTD
ITC’s hotel division was launched on October 18, 1975, with the opening of its first hotel -
Chola Sheraton in Chennai. ITC – Welcome group Hotels, Palaces and Resorts, is today one
of India’s finest hotel chains, with its distinctive logo of hands folded in the traditional
Namaste is widely recognised as the ultimate in Indian hospitality.

Each of the chain’s hotels pays architectural tribute to ancient dynasties, which ruled India
from time to time. The design concept and themes of these dynasties play an important part
in their respective style and decor.

With more and more hotels being added at strategic destinations, the group has joined hands
with the Sheraton Corporation to strengthen its international marketing base.

HISTORY OF ITC LTD

ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of
India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata,
was the centre of the Company's existence. The Company celebrated its 16th birthday on
August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed
J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was
historic in more ways than one. It was to mark the beginning of a long and eventful journey
into India's future. The Company's headquarter building, 'Virginia House', which came up on
that plot of land two years later, would go on to become one of Kolkata's most venerated
landmarks. The Company's ownership progressively Indianised, and the name of the
Company was changed to I.T.C. Limited in 1974. In recognition of the Company's
multibusiness portfolio encompassing a wide range of businesses - Cigarettes & Tobacco,
Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, AgriExports,
Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the
Company's name were removed effective September 18, 2001.
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The Company now stands rechristened 'ITC Limited'.

In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai
which was rechristened 'ITC-Welcomgroup Hotel Chola'. The objective of ITC's entry into the
hotels business was rooted in the concept of creating value for the nation. ITC chose the
hotels business for its potential to earn high levels of foreign exchange, create tourism
infrastructure and generate large scale direct and indirect employment. Since then ITC's
Hotels business has grown to occupy a position of leadership, with over 100 owned and
managed properties spread across India.

ITC Hotel Luxury Collection

 ITC Maurya, New Delhi

 ITC Mughal, Agra
 ITC Maratha, Mumbai
 ITC Grand Central, Mumbai
 ITC Sonar, Kolkata
 ITC Kakatiya, Hyderabad
  ITC Windsor, Bengaluru

WelcomHotel / Sheraton properties

Sheraton Chola, Chennai

Sheraton Park Hotel & Towers, Chennai

Sheraton Rajputana, Jaipur

Sheraton New Delhi, New Delhi.

List of Fortune Hotels

 Fortune Global Select Gurgaon

 Fortune Select Palms Chennai

 Fortune Select Trinity Bangalore

 Fortune Select Exotica Navi Mumbai

 Fortune Select Manohar Hyderabad

 Fortune Select JP Cosmos Bengaluru

 Fortune Park Bella Casa Jaipur

 Fortune Landmark Ahmedabad

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 Fortune Landmark Indore

 Fortune Park Centre Point Jamshedpur.

 Fortune Hotel The South Park Trivandrum

 Fortune Park Calicut Calicut

 Fortune Park Galaxy Vapi

 Fortune Murali Park Vijaywada

 Fortune Park Klassik Ludhiana

 Fortune Pandiyan Hotel Madhurai

 Fortune Park Panchwati Kolkata

 Fortune Fences Tirupati Tirupati

 Fortune Resort Bay Island Port Blair

 Fortune Resort Sullivan Court Ooty

 Fortune Chariot Resort Mahabalipuram

 Fortune Resort Central Darjeeling

 Fortune Inn Riviera Jammu

 Fortune Inn Jukaso Pune.

 Fortune Inn Sree Kanya Vishakapatnam.

List of Welcom Heritage Properties

 Bal Samand Lake Palace Jodhpur

 Bal Samand Garden Retreat Jodhpur

 Bandhavgarh Jungle Lodge Bandhavgarh

 Bassi Fort Chittorgarh

 Bijay Niwas Palace Ajmer

 Bob's Place Nathuakhan

 Burra Sahib's Bungalow Jorhat

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 Calve Pondicherry

 Camellia Hotel & Resort Shanti niketan

 Chalets Naldehra Naldehra

 Chinnar Plantation Bungalow Elappara, Idukki Dist.

 Connaught House Mount Abu.

 Corbett Ramganga Resort Corbett National Park

 Denzong Regency Retreat Gangtok

 Elephant Point Retreat Village Tippi

 Fernhills Palace Ooty

 Golf View Pachmarhi

 Grace Hotel Dharamsala

 Grand Imperial Agra

 Gulaab Niwaas Palace Pushkar

 Gurkha Houseboat Srinagar

 Hirlicheena Nature Resort Manan Village

 Judge's Court Pragpur

 Kanha Jungle Lodge Kanha

 Kasmanda Palace Mussoorie

 Khazanchand Mansion Almora

 Khimsar Fort Khimsar

 Khimsar Sand Dunes Village Khimsar

 Kikar Lodge Anandpur Sahib

 Koolwal Kothi Nawalgarh

 Lal Niwas Phalodi

 Lallgarh Palace Bikaner

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 Maharani Bagh Orchard Retreat Ranakpur

 Mandir Palace Jaisalmer

 Mistry Sahib's Bungalow Jorhat

 Narmada Jackson Jabalpur

 Noor-Us-Sabah Palace Bhopal

 Palace Belvedere Nainital

 Pemaling Dirang Pragati Resorts Hyderabad]]

Art collection
Art Collection Since 1975, ITC-Welcomgroup has collected a massive bank of art by over 50
artists including some of India’s most important contemporary artists like A.G.
Subramanyam, Krishan Khanna, Jatin Das, Ram Kumar, M.F. Hussain, F.N. Souza, J.
Swaminathan, Tyeb Mehta, Anjolie Ela Menon, Akbar Padamsee, A. Ramachandran, Satish
Gujral, Meera Mukherjee, Jamini Roy, Bikash Bhattacharjee, Sanjay Bhattacharjee, Gopi
Gajwani, Biren Dey, Kim Michael, G.R. Santosh and Arpita Singh.

CORPORATE STRATEGIES ITC’s

corporate strategies are :

I. Create multiple drivers of growth by developing a portfolio of world class businesses

that best matches organisational capability with opportunities in domestic and export
markets.
II. Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards &
Packaging, Agri Business and Information Technology.
III. Benchmark the health of each business comprehensively across the criteria of Market
Standing, Profitability and Internal Vitality.
IV. Ensure that each of its businesses is world class and internationally competitive.
V. Enhance the competitive power of the portfolio through synergies derived by blending
the diverse skills and capabilities residing in ITC’s various businesses.
VI. Create distributed leadership within the organisation by nurturing talented and focused
top management teams for each of the businesses.
VII. Continuously strengthen and refine Corporate Governance processes and systems to
catalyse the entrepreneurial energies of management by striking the golden balance
between executive freedom and the need for effective control and accountability.
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ITC HOTELS LOCATION IN INDIA

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PESTLE ANALYSIS
PESTEL analysis is a highly used management tool that helps to identify the effect of
multiple macro factors on their growth. PESTEL analysis allows you to consider the
influence of six factors; political, economic, social, technological, environmental, and legal.
A detailed PESTEL analysis of the Hotel Industry can show how these factors support the
expansion of the hotel industry or hinder its growth.

Political Factors:

The hospitality and tourism industry is vastly affected by the decisions of the local
government. The political stability of a country is helpful for the growth of the hotel
industry, while any turmoil can harm its growth. Here are some ways the political factors can
affect the hotel industry -

 In case of political unrest or any other emergency, the government can impose a travel
ban. This decision can directly harm the hotel industry because they depend heavily on
tourists visiting from varied areas and looking for temporary accommodations.
 Elections or similar changes in government can be proven either favorable or harmful
for the hotel industry. A political party may make some decisions favoring the
hospitality sector as the hotel industry is supportive of the nation's economy. At the
same time, another political party may remove them, considering their opinion about
the hotel industry.
 Taxation in the hotel business plays a crucial role, and it impacts the overall profit of
the hotel. The government can make some tax reforms which can be helpful for the
hotel industry of the country. The hotels can save money from taxes and invest in
security systems or infrastructure development.

Economic Factors:

The hospitality sector is experiencing some growth because many investors are investing in
its profitability. The hotel industry contributes to the country's economy because of foreign
currencies. These are the economic factors that can affect the hotel industry -

 Economic conditions like inflation, unemployment, recession, and economic

instability directly impact the hotel business. When the economy is on the rise, people
prefer luxury hotels bringing more profit to them. If there is less money in people's
pockets, they try to limit their expenses on travels. As a result, their preference
changes to budget hotels.
 The foreign currency and conversion rates contribute to the hostel industry if the
economy is stable. More people will be interested in visiting other countries when the
economy is stable and on the rise. It will increase the foreign currency reserve of a
country, strengthening its economy.
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 The hotel industry is a massive contributor to the global economy. There are more
than 700 thousand hotels, which account for the employment of about 173 million
people. Besides keeping the circulation of money intact, the hotel industry hugely
impacts the global economy.

Socio-cultural factors:

People's preferences and spending habits shape the society and the culture they belong to,
thus, making it a crucial external factor for the hotel industry. The age group of the travelers
also plays a significant role in these selections and choices. Several socio-cultural factors
impact the hotel industry.

 Travelers are from different classes and age groups. Millennials prefer to compare the
price of the hotels and the amenities before checking into a hotel. Many travelers
choose hotels based on the available facilities like bars and swimming pools, heating,
valet, etcetera. The location with its scenic view from the hotels is also why many
travelers choose them.
 Hotels often take the initiative to allow the guests to encounter the local culture and
food. Traveling is not only a mode to enjoy the gorgeous location but experience their
cultural beauty as well. Therefore, hotels make packages with events to let the guest
get a glimpse of the local culture.
 The present-day hotel industry is highly competitive, and many new players are
coming now and then. A massive section of the guests books a hotel after reading
reviews. Or because of family, friends, or peers' recommendations. Thus, making the
hotel industry depends on people's opinion and their general impressions.

Technological factors:

Technological advances have brought a new era to the hospitality sector, and the hotel
industry is enjoying its benefits. The hotels are aided by technology, from providing a
smooth service to offering the best amenities.

 A large number of hotels use their website for booking and secure payment. The AI-
based customer support system and secured application offer the customers a smooth
and satisfactory experience. The guests can book a hotel anywhere and anytime in a
few clicks. It is helpful for the hotels because foreign travelers can book them directly.
 Technology has made guests stay comfortable and safe. Hotels use technologies like
lifts, heaters, and intercoms to offer the best service to their guests. Systems like
CCTV and security alarms keep them safe and secured. The guests tend to choose
hotels with better facilities and security.
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 Social media has given hotels a hotel to reach more customers through advertisements.
It can impact the hotel's reputation either positively or negatively. The travel websites
allow the tourists to write their reviews which keeps the hotels competitive.

Legal factors:

The legal environment of a country is a decisive factor behind the expansion of the hotel
industry. There are laws and taxation rules that have a direct impact on the business of a
hotel.

 The hotel's location is a significant factor influencing customers' choices. The guests
tend to choose places with low crime rates for safety. The localities with high crime
rates are not suitable for hotels as guests will avoid them.
 The hotels must follow innkeeper laws to ensure the guests and their belongings. If
any such issue arises, these laws decide whom to hold responsible and how much
compensation they should pay.
 Many countries monitor hotels to prevent data leaking and breaching. They have laws
regarding the guest's data security, which the hotels must comply with to sustain in the
market. For example, the EU has General Data Protection Regulation which the hotels
need to follow. It keeps the personal data of the guests safe from being leaked.

Environmental factors:

Environmental factors can influence the hotel industry directly. Hoteliers have adopted
sustainable practices to keep their service environment-friendly in recent years.

 The hotels can take measures to decrease food, water, and energy wastage. They may
switch to renewable energy sources for power to reduce pollution. They can also
increase the use of recyclable products to stop plastic pollution.
 The chemical cleaning agents have negative impacts on the environment. Many hotels
have already stopped using any chemicals that are harmful to nature. It is better to use
eco-friendly cleaning agents for a greener earth.
 The environmental conditions of an area directly influence the growth of a hotel. If the
air and water are polluted, and the hotel does not follow the cleanliness standards and
environmental policies, the guests may feel uncomfortable checking in.
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Growth projectile
The impressive overall growth resulted in massive investment in the hotel sector and new
Indian and foreign Hotel Chains made their presence on Indian landscape. The growth of
Hotels in India is propelled by the increase in the tourism. The continued “Incredible India”
campaign launched by Government of India has had a strong impact on the tourist arrivals in
India. The size of the Hotel Industry is USD 3.8 Billion, and is growing at average rate of
12%. The current supply of hotel rooms is about 110,000 hotels rooms and current demand is
about 150,000 hotels rooms.

The major reason of the boom in the Hotel Industry is the growth in information technology
and related services. The rise of stock indices and new business opportunities are also
attracting foreign institutional investors, funds, equity and venture capitalists. The rising
BPO industry is also contributing to growth of the Hospitality Industry. However, certain
factors pose a severe threat to the Industry like terrorism, diseases like H1N1, travel
advisories etc. As per Taj Hotels annual report 2009, the tourist inflow felt by 3.3% in year
2009-10. The successful marketing of Indian Hotels resulted in the growth of these hotels on
the global scale. Many of these hotel chains are respected in International Markets. This
positive image of Indian hotels helped the hotels chains in achieving the global recognition
and many hotel chains like Taj, Oberoi, ISTA Hotels etc have forayed in the International
markets.

Taj Hotel has presence in twelve countries (Taj Group 2014) which include UK, USA,
Malaysia, Maldives, South Africa, Sri Lanka, UAE and Zambia. Similarly, Oberoi hotels
have presence in Indonesia, Mauritius, Egypt and Saudi Arabia. These hotels are respected
for world class hospitality service in the host countries. The Indian hotel business leaders
like P.R.S. Oberoi received '2010 Corporate Hotelier of the World' award in New York in
November 2010 by Hotels Magazine on the basis of voting by the readers of the magazine in
more than 150 countries. The Hotel chain also received the award for being Worlds Highest
Rated Luxury Hotel Brand for being the best in guest satisfaction in service, value and hotels
location and cleanliness (Obeori Hotels, 2014).

Indian hotels are innovating continuously to sustain the competition from domestic and
International Chains. The Indian hotel chains have diversified from being exclusive super
deluxe chains to serving the middle and lower budget markets as well. Thus, Indian Hotels
have evolved to be competitive, innovative and extremely guest focused and has been
successful in establishing their place in global markets. The Indian Hotel chains are using
latest marketing tools like on line marketing, social media marketing, Emails, direct
marketing, travel agencies etc to compete in market.
Indian hotels have established world class brands by superior service and guest satisfaction.
Over the years so many awards have been won by Indian hotels on international levels.
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Hotels like ITC hotels, Taj Hotels, Oberoi Hotels, Ananda In The Himalayas and other hotel
chains have not only been awarded consistently by the International agencies for providing
superior services and guest satisfaction.
Indian Hotel Industry has evolved tremendously over the centuries. The initiative taken by
private entrepreneurs has resulted in the many Hotel chains achieving highest standards and
global recognition worldwide. By expanding in global markets, these Hotel chains have
proved that Indian Hotel chains have tremendous potential and have courage to establish
themselves in global markets. However, in spite of aggressive growth of the Hotel Industry
in India both by Indian and foreign hotels, the competitiveness in terms of being rated among
top rated Hotels on worldwide level doesn’t look that impressive. There are few Hotels
which have figured among world best Hotels but the number of these Hotels is relatively
smaller.
In order to remain competitive and address such problems, the Indian Hotels opt for joining
the international hotel chain and get slotted into multitier branding system. These
International Hotel Chains have an edge over independent hotels because of brand
recognition. The International Hotel Chains therefore their levels of services religiously and
improves their image by branding and excellent service delivery. The customers of these
International Hotel Chains recognize the levels of services where ever they stay and get
satisfied by the services offered by the hotel.
It is clear from the discussion that the Indian Hotel Industry is growing at fast rate. The
competition between the Indian and foreign hotel chains has led to the falling room rates.
While as some hotel chains have earned name and fame in Global markets many others are
being accused of lacking the service quality which does not match their Hotel classification
star category. The best role the Government can play in such a situation is play a role of
facilitator of growth only by encouraging foreign investment, restructuring the tax schemes
to make Hoteliers confident of investing, reduce the luxury and service taxes so that prices of
services offered by the hotels are lowered . The Government should handover the Hotel
classification process to private players like FHRAI so that more transparency is ensured and
only deserving hotels get the higher star ratings.

The hospitality and hotel industry has experienced significant growth over the years and has
become a thriving sector worldwide. Several factors have contributed to the industry's
growth, including increasing global travel, expanding middle-class populations in emerging
markets, and the rise of online travel booking platforms. Here are some key growth
projections for the hospitality and hotel industry.

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Riding on the back of economic growth due to recovery in the global conditions, resulting in
higher movement in the meetings, incentives, conferences and exhibitions (MICE) segment,
and the consistently growing middle class having increasingly disposable incomes and a
fondness for travel, the hotel industry is expected to post a robust growth of 7%-9% in
FY18-19, according to a report by CARE Ratings. Another factor named by the report as a
driving force for growth is India’s attractiveness as a medical tourism destination.

The Indian hospitality industry has emerged as one of the key industries driving the growth
of the services sector and, thereby, the Indian economy,” says the report.

At the close of 2018, the country saw macroeconomic stability owing to a decline in
inflation, and current account deficit (CAD). The Union budget had identified some major
pillars that will support economic growth for the country that includes tax reforms, fiscal
discipline, investment in infrastructure, ease of doing business, agriculture and farmer
welfare, rural sector, social sector, education and job creation. This is said to have translated
into an overall pick up in economic activities, thereby having a positive impact on the
demand for hotels in the country.

According to India Brand Equity Foundation (IBEF), the tourism and hospitality sector’s
direct contribution to GDP surged by 23.6% in 2017, raising the share of the industry (direct
& indirect) to Rs5.9 trillion ($91.3 billion). “Also, tourism in India accounts for 9.4% of the
GDP and is the 3rd largest foreign exchange earner for the country and ranked 7th in terms
of tourism total contribution to GDP in 2017,” says the CARE report.
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“The expected future inventory in 11 major markets across categories (only branded) is low
at around 49,380 rooms for the next five years (FY18-23).Therefore, with increasing demand
on the back of improvement in economic activities and lower room additions, we expect the
major markets in the industry to sustain the average room rates (ARRs), going forward, and
grow at an average of 3.5-4.5% per annum. Also, we expect the occupancy to inch up to an
average of about 68-70% by the end of FY23 compared with 66.6% in FY18,” says the
report.

The existing room supply for the country grew by 7.5% in FY17-18 totalling to 128,163
rooms (as of 31 March 2018) according to the report. This considers the 8,944 new rooms
that entered various markets during the year, as well an expansion of the existing properties.

Kolkata saw the highest increase in supply (20.7%) in FY17-18, adding to the relatively
small base of hotels, followed by Chennai (10.5%) and Ahmedabad (8.9%).

Among the 11 selected cities, Mumbai's hotel market achieved the highest occupancy
recorded over the past few years amongst all major markets across the country and also
recorded the second highest average room rate (Rs7,740), further consolidating its position
as the best performing hotel market in terms of RevPAR too.

Accordingly, the hotels industry is expected to see an increase in room revenue at the rate of
about 10%-12% CAGR over the next five years.

The report names complex regulatory environment and inadequate tourism infrastructure
among the challenges facing the industry.

Goods and services tax (GST) has been implemented from 1 July 2017, with the aim of
replacing the indirect taxes on all goods and services. Initially, room tariff above Rs5,000
was to attract the higher tax rate of 28%, which has been revised now and only tariff above
Rs7,500 would fall in the highest tax slab under the GST regime.

“Accordingly, we at CARE Ratings believe that the effective tax rate would not have any
major impact on the average room rates (ARRs) and occupancy rates (ORs) of the hotels,
given that GST players would be able to avail the input tax credit for both goods and
services,” the report says.

Alternatives to the premium hotel segment have been listed by the report to include time-
sharing as a form of vacation ownership of property, wherein units may be on a partial
ownership, lease or a ‘right to use’ basis where the sharer has no claim to the ownership of
the property. The other option mentioned is the service apartments, which are fully furnished
apartments available for short-term or long-term stay, providing all the luxuries of a
premium hotel such as room service, laundry service, fitness centre, etc, and have larger
rooms and more space at a far more competitive rate.
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Customers of the hotel industry are classified by the report under the heads of business
traveller, leisure traveller and airlines cabin crew, each displaying varied demand dynamics.
The report also highlights the cyclical nature of the industry, pointing out that during positive
cycles the industry witnesses periods of sustained growth and sees healthy average room
rates (ARRs) and occupancy rates (ORs) which fall in the lean seasons.

Elaborating on the pattern of revenue generation, the report notes: “While the macro-
economic factors affect the business destinations (RevPARs – revenue per available room,
growth is sensitive to the macro-economic indicator such as the nominal GDP), the leisure
destinations show a greater sensitivity to non-economic factors such as terror attacks, health
related travel warning, etc. (decline in FTA in 2008-09 was largely on account of the
Mumbai terror attacks on November 26, 2008 and the swine flu linked travel advisories).
Consequently, the average RevPARs of 12 major cities had registered a decline of about
13.9% in 2008-09 and 9.7% in 2009-10. While in 2010-11, with higher growth in nominal
GDP and an increase in FTAs post-recession, these 12 major cities recorded an average
increase of about 2.6% in RevPARs. Similarly, due to increased domestic and international
trade activities and various initiatives taken by the government post 2015-16, the number of
foreign travellers in the country has increased. This has been reflecting in the overall
RevPARs in India that registered a CAGR growth of about 5% between 2014-15 and 2017-1
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