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Youreka

The document provides information about a case study submitted to Mr. T K Chaudhary analyzing the performance of the Youreka Hotel located in Amritsar, India. Some key points: - The 150-room Youreka Hotel in Amritsar was achieving only 31.5% average occupancy after two years and losing Rs. 600,000 per day. - Findings showed the hotel's admin costs and energy costs were higher than industry standards. Hiring from metro cities led to high attrition. - Solutions proposed training local staff to reduce costs, finding local suppliers, improving technology, targeting tourists visiting the Golden Temple, and addressing issues around human resources and attrition. -

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Kanwaljeet Singh
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231 views18 pages

Youreka

The document provides information about a case study submitted to Mr. T K Chaudhary analyzing the performance of the Youreka Hotel located in Amritsar, India. Some key points: - The 150-room Youreka Hotel in Amritsar was achieving only 31.5% average occupancy after two years and losing Rs. 600,000 per day. - Findings showed the hotel's admin costs and energy costs were higher than industry standards. Hiring from metro cities led to high attrition. - Solutions proposed training local staff to reduce costs, finding local suppliers, improving technology, targeting tourists visiting the Golden Temple, and addressing issues around human resources and attrition. -

Uploaded by

Kanwaljeet Singh
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© © All Rights Reserved
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YOUREKA CASE

STUDY

Submitted to – Mr. T K Chaudhary


Submitted by-

S. No Name Roll No.


1 Kanwaljeet Singh 11814523
2 sanjushah Reddy
3 Piyush kimta
4 Pavan Kumar Rao
INDIAN HOTEL INDUSTRY
 Indian hotel industry plays an important role in Indian
economy and national economy. It satisfies the demand of
International tourists as well as national tourists.
 Hotel industries are suffering from many problems and it
effects its status and Indian revenue.
 ICRA said in its research on Indian hotel industry are highly
skill staff, maintenance, Debt, Diversification, Tax polices,
Room rates, Technologies, Safety and security, Less revenue
put hotel on sale.
THE YOUREKA GROUP
• Youreka Hotel is International luxury chain of hotels
• Total rooms – 658000
• Presence in 80 countries with 3800 hotels.
• Its first hotel was opened in Delhi in 1968
• In 2014 it had 2267 rooms in 10 cities in India
YOUREKA Amritsar
ROOMS
• Hotel Rooms contributes for 55% revenue of hotel
• Of 150 rooms divided categorically

Category No. of rooms Room rent


Standard 60 4000
delux 50 6000
F&B Suite 40 8000

• F&B contributes for 45% revenue of hotel and 60% costs for
department.
• Revenue contributes 2000 per occupied room.
YOUREKA Amritsar
Banquets & Conference rooms:
• One banquet hall with capacity of 300 people
• 03 conference rooms with modern facilities
Restaurants:
• BARN : 250 guests
• BERTA: 130 guests (Italian)
• Barre: 25 guests (hard drinks & high tea)
Other sources of revenue:
• Spa services, telecommunication , laundry, & Transportation services,
Fixed Expenses
• 2.3 million (FC for electcity)
• 1.0 million (diesel expenses for generator)
• Property Tax
• Insurance
• Rent
• Franchise cost
• Salaries for staff:
1. Top level employees (heads and GM )
2. Second level employees (engineers, head chefs, etc.)
3. Third level employees (waiters, staff, cooks, etc)
Variable Expenses
• Marketing expenses
• Variable cost of 700 per occupancy
• Operation & Maintenance
• Departmental Expenses
• Food items:
Dairy products (locally procured)
Vegetables & fruits (within 500 km )
Chicken & Mutton (locally procured)
Seafood (constituted of 50% of items purchased)
Problems in Hotel Industry
 Managing Human Resources :1.satisfied employees
lead to satisfied customers. 2. Indian hospitality industry
suffers from high rate of attrition3. The industry requires
150,000 persons per year whereas supply is only 50,000 per
year. This leads to the shortage of 100,000 persons per
annum. Which is very serious problem.
 Taxation :In India, hotels are taxed anywhere between 20%
and 25% depending on the state that they are operating in,
when other Asian countries are levying 8-10%. In addition to
this, different tax structures in different states are difficult for
tourists to comprehend.
Smart Technologies
1. challenges of keeping up with the fast pace of technology is
difficult and expensive alas guests have increased the use of
Internet for online reservations in hotels.
2. number of reservations made via the Internet continues to
increase, and this percentage is increasing every year, hotels cannot
afford not being connected.
3. Free fast Wi-Fi is a hygiene factor for most guests.
4. In the room guest is provided with Connectivity Panels to connect
their Laptops, iPods, video cameras and gaming consoles to the in-
room TV.
Security
Since the 26/11 attack the hospitality industry has continuously
been fighting with every challenge in respect with terrorism
and other security risks by adapting to new technologies and
training the security personnel and other employees as well.
Less Revenue put on sales
1. lack of taste and preference, lack of festival opportunity,
government decision like Demonetization
2. Due to those things in long period they faced revenue
problems and have to shut down their business operations
FINDINGS
•Youreka , Amritsar was unable to achieve operating
breakeven after two years of operations.

•Average occupancy 31.5% only, losing Rs 600000/- per


day.
Findings
• Supplier selection criteria
• Break even point comes to occupancy of 52 rooms per day (On
average )
Is there anything that he could do to make a difference in the bottom line of
the hotel?
As compared to industry standards admin cost and energy cost are
really high for youreka group
Hiring of level 2 people from metro cities and increased incentives
and provided accommodation to stop attrition.
SOLUTION:1. They should train local people in their own institute
and employ them in hotel. This will reduce fixed cost and
attrition rate.
2. Finding local supplier base for procurement of vegetables and
fixtures .
SOLUTIONS :
 Golden Temple at Amritsar
 Training Students in hotel management : The major
problems plaguing the hotel industry in India is the lack of skilled
professionals .To overcome this, put special focus on how students
are being trained in hotel management institutes along with taking
care that the standards of the hotels themselves are improved to
meet international needs and expectations.
 Accurate Budgeting:With the increase in corporate travel,
travel companies are looking at budget hotels, where one gets bed.
 Improvement in technology
 Be Friendly
location of the hotel:
• 5-star room ocupants were mainly
• Tourists
• NRI’s
• Industrialist
• Airline crews
• Case says 100000 people per day visits Golden temple. They
have to put effort in marketing against two competitor
only,to convert average occupancy of 62%(Industry Average)
i.e. 93 rooms every day.
Attributes Disadvantage Opportunity Actions
Low corporate Target 2% of tourist promotion and
1 Place
footfall footfall for 167 rooms advertisement
Direct - Direct team,
tele, social network,
Conceptualise print, media, web
Local people not
restaurants into booking,Indirect -
2 Promotion prone to 5-star
foodie spots e.g. Travel Agents(direct,
culture
Murthal indirect, online),
travel portals, event
planner
5-star material
sourcing costs - Finding local supplier
3 Sourcing
furniture,vegetables base
and fixtures
Outsource/Contract
4 Sea food Sea-food availability to cold supply chain Supplier selection
vendors
Incentives + Training of local
5 Human resource Talented workforce Accomodation for people in their own
employees institute
Conclusion and Future Scope:
 India has a world image of a country surrounded by poverty,
safety issues, political instability and diseases. This creates a
very negative image of both the hotel and tourism industry.
 However, as a travel destination, India's name is still very
prominent. This creates major expectations in the eyes of
travelers and hotel guests in youreka hotel in Amritsar.
Thank You

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