Competition in Hotel Industry
Competition in Hotel Industry
Competition in Hotel Industry
By
Malabica Das
Bunty Chatterjee
INDUSTRY OVERVIEW
REVENUE
Revenues of Hotel and Restaurant (H&R) industry in India during the
financial year 2006-07 was INR604.32 billion , a growth of 21.27%
over the previous year, primarily driven by foreign tourist arrivals
,which increased by 14.17%.
Currently there are some 1,980 hotels approved and classified by the
Ministry of Tourism, Government of India ,with a total capacity of
about 110,000 hotel rooms.
With tourism industry showing excellent performance, in terms of
foreign tourists arrival and demand outpacing supply, the hospitality
industry, is poised to grow at a faster rate and reach INR826.76 billion
by 2010.
It is estimated that over the next two years 70,000-80,000 rooms will
be added across different categories throughout the country.
INDUSTRY OVERVIEW
GROWTH DRIVERS AND POTENTIALS
Rising gdp in developing nations is being rapidly followed by rising living
standards in countries such as china, India, Indonesia, Malaysia and Thailand.
Affluence: travel
Asians are on the move.
recent years have seen outbound travel from Asian countries grow by more than
20 %
The middle class: a changed mind set
people now have the money and are willing to spend it, not only on necessities
but also luxury products, travel, adventure and cultural experiences.
Access: technology
online travel market
Only a decade old
Fastest growing distribution channel in Asia
Indian scenario
Annual growth rate is 24%
The Average Room Revenues (ARRs) in some metro
hotels in India has increased by 15% from the last year
According to Government estimates, India needs about
80,000 rooms in all categories over the next two or
three years at an estimated cost of about US$ 8 – 9
billion.
The average employee to room ratio is 1.8 in hotels in
India, across all the categories, except in the three-star
category, where the ratio drops to 1.5 per room.
Indian scenario
'Hotels in India' have supply of 110,000 rooms.
According to the tourism ministry, 4.4 million tourists
visited India last year and at current trend, demand will
soar to 10 million in 2010– to accommodate 350
million domestic travellers.
'Hotels in India' has a shortage of 150,000
rooms fuelling hotel room rates across India.
With tremendous pull of opportunity, India is a
destination for hotel chains looking for growth.
Government regulations
The government has realized the importance of
tourism and has proposed a budget of Rs. 540 crore
for the development of the industry.
The priority is being given to the development of
the infrastructure and of new tourist destinations
and circuits.
The Department of Tourism (DOT) has already
started the "Incredible India" campaign for the
promotion of tourism in India.
Major players in hotel industry
The major players in hotel industry can be broadly
classified into Public Players AND Private Players.
PUBLIC SECTOR PLAYERS:
1. ITDC Hotels
2. Hotel Corporation Of India