Aureole Institute of Business Management 1

Business Environment

Topic

Environmental Scanning for

(Hospitality & Tourism) sector

Name: AMAN BHATTACHARYA

Roll No. A209
Section ‘A’
Subject: Business Environment
Faculty: Prof. Sukalpa
Date of Submission: 10-04-2010

Short Project Submitted in partial fulfillment for

Semester II evaluation
Of MBA Programme
At AIBM,Pune
Year: 2010
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Introduction
Tourism in India is sunrise industry. Tourism earned more than 15000 crores of
foreign exchange in 2008-09 and it is 2 nd largest foreign exchange for the country.
Over 17 crore domestic tourist have traveled within India and over 9.5 lacs tourist
visited India in 2009 and more expected in the fiscal year of 2010.
State and city description
Lucknow is a heart of Uttar Pradesh. As an Uttar Pradesh is the base of mugals in
early century it is known as city of muglai styles, delicious kebabs and there superior
hospitality the Uttar Pradesh. The government announce that within 10 -15 year
lucknow going to be metro city because of the business tourism growth is the state is
higher than other major city such as Mumbai, New Delhi, Bangalore, Hyderabad,
Goa. Goa comes on second place after Agra (UP) in tourist destination in India.
Along with Lucknow and Agra there are few city famous for tourist destination are
Agra, Allahabad, Varanasi, Fatehpur sikri, Ayodha and Ghaziabad etc. It is going to
connect golden triangle of india.
The sight-seeing in the city are Bara Imambara , Rumi Darwaza or The Turkish
Gate, British Residency, Shah Najaf Imambara, Tarunvali Kothi, Muhammad Ali's
Imambara, Juma Masjid, Qaiser Bagh Palace, La Martiniere-A Funerary Monument,
Lucknow’s Cultural History Remains Unrivaled, zoo and that all give growth of the
tourist in the state /city. It also includes business meetings.
In Uttar Pradesh there are two ITDC offices one in Lucknow and another one in
Agra. Lucknow coming with lots of industrial industry and Foreign Company, and it
obvious more foreign companies more tourist and more hotels and motels growth is
higher. In the city there are many competitors for hotels and motels past 15 year
such as Taj Lucknow, the Clarke, park inn, Hotel Shanti Lodge, Hotel Milan,
Hotel Harsit, Hotel Deep Avadh, Hotel Syona Residencym, Hotel Uday Raj
Hotel Amar Prem, Hotel Lips, Hotel Pradeep Palace, Triloki Hotel, the oberoi and
orchid going to launch there five star property in the city within three to four years.
While there are the major areas are hazratganj, gomtinagar, and indranagar, aligang,
and MG road.
The major industry in Lucknow is Sahara India pariwar ltd. Sahara India Pariwar is a
major entity on the corporate scene having diversified business interests that include
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Finance, Infrastructure & Housing, Media & Entertainment, Consumer Products,

Manufacturing, Services and Trading in Lucknow.
About the hotel.

The hotel Imperial nawab (It is nawabi style hotel) going too situated in the heart of
Lucknow Gomtinagar. The property is located only three kilometers away from the
excitement of the city. The lobby of the Imperial Nawab Entering the gleaming
marble and granite lobby from the excitement and the bustle of the city; guests are
greeted in a world of hospitality. The lobby resplendent with Italian marbles and it
scattered with sofa and mugal Kaleen (carpets) the comfort of beautifully and
appointed carved ceilings of the lobby give an ancient look of the empire of nawabs
the atmosphere of the hotel give grandeur of the past. The hotel has 75 guest rooms
(standard, deluxe, suit rooms) have dial telephone colour television (LCD) and DTH
facility and many other amenities are available in the rooms and a special collection
of personal care amenities.
The guest rooms offer nawabi style and comfort to the guest hotel has 2 banquets
hall for marriage parties and conference, health club with Jacuzzi, Sauna Bath for
male and female separate, Imperial Nawab has 2 restaurants one is Multi cuisine
restaurant and second one is contain cuisine of golden triangle of India (Golden
Triangle) theme restaurant.it also have special bar also. Janan café is a 24 hr coffee
shop.
Other hotel facilities include, are swimming pool business center, travel desk,
parking facilities, room service, laundry facilities, doctor on call and all . Airport
12kms and Railway Station 14 km from the hotel.
If everything goes according to the plan with other business partners the hotel
started construction in the year of 2014.
Business Partners
Present Partners Expected Future partner
Aman Bhattacharya Ranjit Lutte
Ashwani Kumar Nilesh Pullarwar
Chetan satpute Shesh Mani
Yash Jadhav Avi Kumar Rangnenewar
Manoj Kumar Prince Maitte

Aim: -To be world finest hospitality segment.

Objective: - To give prom service for something unique perspective .
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Environmental scanning with the help of PEST analysis

Now we have to see what is PEST analysis? And how it is influence in to the field of
Hospitality service?
PEST analysis of any industry investigates the important factors that affect the
industry and influence the companies operating in the sector. PEST stands for
Political, Economic, Social and Technological analysis. The PEST Analysis is a tool
to analyse the forces that drive the industry and how those factors can influence the
industry.

Political Analysis = It’s include government regulation and legal issue of the
central government.
Employment Law & Act’s in Hospitality Sector:-
The Factories Act, 1948
Objectives 

 To ensure adequate safety measures and to promote the health and welfare
of the workers employed in factories.
 To prevent haphazard growth of factories through the provisions related to the
approval of plans before the creation of a factory.

Scope and coverage

 Regulates working condition in factories.

 Basic minimum requirements for ensuring safety, health and welfare of
workers.
 Applicable to all workers.
 Applicable to all factories using power and employing 10 or more workers,
and if not using power, employing 20 or more workers on any day of the
preceding 12 months.

Main provisions

 Compulsory approval, licensing and registration of factories.

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 Health measures.
 Safety measures.
 Welfare measures.
 Working hours.
 Employment of women and young persons.
 Annual leave provision.
 Accident and occupational diseases.
 Dangerous operations.
 Penalties.
 Obligations and rights of employees.

When to consult and refer

 On starting a factory.
 Throughout the life of the factory.

The Minimum Wages Act, 1948

Objectives

 To determine the minimum wages in industry and trade where labour

organisations are non-existent or ineffective.

Scope and coverage

 Applicable to all employees engaged to do any work, skilled, unskilled manual

or clerical, in a scheduled employment, including out-workers.
 Fixation of minimum wages.

Main provisions

 Fixation of minimum wage of employees.

 Procedure for fixing and revising minimum wages.
 Obligation of employees.
 Rights of workers.

When to consult and refer

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 At the time of fixation of salary of new/existing employees.

The Payment of Wages Act, 1936

Objectives

 To ensure regular and prompt payment of wages and to prevent the

exploitation of a wage earner by prohibiting arbitrary fines and deductions
from his wages.

Scope and coverage

 Application for payment of wages to persons employed in any factory.

 Not applicable to wages which average Rs 1600/- ($35.83) per month or
more.
 Wages include all remuneration, bonus, or sums payable for termination of
service, but do not include house rent reimbursement, light vehicle charges,
medical expenses, TA, etc.

Main provisions

 Responsibility of the employer for payment of wages and fixing the wage
period.
 Procedures and time period in wage payment.
 Payment of wages to discharged workers.
 Permissible deductions from wages.
 Nominations to be made by employees.
 Penalties for contravention of the Act.
 Equal remuneration for men and women.
 Obligations and rights of employers.
 Obligations and rights of employees.

When to consult and refer

 Deciding wages and salary administration at all times.

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The Employees Provident Funds and Misc. Provisions Act, 1952

Objectives

 To make provisions for the future of the industrial worker after he retires or for
his dependents in the case of his early death.
 Compulsory Provident Fund
 Family Pension
 Deposit linked insurance

Scope and coverage

 Application to factories and establishments employing 20 or more persons.

 Can be made applicable by central government to establishments employing
less than 20 persons or if the majority of employees agree.
 Excludes establishments employing 50 or more persons or 20 or more
persons but less than 50 persons, until the expiry of three years in the case of
the former, and five years in the case of the former, and five years in the case
of the latter, from the date of setting up of establishment.
 Applicable to all persons who are employed directly or indirectly through
contractors in any kind of work.

Eligibility

 Employees drawing pay not exceeding Rs. 3500/- ($78.37) per month.

Benefits:

 Apart from terminal disbursal of non-refundable withdrawals for Life Insurance

Policies
 House building
 Medical treatment
 Marriage
 Higher education
 Family pension
 Retirement-cum-withdrawal benefits
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 Deposit linked insurance Amount equal to the average balance in Provident

Fund of deceased subject to a maximum of Rs. 25,000/- ($559.79).

Workmen’s Compensation Act, 1923

To provide compensation for workmen in cases of industrial accidental / occupational
diseases in the course of employment resulting in disablement or death. Coverage
for persons employed in Factories, Mines, Plantations, the Railways and others
mentioned in Schedule II of the Act. 
Benefits:
Compensation for Death

 Minimum - Rs. 20,000 ($447.83) Maximum - Rs. 1,14,000 ($2,552.62)

 Compensation for Permanent disablement
 Minimum - Rs. 24,000 ($537.4) Maximum - Rs. 70,000 ($1567.4)
 Temporary disablement
 50% of wages for a maximum period of 5 years.

The Contract Labour (Regulation & Abolition) Act, 1970

 Not to be required to work beyond 9 hours between 6 A.M. and 7 P.M.

 With the exception of midwives and nurses in plantations.

The Inter-state Migrant Workmen (Regulation of Employment and Conditions

of Service) Act, 1979 

 Separate toilets and washing facilities to be provided in employment covered

by the 3rd and 6th laws.

Maternity Benefit Act, 1961

 Maternity benefits to be provided on completion of 80 days working.

 Not required to work during six weeks immediately following the day of
delivery or miscarriage.
 No work of arduous nature, long hours of standing likely to interfere with
pregnancy/normal development of foetus or may cause miscarriage or likely
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to affect health to be given for a period of one month immediately preceding

the period of six weeks before delivery.
 On medical certificate, advance maternity benefit to be allowed.
 Rs. 250 ($5.6) as medical bonus to be given in case when no prenatal
confinement and post-natal care is provided free of charge.

Equal Remuneration Act, 1976

 Payment of equal remuneration to men and women workers for same or

similar nature of work protected under the Act and also under the provisions
at ISMW Act, mentioned above.
 No discrimination permissible in recruitment and service conditions except
where employment of women is prohibited or restricted by or under any law.

The Children (Pledging of Labour) Act, 1933

 Any agreement to pledge the labour of children is void.

The Bidi and Cigar Workers (Conditions of Employment) Act, 1966

 Employment of children under 14 years of age prohibited under the laws at Sl.
Nos. 2 to 5.
 Except in the process of family based work or recognised school-based
activities, children not permitted to work in occupations connected with:
Passenger, goods mail transport by Railway Cinder picking, cleaning of ash
pits Building operations, construction Catering establishments in Railway
premises or port limits Beedi making Carpet weaving Cement manufacturing
Cloth printing Dyeing, weaving Manufacture of matches, explosives, fireworks
Mica cutting, splitting Wool cleaning
 In occupations and processes other than the above mentioned, work by
children is permissible only for six hours between 8.00 A.M. and 7.00 P.M.
with one day's weekly rest.
 Occupier of establishment employing children to give notice to local Inspector
and maintain prescribed register.
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The Payment of Gratuity Act, 1972 

Objective

 To provide for payment of gratuity on ceasing to hold office

Coverage

 Factories, Mines, Oil fields, Plantations, Ports, Railway Companies, Shops &
Commercial Establishments and to other establishments to which the
Government extends the law.

Eligibility

 Employees drawing wages not exceeding R. 3500/- ($78.37) per month.

Benefits

 15 days wages for every completed year of service or part thereof in excess
of six months subject to a maximum of Rs. 50,000 ($119.58)

Employees State Insurance Act, 1948 

Objective 
To provide for health cover, Medical care and Cash benefits for

 Sickness
 Maternity
 Employment injury
 Pensions to dependents in case of Death (or) Employment injury

Eligibility

 Employees drawing wages not exceeding Rs. 3000/- ($67.17) per month.

Benefits

 Compensation for Death Minimum - Rs. 20,000 ($447.83 Maximum) - Rs.

1,14,000 ($2552.62)
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 Compensation for Permanent disablement Minimum - Rs. 24,000 ($537.4)

Maximum - Rs (70,000) $1,567.4
 Temporary disablement 50% of wages for a maximum period of 5 years.

The Payment of Bonus Act, 1965 

Objectives

 To provide statutory obligations for payment of bonus to persons employed in

certain establishments on the basis of profits or productivity.

Scope and Coverage

 Applicable all over India to factories under the Factories Act and to other
establishments employing 20 or persons on any day during a year.
 Government can extend its coverage to establishments employing between
10 and 20 workers.
 Covers all workers including supervisors, managers, administrators, technical
and clerical staff employed on salary or wages not exceeding Rs 2,500
($55.97) per month.

Main Provision

 Eligibility for bonus.

 Payment of minimum and maximum bonus.
 Time limit for payment of bonus.
 Deductions from bonus.
 Computation of gross profits and available allocable surplus.
 Rights of employees.

When to Consult and Refer

 When the factory if registered under the Factories Act.

 When the number of employees in the establishment reaches 20 or above.
 When calculating the bonus.
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The Shops and Establishments Act, 1953 

Objectives

 To provide statutory obligation and rights to employees and employers in the

unorganized sector of employment, i.e., shops and establishments.

Scope and Coverage

 A state legislation; each state has framed its own rules for the Act.
 Applicable to all persons employed in an establishments with or without
wages, except the members of the employer's family.
 State government can exempt, either permanently or for a specified period,
any establishments from all or any provisions of this Act.

Main Provisions

 Compulsory registration of shop/establishment within thirty days of

commencement of work.
 Communications of closure of the establishment within 15 days from the
closing of the establishment.
 Lays down the hours of work per day and week.
 Lays down guidelines for spread-over, rest interval, opening and closing
hours, closed days, national and religious holidays, overtime work.
 Rules for employment of children, young persons and women
 Rules for annual leave, maternity leave, sickness and casual leave, etc.
 Rules for employment and termination of service.
 Maintenance of registers and records and display of notices.
 Obligations of employers.
 Obligations of employees.

When to Consult and Refer

 At the time of start of an enterprise.

 When framing personnel policies and rules.
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The Trade Unions Act, 1926 

Objective

 To confer a legal and corporate status on registered trade unions.

Scope and Coverage

 Applicable to unions of workers as well as associations of employers.

 Extends to the whole of India.
 A central legislation but administered and enforced by the state governments.

Main Provisions

 Defines trade union.

 Registration of a trade union by any seven or nine workers of an
establishment on applying with a copy of the rules of the union, the name and
address, and the list of office bearers.
 Cancellation and dissolution of trade unions.
 Obligations of registered trade unions.
 Rights of registered trade unions.

When to Consult and Refer

 At the time of start of an enterprise.

 Throughout the running of the enterprise.

The Industrial Disputes Act 

Objectives

 To provide a machinery for peaceful resolution of disputes and to promote

harmonious relation between employers and workers.
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Scope and coverage

 Applicable to all industrial and commercial establishments

 Covers all workers and supervisors drawing salaries up to Rs. 1600/- ($35.82)
per month.
 Not an applicable to person employed in managerial and administrative
capacities.

Main provisions

 Defines industry, industrial dispute, layoff, lockout, retrenchment, trade union,

strike, wages. workman, etc.
 Provides machinery for investigating and settling disputes through works
committees, conciliation officers, boards of conciliation, courts of enquiry,
labour courts, tribunals and voluntary arbitration.
 Reference of dispute for adjudication.
 Awards of labour courts and tribunals.
 Payment of wages to workers pending proceedings in High Courts.
 Rights of appeal.
 Settlements in outside conciliation.
 Notice of change in employment conditions.
 Protection of workmen during pendency of proceedings
 Strike and lockout procedures.
 Lay-off compensation.
 Retrenchment compensation.
 Proceedings for retrenchment.
 Compensation to workmen in case of transfer of undertakings.
 Closure procedures.
 Reopening of closed undertakings.
 Unfair labour practices.
 Recovery of money due from employer.
 Penalties.
 Obligations and rights of employees.
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In the political factor licencing plays an important factor in this political hand plays a
vital role in it success. It will cost lacks of Indian rupees to get the licence.

Approval and licensing of the hotel

Registration is made of all accommodation utilized by the tourists .the work of
registration is done or entrusted to a government or statutory body.
The hotel has to be eligible to various facial relief and benefits only after the hotel
accorded by the government from the point of view the hotel is suitable for the tourist
or not, after approved by the government it get worldwide publicity through tourist.
Publicity and promotion abroad under hotel incentive quota scheme.
The basic requirements for approval of the hotels are: -
1) Each and every functioning hotel should have at least 10 bedrooms.
2) The area of the restrooms /bath rooms.
3) Management must agree to abide by the regular condition by the government.

There is few features for approvals of the functioning hotel are: -

1) General feature in this building should be constructed and the locality the
approach should be attached 50% to 75% bathrooms with all modern facilities.
2) Facilities front deck should be in conformity with the guideline and total security,
well-equipped kitchen and restaurant, and hygienic.
3) Service should be courteous and efficient staff with proper grooming and
hygienic uniforms, housekeeping at the hotel keeping good quality of linens and
machineries.
There are few criteria for approval are: -
Good location of the hotel, fully furnished guest rooms, well occupied bath rooms,
well occupied kitchen utensil, personal hygiene, comfortable and attractive dining
hall, good management, housekeeping and maintenance, front desk, and special
facilities by the hotel I.e. doctor on call, travel desk, saloon for gents and ladies,
handicraft and all.
===============================================================
The Uttar Pradesh Liquor License Rules, 1976 and 1986 act.
License required for the opening a hotels.
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The license is required for the hotels are: -

Building license: The application for obtaining a license for building hotel is to be
made on the prescribe form giving particular pertaining to name of establishment
,location of the premises, name of proprietor /partner ,father name ,caste, residential
address, name of the keeper ,number of stories ,year of grant of original license , last
year of license number of bed of license , size of the rooms ,number of workers etc,
after that local municipal authorities will a notice for the payment amount of license
under the bye- laws after payment the local authority issue the license.
Eating-house: The application has to be made separately for each eating-house
indicating the name and address of license in term of local municipal health
authorities. Certificate is to be issued in the name of officer who has been nominated
by the management. It is for the food license that serve in the hotel.
Bars L-3,L-5,L-20 : L–3 service of liquor in a hotel ( to resident in there rooms),
L-5 service of liquor in a bar / restaurant to a hotels, L-20 temporary arrangements
for service of liquor are required inside the licensed premises of L-3, L-4, L-5, L-19
and L-19 A( for private parties).
Swimming pool: It has to be registered by the police certified by municipal health
authority.
Fire prevention and fire safety act, 1986: Chief fire officer of a particular area
issuing authority, all the hotel required to obtain from DFS before applying for
renewal of licenses from the police.
Prevention of food adulteration: Department of health is issuing authority for food
of eating-house is food is hygienic.
Elevators: Inspector of lifts Lucknow administration office of the electrical inspector
is issuing authority. These licenses need to be renewing every year.
Generating: UPMC issuing authority for license.
Boilers: A license is issued by the UPMC under factories act.
Cold storage: The deputy senior marketing development officer of the directorate
issues a license.
Foreigners’ registration: Under police act all foreigners staying in the hotel will
have to be registered within 24 hours in police headquarters.
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E.S.I: where employees are covered under factories act such employees will be
covered by the E.S.I.
E.P.F: This is a register license with the E.P.F authority.
Foreign exchange license: Reserve bank of India issuing the license, by the act of
1973.
Weight and measure: Inspector of weight and measures department, of a
particular state issuing authority, once in a year, all weighing scales/machines,
measuring jar etc, are required to be calibrated and stamped by the authorized
agency.
Music license: Local authority or Municipal Corporation issuing license.
Insurance health and building: General insurance /life insurance. Is the using
authority .the following insurance are to be taken by hotels.
1) Insurance against fire, floods ,earth quakes, civil riots, malicious risk etc
2) Insurance against cash in safe, burglary and house breaking.
3) Insurance against third party risk.
Nsu (national specialty underwriters) is leading insurance company in the world
Nsu sets the standard when it comes to property and casualty insurance for the
hospitality industry.
Nsu offering business insurance for the hospitality industry. Insurance coverage
services include health insurance policy services, auto insurance coverage for
businesses, business health insurance services, and various other insurance policy
services for businesses; along with the health insurance coverage and liability
insurance services designed to suit your hotel or casino.

Economical Analysis
While operating a hotel generally will say they like inflation because they can raise
rates quickly, keep in mind there are two sides to this. Costs will inflate along with
wages and interest rates inevitably will rise. Just look at the yield, which is at the
steepest upward slope ever. This means eventually interest rates will be high. That
will be necessary to save the Indian economic from collapse in the world market.
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Impact of India's economic growth on Tourism

Indian tourism receipts combined with better passenger transport systems and
customized food and lodging preferences taken into consideration by exclusive tour
operators has meant a niche segment of the country's top travel agencies generating
considerable income for their industry. No wonder, as things stand, tourism has
become the number one export earner, ahead of automotive products, chemicals,
petroleum and food for India and this would not have been possible without the
combining of governmental, community and private industry powers through
diversification in the economy.
This diversification of economy is a sign of health for India as a developing nation
fast emerging as a major player in the tourism sector, which has got a shot in the
arm thanks to better management at local and urban levels. The only issue of
concern is that should India or any of its major tourism generating regions become
dependent for its economic survival upon one industry, it can put major stress upon
this sector and its people, who may be compelled to perform well consistently. One
solution for easing the burden of India's welcome economic growth off the shoulders
of the locals is for our developing country to explore other resources, apart from
embracing specialized tourism pockets, as a way to boost the economy.

Social Analysis= It’s include demographic and culture aspects of the society.
Trends & Developments in Hospitality Sector:
The year 2003 was an outstanding year in terms of inbound tourism, with tourist
arrivals reaching 2.73 million. The strong growth in tourist arrivals in 2003 (especially
in the first half of the year) is partly attributable to the outbreak of SARS in East Asia,
as well as the war on Iraq, which resulted in India being perceived as a safe region
To visit. The more fundamental reason, however, relates to a strong sense of
business and investment confidence in India: inspired by India’s strong GDP
performance, and initiatives taken by the erstwhile Prime Minister, to make peace
with Pakistan, strengthen ties with the developed world and open sectors of the
economy to private sector/foreign investment.
Significantly, the bulk of international arrivals in India, both in 2003 and 2004, have
been business travellers. Domestic travel, both business and leisure, also benefited
from a thriving economy. Prior to being voted out of power, the NDA government
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implemented certain important measures to provide a much-needed boost to travel &

tourism. These included the abolishment of the inland air travel tax of 15%; reduction
in excise duty on aviation turbine fuel to8%; and removal of a number of restrictions
on outbound chartered
Flights, including those relating to frequency and size of aircraft. The provision
included allowing Indian charters to land at all airports in the country, and Indian
passport holders to travel on inbound charters. The government also launched the
Incredible India campaign, which has been successful in launching the ‘Brand India’
image. The new government, it appears, is taking active interest in developing
tourism in India. The continued Incredible India campaign has had a strongly positive
impact on tourist arrivals in 2004. Definite efforts are being made to communicate
the Brand India message: India made its presence strongly felt at the WTTC
promoted Global Travel & Tourism Summit held in Doha, Qatar in May this year.

The five cultural trends affecting the hotel industry

Understanding consumers - expectations is paramount to delivering the type of
hospitality experience that will bring repeat business and earn excellent world-of-
mouth recommendations. These expectations are being driving by five major cultural
trends, according to Daniel Levine, founder, Avant-Guide. These trends are:

Exclusivity through personalization and localization—consumers expect to be

catered to for their hospitality needs.

Upscale design—Design no longer is viewed as a luxury, but a trend to be honored.

Control and consumer transparency - consumers want to feel they are in control of
their hospitality experience, whether it be using price comparison sites, placing live
phone pictures online for others to see at websites like ComVu.com, or posting
reviews of services on a website like Consumerist.com.

Empathy and social networking - This is the intersection between real and virtual
worlds. Various companies are offering networking opportunities from choosing your
cab-sharing partner to another passenger on the same plane to invitation-only meet
spaces and designed to bring like-minded travellers together. Hotels, particularly, are
a natural and organic place for social networking.

Abundance-The wealth of opportunities to service micro niches, whether it be the

Millennial or over 50s—allows personalization of services and offerings.
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Finally, Levine points out that hotels need to be seen as being dedicated to green
initiatives in order to appeal to travellers.

GLOBALIZATION VS LOCALIZATION
Are globalization and localization competing strategies? No. “Any business needs to
think about both,” Globalization is here to stay as evidenced by changes in
demographics and affluence. For instance, Russia is becoming the biggest
European market while India, China and other Asian countries are emerging as
important markets, too. In all of these regions, there is a huge rise in an affluent
middle class who will be interested in travel.

Technology Analysis
With the advancement of technology, the way hotels receive reservations is
changing. In fact, there are so many new companies and even new terminology; it is
hard to understand the tremendous amount of technology that comes between the
guest and the hotel.
First, some basic information about how technology has developed. To go back to
the times before electronic communications, a guest probably wrote to the hotel to
request lodging. Then come the telephone and over time, middlemen known as
travel agents intervened between the guest and the hotel.

Travel agents
First begun as authorized ticket agents for airlines, travel agents were also trained to
purchase rail, ship, hotels, attractions, and rental cars. If a client wanted to reserve a
hotel, agents referred to paper documents (such as the Red Book or Hotel and
Travel Index) for information. Agents
Were happy to call hotels to get more detailed information, but reservations were
made manually and the client had to wait for a confirmation by mail. With the advent
of computers, the airlines allowed travel agents to view their flight inventories and
rates in real time. Soon, the airlines added hotels and car rental companies to their
computers so that agents could book the entire guest’s travel itinerary through their
computer. Today, most
In Indian travel agencies are affiliated with one or more airline system and
domestically book more than 70% of their hotel reservations electronically.
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Business Environment

Hotel connection
Meanwhile, each hotel received these calls at the property level. “In the days when
the only way to reserve a room was to call the hotel directly, most hotels had
between one to six people available to answer calls. In the late 1980’s, the Taj
Corporation was the first hotel in India to install an 800-number answered at a
reservation center (National & International). This was a more efficient way to take
reservations because there was a larger number of calls and they were better able to
handle the peaks and valleys of call volume.
In this environment, there were a larger number of agents available to take
reservations. In addition, the 800-center provided around-the-clock capability to book
Sheraton regardless of which time zone the call originated.” Other hotel companies
soon followed suit. These reservation canters were not computerized until the late
1970’s and early 1980’s.
Advancing technology
Each airline system maintains its own database and must be managed separately by
the hotel reservation center, but the communication link is with just one interface.
This all happen automatically and hopefully all the different databases stay in sync.
Airline systems were still limited in how they could display hotels in their systems,
and today further technological developments have been made to allow the travel
agent direct access to the hotel reservation system’s database.
This is called seamless connectivity. For instance, by using different keystrokes on
Sabre, a travel agent can alternate out of the Sabre screen to get the same real time,
descriptive information from a hotel’s central reservation database as the hotel
company’s CRS reservation agent. This seamless connectivity gives travel agents
detailed product information about the hotel and various rates that previously were
not available in the limited descriptive information permitted by an airline system.

Technology is changing so rapidly that it is difficult to predict what will happen even
in the near future. But in a related article TRC examines other ways for a guest to
reserve a hotel room. It could soon happen that if a hotel cannot be booked
electronically from a customer’s home, the hotel will miss an important new and
rapidly growing source of reservations.
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Business Environment

CURRENT & FUTURE TRENDS

JOINT VENTURES
MNC Hotel Industry giants are flocking India and forging Joint Ventures to earn their
share of pie in the race. Government has approved 300 hotel projects, nearly half of
which are in the luxury range.
E-BUSINESS
One of the top strategies for hotel e-business is evolving from selling to engaging the
customer. Hoteliers need to think more like retailers. To succeed, hoteliers need to
fulfill the experience expected by customers, not just think of them as heads in a
bed. Another strategy is engaging the customer through social computing, which is
the fifth generation of electronic distribution. Travel plays a big role in social
computing, making social computing a blend of marketing and distribution, The sixth
generation for electronic distribution is mobile technology. Mobile phones are
becoming ubiquitous in many countries. Travelers are an ideal group for mobile-
based
Services and activities frequent travelers are the ones who find the most utility from
using mobile services. Some of the opportunities center on the five important trends
affecting hotel e-business. These trends are: more demanding consumers; more
complex distribution channels; changing business models where companies must
give more but expect less in return; an emphasis on technology and richer content;
and a change in the structure of hotel e-business.
 Aureole Institute of Business Management 23
Business Environment

GROWTH OF OTHER INDUSTRIES

With the USD 23 billion software services sector pushing the Indian economy
skywards, more and more IT professionals are flocking to Indian metro cities. 'Hotel
Industry in India' is set to grow at 24% a year. This figure will skyrocket in 2010,
when Delhi hosts the Commonwealth Games. A major reason for the growing
demand for hotel rooms is the underlying boom in the economy, particularly the
growth in the IT and ITES industries. The overall growth outlook appears buoyant
and much of this growth will be driven by the BPO explosion, IT, Telecom and
energy sectors.
The opening up of the aviation industry in India has resulted in exciting opportunities
for the hotel industry. The various emerging concepts in India such as service
apartments, spas, medical tourism, wildlife resorts.
 Aureole Institute of Business Management 24
Business Environment

Conclusion

It can be seen clearly that PEST analysis gives an organisation a clear advantage
for the future by predicting changes in the external environment. This gives them the
opportunity to prepare for the change and, for example in the event of a high
economy, take full advantage and capitalise on this change. The number of macro-
environmental factors is virtually unlimited. In practise, an organisation must prioritise
and monitor those factors that influence its industry.
Even so, it may be difficult to predict future trends with an exceptional level