Competition in hotel industry

By Malabica Das Bunty Chatterjee

17%. y With tourism industry showing excellent performance.INDUSTRY OVERVIEW y REVENUE y Revenues of Hotel and Restaurant (H&R) industry in India during the financial year 2006-07 was INR604.000-80.with a total capacity of about 110. a growth of 21.980 hotels approved and classified by the Ministry of Tourism.76 billion by 2010. is poised to grow at a faster rate and reach INR826. y Currently there are some 1.000 rooms will be added across different categories throughout the country. in terms of foreign tourists arrival and demand outpacing supply. primarily driven by foreign tourist arrivals . y It is estimated that over the next two years 70. the hospitality industry.000 hotel rooms.27% over the previous year.which increased by 14.32 billion . Government of India . .

INDUSTRY OVERVIEW y GROWTH DRIVERS AND POTENTIALS y Rising gdp in developing nations is being rapidly followed by rising living standards in countries such as china. adventure and cultural experiences. y Affluence: travel Asians are on the move. travel. Indonesia. Malaysia and Thailand. not only on necessities but also luxury products. y Access: technology online travel market Only a decade old Fastest growing distribution channel in Asia . recent years have seen outbound travel from Asian countries grow by more than 20 % y The middle class: a changed mind set people now have the money and are willing to spend it. India.

000 rooms in all categories over the next two or three years at an estimated cost of about US$ 8 ² 9 billion. except in the three-star category.Indian scenario y Annual growth rate is 24% y The Average Room Revenues (ARRs) in some metro hotels in India has increased by 15% from the last year y According to Government estimates. across all the categories.5 per room. . India needs about 80. where the ratio drops to 1.8 in hotels in India. y The average employee to room ratio is 1.

y With tremendous pull of opportunity.Indian scenario y 'Hotels in India' have supply of 110. . India is a destination for hotel chains looking for growth. y 'Hotels in India' has a shortage of 150.000 rooms. According to the tourism ministry. demand will soar to 10 million in 2010² to accommodate 350 million domestic travellers.4 million tourists visited India last year and at current trend.000 rooms fuelling hotel room rates across India. 4.

y The priority is being given to the development of the infrastructure and of new tourist destinations and circuits. y The Department of Tourism (DOT) has already started the "Incredible India" campaign for the promotion of tourism in India. 540 crore for the development of the industry.Government regulations y The government has realized the importance of tourism and has proposed a budget of Rs. .

2. 6.ITC Hotels 2.Radisson Hotels & Resorts . PUBLIC SECTOR PLAYERS: 1.Major players in hotel industry y The major players in hotel industry can be broadly classified into Public Players AND Private Players. ITDC Hotels Hotel Corporation Of India PRIVATE SECTOR PLAYERS: 1.(THE TAJ HOTEL RESORTS & PALACES) 3.OBEROI HOTELS (EAST INDIA HOTELS) 4.Indian Hotels Company Ltd.Hotel LeelaVenture 5.Asian Hotels Ltd.

more than 50 international budget hotel chains are moving into India to stake their turf . hoteliers need to fulfil the experience expected by customers. y BUDGET HOTELS y Already. nearly half of which are in the luxury range. making social computing a blend of marketing and distribution. Travel plays a big role in social computing. To succeed. not just think of them as heads in a bed.Future outlook y JOINT VENTURES y MNC Hotel Industry giants are flocking India and forging Joint Ventures to earn their share of pie in the race. Hoteliers need to think more like retailers. which is the fifth generation of electronic distribution. y Another strategy is engaging the customer through social computing. y E-BUSINESS y One of the top strategies for hotel e-business is evolving from selling to engaging the customer. Government has approved 300 hotel projects.

United States of America. Mauritius. Bhutan. y Taj Hotels Resorts and Palaces comprises 59 hotels at 40 locationsacross India with an additional 17 international hotels in the Maldives. Sri Lanka. Africa. recognized as one of Asia's largest and finest hotel company.Top three players y The Indian hotels company y The Indian Hotels Company and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces. Malaysia. .United Kingdom. the Middle East andAustralia.

with its distinctive logo of hands folded in the traditional Namaste is widely recognized as the ultimate in Indian hospitality. 1975. Palaces and Resorts. is today one of India's finest hotel chains. y ITC ²Welcome group Hotels.Top three players y ITC/ Sheraton Corporation y TC's Hotel division was launched on October 18. with the opening of its first hotel-Chola Sheraton in Chennai. .

and two inland cruises. about 10 mid-range hotels. Egypt. if you ask EIH (better known as The Oberoi Group). . Most of the company's luxury properties bear the Oberoi banner. Indonesia. y The Oberoi Group operates primarily in India. and Saudi Arabia.Top three players y The EIH Ltd (The Oberoi Group) y Asian elegance is the key to running hotels. but also in Australia. Mauritius. y The company owns and operates about 20 luxury hotels.

. y It·s the market·s way of ensuring that more consumers get products and services at lower prices and companies make higher profits³a win-win for both companies and consumers.Differential pricing y Why Do Companies Practice Differential Pricing? y Economists argue that companies engage in differential pricing in order to maximize sales and thus profits. y First a company establishes a business model that anticipates a standard price for the product or service that should result in a profit if sales goals are met.

And many passengers fly free by using frequent flier miles. for the same product or service. . whether they want to fly first or business class or coach. y For example. the airlines have a range of fares they charge customers based on when and how they make their reservation. or whether they are willing to stay over a Saturday night.Differential pricing y What Is Differential Pricing? y Differential pricing is the practice of charging some customers or clients more. y Virtually every industry and most companies engage in some form of differential pricing. while charging others less.

Differential pricing y Differential pricing permits companies and individuals to make their products or services available to people in a wider range of incomes. y Eliminating differential pricing ensures that low income people will have little or no access to the newest. life-saving drugs. y Who Does Differential Pricing Help? y Differential pricing helps low-income people get a product they could not otherwise afford. y Providing the widest possible access to a product means permitting³even encouraging³differential pricing. .

. y Industry is opening gates for the foreign investment which is a good sign for the industry and industry is working toward the fulfilment of the demand and supply gap.Conclusion y The hotel industry in India having a tremendous opportunity in the future because of increasing trends in the tourism industry and government promoting the ´Incredible Indiaµ campaign and other tourism promotion measures. y http://www.Bibiliography y y http://www.insideronline.pdf .org/archives/2003/may03/prici ng.pdf y Indian%20Hotel%20Industry_final-14%208%2007.