CHAPTER -1 INTRODUCTION TOURISM “Tourism” is the totality of the relationship and phenomenon arising from travel and stay

strangers the stay does not imply the establishment of a residence and con nected with remunerated activity. IMPORTANCE OF TOURISM In creating better appreciation of other people’s ways of the life and institution , tourism may create goodwill for a country. Each year many tourist travel to pa rticipate in particular events ranging from congress to corona tings; their visi ts also afford opportunities to improve co-operation as well as project the corr ect image of a country to the out side world. Politics, society, education, and culture thus often provide motivations for tourist to travel away from home, the y influence tourism and tourism in turn has an influence on them. These factors also help explain participation in tourism generally as we have seen. An evaluat ion of the significance of tourism may be extending to such aspects as organized sport and religion. The main economic significance of tourism-that money earned in places of normal residence is spent in places visited-is common to all touri sm, whether domestic or 1

international. Each year vast sums are transferred from the economy from whom it is earned, to economies in receiving areas where they provide a source of incom e, a means of livelihood, and amenities for the resident population. The outstan ding economic effect of tourism lies in the purchasing to spend at a much bigger rate than when they are at home. The flow of money generated by tourist expendi ture finds its way into the overall economy of the tourist destination, as the m oney is turned over and re-spent. But international tourist expenditure introduc es an additional aspect of economic significance, as countries, which have separ ate political and economic entities, have to balance their transactions with the rest of the world. International tourism, therefore, enters into the balance of payments accounts o f individual countries and ease of major significance in international trade. Fo r countries, which generate tourist traffic, it represents an import, in much th e same way, as the import of merchandise. Globally tourism countries are a major item in world trade, which has shown a much faster rate of growth in recent yea rs than trade in goods. Tourism is evaluated mainly in terms of its economic sig nificance, but reference is made also to its role as source of other, less quant ifiable, benefits and to some of the problems which tourism presents to individu al destinations. When traveling away from home, tourists come in contact with places they visit a nd with their inhabitance, and so social exchanges take place. Their presence an d their social background affects the social structure and mode of life at the d estination. Tourists are in 2

turn affected by the experiences and often carry back home with them new habits and new outlook on life. Tourism has an educational significance. In the wider s ense it has the altogether beneficial effect which contact between people of dif ferent races and nationalities can bring about. In a narrow sense much tourist a ctivity takes the form of study trips and attendance at courses and conferences with specified educational aims in view. Tourism is often accompanied by cultura l exchange and by cultural enrichment of those who travel as well as those at th e receiving end. The cultural factors that may attract tourists to a particular destination are architecture, historical monuments and birthplaces of famous peo ple. These are some of the places most visited by the tourists. Festivals and ex hibition rely heavily to visitor traffic as their audience. Tourism can be classified into: a. Tourists visit places for recreational purposes. Such tourists spots are usually hill stations, beaches etc, such tourists like to get away from the daily grind of life and freshen themselves. b. CULTURAL TOURISM: Such type of tourist satisfies the cultural curiosity of the tourist. Such touri st spots include ancient monuments, places of historical and religious importanc e etc. 3

d. This requires documents suc h as visa. cultur al or academic reasons. spas etc. E. This type provides peopl e to have adventure like diving. hot springs. rafting etc. e. HEALTH Such type of tourism takes people to places of recovery like places with curativ e possibilities. International: Such type of tourism refers top traveling to other countries other than their ow n and with different political and economic systems. passports.g.c. etc . to cross the borders.: Hill-Stations. skiing. CONVENTION/EDUCATIONAL: Tourism such as these are meant for organizing conventions for political. Tourism can also be classified on basis of region: Domestic: Domestic tourism is for tourists belonging to their own country and do not requi re any papers or documentation for travel. ADVENTURE/SPORTS: This type of tourism is very particular with the youth. 4 .

MODERN TRENDS IN TOURISM Spread over a land mass of 324 million sq. The annual foreign tourist arrival in India is 2 million where as the fo reign 5 . Behind th is terrific beauty. it some how gets on his blood. One visit to India can never satisfy the thirst of s creening visitor and when back in his/her place . church and mosques. the land o f Emperor Bharatha. There is diversity and get unity. Some places are featureless as some spectacular. India is a country where tourists can enjoy the adventure of Himalayas and t he beauty of the sea. temples. Love it or not. there is also Bharat. India is luxurious country. For a foregone visitors to indo. Tourism in India is presently the 3rd largest after gum and jewelle ry and ready-made garments. religious customs and festivals.kms with a population of around millio n. with at the rote of about 13 million every year. religion. the food can be terrible as it is magnificent and the country defies imagination an d cold logic. with 14 major and 20 not lan guages and 845 dialects. India has a never-ending culture. It mixture of natural beautiful and diversity of culture attracts a lot of touri sm. This is India of the Indus valley civilization. One can never ignore India. each state habits. They can explore the desert and jungle of Assam. desire to get back there. The fettle of India tourism is not very attractive when compared to the world sc enario.

Each year. It is a luxury train with 14 deluxe saloons. which will occur in future. The government. 70 billion. Most of the India tourism thrives on d omestic tourism. Tourism budget has been inc reased from 100 Crore to 160 Crore recently and the government has also helped i n their organization of visit India year 1999-2000 which boost up the industry. will without any doubt s hoot up the industry. 6 .Crore. In February 1995. Now the Indian tourism exchange industry has become the 11th largest fore ign exchange earner of the world and during 1997-1998 the estimation made on the earnings of foreign exchange was Rs. 100 million domestic tourist criss-cross the borders of the states. The train covers 8 de stinations in 7 days. 11032/. Tourism industry in India shows a positive trend for the future and with the dev elopments as well as those. in collaboration with Rajasthan tourism had put forward the Pala ce of Wheels.exchange earnings touched Rs. the Gujarath tourism launched a similar train called Royal Orient which is centrally air-conditioned. The government of India had put forward some strategy on order to improve this s ector.

• • Determine the profitability analys is. To estimate the total expected revenue from the var ious departments of the proposed hotel.CHAPTER -2 PROJECT DESIGN AIM: To reveal the market feasibility and financial viability of the proposed hotel OBJECTIVES: Some of the main objectives of the study of the project are: • To determine the ma rketing feasibility & Financial Viability of a proposed hotel in TRIVANDRUM • • To e stimate the cost of project. 7 . To find the break-even point and expected return on investment. • To calculate the profitability ratios an d pay back loan period of the proposed hotel.

8 .METHODOLOGY: The information for this project has been collected through the following proced ures: Primary Data: Some of the primary data. books and various supplementary copies of news and other magazines and from the Internet has helped us in gathering inform ation. which was collected during the survey through investigation woith hospitality official s. LIMITATIONS: • Calculation made in the project is based on assumption. • Getting exact financial figures was not possible. The data. wer e collected from government officials of respected departments. approximation and subjec t to change. Secondary Data: Various data were used from journals. which are collected for the study of this project.

famous for 9   . the modern state of Kerala was created in 1956. The state has been in the forefront. Though it s roots date back to the early years of the Christian era. Thiruvananthapuram (also known as Trivandrum) is the capital of Kerala. lowest rate of infant mortality and the lea ding female to male ratio. in terms of education and health services. when all the states of India were reorganiz ed on a linguistic basis. History was created in 1957. when Kerala became the fi rst state in the world to have democratically elected a Marxist government to po wer.CHAPTER -3 INFORMATION ABOUT THE PLACE KERALA Slender green sliver of land clinging to the south western flank of the Indian p eninsula. particularly in the numerous wayside tea stalls. GEOGRAPHY Kerala is made up of fourteen districts. Things have changed. It has the highest rate of literacy. but politics still continues to dominate conversation. Each of them have a distinct character. Kerala is one of the southern states of the Republic of India. in the country. where the brew is as strong as the ideology.

Kerala is also a paradise of backwaters. canals and ocean inlets play an important role in economic field of the state. revealing the fact that then the land was ruled by dynasty known as the Perumals. The kerala coast is renowned for prawns . Malabar . 10     . Parma and Periyar.Kerala’s contributio n towards the national total of fish production amounts to 35%. Many o f the rivers are harassed for power generation and irrigation. Kochi . were united to form the present state of Kera la.it s Kovalam beach (rated one of the top ten beaches of the world). The numerous backwaters. It s monsoons are likened to a battalion of wild elephants. Cheraman – perumal abdicated kingship and divided the land between his chieftains. sharks and sardines. But from 6th century onwards the picture gains clarity. HISTORY OF KERALA The history of Kerala belonging to the early Christian era is not much known except that the dynasty called the cheats were the predominant ru lers here. The state of Kerala was formed long after Indian independence. Travancore . Beside the major rivers are Bharathapuzha. Thus the whole Malayalam speaking population was brought within a single phy sical boundary. LAND AND PEOPLE A total number of 45 rivers make Kerala a fertile piece of land flowering down f rom the ghats to the west. The last of the line. Geography is destiny in Kerala with the monsoon winds bringing the gift of life annually. in 18 56.

The annu al rainfall is about 310 cm . In summer the temperature rises to a maximum of 35 C while in winter it is around 25 C LITERATURE Malayalam . Kochi has a moderate climate. Heavy shower s are experienced during the months June. the prime language of Kerala is treasures have of literature. Onam is a harvest festival celebrated in chinga m the first month of 11 ¡ ¡ . July and August due to the South-West Monsoon. Needless to say t hat there are organizations and forums to encourage and appraise artistic creati on in the fields of literature.CLIMATE Being situated very close to the sea. All the district capitals and other tourist spots are decorated and provided with entertainment. December to February is pretty cool. art and cinema. the national festival of Kerala is now observed as a part of the tourist wee k celebrations. With a n envious level of literacy in India (100%) urban area of Kerala have an intelle ctual background. FESTIVALS AND FOLK ARTS ‘Onam’. November and December. October. Large groups of the population possess the capacity to evaluat e arts and literature with an aesthetic and objective outlook. The North-East Monsoon brings light rainfall during the months Septembe r.

Chambakulam etc. It is a sophisticated way of using weapons like sword. Kumarakam . Besides. The popular thirst aids are buttermilk and bottled soda drinks. Kalarippayattu is an ancient martial art of Kerala. Kathakali is a dance drama in which the actors do not speak but express the mselves through mudras ( gestures ) accompanied by padams ( recitals ) in the ba ckground. Training in kalari ppayattu is imparted at CVN Kalari. curd . Thiruvananthapuram and many other centers. Payasam is a preparation of rice or vermicelli with milk. east fort. Kochi . Aranmula . pappad . The nonvegetarian dishes are made of mutton . sugar and spices. Other popular festivals are Vishu . stick . Rice is the staple food. beef and chicken. there a re numerous celebrations of local importance along the length and breadth of Ker ala. tender coconut water is the best bet for a refreshing and nourishing 12 . dagger . It is accompanied with varies curries . A dessert called payasam usually follows the main course of fo od. spear and shield. FOOD AND DRINKS Kerala has a variety of delicious food specialties.Malayalam era (august/september). An interesting pageant of this festivity is th e snake boat race held at Alappuzha . pickles and other side dish es. Fish is also a favorite dish. Ramzan and Christmas. However.

COMMERCE Agriculture contributes most to the state s income in the primary sector.3 Meters) 13     .863 Sq.Km 14 63 991 Corpo rations Municipalities Rivers 3 54 44 Highest Mountain Anamudi (2652. Kerala s major sources of exports are agro-based and traditional like coir and cashew as well as marine products and manpower. Kerala at a glance Area Districts Taluks Panchayats 38. with Kerala being the largest producer and exporter of black pe pper. pepper is the single most im portant product. In spices. Cardamom and ginger are also exported.

Referred to by Mahatma Gandhi as the "Evergree n city of India". the wider urban agglomeration having a population of about one million. The temple of Vishn u reclining on Anantha. However. 14 . it is also a major academic hub and is home to several educational insti tutions ORIGIN OF NAME Thiruvananthapuram literally means "City of Lord Anantha" in Malayalam. it is the largest and most populous city in Kerala. The name derives from the deity of the Hindu temple at the centre of the city. Anantha i s the serpent Shesha on whom Padmanabhan or Vishnu reclines. the city is still widely referred to as "Trivandrum". The city was officially referred to as Trivandrum i n English until 1991. With almost 745. The city is the state capital and houses many central and state government offic es. when the government decided in favour of Thiruvananthapura m. Apart from being the political nerve centre of Kerala. It is located on the west coast of India near t he extreme south of the mainland. organizations and companies.TRIVANDRUM Trivandrum is the capital of the Indian state of Kerala and the headquarters of the Thiruvananthapuram District. the city is characterized by its undulating terrain of low coa stal hills and busy commercial alleys. the Sri Padmanabhaswamy temple is the most recognizable iconic landmark of the city.000 inhabitants per the 2 001 census.

The Padmanabhapuram pala ce. culture . KOVALAM BEACH Its is one if the finest beaches in India and the most attractive tourist center of Kerala. It is 13 kms south of Thiruvananthapuram. old coins . 56 kms from Thiruvananthapuram is a pleasant hill resort. This museum has a collection of 19th century oil paintings . the Chitralayam art gallery with a large collection of paintings. the zoo. a monument famous for its moral painting. the museum. MUSEUM AND ART GALLERIES THIRUVANANTHAPURAM MUSEUM : Palayam road . PONMUDI Its is one of the tallest peaks in Kerala and an attractive hill station . copies of moral paintings etc. in stone and in plaster of Paris . The Kawadiyar palace. Ponmudi. is located near Thiruvananthapuram . It is about 1 ½ hour drive from the capital city. the Sri Padmanabh a Swamy temple and the aquarium are the main attraction of the city. Thiruvananth apuram .AREAS OF INTEREST THIRUVANANTHAPURAM It is the capital city of Kerala. 15 .

Eas t Fort. ivory carving . Attukal Devi Temple. Statue Junction PLACE TO WORSHIP CHRISTIAN St mary’s church . AREAS Bheema Palli. East Fort. Vinakaya Temple. East Fort.PADMANABHAPURAM PALACE Displays articles of archaeological importance like royal beds . paintings . coir p roducts . MUSLIM Juma Masjid. snake boat models. East Fort. Palayam HINDU Padmanabha Temple. 16 . epigraphs . WHERE TO BUY Special local handicrafts rosewood carving . Palayam. arms etc.

of rooms 83 194 64 58 20 Occupancy 65% 65% 60% 70% 70% Product 5395 12610 3840 4060 1400 Total 419 27305 17 .CHAPTER -4 DEMAND QUANTIFICATION Demand quantification is a part of Market research and broadly includes: a) b) c ) Determining the size of both current and potent Accessing Market trends Demand & sales forecasting HOTELS AND THEIR FACILITIES SL.No 1 2 3 4 5 Name of the Hotel South Park Leela hotel and Resort Mascot hotel Muthoot hotel Taj green cove No.

Discotheque.Leela Hotel and Resort Rooms 194 Facilities Business Center. Beauty Parlor. Shopping Center. Swimming Pool. Recreation Club. Travel Counter. Health Club. Free Multi Channel CCTV including Movies.Hotel South Park Rooms 83 Rooms Facilities Doctor on Call. Travel Counter. Conference Hall. Conference Hall. Beauty Parlor. Health Club. 24 Ho urs Currency Exchange Facility. Book Shop. Free P arking. Book Shop. Recreation Club. Swimming Pool.1.Muthoot Hotel Rooms 58 rooms Facilities Business Center. In-house Laundry. Restauran ts 3.Restaurant s 18 . Left Luggage Room 2. Discotheque. Shopping Center. Safe Deposit Locker Facility.

Recreation Club. Average occupancy = Total no of rooms = 27305 419 65. Car hire. B ar. Taj Green Cove Business Center. Mascot Hotel Facilities 64 rooms. Conference Hall. Health Club.4. Shopping Total Product 1. Tra vel assistance . Travel Counter. Conference hall .16 = Assuming that break-even occupancy is 60% for a three star hotel Therefore deman d for the room for the proposed hotel 19 . Swimming Pool. Book Shop. Laundry . Discotheque. Beauty Parlor. 5. Health club. Satellite television . Currency exchange. Doctor call.24 hour room service/ Coffee shop.Restaurant .

Demand = (Average Occupancy –B.E.18 Since the assumption made are not fully validated it is suggested a hotel projec t of 45 can be promoted in TRIVANDRUM 20 .16 60 = 453.91 4.91 3.O 60 34.E.O) x Total rooms B.O = (65– 60) x 419 60 = 34.Total potential of rooms = Total rooms X Average Occupancy Break even occupanc y = 419 X 65.2.E.Maximum Number of rooms = Demand X 100 = B.91 x 100 = 58.

Each features a seating area and balcony.CHAPTER -5 TECHNICAL DETAILS OF THE PROPOSED HOTEL PROFILE OF THE PROPOSED HOTEL NAME STAR CATEGORY HOTEL FORT MANOR 3 STAR NUMBER OF ROOMS 45 ADDRES Pattom. 21 .O. Pattom palace P. Luxurious marb le bathrooms with Victorian style freestanding bathtubs overlook a private walle d courtyard. Kerala-695004 ABOUT THE FORT MANOR HOTEL Accommodation consists of elegantly appointed rooms that range from the suite to the pent house suites. Trivandrum.

50 Pax) 1 Bar ( LAGOONA.The FORT MANOR Hotel has 45 ROOMS. 20 DOUBLE rooms. Conference Hall & Board Room(420 Pax) Name of the hotel Star category Location Type Propose site No. The Main features of the hotel are: ROOMS • • • • • 20 SINGLE rooms. Accommodation Bar. Trivandrum 45 Restaur ant. 5 Deluxe suites TARIFF 2500 3500 4000 1 multi cuisine restaurant ( THE REGENCY.30 Pax) • 1 Banquet Hall. Car parking etc Means of Finance Manpower ICICI 135 22 . Of rooms Faciliti es offered “HOTEL FORT MANOR” 3 star Trivandrum Private ownership Pattom.

AMENITIES • • • • • • • • • • • • • • • • • • • • Air conditioned room Airport transfers Audio visual acilities Bar Business center Cable TV Car parking Doctor on call Fax service Fi re safeguards Laundry facilities Money changer Parking Photocopy services Power back-up Restaurant Safe deposit Travel desk 23 .

table. delegate kits Video coverage and photography 24 . stationary. and lapel micropho xhibitions – design and execution Business center Full communication facilities – Na tional and international Printing.BANQUET FACILITIES (420 PAX) • • • • • • • OHP presentations Public address systems – lectern.

will vest achieve the objective of an enterprise of a given time . wh ich are also popularly known as the four P’s viz. it just means the mixing of marketing ingredients. pricing. When the functions mentioned above are interlocked in a planned and systematic m anner to attain a given objective. prom otion and distribution of ideas. product planning. 25 . MARKETING MIX: In common parlance. Marketing is concerned with business and the functions. They merge their identity in what is called t he marketing mix in short. pricing. The marketing mix refers to the a ppointment of the effort. the design and integration of element s of marketing in to a program. the combination.CHAPTER -6 RECOMMENDED MARKETING MIX Marketing is the process of planning and executing the conception. goods and services to create exchanges that sat isfy individual and organizational objectives. which is on the basis of an appraisals of the ma rketing forces. selling and advertising. A market is regarded as a single or an aggregated or relationship b etween consumers and producers who are separated by place and time and have a po tential to strike an exchange of goods and services. marketing is the process of selling something at a shop or m arket place.

Adequate advertising, sales, promotion and personnel selling to create interest and design for the product among customers for the proposed hotel can be based u pon the concept of the customer segment aimed at promote the market strategy. The four basic aspect of marketing are: • Place • Product • Price • Promotion An optional marketing mix, hence involves from a creative blinding of ingredient s or elements, so that the product or services is offered to the market under th e conditions most favorable to the attainment of marketing objectives. PLACE: The place can define as “The aggregate of forces or conditions within which buyers and sellers make decision that result in the transfer of goods can be segmented geographically into: • • Region or place Climate 26

In the geographic base, regional differences in terms of topography, climate, po pulation and its density, from the base for market segmentation and differentiat ed marketing effort. Choosing the right location is an important and vital decision for any hospitali ty business. Certain factors have to be taken into account to decide the right p lace. Some of the factors that decided the selection of proposed hotel place are : Railway station and bus stand are 5Kms respectively. Main City is just 2 km fr om the proposed site. Easy accessibility to town area. PRODUCT: A product is a bundle of utilities and accompanying services. The proposed three star hotel would be a three-floor building with the following facilities. Car P arking Banquet Facilities Telephone in all Rooms TV with Channels in all Rooms C entral Air Conditioning system Multi- Cuisine Restaurant Bar 24 Hours Room Servi ce 27

The important features of the hotel are that it will have 20Single Rooms, 20 Dou ble rooms , 5 Suite rooms The hotel will have a Multi-cuisine restaurant with 50 covers, and a bar with 30 covers. The hotel and staff will be at their best ser vices to their customers. PROMOTION: To make the product and price known and acceptable to the target customers, it i s essential to communicate, persuade and motivate them. Promotion can be effecte d through, Personal Selling Advertisement Sales Promotion Public Relation PERSONAL SELLING: The hotels sales persons, who are on its customers so as to make an offer of sal e, motivate them to positively respond to it and finally clinch the ideal. ADVERTISING: The proposed hotel prompted through advertisements, by giving complementary to t he guest and also by suggesting other 3* and 4* hotels by suggesting the name of the hotel if the guest has his company here, so that it is easily accessible in the same way the 28

As t he proposed hotel is mostly targeting on air travelers. Etc. Advertisement could be referred to as t he use of mass communication media to influence existing or potential through ne wspaper. To increase safer for the company. To create favorable image and confidence of company. Advertisements will have positive effects such as: It wil l help to raise awareness about the company. RADIO ADVERTISING AND OUT DOOR ADVERTISERS PRINT MEDIA: Newspaper and magazine have a great effect on influencing the people. The hotel will provide 29 . Such advertisements are already targeted at particular market segment. The sales can also be promoted by giving discounts to the regular customer. OUT DOOR ADVERTISEMENT: This type of advertisements covers large number of people with low experiences. The various elements of advertising are joint media. there is a large reading audience.proposed hotel also in return will help. it is suggested to have a airport facilitator to guide to gust and even canvas people for the hotel. T V ads. An alterna tive advertisement given in the newspaper or magazine will influence the people.

Another factor to be considered when pricing of rooms and out lets are low is to compare it with the competitions. The pricing strategy will naturally depend on what the proposed hotel offering. The off-heard saying “5 star fac ilities at 3 star rates” would be a reality as far as The Destiny would be concern ed. 30 .pick up and drop to guest from the airport. and also will have tips with air lin es for the staff and customers in cause of stop over and delay of flight etc. It should be less that of the competitions. the facilities available in the hotel etc. l will be offering its facilities at nominal rates.

CHAPTER -7 CONCLUSION (MARKET FEASIBILITY) The market survey conducted at Trivandrum revealed good scope for the establishm ent of a four star hotel. The conclusions regarding the viability of three star hotels. But the tourist’s activ ities are so much that the city will require a few more star hotels. Various factors ha ve made a Trivandrum wonderful place to visit. The tourism departments are encouraging hotel projects so it would be easy to obtain necessary licenses. 31 . banquet halls accommodat ing many people at a time. services and good conferences. This place occupies a unique position in all Indian scenario. The development of this region has also made it possi ble for the hoteliers satisfy with their share of profits. The activities develop in the city more because of the better facilities in hote l with good rooms. It is also expected the proposed hotel will b e a step forward in the even distribution of accommodation and improving its inf rastructure. food. It is expected that the proposed hotel will help in setting standards for other hotels to follow in years to come.

An attractive brochure would be given along with it. The proposed hotel can expect a good occupancy. Considering the enti re favorable factor it is concluded that a 3 star hotel is easily and scope for marketing the hospitality product is excellent.There will be qualified trained efficient and courteous staff properly groomed. 32 . The aim would be to provide the best possible service to the guest and for the t ie up keep of the hotel. The promotion advertisements will be through print medi a and hoarding. The proposed hotel has a great potential to capture a large share of the develop ing market.

The financial planning includes the selection of objectives and selection of pol icies. The amount of capital to be raised. C. B. The various conside ration relating. requirement of investors and possi bilities of expansion resolve themselves into a present determination of: A. Policies as to administration of capital. programmers and procedures to achieve the objectives. 33 .CHAPTER -8 (PART-B) FINANCIAL VIABILITY INTRODUCTION TO FINANCIAL ASPECTS OF THE PROPOSED PROJECT The financial viability means to find out whether it is financially viable to st ar or three star hotel as this project reports is based on three star hotel in s impler words financial viability is to find out starting a three star hotel is f inancial successful or not. The forms of propitiated amount of sec urities to be issued. To the present capital need.

ft = 13870 sq.It is not too much to emphasize the correct estimate of the present and future n eeds of a capital a sound capital structure and proper projection of capital wil l lead to success to the company.T rivandrum = HOTEL FORT MANOR = 45 Rooms =Single Room: 2500/Double Room: 3500/Sui te Room: 4000/(Rates are fixed till 3rd then to increase 10% every year) FACILITIES PROVIDED BY THE PROPOSED HOTEL Multi – cuisine Restaurant Bar Banquet/ Conference Hall = 50 Covers = 30 Covers = 420 Covers 34 .ft = Business Hotel = Pattom. PROJECT AT GLANCE Total land Area Total Built up Area Type of hotel Location Name of the hotel No – of guest room Room tariff = 3500 sq.

Centralized A/C Room Service Travel Desk Locker Facility Car Rental Free Pick Up Facility Secretarial / Valet Services Doctor On Call Channel Music Cable Networ k Foreign Currency Exchange 35 .

55 12.93 158.12 553.30 39.10 Cost of building Plant and machinery Furniture and fixture Miscellaneous fixed assets 36 .12 Margin for c ontingency (10% on 1-5) Preliminary POP expenses 55.93 Interest on implementation period Total cost of the project 34.31 77.CHAPTER -9 COST OF PROJECT Amount in lakhs Cost of land 49.29 639.50 685.65 212.

41 252.85 37 .07 DER (DEBT EQUITY RATIO) Debt equity = Term loan Share capital DER = 415.07 = 1.CHAPTER -10 MEANS OF FINANCE 1) Term loan (65% of project) : 415.41 2) Owners capital (35% of project) : 252.

48 1326.70 421.73 Total Sales 686.68 613.91 951.84 945.15 357.57 494.79 1124.CHAPTER -11 SALES REVENUE ESTIMATION OF INCOME OF 5 YRS Item % of occupancy (operational level) Year I 60% Year II 65% Year III 70% Year IV 7 5% Year V 80% Room sales 306.09 827.64 F and B sales 519.69 718.37 38 .28 810.60 332.

31 129.28 66.27 50.67 228.48 76.22 76.23 44.09 57.31 Salaries and wages (annexures) Administration and management expenses (5% of total sales) 88.54 97.95 50.83 .45 151.54 57.28 106.94 (15% of total sales) Insurance and legal char ges (5% 44.31 50.31 of total sales) Miscellaneous expenses (4% of total sales) Total e xpenses 35.22 76.16 Year V 380.28 66.23 Year IV 331.54 57.31 40.CHAPTER -12 OPERATIONAL EXPENSES ESTIMATION OF EXPENSE FOR 5 YRS Item Year I Year II 245.87 sales) Electricity (5% of total sales) 44 .43 45.86 198.22 117.80 66.47 Year III 287.31 Advertisement and publicity 132.67 Cost of F and B (40% of F and B 207.62 171.

94 1028.97 61.23 783.46 686.52.85 39 .56 898.05 597.

BOD 40 .

30 53.23 39.09 2.99 21.67 7.80 29.CHAPTER -14 DEPRECIATION STATEMENT Year Building Dep (10%) P&M Dep (25%) F&F Dep (25%) Misc Dep (25%) Total Depreciation I 206.70 .82 1.77 III 191.55 9.65 23.64 II 212.56 6.12 3.03 89.29 159.07 39.41 9.66 212.17 119.43 29.27 70.26 5.70 19.88 12.85 22.

53 3.28 IV 172.58 22.19 16.70 4.96 36.12 1.53 17.28 45.09 V 155.56.17 5.52 67.39 16.79 12.40 41 .84 0.28 15.13 3.25 89.

) Profit for tax B = A 43.PROFITABILITY STATEMENT Particulars 1) Op.15 7.64 4.37 203.93 42 .17 46.51 58.00 100.51 58.65 100.83 10.81 37.) a) Interest on L/T loan 74.51 106.50 77.63 3.09 36.84 249.) Income tax @ 50% + 10% surcharge(C+D) 8.) Available surplus(8+3+4) 184.50 150.61 362.25 135.28 45.78 5.89 17.50 77.5 2 6.88 67.50 77.56 339.62 167.) POP expenses 77.) Profit before tax A[1(2+3 +4)] 6.51 58.) Depreciation 89.15 77.50 70. Profit 2.82 324.) Interest on BOD 3.7 8 222.54 56.90 b.52 106.26 63.) L.50 250.54 497.45 Year I Year II Year III Year IV Year V 288. ) Profit after tax E = [B(C+D)] 9.56 339.40 4.T repayment 58.36 65.40 190.23 425.50 2 50.77 56.51 58.81 43.18 4.62 167.92 200.97 42.50 5.81 25.

11.) Net cash flow (9 -10) 94.65 95.41 100.12 103.11 127.38 43

CHAPTER -16 FUND FLOW STATEMENT Implementation period Source of funds Share capital Secured loan Gross profit Depreciation POP expense s Application of funds Year I Year II Year III Year IV Year V 252.07 121.68 176.34 228.45 302.95 383.62 89.64 77.50 Year I 70.77 77.50 Year II 56.28 77.50 Year III 45.09 77.50 Year IV 36.40 77.50 Year V Implementation period Fixed assets Margin for contingency POP expenses Interest LTL Interest W/C Repay ment of L/T Dividend of shares (35% of cash flow) 74.90 2.96 58.51 65.54 3.37 58 .51 56.17 3.82 58.51 46.81 4.42 58.51 37.45 5.08 58.51 685.93 55.31 77.50 44

CHAPTER -17 BREAK EVEN ANALYSIS To arrive at Break Even Point for a specific year occupancy. Revenue: - III year 945.79 occupancy: - 70% Fixed cost:Rupees in lakhs 1.) 2.) 3.) 4.) 5.) Power (40%) Salary (80%) Insuranc e and license Interest on LTL Administration and management expenses Total 22.91 85.44 2.00 56.17 57.28 223.80 Variable cost:Rupees in lakhs 1.) 2.) 3.) 4.) Power (60%) Salary (20%) Interest on W/C (interest on B.O.D) Expense towards telephone (10%) Total 34.36 21.36 3.8 2 10.00 69.54 45

e.P Assumed occupancy = 1145.. BE Turnover = Total Revenue x B.54 = 1076.80 1076.20 (i.Variable Cost = 1145. Contribution = Income .25 2.1. 20% ) 3.36 46 .79 – 69.25 = 0.79 x 20% 70% = 3 27.E. Break Even Point = Fixed cost Contribution = 223.

64 74.50 285.77 65.90 133.50 491.43 Year III 167.CHAPTER -18 DEBT SERVICE COVERAGE RATIO Coverage (A) Profit after tax Depreciation Interest on L/T loan POP expense Tota l Year I 43.96 47 .68 Year IV 58.50 56.54 77.51 37.51 74.28 56.81 36.50 320.54 124.32 Year V 58.81 77.17 114.51 65.15 89.41 Year II 58.17 77.05 Year III 58.45 Year IV 250.16 Debt (B) Repayment of L/T loan Interest on L/T loan Total Year I 58.02 Year V 339.81 105.50 357.62 45.51 46.09 46.51 56.62 70.45 77.45 95.19 Year II 106.90 77.50 420.40 37.

90 + 5.10 + 3. 10 + 3.58 + 3.96 = 2.13 + 2.41 124.58 + 3.11 = 16.02 + 491.45 + 420.36 48 .68 105 .43 + 357.DSCR = A/B = 285.83 Average DSCR = I year + II year + III year + IV year + V year = 2.32 95.16 133.19 + 320.11 5 = 16.90 + 5.05 114.83 5 = 3.13 + 2.

O.85 III year = 100.53 49 .71 IV year = 103. 07 = 50.38 x 100 252.90 V year = 127.54 II year = 95.I (RETURN ON INVESTMENT) Return on investment.41 x 100 252.12 x 10 0 252.CHAPTER.07 = 40.65 x 100 252.07 = 37.19 RATIO ANALYSIS R.07 = 37.11x 100 252.07 = 39. = Net cash flow x 100 Equity share capital I year = 94.

30 =2.53 5 = 206.42 50 .85+3 9.54+37.O.71+40.90+50.30 Pay Back Period = 100 ROI = 100 41.53 5 = 41.Average R.I = I year + II year + III year + IV year + V year 5 = 37.

46 Sensitivity to income change = Total income Occupancy = 1145.36 11.79 70 = 16.46 51 .56 70 = 11.36 Sensitivity to expense change = Total expense Occupancy = 783.19 = 1.SENSITIVITY RATIO Sensitivity change = Change in income Change in expenses = 16.19 III year sensitivity ratio = 1.

04 = 898.10 (amount in lakhs) B = total revenue – total expenses = 4893.COST BENEFIT ANALYSIS A = Total cost of project = 639.37 – 3995.33 (amount in lakhs) Capital intensity = B/A = 898.24 52 .33 720.22 = 1.

18. 7. 8.5 2 2 5 1 15 3 6 4 2 5 1 1 3 3 3 5 (years) 9(months ) 53 . 2. Project approval Buildin g construction Order for P and M Plumbing and electrification Delivery and insta llation of machinery Recruitment of staff Furnishing and interior decoration App lication for working capital Procurement of material Trail runs and commissionin g Land seaping Inauguration and commercial operating Total implementation period Duration (Months) 2 4 2 6 1. 17. 14. Des cription Project search Preparation of feasibility report Formation of feasibili ty report Purchase of land Preparation of building plan and tender Application f or loan Staff appointment Application for power. water. 5. 11.CHAPTER -20 NETWORK ANALYSIS Sl. 19. 3. 6. 9. 10. 4. 12. 16. 20. 13. 15.no 1.

65%.99 Break-even point: 327.10/. After studying the above aspect and estimation of profitably statement and other financial status it has been concluded that 3 star hotel with 45 rooms in Triva ndrum is financially viable. 75% and 80%. 54 . Statistical data of the project may be summed as follows Debit. Total cost of project is Rs 639.8 5 Average return on investment: 59.Hence the proposed project has been consid ered and it was decided to construct the hotel near Pattom.CHAPTER -21 CONCLUSION The project on financial viability was completed in Trivandrum city of “God’s own co untry” Kerala.lakhs and has 45 rooms. which is the capital of Kerala. The occupancy forec asted for a period of 5 consecutive years from commencement of operations is tak en into account as – 60%.36. Trivandrum. A market survey conducted before the commencement of the project sh ows that there is great demand for the products of hospitality industry in Triva ndrum. 70%. Equity ratio 1.

answers.M.com 55 .CHAPTER -22 BIBLIOGRAPHY S.No. 1. 6. Titles Perspectives on Indian hotel industry Hotel Econo mics Hospitality Management All India Travel Companion Project Analysis Hotel Ac countancy Authors Pushpinder S.hoteliercaterer. Mathew T.com www. Phyler T. 3. Philip Asia Publishing Compan ion G. 2.Gill P. 4. 5. Ryder WEBSITES www.

ANNEXURES ANNEXURE 1 Cost of land = Land required in sq.08 lakhs Total = 49.61 lakhs 15% for conveyance = 6.93 lakhs 56 . ft x Rate per sq.24 lakhs 5% for site development = 2. ft = 3500sq. ft x 300 = 41.

15 lakhs 57 .05 lakhs 158.60 lakhs 12. ft 13870 sq.48 lakhs 25% on Consultant Total 26.ANNEXURE 2 COST OF BUILDING Total built up area Rate per sq.02 lakhs 15% of Electrical work 12% of Plumbing and Drainage 15.ft Rs 750/Cost 104.

3. PLANT AND MACHINERY Items Central a/c Lift Generator Transformer Bore well Boiler EPBAX Instrument Exhaust / vent CCTV Kitchen equipment Water cooler Fire fitting Typewriter Computer Tele x Amount in lakhs 70 25 25 20 2 10 15 5 2 10 15 2 2 Rs 5000/Rs 800000/Rs 75000/58 .

30 212.Fax Total Rs 50000/9.ft 40 40 40 40 40 Total 70000 90000 48000 20000 16000 2 0000 16000 100000 660000 20000 40000 280000 60000 40000 59 .30 ANNEXURE -4 a.V stand Carpets 6600sq. GUEST ROOM Item Twin bed Double bed Side table Chair Coffee table Cupboard Luggage rack T. ft 500 1000 7000 1500 1000 No’s 20 20 80 40 40 40 40 40 6600sq.ft Mirrors Wash basin Bath tub W/C Upholstery Price in Rs 3500 4500 600 500 400 500 400 2500 100/ sq.

ft 40000 100000 308000 60 .ft 400 sq.Dressing table Fixtures 1000 5000 40 40 40000 200000 1720000 Total b. FOOD AND BEVERAGE OUTLETS RESTAURANT: (50Pax) Item Price No Total Tables Chairs Side station Décor and upholstery 2500 500 4000 13 55 2 32500 27500 8000 100000 Carpets Fixtures Total 100/sq.

ft Total 5000 15000 15000 50000 50000 20000 75000 230000 61 . BAR: (30Pax) Item Stools Table Chair Bar counter Music system Carpets Décor Total Price 500 1500 500 50000 50000 100/sq.ft No 10 10 30 1 1 200 sq.c.

62 .

d.T cabin Desk Miscel laneous Total Price 150 200 250 200 1500 500 5000 6000 Number 15 15 10 10 5 5 1 1 Total 2250 3000 2500 2500 7500 2500 5000 6000 6000 36750 63 . ROOM SERVICE :( 45Rooms) Item B/f Trays Tea Trays 12” Salvers 9” Salvers Trolleys Racks O.

ft 1200sq. BANQUET :( 420 Pax) Item Price Number Total Chairs Tables 500 1000 425 30 212500 30000 Carpets 100/sq.ft (1) 120000 Podium Music system 1500 2 3000 50000 12” salver Fixtures 250 30 7500 100000 Total 523000 64 .e.

HOUSEKEEPING Item Cupboards Total 50000 Shelves 25000 Racks 30000 Bins 10000 Fixtures 50000 Total 165000 65 .f. PURCHASE. STORES.

ADMINISTRATION Item Total Tables 75000 Chairs 50000 Fixtures 50000 Total 175000 66 .g.

RECEPTION AND LOBBY Item Counter Stationery Pigeon hole Cupboard Safe deposit Sofa set Fixtures Lugg age carrier Miscellaneous Total Total 40000 5000 10000 10000 20000 200000 300000 100000 50000 735000 67 .h.

STAFF CAFETARIA Item Tables Chairs Fixtures Total Total 12500 25000 25000 62500 68 .i.

FOOD AND BEVERAGE OUTLETS Item Price Number Total Table cloth 200 30 6000 Napkins 30 200 6000 Par stock(*3) 12000 Total cost 36000 69 .5. MISCELLANEOUS FIXED ASSETS a.

BANQUET HALL AND CONFERENCE Item Price Number Total Frills 500 30 15000 Table cloth 150 30 45000 Napkins 30 500 15000 Par stock (*3) 34500 Total 103500 70 .b.

GUEST ROOM AND SUITE ROOM LINEN Item Single bed sheet Double bed sheet Blankets Blanket cover Mattress Mattress protector Bed cover (single) (double) Price 250 250 400 200 1000 200 Number 25 30 50 50 50 50 Total 6250 9000 20000 10000 50000 10000 200 300 25 30 5000 9000 Pillow cover Hand towel Bath towel Bath mat Pillows Par stock (*4) Total 50 30 100 150 150 100 100 100 50 90 5000 3000 10000 7500 13500 158250 633000 71 .c.

d. KITCHEN STEWARDING (RESTAURANT &ROOM SERVICE) Item Price (Rs) Number Total Glasses 50 800 40000 Chinaware 30 800 24000 Flatware 30 800 24000 Cutlery 30 800 24000 Miscellaneous 25000 Total 137000 72 .

BANQUETS Item Price(Rs) Number Total Glassware 50 1000 50000 Chinaware 30 1000 30000 Flatware 30 1000 30000 Cutlery 25 1000 25000 Total 137000 73 .e.

F .STAFF CAFETARIA Item Total Plates 60000 Spoons 20000 Forks 20000 Total 100000 74 .

g. HOUSE KEEPING MISCELLANEOUS ASSETS Item Vacuum cleaner Cleaner mug Mops Brooms Squeezer Duster Waiters cloth Miscel laneous Total Number 4 20 30 30 30 100 500 Price 5000 20 30 25 25 5 40 Total 20000 400 900 750 750 500 20000 25000 68300 75 .

) Salary and wages 2.) Registration and establishment fees 5.) NSC 2. PRELIMINARY AND PRE-OPERATIVE EXPENSES Item 1.00 2.00 3.) Adver tisement and publicity 7.) Water suppl y d.) Telephone c.00 3.00 10.00 5.) Loan procurement and application Rs. In Lakhs 20.00 77.) Miscellaneous expenses POP Total 10.) Insurance 6.) Electricity b.00 15.)Deposits a.00 5.00 8.50 76 .) Project fees 4.6.50 2.00 3.

) TOTAL AMOUNT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 General manager Front office manager Lobby manager GRE Front office assistant Tr avel desk operator Bellboys Telephone operator Bell captain Night auditor F & B Manager Banquet manager Restaurant manager Barman Captains Senior Captain 1 1 1 1 4 1 4 2 2 1 1 1 1 1 2 2 20000 9000 8000 5000 5000 4500 2500 3000 3000 4000 12000 9000 9000 5000 4000 500 0 20000 9000 8000 5000 20000 4500 10000 6000 6000 4000 12000 9000 9000 5000 8000 1 0000 77 . NO DESIGNATION NO. SALARY AND WAGES S.OF PERSON REQUIRED SALARY (RS.7.

17 18 19 20 21 22 23 24 25 26 27 28 29 Stewards Executive chef Souse Chef Commis Chef de partie Steward supervisor Dish / pot washer Executive house keeper House keeping supervisor Floor supervisor R oom attendant/house man Personal manager Sales & marketing manager 20 1 2 6 3 1 4 1 2 3 10 1 1 1 1 1 2 2 1 3000 25000 10000 4000 5500 4500 2000 12000 5500 5000 3000 8000 9000 5000 5000 10 000 6000 4000 15000 60000 25000 20000 24000 16500 4500 8000 12000 11000 15000 30000 8000 9000 5000 5 000 10000 12000 8000 15000 30 Sales & marketing executive 31 Accountant 32 Chief accountant 33 Cashier 34 B .Sales executive 35 Bakery chef 78 .

M secretary 2 2 2 1 1 2 2 2 1 1 1 4000 3000 3000 2500 2500 2500 3000 3000 8000 3000 6000 8000 6000 6000 2500 2500 5000 6000 6000 8000 3000 6000 47 Pest controller 48 Laundry manager 49 Personnel office asst.OT 44 Training manager 45 Trai ning assistant 46 G.36 Desk control supervisor 37 Linen attendants 38 Laundry attender 39 Flower.S. 50 Drivers 51 Do orman 52 Apprentices 53 Life guard 2 1 2 2 2 4 2 2000 8000 3000 4000 3000 1500 2500 4000 8000 6000 4000 6000 6000 2500 79 . As sistant 40 Carpenter 41 Plumber 42 Hostess 43 R.

54 Security manager 55 Security Supervisor 56 Security guard 57 Chief engineerin g 58 Supervisor 59 Technicians 60 Purchase officer 61 Purchase manager 62 Stores keeper 1 2 4 1 2 2 1 1 2 8000 4500 2500 9000 4000 3000 5000 8000 3000 8000 9000 10000 9000 8000 6000 5000 8000 6000 TOTAL 135 613000 Add benefits 20% 0f 613000 + 122600 735600 x 12 Total Salary = Rs 8827200 80 .

8.14 409.81 58.12 292.81 58.81 37.09 18.59 117.63 351.90 65.81 58.08 58.45 28.81 L/T loan 468.81 58.10 17 5.54 56.81 58.61 234. INTEREST ON L/T LOANS (Rate of interest 16%) Year I II III IV V VI VII VIII Installment 58.81 58 .73 9.81 58.57 Interest 74.17 46.37 81 .

30 III 2500 20 70 365 127. of days Total Rs in Lakhs I 2500 20 60 365 109.50 II 2500 20 65 365 153.75 IV 2750 20 75 . ROOM SALES Room sales = Room Tariff x No: of Rooms x % Occupancy x 365 100 SINGLE ROOM (20 Rooms) year Room Tariff No: of Rooms % Occupancy No.9.

66 82 .365 150.56 V 3025 20 80 365 176.

85 210.78 247.DOUBLE ROOMS (20 Rooms) Year Room Tariff No: of Rooms % No.32 83 .07 178. of days Occupancy Total Rs in Lakhs I II III IV V 3500 3500 3500 3850 4235 20 20 20 20 20 60 65 70 75 80 365 365 365 365 365 153.30 166.

22 V 4840 5 80 365 70.SUITE ROOMS (5Rooms) Year Room Tariff No: of Rooms % No.10 IV 4400 5 75 365 60.40 51. of days Total Occupancy Rs in Lakhs I 4000 5 60 365 43.66 84 .80 II III 4000 4000 5 5 65 70 365 365 47.

.

32 IV 22 390 365 31.10. of covers Average sold/day cover charges Number of days Total Rs in lak hs I 8 285 365 8. FOOD & BEVERAGE SALES F & B SALES=No: of Pax x Average Cover Charge x 365 BAR (30 Pax) Year No.53 85 .32 II 12 320 365 14.31 V 30 425 365 46.01 III 18 355 365 23.

85 II 35 325 365 41.10 IV 45 375 365 61.RESTAURANT (50 Pax) Year No.00 86 . of covers Average Number of sold/day cover charge days Total Rs in Lakh s I 30 300 365 32.59 V 50 400 365 73.51 III 40 350 365 51.

37 IV 43 375 365 58.70 87 .ROOM SERVICE (45 Rooms) Year No.85 V 45 400 365 65. of covers Average Number of sold/day cover charge days Total Rs in Lakhs I 37 300 365 40.26 III 41 350 365 52.51 II 39 325 365 46.

.

of covers sold/day Average per cover No.91 III 360 450 365 591.16 V 420 500 365 . of days Total Rs in Lakhs I 300 400 365 483.BANQUET & CONFERENCE HALL (420 Pax) Year No.30 IV 390 475 365 676.00 II 330 425 365 511.

766.50 88 .

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