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ASSESSMENT FEEDBACK SHEET
Copy for student _____ Copy for file _____ Pigeon Hole No:
Name: Aditya Joshi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Level Masters Course MA Hospitality / Tourism Management
Module Code RHM 73 Module Name International Hospitality Development Module Tutor Pete Odgers Assignment Type Individual Date due in: 26/03/2010 ___________________________________________________________________________________________________ Part B To be completed by ADMINISTRATIVE PERSONNEL Date received: Time: Part C To be completed by ASSESSING TUTOR Please complete this form relating comments to published assessment criteria
Assessment Criteria / Feedback / Areas for Improvement
Use of appropriate management tools
Quality of sources and data
Quality of analysis and application of research into the feasibility of proposed development
Viability of the conclusions and recommendations
Quality of presentation
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University of Brighton International Hospitality Development Module Code: RHM73
Course: MA in Hospitality Management Course Tutor: Mr Pete Odgers Stage 1
Date due in:26/03/2010 Submitted by: Aditya Joshi
Introduction Tourism is the source for the fact that Hospitality industry is turning towards Globalization. Tourism alongwith Hospitality Industry is the most important aspect for some countries as it is the major source of foreign currency for any country and arguably the largest employer for the country. As it is rightly said,” In many countries, where tourism has become a major export industry, the hospitality sector is the focal point for concepts of globalization to take root.”[Cline R.:1995] Roadhouse Hotels as we know from the worksheet given is a well-known chain of budget hotels and considering the basic management tools in the form of PEST and SWOT along with the country rating chart we would analyse two countries from different continents viz. Newzealand and India. Reasons for Choosing Newzealand and India International tourism expenditure is expected to be soft (down 2 per cent in 2009), followed by a recovery in 2010 (up 4.5 per cent). A larger increase in spending (up 9.1 per cent) is forecast for 2011. The increase in this year will be influenced by a recovering global economy and New Zealand's hosting of the Rugby World Cup.[Tourism Newzealand:2009] The statements above could clearly indicate the support the NZ government provides to tourism which indirectly suggests favourable conditions for any chain to think about as a possible destination for International Hospitality Development. Investing in India, with its "long history of English law," is more straightforward than China, which requires more caution, said Hilton President and Chief Operating Officer Matthew Hart. [Reuters:2007] A handful of global luxury hotel chains are scouting for opportunities in India, thanks to the rise in hotel occupancy rates during the October-December quarter and the enormous potential in a booming market that doesn't have enough hotel rooms. [Hotel-Online:2010] Concluding the above two statements we could clearly see that there is a increasing amount of pressure on rooms seeing the amount inbound tourists in India. We could also conclude that the investments in India are easier too taking into account the English inclined laws of the country. Before any Hospitality Property thinks about globalizing themselves several factors are needed to be kept in the mind and have to carefully analyze them in order to minimize the possibilities of wrong investments in a wrong place. These factors would be used by us to show the grading of each country according to which we would see the best country with respect to have property of Roadhouse Hotels. The factors we said are a part of PEST which in turn is a part of SWOT. We would therefore start with the PEST analysis for the countries we have proposed. 11
Pest Analysis Political Factors (New Zealand) New Zealand is a democratic country consisting of a Labour party and National Party which are the major political parties in New Zealand acquiring 43 seats and 58 seats in the parliament respectively. Political stability in New Zealand is known to be very stable one with minimal risk of instability.[Online:2010] Risk of Political Instability, 2009 Country Australia New Zealand Singapore Germany United States Hong Kong SAR France China United Kingdom India Indonesia Taiwan Malaysia Japan Korea Philippines Thailand Rating (1) 9.54 9.27 8.64 8.33 8.05 7.71 7.63 7.62 7.40 5.83 4.93 4.91 4.78 4.77 4.39 3.42 2.76
Footnotes: 1: 0 = very high, 10 = very low Figure 1.
http://www.business.nsw.gov.au/aboutnsw/climate/A9_riskofpolinstabil.htm This clearly shows and explains the statement above we say New Zealand is one of the most stable countries with regards to politics. Political Factors (India) India is a democratic country as well and the main ruling parties are BJP and Congress also known as UPA[United progressive alliance] and NDA[National democratic alliance]. As we see in figure 1 we see India to have a bit unstable political situation because of the latest elections. But since the congress holds the government in India for consecutive two 5 year sessions of which the latter started in 2009, we could see the political stability strengthening in coming years. [Online:2010] Economic Factors (New Zealand) "Returning economic stability is leading to a rebound in some of our main visitor markets, providing some light at the end of the tunnel for many tourism operators after what was a difficult year in 2009." [Online:2010] This clearly indicates that tourism sector along with the hospitality sector were hit by the economic recession faced by the whole world too. Hospitality being a part and parcel of the Tourism industry was ought to face the pinch as the tourism industry suffered due to the low volumes of tourists to New Zealand. New Zealand supports the Franchising in a huge amount as it earns 10% of its GDP from Franchising. They also have five banks in New Zealand which have a special Franchising Department the only reason as they say, “that franchise companies have a better success rate compared to stand alone independent companies,” [Online:2010] As of 1 April, 2009, the New Zealand tax rates (excluding ACC earner’s levy) are: • 12.5 cents of every dollar for income up to $14,000 • 21 cents of every dollar for income from $14,001 and $48,000 • 33 cents of every dollar for income from $48,001 to $70,000 38 cents of every dollar for income of $70,001 and over [Online:2010] The above mentioned rates denote the tax rates which in turn would help us determining a score for the economy and tax rates on the evaluation sheet. Economic Factors [India] “India's Reserve Bank of India, in its first financial stability report on Thursday, said that signs of recovery in growth were evident, adding that the monetary policy exit was started with the union budget committing itself to a return to fiscal consolidation.” [RTT News : 26th March 2010] This clearly shows the similarity between the New Zealand and India. “India has been ranked the "best country brand for value-for-money" in the Country Brand Index (CBI) survey conducted by FutureBrand, a leading global brand consultancy. India also claimed the second place in CBI's "best country brand for 11
history", as well as appears among the top 5 in the best country brand for authenticity and art & culture, and the fourth best new country for business.”[IBEF: Feb. 2010] This indicates a positive sign for the new establishments intending to invest their capital in India. Foreign Direct Investment seen in services sector for the period from April to December 2009 was a whopping $3,547 Million which was more than any other sector in India. [Online:2010] “The hotel industry has reacted optimistically to the Budget proposal for investment-linked tax deductions for new hotels in the two-star category and above. Analysts have interpreted this proposal as a tax holiday for at least eight years on investments in new hotels, except in land, goodwill and financial instruments.” [Online:2010] This indicates a favourable taxation policies being in place with respect to India thus favourable for the companies looking to invest and globalize their brand in India. Social Factors (New Zealand) [Online:2010] Population growth rate in New Zealand is 0.949 as compared to 1.3 in India which indirectly suggests the following points [World Bank, World Development Indicators] Per Capita Income – This is because the more the population the lesser the jobs and eventually lesser the salary. Labour Charges – As the per capita decreases the labour charges are reduced . Cost of Supplies- If the Demand would be more than the supply the cost of supplies would increase The per Capita Income of India was $976.3 as compared to $ 31219 which is a significant amount of difference. This is the result of none other than the amount of population each of the country has . viz. New Zealand= 4179000 as compared to 1169016000 of India as in 2007. Tourist Arrivals in Newzealand were 2434000 whereas India had 4447000 tourists in 2007 which indicate India was a more favorable condition for the tourists as in 2007 Urban Population% of New Zealand in 2007 was 86.4% as compared to India with 29.2% which might denote somewhat a equal proportion taking the population of both the countries into account. This indicates that 86% people can afford the budget hotels as compared to 29.2% population in India. Hotels by Concentration In New Zealand Hotels By Concentration could mostly be found in Aukland, Christchurch and Wellington.
Hotels in India could be found in the four metromolitan cities viz Mumbai, Delhi, Kolkata and Chennai. Along with this there is a growing trend of move to the cities nearby the metropolitan cities such as Pune near Mumbai which has now becoming a IT hub; Bangalore the IT city of India, Ahmedabad; Jaipur etc. wherein they have a larger amount of tourist spots as compared to the metropolitan cities. Technological Factors Both New Zealand and India are technologically advancing countries and the countries have nothing to do with the bringing of new technologies unless they are harmful to humans or the atmosphere Legal factors [New Zealand][Online:2010] Laws related to employment in New Zealand are as follows
• • • • • • • • • • • • • • • • • •
Employment Relations Act 2000* Equal Pay Act 1972* Fair Trading Act 1986 Health and Safety in Employment Act 1992* Health and Safety in Employment Regulations 1995 Health and Safety in Employment (Asbestos) Regulations 1998 Health and Safety in Employment (Mining Administration) Regulations 1996 Health and Safety in Employment (Mining—Underground) Regulations 1999 Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999 Health and Safety in Employment (Pipelines) Regulations 1999 Health and Safety in Employment (Prescribed Matters) Regulations 2003 Health and Safety in Employment (Pipelines) Regulations 1999 Health and Safety in Employment (Prescribed Matters) Regulations 2003 Health and Safety in Employment (Pressure Equipment, Cranes, and Passenger Ropeways) Regulations 1999 Health and Safety in Employment (Rates of Funding Levy) Regulations 1994 Holidays Act 2003* Human Rights Act 1993 Industry Training Act 1992 Injury Prevention, Rehabilitation, and Compensation (Accredited Employers 11
Framework) Amendment Notice 2005
• • • • • • • • • • • • • • • • • • •
Injury Prevention, Rehabilitation & Compensation Act 2001 Injury Prevention, Rehabilitation, and Compensation (Ancillary Services) Regulations 2002 Injury Prevention, Rehabilitation, and Compensation (Applications to Determine Previous and Subsequent Injury Entitlements) Regulations 2003 Injury Prevention, Rehabilitation, and Compensation (Code of ACC Claimants' Rights) Notice 2002 Injury Prevention, Rehabilitation, and Compensation (Earners' Levy) Regulations 2008 Injury Prevention, Rehabilitation, and Compensation (Indexation of Maximum Weekly Compensation) Regulations 2004 Injury Prevention, Rehabilitation, and Compensation (Indexation) Regulations 2002 Injury Prevention, Rehabilitation, and Compensation (Interest Rate for Late Payment of Levies) Regulations 2002 Injury Prevention, Rehabilitation, and Compensation (Interim Indexation of Weekly Abatement Amounts) Regulations 2002 Injury Prevention, Rehabilitation, and Compensation (Liability to Pay or Contribute to Cost of Treatment) Regulations 2003 Injury Prevention, Rehabilitation, and Compensation (Lump Sum and Independence Allowance) Regulations 2002 Injury Prevention, Rehabilitation, and Compensation (Motor Vehicles Levies) Regulations 2008 Injury Prevention, Rehabilitation, and Compensation (Occupational Diseases) Order 2007 Injury Prevention, Rehabilitation, and Compensation (Public Health Acute Services) Regulations 2002 Injury Prevention, Rehabilitation, and Compensation (Refund Of Fuel Levy) Regulations 2003 Injury Prevention, Rehabilitation, and Compensation (Residual Claims Levy) Regulations 2008 Injury Prevention, Rehabilitation, and Compensation (Review Costs and Appeals) Regulations 2002 Injury Prevention, Rehabilitation, and Compensation (Work Account Levies) Regulations 2008 Minimum Wage Act 1983* 11
• • • • • • • • • • • •
Minimum Wage Order 2008 Parental Leave and Employment Protection Act 1987* Parental Leave and Employment Protection (Rate of Parental Leave Payment) Regulations 2008 Privacy Act 1993 Protected Disclosures Act 2000 State Sector Act 1988 Volunteers Employment Protection Act 1973* Wages Protection Act 1983* Employment Court Regulations 2000 Employment Relations Authority Regulations 2000 Employment Relations (Code of Good Faith for Public Health Sector) Order 2006 Employment Relations (Prescribed Matters) Regulations 2000
Legal Factors[ india] India almost follows the same footsteps in accordance to law and they must be well studied before negotiating in the talks with the business deal.
Conclusions and Recommendations The following could be rightly concluded from the research conducted India scored 76.9 in comparison with New Zealand 67.1 the reasons mainly being India has the law alike UK and the RoadHouse Hotels being a budget hotel suits India better than NZ where 86% population is urban and has a spending power. The form of operation should be a Joint venture to avoid excess risk. Recommendations found were that the location of the hotel might be considered to be near Mumbai as Delhi already are booming with lots of hotels being constructed since 2009 for the commonwealth games to be held in Delhi In 2010.
References Cline R. (1995), Hospitality Adjusts To Globalization, Arthur Anderson and Co. Sc., http://www.hotelonline.com/Trends/Andersen/global.html Online(2010)India's Shortage of Hotel Rooms and Spike in Occupancy Rates Prompt Global Luxury Chains to Seek Partnership Opportunities http://www.hotelonline.com/News/PR2010_1st/Jan10_IndiaGrowth.html Reuters(2007) Major hotel brands see big opportunity in Asia, January 12,2010 Issue URL= http://data.un.org/CountryProfile.aspx?crName=India URL= http://data.un.org/CountryProfile.aspx?crName=New%20Zealand URL= http://www.ers.dol.govt.nz/law/statutes.html Accessed in March,2010 URL=http://indiatoday.intoday.in/site/Story/86000/Business/Hospitality+sector+lauds+FM+for+extending+tax +sops+to+two-star+hotels.html Accessed in March,2010 URL= http://dipp.nic.in/fdi_statistics/india_FDI_December2009.pdf Accessed in March 2010 URL= http://www.rttnews.com/Content/AllEconomicNews.aspx?Id=1252047 Accessed in March,2010] URL= http://www.ibef.org/industry/tourismhospitality.aspx Accessed in March 2010 URL= http://www.workingin-newzealand.com/money-and-costs/finance-and-tax/guide.aspx Accessed in March 11
2010 URL= http://www.workingin-newzealand.com/business-and-invest/buying-a-business-orfranchise/opportunities.aspx Accessed in March 2010 URL= http://www.tourismnewzealand.com/media/releases/summer-arrivals-get-a-kick-start Published on 4th February 2010 URL= http://www.indian-elections.com/ Accessed in March, 2010 URL= http://www.parliament.nz/en-NZ/MPP/Parties/ Accessed in March 2010. URL= http://www.tourismnewzealand.com/news-and-features/news/international-tourism-expenditure-forecastto-reach-82-billion-by-2015 21st September 2009 Issue
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