CHAPTER 1

INTRODUCTION AND INDUSTRY PROFILE

1.1. INTRODUCTION
An organisation is a social arrangement which pursues collective goals, which
controls its own performance, and which has a boundary separating it from its
environment. Organisation is the association formed by a group of people who
see that there are benefits available from working together towards some
common goal.

Organisation studies are the study of individual and group dynamics in an

organisational setting, as well as the nature of organizations themselves.
Whenever people interact in organisations, many factors come in to play.
Organisational studies attempt to understand and model these factors.
Organizational study is essential to any MBA graduate as it helps them to
connect theory with practice.

For the students of the Master of Business Administration programme, the

knowledge relating to how an organisation functions is vital. It is important to
understand key issues in strategy deployment such as mission, vision, goals,
objectives and so on. It is equally important to understand how the different
functional areas of an organisation work together in realizing the common goal
of the organisation.

1.2. SCOPE OF THE STUDY

The organisation study at Shangri-La Hotel aims at getting accustomed to the
business environment of Shangri-La Hotel for a period of 15 days. The study
will be conducted to understand the structure, function and process of their
various departments and their interdependence.

1.3. OBJECTIVE OF THE STUDY

The organisation study was carried out Shangri-La Hotel situated at Bengaluru,
to achieve the following specific objectives.
  To familiarize with the organisation structure and it’s functioning.
 To familiarize with different departments in the organisation and their
functions and activities.
 To understand how key business process are carried out in an
organisation.
 To understand the growth and diversification strategy, portfolio
structure of the organisation.
 To study the overall performance of the organisation.
 To conduct a SWOT analysis of the organisation.

1.4. METHODOLOGY
1. Primary data – Primary data were collected from discussion with the
managerial head of the various departments.

2. Secondary data – Secondary data were obtained from the annual report,
from the website and other concerned books.

1.5. LIMITATIONS
There were some limitations in conducting the organization study at Shangri-La
Hotel.

 There were difficulties in obtaining data from executives and managers

due to their busy work schedule.
 The reliability of data used for study largely depends upon the
company’s reports and the information given by executives.
 The company has the limitation to disclose their financial details, so a
detailed analysis of financial performance of the company wasn’t
possible.

1.6. INDUSTRY PROFILE

The hotel industry is one of the major sectors in the hospitality sector. Hotel
facilities vary in function, size, and cost. The facilities provided by hotels
include swimming pool, childcare, conference facilities, business centres, and
social function services, among others. The booming travel and tourism
industry is one of the major factors boosting the growth of the hotel industry.
Hotels are classified based on services they offer into: 1star, 2star, 3star, 4star,
5star and unrated. The one star includes tourist hotels; two star hotels include
standard hotels; 3 star hotels include comfort hotels; 4 star hotels include first
class hotels; and 5 star hotels include luxury hotels.

The 3 star segments held the largest market share in the global hotels market.
Increasing domestic tourism coupled with demand for luxurious lifestyle is one
of the major factors fuelling the demand in the 3 star hotels segment.
However, unrated segment is expected to be fastest growing segment with
increasing demand in the budget hotels segment. However, the 5 star hotels
segment also has huge growth potential. Increasing number of business travels
coupled with demand for better service is one of the major factors fuelling the
demand in this segment.

Luxury travel has given birth to luxury hotels that are characterized a high-end
experience at a premium price. Luxury hotels defined by luxury features such
as furnish bathrooms and swimming pools. Moreover, highest of professional
and personalized service, luxury hotels have become the epicentre of revenues
earned by the overall hospitality industry.

Increasing trends of western lifestyles in global scenario accelerated the

demand for luxurious hotels market during holidays and business meetings. As
more and more consumers are showing a keen interest in materializing their
aspirations of luxury living are also increasing and they are spending
bountifully on the same. With a wide range of expectations from the world of
luxury services, consumers are opting for luxury resorts and hotels over the
regular bed and breakfast accommodations. The global luxury hotels market is
also being propelled by the growing number of international events and strong
branding and advertising strategies implemented by hotel firms across the
globe.

The global luxury hotels market is segmented on the basis of types and
geography. On the basis of type, this market is segmented into five types:
business hotel, suite hotel, airport hotel, resorts, and others. Business hotels
hold the largest market share in 2015. Between 2015 and 2021, this segment is
expected to surge at a CAGR of 3.8%. In the coming years, this segment is
expected to cater to the burgeoning class of business travellers and conference
groups that are backed by a corporate budget to spend on living in foreign
countries. Meanwhile, the airport hotels segment will rise at a steady CAGR of
3.7% during the forecast period. The global luxury hotels market will receive a
huge back supports from ubiquitous promotional activities, strong branding
strategies, and increasing investment in online advertising.

Geographically, this market is segmented into North America, Europe, Asia-

Pacific, Latin America and the Middle East and Africa. These segments further
bifurcated into Unites States, United Kingdom, Germany, France, China, Japan,
India, and Brazil. North America was the leading player for luxury hotels
market across the globe. North America is remaining continuous leading
market player during the forecast period from 2016 to 2021 due to the huge
presence of luxury hotels in the United States.

Some of the important players in the global luxury hotels market are Shangri-
La International Hotel Management Ltd., Four Seasons Holdings Inc., ITC Hotels
Limited, InterContinental Hotels Group PLC, Starwood Hotels & Resorts,
Mandarin Oriental International Limited, Jumeirah International LLC, The
Indian Hotels Company Limited, Marriott International, Inc. and Kerzner
International Resorts, Inc.

Luxury Hotels Market: Type Segment Analysis

  Business Hotels
 Suite Hotels
 Airport Hotels
 Resorts
 Others
Luxury Hotels Market: Regional Segment Analysis

 North America
o U.S.
 Europe
o UK
o Germany
o France
 Asia Pacific
o China
o Japan
o India
 Latin America
o Brazil
 The Middle East And Africa

1.7. ORIGIN OF HOTEL INDUSTRY IN INDIA

Hotels & the Catering Industry as we know started in the 19th century with the
development of major cities, easier sea travel & coming up of railways. During
Mogul rule, the forts & their surroundings would cater to the needs of the
traveller often in exchange for no more than the story of their adventures
during their travel or any news from other towns and villages they passed by.
In India, resting houses called serais/sarais and dharamshallas were
established on high ways by kings and emperors of ancient and medieval
periods. Movement of people both political and pilgrimage stressed the need
for better and improved facilities to cater to the varied needs of the various
classes of the society.

In India, development of catering can also be attributed also to the legacy left
by people belonging to different cultures and ethnic groups who have ruled
here. Development of catering in India as we see it today is chiefly due to the
British, who had introduced hotels and restaurants similar to those found in
Europe. Most of modern hotels that sprouted were managed by European
families. The Bombay hotel was opened in 1799. The British brought modern
hotels to Kolkata. The Oldest was John Spence's Hotel. Spence's, the first ever
hotel in Asia was opened to the public in 1830. The credit for opening the first
Western style hotel under the name of British Hotel in Bombay in 1840, goes
to Pallonjee Pestonjee was the first hotel to give a la carte and table
de hôte menu. Then came the Auckland hotel by David Wilson in Calcutta in
the year 1840-41 (now - The Great Eastern Hotel - officially Lalit Great Eastern
Hotel) is a colonial era hotel in the Indian city of Kolkata - formerly Calcutta)
and Connemara hotel in madras in the year 1870 by E. A. Oak Shroff. But now
this property belongs to Taj group.

Today, ITDC provides a complete range of tourism services, including

accommodation, catering, and entertainment and shopping, hotel consultancy,
duty free shops, and an in-house travel agency. The India Tourism
Development Corporation (ITDC) was set up in 1966 as a corporation under the
Indian Companies Act of 1956, with the merger of Janpath Hotel India Ltd.

In 1971-72, a beautiful palace of Rajasthan was linked up to the Taj, the lake
palace in Udaipur, a marble dream, afloat lake pichola and the Rambagh
palace, originally created at the height of Rajput splendour in Jaipur. In 1903
he raised finance invested his own money, hired the best architects and
craftsmen and build the exquisitely beautiful Taj Mahal hotel in Bombay with
220 rooms. Mohan Singh Oberoi took Carlton hotel in Shimla on lease in 1927,
renamed as Clarks hotel. He took a building in 1933 and built grand hotel in
Calcutta.

When India agreed to host the 1982 Asian Games, the GoI granted licenses for
building hotels to the Taj Palace, Asian Hotels Hyatt Regency, India Tourism
Development Corporation - Lodhi Hotel, Samrat Hotel, Kanishka, Le Meridian,
and Surya Sofitel, with the stipulation that their new hotels had to be
completed in time for the games. India hosted the Commonwealth Games in
2010, at Delhi. It was India's most successful Commonwealth Games to date
with Indian athletes winning 38 gold, 27 silver and 36 bronze medals. This also
added to growth of hotel industry in India.

1.8.GROWTH AND PRESENT STATUS

The hotel industry in India is going through an interesting phase. One of the
major reasons for the increase in demand for hotel rooms in the country is the
boom in the overall economy and high growth in sectors like information
technology, telecom, retail and real estate. Rising stock market and new
business opportunities are also attracting hordes of foreign investors and
international corporate travellers to look for business opportunities in the
country.

The hotel industry in India is going through an interesting phase. The industry
has a capacity of 110,000 rooms. According to the tourism ministry, 4.4 million
tourists visited India last year and at the current rate, the demand will soar to
10 million by 2010 to accommodate 350 million domestic travellers. The hotels
of India have a shortage of 150,000 rooms fuelling hotel room rates across
India. With tremendous pull of opportunity, India has become a destination for
hotel chains looking for growth.

Due to such a huge potential available in this segment, several global hotel
chains like the Hilton, Accor, Marriott International, Berggruen Hotels, Cabana
Hotels, Premier Travel Inn (PTI), InterContinental Hotels group and Hampshire
among others have all announced major investment plans for the country. The
Government's move to declare hotel and tourism industry as a high priority
sector with a provision for 100 per cent foreign direct investment (FDI) has also
provided a further impetus in attracting investments in to this industry.

Total contribution by travel and tourism sector to India’s GDP is expected to

increase from US$ 136.3 billion in 2015 to US$ 275.2 billion in 2025. India
ranked third among 184 countries in terms of travel & tourism’s total
contribution to GDP in 2016. Travel and tourism is the third largest foreign
exchange earner for India. A sum of US$ 22.089 billion was earned under
foreign exchange through tourism during January-October 2017. The
employment in the sector is expected to rise to 46.42 million by 2026. During
January – October 2017, 7.996 million foreign tourists have arrived in India.

The launch of several branding and marketing initiatives by the Government of

India such as ‘Incredible India!’ and ‘Athiti Devo Bhava’ has provided a focused
impetus to growth. The Indian government has also released a fresh category
of visa - the medical visa or M visa, to encourage medical tourism in the
country. Incredible India 2.0 campaign was launched in September 2017.

The Government has also been making serious efforts to boost investments in
tourism sector. In the hotel and tourism sector, 100 per cent FDI is allowed
through the automatic route. A five-year tax holiday has been offered for 2, 3
and 4 star category hotels located around UNESCO World Heritage sites
(except Delhi and Mumbai). The investment in tourism sector is expected to be
US$ 12.4 billion in the 12th Five Year Plan; of these, private investments are
likely to total US$ 9.2 billion. Total FDI received by Indian hotel & tourism
sector was US$ 10.6 billion between April 2000 and September 2017.

1.9. PEST ANALYSIS

1.9.1. Political factors

Hotel industry as well as tourism industry has a basic backbone of the
government support without which it won’t be able to sustain the competitive
world. Government charges huge amount of tax from the star and luxury
category of hotels and thus has a huge impact with the political changes
that occur. Any small step taken by the government by changing some law it
would seriously affect hotel industry. The hotel industry is getting huge
incentives and the state governments are supporting the development of the
hotels and their growth. This in fact answers the questions how are Indian
Hotels are planning to expand in the economic crunch time. The Terror attack
on the Mumbai city’s renowned hotels Taj and the Oberoi’s had brought a
concern on the faces of the hoteliers with a substantial drop in foreign
travellers to India taking the terror threat into account. Few steps taken by the
government towards development of the hospitality and tourism industry are:

1) Foreign direct investment 100%

2) Disinvestment

3) Taxes

4) Foreign collaboration

5) Government pressure to increase security level, add sewage treatment

plant, etc.

6) Government promoting tourism

7) Government permission is no longer required for hiring foreign technicians.

1.9.2. Economic factors

Generally the hotels 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 will inevitably rise. This means eventually interest rates will be
high. That will be necessary to save the Indian economy from collapse in the
world market.

Hotels in India try to capitalise on the foreign travellers who are seen to bring
more money to spend along with increasing amount of expectations from the
hotels. As seen in the recent past the guests are willing to pay for the services
they get and the more the guests pay the more would the hotel and
the industry would prosper. With the increase in the paying power of
the guests the need for the good and luxurious hotels becomes massive. The
per capita income in India also has rose to a new extent enabling the common
man to go to luxurious hotels to have a lunch or a dinner. Due to the seasonal
nature of demand, revenues and room occupancy can vary significantly during
peak and non-peak periods.

1) Recent economic slowdown effect.

2) High growth in Tourism industry.

3) Interest rates.

4) Exchange rates.

5) Inflation rates.

1.9.3. Social factors

Changes in social trends can impact on the demand for a firm's products and
the availability and willingness of individuals to work. As hotels benefit from
holidaying the extent to which people take holidays and their ability to get off
from work for such holidays will have a direct bearing on the demand

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
word-of-mouth recommendations.

Exclusively through personalization and localization – Consumers expect to be

catered to for their hospitality needs.

Upscale design – Design no longer id viewed as a luxury, but a trend to be

honoured.

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 or posting
reviews online.
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 to bring like-minded travellers together. Hotels particularly, are a
natural and organic place for social networking.

Finally, hotels need to be seen as being dedicated to green initiatives in order

to appeal to travellers.

1.9.4. Technological factors

With the advancement of technology, the way the 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. It can be seen that customers,
even potential customers extensively use online information sources including
reviews and comments by previous customers when making their own choice
about holidays and places to visit. The use of technology and other advanced
techniques can be useful in managing the consumption of resources such as
water and electricity which are resources that are extensively used in this
industry. E.g.: Power Factor Corrections, recycling water. The increasing use of
IT/IS can help in improving the information available for management decision
making which will also allow the organization to better plan its future activities
and events.

1) Computerization.

2) Global distribution system (GDS).

3) Provide LCD, laptops and conference facilities.

4) Real-time access to inventory, transparency across multiple channels.

1.10. PORTER’S FIVE FORCES MODEL

THREAT OF NEW ENTRANTS – BARRIER TO ENTRY:
According to Michael Porter, threat of new entrants are determined by
barriers to entry which include economies of scale which include size and
scope of operations required to achieve viable cost structure; product
differentiation, switching costs and customer loyalty created by quality,
reliability and brand image; capital requirements which involve size of cash and
financial resources required to establish and run a business; cost disadvantages
independent of scale as opposed to advantages held by existing competitors
such as location, patents and experience; access to distribution channels which
include means to reach customers; government policy such as licensing,
subsidies or tax incentives; and expected retaliation from existing competitors
which are determined by current rivalry, history of vigorous retaliation and
strengths of incumbents. The Hotel Industry on a global basis is characterized
by high capital costs and a high proportion of fixed costs to total costs. There
are considerable economies of scale in the local Hotel Industry. The high
capital costs require that from the outset the hotel project must be managed
to achieve the most cost effective use of resources applied to construction,
furnishing and equipment, pre-operational expenses and finance. The
optimum size for a hotel in metropolitan cities is around 500 rooms. It may
also be a marketing advantage to belong to a “chain of hotels” to benefit from
brand image or loyalty. Hotels must also aim to fill their rooms as profitably as
possible, both through room occupancy levels and the relative tariffs applied.
The two crucial factors that enable hotels to differentiate themselves are good
location for the relative target market and quality of service. This latter issue is
dependent upon good management and trained and motivated staff. The
Hotel Industry in most metropolitan cities in the world provides considerable
opportunity to cross-sell profitable products such as Food and Beverage. Tariffs
are determined according to the level of differentiation achieved through
location, management, staff and guest ratios and any other miscellaneous
factors such as the quality of architecture or decoration. A hotel operator will
need either to sell the hotel project before completion or to acquire hotel
management expertise by a management agreement or some form of
acquisition. The industry generally exhibits high product differentiation in this
respect. Capital requirements for hotel 45 projects are high. Hotels cannot be
easily traded, but must be retained on a long-term basis for investment
purposes. The industry is subject to considerable cost advantages or
disadvantages independent of size. The success of a hotel project is very
sensitive to location, management and the quality and experience of staff. The
growth of the Hotel Industry in most metropolitan cities is limited by the
availability of suitable locations. Access to distribution channels can be a
problem, but this factor can be mitigated by a connection with an international
hotel chain. Government policy in most metropolitan cities, in itself, is not
hostile to new hotels. Likely reaction from existing competitors is likely to be
quite acute, but varies according to the particular market segment and
strategic group. The industry exhibits high entry barriers restricting new
entrants, particularly because of the combined factors of economies of scale
and high capital cost of entry, together with the limited supply of suitable
locations.

THREATS OF SUBSTITUTE PRODUCTS:

Michael Porter indicated that substitute products can be existing or potential
products and services which are able to perform the same function. Substitute
products can reduce costs, and/or provide better quality performance and
better value which very often the result of technological innovation. The Hotel
Industry in all major cities is not threatened by substitute products except that
in times of recession domestic travel might replace international or overseas
travel and certain destinations replace more expensive ones on cost grounds.
In theory, substitute products perform same function, reduce costs, and/or
provide higher quality performance with better service due to technological
advancement. In the “lower” strategic groups for tourist traffic, hostels, motels
and staying with relatives might replace cheaper hotels. This market is either
low income or cost-conscious, but in any event, it is quite price-sensitive. A
hotel operator in anywhere can compete on a low cost basis in a niche
segment. It can also compete on the basis of a modern, comfortable but not
luxurious hotel situated in a popular and convenient location appearing to
offer good value to the cost-conscious visitors. Whether this strategy is
sustainable in the long term is uncertain, given that in an area with good
communications and cost conscious travellers may be prepared to suffer slight
inconvenience for cost savings. The importance of location to the target
market may be over-rated. The hotel 46 operator may not be able to rely solely
on location to retain its market share in a situation of oversupply and
consequently intense rivalry. There is no major threat of substitute products
specific to a hotel’s product and service. A hotel will be subject to powerful
buyers only if its marketing strategy concentrates on attracting tour groups,
provided no oversupply for the hotel’s target market develops. A hotel may
not appear to be particularly vulnerable to intense rivalry because of the
fragmented nature of the competition in its strategic group and the potential
growth rate of its target market. In the “upper” strategic groups, for example,
those particularly catering for business traveller, or the upper middle aged and
old aged bracket, there is little opportunity for substitute products. Substitute
products are not a major present or likely threat to Hotel Industry as a whole.

BARGAINING POWER OF SUPPLIERS:

Porter emphasized that suppliers to an industry may be powerful if they are
more concentrated than their customers and their customers do not command
a significant share of their business because their customers do not represent a
potential long-term or major relationship, for example, one-off or small
customers versus regular or bulk buyers. Or their customers face differentiated
products and services or high switching costs. A customer may be reluctant to
change a supplier if such change would face extra one-time switching
expenditure. Also if such change entails a perceived deterioration in the
quality, image or quality of the supplier’s product which will adversely affect
the customer’s service. Suppliers have more bargaining power if their product
is an important input in the industry success. The supplier’s input is crucial to
the success of the customer’s product and service such as local tourist
operators, thereby lowering the customer’s price sensitivity. There is a great
demand for enhanced global information and booking capabilities in the
hospitality industry. However, the only supplier which might exercise power
over any company would be labour and experienced trained personnel, which
is in great demand in the Hotel Industry all over the world. In relation to other
industries, hotels are not significantly subject to the bargaining power of their
suppliers and suffer low levels of indirect pressure on their competitiveness
from this source. For a sustainable business strategy over the long term a hotel
will have to maintain a permanent cost advantage over potential 47
competitors in higher strategic groups, say in the four or even five star
categories hotels, as well as further differentiating itself within its own
strategic group.
BARGAINING POWER OF BUYERS:
Porter mentioned that the buyers of goods and services from an industry may
be powerful if they are more concentrated than the players in the industry and
are able to force down prices as well as reduce the industry’s margin. They can
purchase from the industry in large volumes, thus forcing down prices, or
increase costs through demand for higher quality products and services. If the
products and services purchased by buyers lack differentiation or switching
costs, they can easily find acceptable alternative sources of supply. Buyers can
pose a threat of backward integration as large group of buyers can acquire the
supply source. If the industry’s input is not crucial to the success of the buyer’s
product and service, price sensitivity thus increased. Buyers have the incentive
to be powerful if purchases from the industry represent a significant
proportion of their total costs. Buyers will earn low margins and are price
sensitive if they cannot pass on cost increases easily, or absorb them due to
low profit margins. This can happen to a lot of in-bound tour operators or
travel agencies in most metropolitan cities. Certain buyer groups exercise
bargaining power as a result of their concentration or bulk purchases of hotel
rooms. These groups would include tour operators, domestic or international
airlines and large customers, such as convention organizers. This factor is more
acute in the lower tier strategic groups which cater more to travel groups than
the independent leisure or business traveller. Differentiation is a significant
factor in respect of the business travellers and for certain categories of
independent leisure travellers, but it declines in importance in the strategic
groups catering to budget leisure travellers and groups. Users of hotels are not
likely to buy them, with the possible exception of airlines, because of the high
level of investment required. Even many international hotel chain companies
themselves function as operators or managers instead of owners. There is,
therefore, only a minor threat of backward integration. With regard to
business travel, buyers will tend not to be price-sensitive if the purchase of a
hotel room represents only an insignificant item relative to the underlying
business transaction. Otherwise, large scale buyers of hotel rooms for business
purposes will tend to “shop around” for special rates. Buyers of hotel rooms
are often, as a group, rather fragmented on a worldwide basis. 48 Where
buyer groups become more concentrated, for example, tour groups, the
prevalence of low profit margins will tend to raise the buyer group’s price-
sensitivity. In this context a hotel’s choice of buyer group becomes crucial and
hotels which target tour groups or other categories of concentrated buyers will
be more subject to the bargaining power of buyers. Within that class its
strategic group is further defined by its target market, namely, medium-pocket
in the upper age bracket. Purchases of hotel rooms are important to certain
categories of leisure traveller, and to most categories of business traveller. The
bargaining power of buyers varies significantly within the industry, depending
upon a hotel’s target buyer group, but this factor becomes acute in a situation
of oversupply or where buyers of hotel rooms are concentrated.

RIVALRY AMONG EXISTING FIRMS:

Porter reiterated that intensity of rivalry is dependent on number and size of
direct competitors as numerous and/or equally balanced competitors may lead
to intense competition. This is because business growth sought is greater than
rate of growth of the industry. The rivalry for market share becomes intense
when product differentiation and switching costs are low. Rivalry becomes
more intense in fixed costs particularly in high preservation/carrying cost
industries such as the Hotel Industry in most metropolitan cities. There are
strong pressures to sell capacity by price-cutting except weekends and holiday
seasons. Capacity augmentation exists as large additions to capacity can
disrupt the demand and supply balance and leads to intense rivalry. Exit
barriers happen due to economic, strategic and economic factors which retain
competitors in an industry. Despite low or negative profitability and diversity,
companies and industries may have different origins, goals and strategies and
an overlap in target customers.

COMPANY PROFILE
BACKGROUND AND HISTORY

Hong Kong-based Shangri-La Hotels and Resorts is one of the world’s premier
hotel ownership and management companies. Shangri-La Hotels and Resorts
is the trade name of Shangri-La Asia Limited’s management arm.

The Kuok Group, a diversified and dynamic business conglomerate with origins
in Malaysia, has a major equity holding in Shangri-La Asia, which is listed on the
Hong Kong Stock Exchange. Established by Robert Kuok, the group’s business
operations span a range of activities and a number of countries in Asia. In
addition to hotels, the group’s portfolio also includes commodity trading, real
estate, beverages, logistics, shipping, edible oil refining and plantations.

Inspired by the legendary land featured in James Hilton’s novel Lost Horizon
published in 1933, the name Shangri-La encapsulates the serenity and service
for which Shangri-La is renowned worldwide. The group operates Shangri-La,
Kerry, Hotel Jen and Traders branded properties. Shangri-La properties are
primarily five-star deluxe city centre and resort hotels with the majority of the
city centre hotels having over 500 guestrooms, whereas the resort properties
tend to be smaller. Kerry Hotels are designed to appeal to business travellers
who prefer a vibrant and relaxed environment without compromising on
service or quality. The hotels are contemporary in style and provide a
seamless link between business, entertainment and recreation. Extensive
leisure facilities serve as a social hub for both hotel guests and the local
community. Hotel Jen is a diverse collection of hotels in the best locations
across Asia Pacific, with a unique brand of style and service delivery designed
to appeal to a ‘New Generation’ of travellers.

Shangri-La’s tradition of service excellence started with the opening of the

Shangri-La Hotel, Singapore in 1971. The hotel’s 15 acres of landscaped
gardens, beautifully appointed guest rooms and gracious Asian style set a new
standard for hotel excellence, which to this day continues to guide the group’s
design features.

Training is Shangri-La's top priority and significant resources are allocated

annually to ensure employees have the skills and knowledge to be the best in
their fields. This has earned the group international awards and recognition
from guests, prestigious magazines as well as industry partners and made
Shangri-La one of the preferred hotel employers, with around 42,000 people
serving guests with the philosophy “hospitality from the heart.”

Since its origin, the group has grown rapidly to satisfy the increased demand
for deluxe hotels and resorts in Asia Pacific's capital cities and most sought-
after leisure destinations. Today there are more than 95 properties, of which
only 20 are third party management agreements, throughout Asia Pacific,
Europe, Indian Ocean, North America and the Middle East, representing a
room inventory of over 40,000. In addition, the group has a substantial
development pipeline with upcoming projects in Australia, mainland China,
Cambodia, Indonesia, Malaysia, Myanmar, Saudi Arabia and Sri Lanka.

Shangri-La also operates its own dedicated sales and marketing offices: Hong
Kong, Beijing, Shanghai, Guangzhou, Singapore, Tokyo, Seoul, London, Los
Angeles, New York, Sydney and Dubai. The group is linked to more than 30
frequent flyer programmes and has its own frequent guest recognition
programme – Golden Circle. The Golden Circle programme has been
acknowledged as being one of the best in the industry with over four million
current members.

The following is a brief chronology of the development of the hotel company:

1971 April Shangri-La Hotel, Singapore opens

(managed by Western International Hotels (now
Westin) until January 1983)

1979 Kuok Hotels established to manage three

properties:-

Shangri-La's Rasa Sayang Resort & Spa

Golden Sands Resort

The Fijian

1981 April Kowloon Shangri-La opens

(managed by Western International Hotels (now
Westin) until April 1991)
1984 Shangri-La International Hotel Management Limited
assumes management of Shangri-La Hotel,
Singapore

November Shangri-La Hotel, Hangzhou opens

1985 April Shangri-La Hotel, Kuala Lumpur opens

1986 March Shangri-La Hotel, Bangkok opens

April Shangri-La Hotel, Penang opens

(Rebranded as Traders Hotel, Penang in 2006 and
named as Hotel Jen, Penang in November 2014)

October Shangri-La Hotel, Beijing opens

1988 December Shangri-La's Tanjung Aru Resort & Spa, Kota

Kinabalu opens

1990 July China World Hotel, Beijing opens

1991 March Island Shangri-La, Hong Kong opens

April Kowloon Shangri-La, Hong Kong

(Shangri-La assumes management)

1992 August Edsa Shangri-La, Manila opens

September Shangri-La Hotel, Shenzhen opens

1993 March Rasa Sentosa Resort, Singapore opens

(rebranded as Shangri-La’s Rasa Sentosa Resort &
Spa, Singapore in January 2011)

April Makati Shangri-La, Manila opens

 October Shangri-La's Mactan Island Resort & Spa, Cebu
opens

1994 March Shangri-La Hotel, Jakarta opens

March Shangri-La's Far Eastern Plaza Hotel, Taipei opens

1995 January Traders Hotel, Manila opens

(rebranded as Hotel Jen Manila in November 2014)

January Shangri-La Hotel, Surabaya opens

April Traders Hotel, Singapore opens

(rebranded as Hotel Jen Singapore in September
2014)

1996 April Shangri-La Hotel, Beihai opens

June Shangri-La's Rasa Ria Resort & Spa, Kota Kinabalu

opens

August Traders Hotel, Shenyang opens

(rebranded as Hotel Jen Shenyang in March 2015)

August Shangri-La Hotel, Changchun opens

November Traders Hotel, Yangon opens

(rebranded as Sule Shangri-La, Yangon in April 2014)

1997 August Shangri-La Hotel, Qingdao opens

December Shangri-La Hotel, Dalian opens

1998 August Pudong Shangri-La, East Shanghai opens

1999 April Shangri-La Hotel, Wuhan opens

 May Shangri-La Hotel, Harbin opens

August Shangri-La's Kerry Centre Hotel, Beijing opens

(rebranded as Kerry Hotel, Beijing in November
2011)

2003 July Shangri-La Hotel, Sydney opens with rebranding of

ANA Harbour Grand Hotel

July Shangri-La Hotel, Dubai opens

2004 August Shangri-La Hotel, The Marina, Cairns re-branding

2005 January Traders Fudu Hotel, Changzhou opens

January Shangri-La Hotel, Fuzhou opens

September Shangri-La's - Eros Hotel, New Delhi opens

2006 February Shangri-La's Barr Al Jissah Resort & Spa, Sultanate of

Oman opens

July Traders Hotel, Kuala Lumpur opens

July Shangri-La Hotel, Suzhou opens

2007 January Shangri-La Hotel, Guangzhou opens

May Shangri-La Hotel, Chengdu opens

August Shangri-La Hotel, Qaryat Al Beri Abu Dhabi opens

September Shangri-La Hotel, Huhhot opens

September Shangri-La Hotel, Xian opens

 November Shangri-La Hotel, Baotou opens

December Shangri-La Hotel, Chiang Mai opens

2008 October Futian Shangri-La, Shenzhen opens

November Shangri-La's Far Eastern Plaza Hotel, Tainan opens

2009 January Shangri-La Hotel, Wenzhou opens

January Shangri-La Hotel,Vancouver opens

March Shangri-La Hotel, Tokyo opens

March Shangri-La's Boracay Resort & Spa, Philippines opens

July Shangri-La’s Villingili Resort & Spa, Maldives opens

August Traders Hotel, Qaryat Al Beri, Abu Dhabi opens

August Shangri-La Hotel, Ningbo opens

2010 March Shangri-La Hotel, Guilin opens

August Traders Hotel, Hong Kong opens

(rebranded as Hotel Jen Hong Kong in October 2014)

August China World Summit Wing, Beijing opens

November Traders Hotel, Male, Maldives opens

(rebranded as Hotel Jen Male, Maldives in January
2015)

December Shangri-La Hotel, Paris opens

2011 February Kerry Hotel Pudong, Shanghai opens

 April Shangri-La Hotel, Manzhouli opens

2012 August Traders Hotel, Brisbane opens

(Shangri-La assumes management in August 2012
Rebranded as Hotel Jen Brisbane in October 2014)

October Shangri-La Hotel, Toronto opens

October Shangri-La Hotel, Changzhou opens

November Shangri-La Hotel, Haikou opens

December Shangri-La Hotel, Yangzhou opens

2013 May Shangri-La Bosphorus, Istanbul opens

June Traders Hotel, Puteri Harbour, Johor, Malaysia

opens
(rebranded as Hotel Jen Puteri Harbour, Johor in
April 2015)

June Jing An Shangri-La, West Shanghai opens

August Shangri-La Hotel, Qufu opens

August Shangri-La Hotel, Shenyang opens

2014 April Shangri-La Hotel, Lhasa opens

May Shangri-La Hotel, London opens

August Shangri-La Hotel, Tianjin opens

August Introduction of Hotel Jen Brand

August Shangri-La assumes management of Le Touessrok

 Resort & Spa, Mauritius

September Hotel Jen Orchard gateway Singapore opens

October Shangri-La's Sanya Resort & Spa, Hainan opens

October Shangri-La Hotel, Nanjing opens

2015 February Shangri-La Hotel, Nanchang opens

May Shangri-La Hotel, Qinhuangdao opens

June Shangri-La Hotel, Ulaanbaatar opens

June Shangri-La Hotel, Hefei opens

August Hylandia by Shangri-La opens

(Renamed as Shangri-La Resort, Shangri-La in
December 2017)

August Shangri-La Hotel, Tangshan opens

September Shangri-La Hotel, Bengaluru opens

November Shangri-La’s Le Touessrok Resort & Spa, Mauritius

opens

December Shangri-La Hotel, Doha opens

2016 March Shangri-La at the Fort, Manila opens

March Midtown Shangri-La, Hangzhou opens

June Shangri-La’s Hambantota Resort & Spa opens

2017 January Songbei Shangri-La, Harbin opens

 April Kerry Hotel, Hong Kong opens

May Hotel Jen Beijing opens

June Shangri-La Hotel, Yiwu opens

November Shangri-La Hotel, Colombo opens

November Shangri-La Hotel, Xiamen opens

December Shangri-La Hotel, Jinan opens

Hong Kong-based Shangri-La Hotels and Resorts, one of the world’s premier
hotel management companies, currently operates over 100 hotels in 22
countries and 73 destinations under the Shangri-La, Kerry, Hotel Jen and
Traders brands. Prominently positioned in Asia, the group has established its
brand hallmark of “hospitality from the heart” over four decades in Asia
Pacific, the Middle East, Europe, North America and the Indian Ocean. The
group has a substantial development pipeline with upcoming projects in
Australia, mainland China, Cambodia, Indonesia, Malaysia and Saudi Arabia.

VISION
‘’To be the first choice for guests, colleagues, shareholders and business
partners.’’

MISSION
‘’To delight our guests every time by creating engaging experiences straight
from our heart.’’
OBJECTIVES
 Ensure leadership drives for results
 Make guest loyalty a key driver of their business
 Enable decision-making at the guest contact point
 Be committed to the financial success of their own unit and of their
company
 Create an environment where our colleagues may achieve their personal
and career goals
 Demonstrate honesty, care and integrity in all their relationships
 Ensure their policies and processes are guest and colleague-friendly
 Remain deeply committed to their social responsibility by making a
positive contribution to their communities, environment, colleagues,
guests and business partners

SWOT ANALYSIS
STRENGTHS:

1. Represents Asian culture

2. Asia’s leading luxury hotel group

3. 95+ Hotels under 4 brands across the globe

4. The business hotels are known to be the best in their category

5. Good reputation and customer loyalty

6. Aspirational brand

7. Focus on Guest recognition and offers three different level of membership

WEAKNESS:

1. Shangri – La is dependent on its owner company as it doesn’t own all of its

hotel chains

2. Limited focus on business travellers

3. High attrition
OPPURTUNITIES: