Chapter-2

Hotel Industry – An Overview

2.1 Concept of Hotels

Earlier, Hotels are generally known as "Dharamshalas" and they were offering

overnight stay and food services. Generally, a "Hotel" is defined as public

establishment-offering visitors against payment two basic services, i.e.

accommodation and catering (Ghosh, Biswanath). Many changes are undergone in the

extent of Hotel Industry. At that time the standard of Hotel was normal with very

simple food and bedrooms. As the travelling become more convenient, Hotels grew in

number as well as in size. Competition raised the standard of Hotels. Today the Hotel

Industry sector is the leading sectors in India. It is estimated to grow up at the rate of

8.2% in 2010 - 2019. International Hotels including Marriot, Sheraton, Radisson, Lalit, ITC,

are already renowned in the Indian hospitality markets and are still growing.

The concept of Hotel states that it does not take house, which gives the modern

facilities and features on the payment period. Commonly, it does not take place in

which there is lodging, activity and other solutions are offered similar to non-

permanent house.

Tourists quit as a tourist and become clients in an area. The particular Hotel could be

the place, which gives lodging with the assemblage involving people is for

interpersonal functions and for activity goal as well as store in preserving component

of its office space for small business task as their balance works to the Hotel. The

particular Hotels can also be properly taken care of using a significant conference
corridor the place that the optimum achievable facility is found with the conferences

and activity goals. [1]

Increase involving trade ended in increment in volume of International guests across

the world. Nowadays the vast majority of awareness acquired through catering and

room decorating. Principal target ended up with facilities together with large food

corridor and assembly halls for organizing events, and so forth. Nowadays Hotels

offer unique variations of solutions to the guests. The particular solutions vary

according to their own area, kind, sizing and grade from the Hotel.

2.1.1 Luxury Hotels

A Luxury Hotel generally maintains the quality of personal services. These Hotels

comprise the Five Star Hotels with the high class of services. These Hotels deal their

guests with the high level of comfort and convenience. The aim of these hotels is to

welcome their guests with premium services. They charge high as compare to other

Segment Hotels. These Hotels facilitate fine ambience, very well maintained staff,

continental food and high profile management. All the amenities including café, bar,

swimming pool, health centre, transport facilities, sporting facilities, conference hall,

provided by the hotel itself.

v These Hotels offers immaculate services.

v These Hotels are welcoming

v These Hotels are reliable in providing a knowledge that meets or exceeds.

v They offer services that are accurately personal, recognizing the desires of the

individuals or customers.
2.1.2 Major services provided by the Hotels

· Reception

· Facility of rooms/floors

· Restaurant

· Cuisine meals and refreshments

· Bar

· Entertainment and Recreation

· Sightseeing

· Bell to provide information to Guests

· Parking Space

· Transport Facilities

· Lounge Facilities

· Swimming Pool

· Bathroom Facilities

· Garden

· News Stand

· Shopping Facilities

· Telephone

· Radio

· Television

· Laundry and Cleaning

· Telex Service

· Conference Hall

· Banquet Hall

· Sporting Installation
· Exhibition Area

· Convention Facilities

· Business Area

· Health Club, etc

Earlier, there were many trends in the Hotel Industry:

· This Industry became more profitable because of the auxiliary facilities.

· Growth of Hotel Industry; some Hotels are owned by cooperatives and some

others were operated on lease for the knowledge in the business of Hotel.

· High land cost; Hotels situated in the centre of the city can maintain the

auxiliary shops such as dress shop, flower shop, beauty salon to serve both

guests of Hotel as well as the people residing near the Hotels. Such shops may

operate by the Hotel but generally leased out for the outside concern.[2]

2.2 Features of Luxury Hotels

v Perishability: The services become perishable when the capacity of these

services is not utilized properly.

v Variability: The quality of service varies to great extent.

v Inseparability: It means the service is indivisible from the provider.

v Intangibility: Hospitality sector is intangible but Hotel Industry is tangible we

can feel experience and sense the product. [3]

2.3 Classification of Hotels

Classification of Hotel Industry

On the basis of Standards On the basis of Nature

•Heritage Hotels
•Five star Hotels
•Beach Resort Hotels
•Four star Hotels
•Government Approved Hotels
•Three star Hotels
•Residential Hotels
•Two star Hotels
•Commercial Hotels
•One star Hotels
•Floating Hotels

Figure-2.1 Classification of Hotels

I. On the basis of Standards

Indian Hotels are divided in the different category because of infrastructure, location,

basic amenities provided by them. All the Hotels are Government approved with the

quality of services they offered.

 · Five Star Hotels

Five Star Hotels are most lavish and advantageous lodgings. These lodgings are

comprehensively provides administration quality as well as services and settlement to

their guests. These lodgings are top level Hotels that are found in huge urban

communities. With respect to matching the global benchmarks in neighborliness, Five

Star Hotels give all the necessary services. In this classification of lodging, HR

experts are employed to situate up the HR office independently to execute and seek

after the idea of HR strictly.

· Four Star Hotels

Four Star Hotels are one stage underneath the five star lodgings; inside a restricted

plan, these lodgings give all the essential services to the guests. The characteristics of

settlement gave by these hotels are as equivalent as five star lodgings. The principle

point of these lodgings is to engross their guests with the constrained budget.HR idea

is less follow or not strictly taken by such Hotels.

· Three Star Hotels

Economy classes of Hotels, which are spotted in every greater and more diminutive

city, fulfill the needs of plan voyagers. These lodgings do not comprise of all services

however, they give great administrations at sensible cost. The administrations gave by

the lodgings are not of higher classification still enough to satisfy the essential needs

of clients. The idea of HR followed in this class of lodging.

· Two Star Hotels

Two Star Hotels are the most accessible in the modest urban communities. They give

all the essential offices to the guests at the lower cost. The HR idea is not trailed by

the administration.
 · One Star Hotels

One Star Hotels gave exceptionally fundamental services; they have just few rooms,

which are placed in far-flung regions. On the off chance that client is searching for the

least expensive accessible settlement then this classification of lodgings are the best

choice

II. On the basis of Nature

· Heritage Hotels

On the off chance that somebody is searching for the tastefulness, extravagance and

imperial treatment then the legacy lodgings are best for him or her. These lodgings are

vacation destination in themselves.

· Beach Resort Hotels

Shoreline Resort lodgings are the hotels, which are placed close to, the ocean range.

These lodgings pull in the visitors in light of their excellence. Bay of Bengal,

Andaman and Nicobar, Arabian Sea has around 7500kms long drift line gives

astounding shorelines.

· Government Approved Hotels

These Hotels debarred in star class and not in any case so little to recognize in the

rundown of lodgings. Numerous cabins and resorts endorsed by the administration

and they give least level of settlement services.

 · Residential Hotels

These lodgings called Condo or Hotels. The rent charges of these Hotels are on the

month, half-yearly and yearly premises. These lodgings are set in the towns and

enormous urban communities where dinners not given to the clients. The ideas of

private lodgings are establish by USA. The lodging gave by these hotel areas are the

overall oversaw home.

· Commercial Hotels

These lodgings are essentially for the persons who visit with the end goal of a few

business actions. These lodgings are set close to the mechanical focuses.

Consequently, primary consideration of these hotels is on the individual guests.

· Floating Hotels

The Hotels, which placed on the water surface, known as Coasting Lodgings. They

give all the fundamental comforts, which is given by the great hotels. Old

extravagance boats are utilized as the gliding hotels as a part of the heading traveler

producing nations of world.

2.4 Segmentation of Hotels

Segmentation of Hotel Industry

Premium and Luxury

Segment

Mid-Market Segment
Segmentegment
Budget Segment

Figure- 2.2 Segments of Hotel Industry

I. Luxury and Premium Segment

A luxury Hotel is the one, which is expensive and usually costs high than the normal

accommodation. These Hotels are costly as they provide different types of services

too. Guests expect to have premium service, superior food quality and classy

environment. This segment is expensive because they must sustain a very high

satisfaction level. Luxury segment can compensate with quality prices.

II. Mid-Market Segment

Competition in mid-market segment focuses on both price and quality. Guest is

searching for the hotel, which is both affordable and maintains price rather than cheap

accommodation. A Hotel of this segment provides high quality food services as well

as hygienic and comfortable environment. Customers are eager to pay normal prices

but their desire is to get value in return. There is a fragile balance between price and

quality.

III. Budget Segment

Budget Hotels are motivated by the price factor. Under this segment guests expects

very basic quality of services and satisfies basic needs of the customers. These Hotels

keep very low prices of rooms as per the demand of the customers and make more

profits. Main purpose of these hotels is to increase volume of customers to earn more

and more profit margins. [4]

2.5 Major Departments in Hotels

· Human Resource Department

· Finance Department

· Maintenance and Engineering Department

· Front Line Office Department

 · Food and Beverages Department

· Housekeeping Department

· Security Department

· Sales and Marketing Department

1. Human Resource Department

HR Department is the most important department of an Organization. This department

has the responsibility for hiring, labour relations, wages and salary administration,

employee relations, training and staff development.

2. Finance Department

Financial Controller handles the Finance Department, as a member of management

team he/she directs about increasing profitability through asset management. This

department handles all the financial activities of hotel. It is responsible for account

receivable, accounts payable, payroll, coordinating with purchasing department, cost

control systems of the hotel, handles customers enquiries about billing.

3. Maintenance and Engineering Department

This department maintains all the physical equipments of the Hotel such as; elevator

systems, plumbing, electricity, air conditioning. This department is responsible for all

the mechanical and technical conditions of the Hotel.

4. Front Line Office Department

Front line office Department is core of a Hotel. This department is responsible for the

first and the last impression on the customers. Customers approach this department

regarding the information and services.

5. Food and Beverages Department

Food and Beverages Department of Hotel provides services of Food and Beverages to

their customers. These services includes coffee shop, bar, lounge, banquet hall, room

services, etc.

6. Housekeeping Department

Housekeeping Department take cares of the services like maintaining and cleaning

guest’s room, office areas, back space area of the hotels, washrooms.

7. Security Department

Security Department plays a vital role in the Hotel. The major role of security

department is to protect the safety of customers, employees, visitors of Hotel.

Maintaining security alarms, monitoring equipments, patrolling premises of Hotel,

etc. are the major functions of security department.

8. Marketing and Sales Department

Marketing and Sales Department of Hotel generates business and coordinating

advertising for the Hotel. To build the image of the hotel sales promotion and public

relation activities by the Sales and Marketing Department. [5]

 Departments Covered in the Study

Food and Sales and

Front Line Office Housekeeping
Beverages Marketing
Department Department
Department Department

Figure-2.3 Departments of Hotel

I. Food and Beverages Department

In Hotel Industry, Food and Beverages Department mainly uses for catering. This

department of Hotel consists of several divisions; they are

· Restaurants

· Kitchen

· Banqueting

· Catering

· Bar

· Room service

· Stewarding
I-1 Staff members of Hotel work as per their position. Different positions are

categorized as follows;

Manager

Assistant
Manager

Cashier Captain(1) Captain(2) Bartender

Station Station
Waiter(1) Waiter(2)

Waiter(1) Waiter(2)

Figure - 2.4 Position of Staff members of Hotel in F&B department

Head chef

Sous chef

Chef de Partie

Commis I Commis II

Apprentice Apprentice Apprentice

Figure- 2.5 Structure of Food and Beverages Department

I-1 Major responsibilities of Food and Beverages Department are as follows:

· Interviewing and Selecting staff for Hotel

· Training of staff members for higher level
· Controlling the Inventory of Hotel.
· Co-ordination with the other Departments of Hotel.
· Complying with Health and Safety Regulations.
· Promotion and Marketing of the Food and Beverages Department.
· Ensuring profit margins of the Food and Beverages Department.
· Dealing with the matters of wine, beer, etc
· Conducting meetings with the section heads to ensure whether all sections
working effectively or not.

II. Front Line Office Department:

Front Line Office Department of Hotel is headed by Front Office Manager. The main

duty of FOM is to take care of the requirement of the guests as well as fulfill their

needs.
Front office

Assistan Reservati Telepho Front Chief Executi

Concier ve floor
t on ne desk
ge manager
manage manager services

Guest Reserva Telepho Front Baggage Senior Executiv

relations tion ne desk supervis airport e floor

Reserva Telepho Front Baggage Airport

tion ne desk porter represe

Door
attenda

Parking
attenda

Figure-2.6 Structure of Front Line Office Department

II-1. Major responsibilities of Front Line Office Department are as follows:

· Monitors the reservation position.

· Analysis market mix and prepare for tenancy forecasts.

· Supervision of rate policies.

· Reviewing the normal rates of room.

· Reviewing same day and next day arrivals and departures.

· Making adjustments of staff members needed for arrivals and departures.

· Reviewing the VIP list, VIP rooms as well as welcoming VIPs.

III. Housekeeping Department:

Housekeeping Department is headed by the Executive Housekeeper. This department

mainly consists of:

· Housekeeping Office

· Guest Floor

· Laundry Department

· Public Areas

· Health Club

· Floral Arrangement

III- 1. Major responsibilities of Housekeeping Department are as follows:

· Training

· Prepare work schedule for the employees of Housekeeping Staff

· Arranges Supervision

· Handles Complaints

· Manages and Control Equipment

· Staff Welfare
 Executive housekeeper

Assistant Executive
housekeeper

Laundry Uniform Administ Assistant Public Health Flower

manager supervis rative houseke area club shop
or assistant eper supervis manager manager
or

Laundry Assistant Housekee Floor Toilet Health Flower

supervis Uniform ping supervis attendan club shop
or supervis coordinat or t supervis supervis
or or or or

Laundry Uniform Room Cleaner Swimmin Flower

attendan attendan
attendan g pool shop
t t
t attendan attendan
t t

Laundry
Fitness
runner
centre
attendan
t

Figure-2.7 Structure of Housekeeping Department

IV. Sales and Marketing Department:

Sales and Marketing Department is an integral part of Hotel Industry. This department

includes selling, sales promotion, advertisement and public relations.

 Senior sales manager

Assistant sales manager

Sales Supervisor Advertisement Supervisor

Sales Coordinator Sales Coordinator Advertisement Advertisement

Coordinator Coordinator

Figure-2.8 Structure of Marketing and Sales Department

IV-1. Major responsibilities of Marketing and Sales Department are as follows:

· Support sales team and distribution pattern

· Provide leadership on serving the client better

· Manage advertising and promotions

· Manage client relationships. [6]

2.6 Historical Perspective of Hotels in India

Indian and British Aristocracy develop hotels. During the Second World war two

repudiated companies owed Hotels; they are

· The Taj Group by JRD Tata (Indian Hotel Company)

· Faletti’s Hotel by Oberoi Group (East India Company)

In 1947, there were no developments in Indian Hotel Industry. Late Pandit Jawaharlal

Nehru recognized in the conference of 1956, that Hospitality Sector could be one of

the leading sectors in Indian Economic Growth. After that Government of India

invested in the development of Hotel Ashoka which was situated in New Delhi. Later

in 1967, Government of India created Ministry of Tourism. The chairman of East

India Hotels Ltd. was Mr. Rai Bahadur.

In 1970 some next repudiated projects; Taj Mahal Hotel, Oberoi Tower Hotel,

Holiday Inn were constructed in Bombay.

2.7 Current scenario of Hotels in India

v India will be investing approx rs. 448 billion in the Hospitality Industry in the

next five years to reach at Rs 230 billion, growing at a CAGR of 12.2 %.

v Average Room Revenue has increased by 18% in some Hotels of metro in

India from last few years.

v According to World Tourism Organization, International tourist inflow in

India would be 10 million by 2020.It indicates that tourist influx has to grow

at 6.5% CAGR for the next 14 years.

v As per the estimation of Indian Government, around 80,000 rooms over the

next 2-3 years at an estimated cost of US $ 8-9 billion needed by India.

v The average ratio of employees is 1.8 in the Hotels of India.

v The manpower requirement of Hotel Industry is increasing because some new

rooms were constructed. It is also expected that jobs in accommodation and

food services as a whole increases by 28% in between 2012-2015.

 v One of the most profitable investments is development of Hotel Industry.

Estimation of Cygnus is that total supply of rooms of Hotel in India is

estimated to arrive at more than 1, 80,000 within 5 years.

v It is expected that approximately Forty International brands will enter to

Indian market in next 5 years.

v As per the Travel and Tourism Competitiveness Report 2011 by the World

Economic Forum (WEF), India ranked 12th in the Asia Pacific Region and

68th rank overall in the list of the world's beautiful destinations.

v MNC Hotel Industry giants offer joint ventures to India to earn their share in

the race. Indian Government permitted 300 Hotel projects most of them are in

luxury range. [7]

2.8 Major Players of Hotels in India:

Taj Group of Hotels

Intercontinental Hotels

Le Meridian Group of Hotels

Oberoi Group of Hotels

The Park Group of Hotels

Welcome Group of Hotels

Carlson Group of Hotels

Figure- 2.9 Players of Hotel Industry [8]

 References:

1. Walker, J. (2007). “Introduction to Hospitality Management, in Hospitality

Management”, New Jersey: Pearson Education, (Second ed.), pp. 15-18.

2. Retrieved on June 2nd, (2010) from www.docstoc.com › Education › College

“Introduction to hotel industry: origin of the word hotel and concept” p 7.

3. Barrows, C., & Powers, T. (2008). “Hotel Industry: An Overview in

Introduction to the Hospitality Industry”, Ontario, Canada: Wiley, West

Publication, (Fourth ed.) pp. 28-34.

4. Barrows, C., & Powers, T. (2008). “Hotel Industry: Categorization of Hotel

Segments, in Introduction to the Hospitality Industry”, Ontario, Canada:

Wiley, West Publication, (Fourth ed.), pp 42-44

5. O'Fallon, M., & Rutherford, D. (2011). “Classification of departments in

luxury hotels in Hotel Management and Operations”, New Jersey: John Viley

and Sons, (Second ed.), pp 52-58

6. Retrieved on April 3rd, 2013 from

www.hvs.com/Jump/Article/Download.aspx?id=6145,Indian-Hotel-Industry-

Survey

7. Retrieved on January 5, 2014 from www.indianmirror.com/indian-

industries/hotel.html Hotel Industry

8. Ball, S., Horner, S., &Nield, K. (2007). “Today's Dragon and Tigers in

Contemporary Hospitality and Tourism Management Issues in China and

India”, New York, McGraw Hill. (Third ed.), pp82-83.