Resort PDF

TOURISM CORPORATION OF GUJARAT LIMITED
FEASIBILITY STUDY
DEVELOPMENT OF RESORT AT
DHORDO, KUTCH, GUJARAT
January 2019
Development of Resort at Dhordo, Kutch Feasibility Study
Table of Contents
CHAPTER 1.0 INTRODUCTION.............................................................................................. 3

1.1 Introduction ........................................................................................................................... 3
1.2 Need for the Study............................................................................................................... 4
1.3 Objectives of the Study ....................................................................................................... 4
1.4 Constraints and Limitations ................................................................................................ 4
1.5 Approach and Methodology ............................................................................................... 5
CHAPTER 2.0 SECTOR PROFILE.......................................................................................... 6
2.1 An Overview of the State Gujarat...................................................................................... 6
2.1.1 General Overview ......................................................................................................................... 6
2.1.2 Economic Overview ...................................................................................................................... 8
2.1.3 Tourism Overview ......................................................................................................................... 8
2.1.4 Growth of Tourism in Gujarat ...................................................................................................... 9
2.2 Tourism Scenario in the State............................................................................................ 9
2.2.1 Key Tourist Circuits of Gujarat .................................................................................................. 10
2.2.2 Gujarat – The Tourist Hub ......................................................................................................... 11
2.2.3 Trend in Tourist Arrival ............................................................................................................... 12
2.2.4 SWOT Analysis of Gujarat as Tourist Destination ................................................................. 12
CHAPTER 3.0 HOTEL INDUSTRY – AN OVERVIEW & MARKET ANALYSIS.................. 14
3.1 Hotel & Hotel Industry – An Introduction ........................................................................ 14
3.2 Classification of Hotels...................................................................................................... 14
3.2.1 On the basis of Standard ........................................................................................................... 14
3.2.2 On the basis of Nature ............................................................................................................... 15
3.2.3 World Record Setting Classifications ....................................................................................... 16
3.3 Different Departments in Hotel ........................................................................................ 16
3.3.1 Core Funcitoning Department ................................................................................................... 16
3.3.2 Support Department (Cost Centres) ........................................................................................ 16
3.4 Hotel Industry in India ....................................................................................................... 17
3.4.1 Background .................................................................................................................................. 17
3.4.2 Present Scenario of Hotel Industry in India............................................................................. 18
3.5 Hotel Industry in Gujarat ................................................................................................... 18
3.5.1 Hotels in Gujarat.......................................................................................................................... 19
3.5.2 Challenges faced by Hotel Industry in Gujarat ....................................................................... 20
3.6 Hotel Industry Market Analysis in Bhuj and Dhordo ..................................................... 20
3.6.1 Hospitality Demand Drivers ....................................................................................................... 21
3.7 Existing Supply................................................................................................................... 22
CHAPTER 4.0 SITE ANALYSIS ............................................................................................ 24
4.1 An Overview of Dhordo and Bhuj .................................................................................... 24
4.1.1 Introduction .................................................................................................................................. 24
Tourism Corporation of Gujarat Limited Page | 1

4.1.2 Connectivity.................................................................................................................................. 25
4.1.3 Demography ................................................................................................................................ 25
4.1.4 Economy....................................................................................................................................... 26
4.1.4.1 At District Level............................................................................................................................ 26
4.1.4.2 At City Level – Bhuj..................................................................................................................... 27
4.1.4.3 At Village Level – Dhordo .......................................................................................................... 27
4.1.5 Tourist Inflow of the City............................................................................................................. 28
4.1.6 Tourism Resources..................................................................................................................... 28
4.2 SWOT Analysis of Dhordo as Tourist Destination........................................................ 32
4.3 Site Location and Description .......................................................................................... 33
4.4 Linkages and Connectivity: .............................................................................................. 34
4.5 Site Topography and Vegetation..................................................................................... 35
4.6 Site Access and Connectivity........................................................................................... 35
4.7 Proximity to Key Areas...................................................................................................... 36
4.8 Existing Infrastructure ....................................................................................................... 36
4.9 SWOT Analysis .................................................................................................................. 37
CHAPTER 5.0 FINANCIAL ANALYSIS................................................................................. 39
5.1 Introduction ......................................................................................................................... 39
5.2 Project Design and Product Mix ...................................................................................... 39
5.3 Assumptions for Financial Analysis ................................................................................ 40
5.3.1 Construction Period .................................................................................................................... 40
5.3.2 Concession / Lease Period........................................................................................................ 40
5.3.3 Capital Cost Assumptions.......................................................................................................... 40
5.3.4 Financing & Taxation Assumptions .......................................................................................... 41
5.4 Project Cost ........................................................................................................................ 42
5.5 Sources of Finance............................................................................................................ 42
5.6 Project Revenue................................................................................................................. 42
5.7 Combined Cash Flows, DSCR and IRR Working ......................................................... 43
5.8 Cash Flows/IRR/DSCR..................................................................................................... 43
5.9 Conclusion and Summary ................................................................................................ 43
5.10 Recommendations............................................................................................................. 44
5.11 Points needs to be considered ........................................... Error! Bookmark not defined.

INTRODUCTION
1.1 Introduction
Gujarat is the 6th largest State in India, located in the western part of India with a
coastline of 1600 km (longest in India). It is one of the most popular tourist regions in
the country, and was visited by 44.8 million domestic and international tourists in 2016-
17. Gujarat offers scenic beauty from Great Rann of Kutch to the hills of Saputara.
Gujarat is one and the only place to view pure Asiatic lions in the world. Gujarat is also
the birthplace of Mahatma Gandhi and Sardar Vallabhbhai Patel, iconic figures of
India’s Independence movement. Amitabh Bachchan is the brand ambassador of
Gujarat Tourism since 2010. The “Khushboo Gujarat Ki” campaign by celebrity
Amitabh Bachchan has increased tourism in Gujarat tremendously.1
Tourism in Gujarat has a wide scope for tourists, as it includes wide range of forts and
museums, wild life sanctuaries, temples and mosques and other places of interest. It
offers a traveler’s paradise by offering a wide spectrum of tourism sectors such as
spiritual tourism, business tourism, nature tourism, heritage tourism, medical, health,
cultural, adventure, and event, urban or rural and recreational tourism. The State
Government’s “Khushboo Gujarat ki” campaign has helped to increase the business.
Thus an increased occupancy is estimated by the hotel industry.
With Ahmedabad being announced as World Heritage City (first of its kind in
India) and installation of Statue of Unity Project (world’s tallest statue), tourism
is expected to increase further in times to come.
TCGL – Tourism Corporation of Gujarat Ltd., was formed in 1978 and provides
comprehensive travel assistance and services to the tourists coming to visit Gujarat.
Some of the services of TCGL include accommodation, conducted tours and ground
transport with a wide range of choice to meet diverse needs. The Corporation has a
network of Wayside Amenities and Cafeterias under the brand name Toran.
The effective development in infrastructure undertaken by the Corporation has helped

the State to increase the number of tourists to Gujarat. The efforts in promoting
infrastructure in keeping with the spirit of the state, its people and its natural
environment have won the Corporation such prestigious awards as the National
Tourism Awards – 2005-06 for best kept Tourism Monument – Champaner and
Excellence in Publication (Collateral).
To add on to these services TCGL has identified a land parcel measuring about
2,50,000 sq. mt near Dhordo for developing it as a Resort on PPP Format.
1http://www.thehindubusinessline.com/economy/taai-award-for-gujarat-
tourism/article2735467.ece

1.2 Need for the Study

With its notable mud architecture, a medley of craft traditions and exquisite apparel,
naturally available seasonal salt marshland, this eminently colorful and culturally rich
land of Kutch has a wonderful handcrafted feel. Each community has its own oral
traditions, dance, craft and dress. Stretching along the Tropic of Cancer, from
Rajasthan to the edge of Pakistan and the Arabian Sea, Kutch covers a little over
45,000 sq km and is geographically one of India's largest and most distinctive districts.
Other than places of tourist importance like Dholavira, Great Runn of Kutch, Bhuj,
Anjar, Mandvi in Kutch, roping in Amitabh Bachchan as the tourism ambassador and
the launch of Vibrant Gujarat investor summit has also led to a growth in people visiting
the state. The political momentum of the Ex- Chief Minister of Gujarat, Sh. Narendra
Modi becoming the Prime Minister of India, has also added to an already positive
business environment in the state.
Moreover, Gujarat followed by Maharashtra and Karnataka are the leading states
attracting significant investments in India’s hotels and tourism industry. Driven by the
growing middle class with rising disposable incomes and ever evolving lifestyles, the
tourism in the state offers tremendous growth potential for growth and development of
India’s overall tourism industry.
Tourism sector demand in Kutch is driven by factors varying from palace and
architecture and History in Bhuj & Dholavira to desert, wildlife, flamingos, bird watching
in Great Rann of Kutch to beaches in Mandvi and so on. A growing demand for
business tourists in Gandhidham, Mundra and Kandla has also added to the demand
for rooms in the area. Limited supply of quality hotels and ever increasing tourism in
the region, clear title large parcel of land having frontage on the main road makes this
site feasible for development as envisaged.
1.3 Objectives of the Study

The Key Objectives of this Feasibility Study are:
 To understand the nature and attributes of tourist inflow to the region along with
the various demand drivers to forecast the growth.
 To summarise the need / business case for a Resort / Hotel in Dhordo.
 Research the potential market demand for the Hotel of the size proposed.
 Estimate the capital cost of the facility (exclusive of land).
 Provide indicative operating projections and net operational cash flow projections
for the venue.
 Assess the risks of the project.
 Summarise other requirements that have to happen if the Resort is to be a success.
1.4 Constraints and Limitations
The findings contained in the report reflect analysis of primary and secondary sources
of information. Sources quoted or referred to in this report are deemed reliable.

Conclusions reached by the consulting team regarding the proposed facility are based
on trends and assumptions; there may be differences between the projected and actual
results. Bidders / Developers are free to conduct their independent evaluation of the
project site, requirements, commercial viability, potential of project and project
facilities.
Findings contained in this report are also based on evaluation of the present economy
for the region and do not make provision for political instability or any sharp rise or
decline in the economic conditions, not presently foreseeable.
It must be emphasized that in some instances the consultants were unable to procure
necessary data and / or were unable to get up-to-date data. They were informed that
certain data was confidential or not officially collected at all. In such instances,
qualitative assessments, where appropriate have been made.
1.5 Approach and Methodology

A stage wise approach for the study adopted is:
 Research supported with quantitative and qualitative analysis
 Collection of data from authentic sources
 Cross checking of data before using for analysis
 Inputs on the attractiveness of the proposed PPP structure etc
The above mentioned approach and the following methodology will be adopted to
undertake the study. Feasibility forms the first part of the methodology of the entire
project.

SECTOR PROFILE
2.1. An Overview of the State Gujarat
2.1.1. General Overview
Gujarat is a state in western part of India known locally as Jewel of the Western part
of India. It has an area of 196,204 sq.km with a coastline of 1600 km most of which
lies on the Kathiawar peninsula, and a population in excess of 60 million. The state is
bordered by Rajasthan to the north, Maharashtra to the south, Madhya Pradesh to the
east and the Arabian Sea as well as the Pakistani province of Sindh to the west. Its
capital city is Gandhinagar while its largest city is Ahmedabad. Gujarat is home to the
Gujarati speaking people of India.
Figure 1 Gujarat State
The Indian State of Gujarat has 33 districts. Of this Kutch is the largest district and
Dang is the smallest district of Gujarat. Following is the list of 33 districts of Gujarat in
which 7 districts were created on 15th August 2013.

Gujarat is well connected by a wide network of air, rail and road with important
destinations of the country as well as of the globe. Gujarat also has an inter city surface
transport system both in terms of railways and bus network. Ahmedabad being the
biggest city of the state is well connected by air, rail and road Gandhinagar and
Ahmedabad are twin cities well connected to each other.
By Air: Ahmedabad, the premier Airport

of Gujarat is connected to major Indian
cities like Delhi, Mumbai, Calcutta,
Chennai etc, by daily services. Gujarat
has its own International Airport “Sardar
Vallabhbhai Patel International Airport”
which connects to countries worldwide.
The state’s other functional airports are
Vadodara, Rajkot, Surat, Jamnagar,
Porbandar, Bhavnagar, Diu and Bhuj.
By Rail: Gujarat comes under the

western zone of the Indian Railways.
Vadodara Railway Station is the busiest
railway station in Gujarat and the fourth
busiest railway station in India. Other
important railway stations are Surat,
Ahmedabad and Rajkot Railway Station.
Delhi – Mumbai is planning Delhi Mumbai
dedicated rail freight route passing
through the state.
By Sea: Gujarat State has the longest

sea coast of 1600 km in India. Kandla
Port is one of the largest ports serving
Western India. Other important ports in
Gujarat are the Port of Navlakhi, Port of
Magdalla, Port Pipavav, Port of
Porbandar, Port of Veraval and the
privately owned Mundra Port.
By Road: Gujarat State Road Transport

Corporation (GSRTC) is the primary
body responsible for providing the bus
services within the state of Gujarat and
also with the neighbouring states. It is a
public transport corporation providing
bus services and public transit within
Gujarat and to the other states in India.

2.1.2. Economic Overview
Gujarat has seen rapid economic growth over the past decade. Driven by massive
investment and rapid industrialization, Gross State Domestic Product (GSDP) of
Gujarat increased at a CAGR of 13.55 per cent between 2011-12 and 2016-17 to reach
Rs 11.62 trillion (US$ 173.24 billion) during 2016-17. Gujarat has achieved the
distinction of being one of the most industrially developed states and contributes about
a quarter to India’s goods exports. Accounting for about 4.99% of the country’s
population and 5.97% of land area, the state has metamorphosed into one of the fast
growing state economies, overcoming its limitations in resource base and its climatic
constraints.
At current prices, Gujarat’s GSDP was about Rs 11.62 trillion (US$ 173.24 billion)
during 2016-17. As per the “Economic Freedom of the States of India (EFSI) 2013”
Report, Gujarat has been ranked at 1st position on Economic Freedom with a score of
0.65. The report reaffirms the fact that the Gujarat model of development is based on
global best practices and is robust, sustainable and all inclusive.
The economy of Gujarat has significant agricultural as well as industrial production.

Gujarat controls some of the largest businesses in India. Major agricultural produce of
the state includes cotton, groundnut, dates, sugarcane, milk & milk products. Gujarat
is the main producer of cotton, tobacco and groundnuts in India. Other major crops
produced are rice, wheat, jowar, bajra, maize, tur and gram.
One of India’s most industrialized states, Gujarat maintains a variety of industries, the
principal ones being general and electrical engineering, and the manufacture of
textiles, vegetable oil, chemicals, soda ash, cement and petrol. New industries include
the production of fertilizers and petrochemicals.
2.1.3. Tourism Overview
Gujarat offers a wide range of the most spectacular attractions which includes
breathtaking locations and scenic landscapes. Gujarat is also a melting pot of several
civilizations resulting in a vibrant culture and a rich heritage. Gujarat is home to the
unique with its exceptional archeological sites, several architectural marvels and
witnesses of its glorious history and pilgrim centres for many faiths. Finally, it is also
the land of several mythological and historical figures like the legendary Krishna and
Mahatma Gandhi the apostle of non violence.
Gujarat has immense potential to become a major tourist destination. Its historical
monuments represents the great religions of Asia – Hindu, Buddhist, Jain, Islamic,
Parsee and Sikh.
For ecotourists the state offers opportunities to see a wide range of wildlife including
the Asiatic Lion and Indian Wild Ass, endangered antilopes, a variety of deer etc. It has
India’s first marine national park. It is also one of India’s most important areas for
birdwatchers.
There are more than 400 archeological sites in the state including some of the most

substantial excavations of Indus Valley Civilization period at Lothal (near Ahmedabad),

Surakotada and Dholovira (in Kutch).
The archeological zone of Champaner –Pavagadh have been acclaimed by UNESCO

as the “World Heritage Site” because of its great mosques, temples, stepwells and
forts. The recent tag of being the first city in India under UNESCO as “World Heritage
City” will go a long way to reinforce tourism in the State.
Gujarat has many enchanting tourist places, memorable historic monuments and
sacred pilgrimages, depicting the glorious cultural heritage, which can attract both
Indian and International travelers.
The State has important pilgrimage places like Dwarka, Somnath, Dakor, Ambaji etc
for Hindus, Udwada, Navsari and Surat for Parsees, Palitana, Girnar etc for Jains.
2.1.4. Growth of Tourism in Gujarat
A separate tourism department was established in 1973 to identify and develop the
tourism potential in the State. This was followed by the creation of Tourism Corporation
of Gujarat Limited in 1978 which was entrusted with the task of undertaking and
developing tourism related commercial activities. The Corporation is presently
engaged in a variety of activities such as creation of lodging and boarding facilities for
the tourists and other aspects of tourist aciliation such as transportation, packaged
tours, wayside catering along the National and State Highways, arranging cultural
festivals, organizing exhibitions and producing and distributing maps, posters,
brochures and pamphlets.
In 1991 the State declared the tourism policy. The main rationale for formulating the
tourism policy is rooted, on one hand, in the convergence of socio economic spread
benefits, environment friendliness and employment potential of tourism industry and
on the other hand, in the growing demand for the tourism products in the State, brought
by the rapid industrial growth in the State during the recent years that has led to
tremendous increase in number of business travelers.
2.2. Tourism Scenario in the State
Tourism is a major phenomenon of the modern society, which has emerged as an

economic activity of immense global importance. Tourism is one of the world’s largest
and fastest growing industries.
Gujarat is one of the most flourishing tourist destinations in India. The gross flow of
tourist during the year 2017-18 has crossed 50 million which is 13.8% higher that the
figure of 2016-17. The same figure for 2016-17 is 44.8 million which is 16.9% higher
than the flow of 38.3 million in the year 2015-16. Gujarat has the longest coastline in
India, the only White Dessert in the country, multi cultural heritage and monuments.
The efforts of Gujarat tourism department seem to be paying off as the number of
spiritual tourists and leisure travelers sharing “Khusboo Gujarat Ki” has risen in the one
last year.

2.2.1. Key Tourist Circuits of Gujarat
Gujarat consists of five major circuit viz the Kutch circuit, the Saurashtra circuit, the
South Gujarat circuit, the North Gujarat circuit and the Central Gujarat circuit. The areas
covered by the circuit are:
a) The Kutch Circuit – Little Rann Sanctuary, Dasada, Narayan Sarovar, Koteshwar,
Mata no Madh, Bhadreshwar, Kera, Bhuj, Mandvi, Gandhidham, Wankaner,
Konthkot, Village Circuit of Kutch.
b) The Saurashtra Circuit - Bhavnagar, Palitana, Velavadar, Ahmedpur Mandvi,

Veraval, Somnath, Rajkot, Gondal, Porbandar, Dwarka, Wankaner, Jamnagar.
c) The North Gujarat Circuit - Dasada, Mehsana, Modhera, Patan, Siddhpur,

Balaram, Ambaji, Kumbharia, Poshina, Danta, Taranga, Vadnagar.

d) The South Gujarat Circuit - Bharuch, Surat, Tithal, Udwada, Vapi, Navsari,
Saputara.
2.2.2. Gujarat – The Tourist Hub
Gujarat is a proactive government and aggressive marketing, untapped tourism

opportunity, strategic location unique blend of pilgrims, adventure hill station, beaches,
heritage, desert available in the state. Gujarat offers a wide spectrum of tourist sectors
which sing in the glory of State’s rich culture and heritage such as:
a) Business Tourism
Gujarat is one of the most industrialized states of the country. There are many
Indian and global companies located in Gujarat and the area has seen double digit
GDP growth in the past decade. It is also known as “Growth Engine of India”.
b) Archeological and Heritage Tourism
Within Gujarat there are a wide variety of historic forts, palaces, mosques, temples
and places of historical importance.
c) Cultural Tourism
Gujarat is well known for its rich culture. The folk art of Gujarat forms a major part
of the culture of the state. The handicrafts such as bandhani, patolas, kutchi work,
pottery, khadi etc and unique fairs and festivals like navratri, makarsankranti,
sharadpurnima, mahashivratri and tarnetar festival make Gujarat culturally very
rich.

d) Religious Tourism
Gujarat is home to multitude devotional centres and temples like Dwarka, Dakor,
Ambaji, Palitana, Somnath, Shamlaji, Bahucharaji, Pavagadh, Akshardham,
Swaminarayan temples, Jain temples and recently made Mahatma Mandir in
Gandhinagar.
e) Medical Tourism
Ahmedabad the leading city of the state is the most preferred place for medical
tour or treatments in India. With world class health facilities and affordable cost,
the city is becoming one of the most sought after medical tourism centre in the
country.
f) Wild Life Tourism
Gujarat is habitat for the world’s rarest as well as large number of flora and fauna.
Fauna includes Asiatic lions, wild ass, black bucks, bears, monkeys etc including
migratory birds like flamingos, pelican etc. Flora includes species of khair, sadad,
timru, babul, ber, bordi etc. The state also has national park/sanctuaries at Gir
National Park, Vansada National Park, Nalsarovar bird sanctuary etc.
2.2.3. Trend in Tourist Arrival
Table 0-1: Domestic and Foreign tourist arrivals in Gujarat
Within Other Indian Foreigners Total Growth

Year Gujarat States / NRI Tourists (%)
Nos. % Nos. % Nos. % Nos. % (YoY)
2013-14 221.61 77 60.61 21 5.66 2 287.88 100 13.30
2014-15 245.94 75 74.63 23 6.33 2 326.91 100 13.56
2015-16 281.80 73.5 93.99 24.5 7.33 2 383.12 100 17.19
2016-17 324.00 72 114.76 26 9.24 2 448.00 100 16.94
2017-18 367.86 72 131.31 26 10.61 2 509.78 100 13.79
Source: GITCO estimates
2.2.4. SWOT Analysis of Gujarat as Tourist Destination
Strengths
 Gujarat has historical monuments that represent the great religions like Hindu,
Buddhist, Jain Islamic, Parsee and Sikh.
 A wide range of wildlife including the Asiatic lion, Indian wild ass, endangered
antalopes etc, and India’s first marine national park.
 Immense variety of tourist interests: Long coastal lines with beaches, Forests and

Wildlife, Heritage and Culture, Pilgrimage, Rural/Tribal Culture, Handicrafts,

Cuisine, Sophisticarted Amusement Parks, Multiplexes.
 Reasonably good core infrastructure (i.e Power, Road & Communications)
 Large number of Non Resident Gujaratis visiting Gujarat every year.
 Gujarati’s love to travel and thus forms a major chunk of domestic tourists.
 The Brand Ambassador for Gujarat tourism is Mr. Amitabh Bachchan.
Weakness
While other states (i.e AP, Kerala, Goa etc) made successful efforts at developing
tourism within their states, the relative inability of the Gujarat State to harness and
develop its full tourist potential may be attributed to a combination of factors such as:
 Quality of Destinations not comparable with the best in the country (e g beach
resorts of Goa, Heritage properties of Rajasthan).
 Inadequate tourism infrastructure (Lack of Star Category facilities at many tourist
destinations of importance)
 Long Distances among tourist destinations i.e. difficult for tourists to cover at one
go in comparision to tourist destination like Rajasthan.
 The state has been effected by earth quakes, natural calamities and communal
disturbances.
Opportunities
 Tremendous scope for development
 Potential for attracting large number of outbound tourists and Non Resident
Gujaratis.
 Possibilities of joint efforts with neighbouring states (i.e with Rajasthan for heritage
tours, and with Madhya Pradesh for Forests/ Wildlife/ Eco Tourism)
 Private Sector Interests in the Sector
 Medical Tourism has high growth potential because of the availability of high
quality, low cost surgeries.
 Gujarat upcoming as Spiritual “Wellbeing” tourism.
Threats
 Competition from other States focusing aggressively on tourism
 The emergence of the neighbouring South East Asian countries as popular tourist
destinations can hamper domestic tourism.

HOTEL INDUSTRY – AN
OVERVIEW & MARKET ANALYSIS
3.1. Hotel & Hotel Industry – An Introduction
The common law says that the hotel is a place where all who conduct themselves
properly and who are able and ready to pay for their entertainment, accommodation
and other services including the boarding like a temporary home. It is home away from
home where all the modern amenities and facilities are available on a payment basis.
It is also considered to be a place where tourist stops, cease to be travelers and

become customers. The definition presented by the hotel operators to the authorities
of the National Recovery administration in Washington is found to be a more
comprehensive definition presented by Stuart McNamara. The definition states that
“Primarily and fundamentally, a hotel is an establishment which supplies boarding and
lodging not engaged in Inter-State commerce or in any Intra-state commerce,
competitive with or affecting inter-state commerce (or so related that the regulation of
one involves the control of other)”.
One of the fastest growing sectors of the economy of our time is the hotel industry.
The hotel industry alone is a multi billion dollar and growing enterprise. It is exciting,
never boring and offer unlimited opportunities. The hotel industry is diverse enough for
people to work in different areas of interest and still be employed within the hotel
industry. This trend is not just in India, but also globally.
Modern hotels provide refined services to their guests. The concept of total quality
management is found getting an important place in the marketing management of
hotels. The emerging positive trend in the tourism industry indicates that the hotel
industry is like a reservoir from where the foreign exchange flows.
3.2. Classification of Hotels
3.2.1 On the basis of Standard

Like most of the countries in the world, India also has hotels divided in different
categories depending on their location, facilities, infrastructure and amenities provided.
All the star hotels in India are government approved with continuous control on the
quality of service offered.
1. Five Star Hotels – The most luxurious and conveniently located hotels in India are
grouped under Five Star Deluxe Hotel categories. Five Star Deluxe in India are
globally competitive in the quality of service provided, facilities offered and
accommodation option. These are top of the line hotels located mostly in big cities.
These hotels provide all the modern facilities for accommodation and recreation
matching international standards in hospitality. In such type of hotel HR department
are established separately and to execute and to follow the concept of HR strictly,
HR professional are hired.
2. Four Star Hotels – A rung below Five Star Hotels are Four Star Hotels, these
hotels provide all the modern amenities to the travelers with a limited budget.
Quality of service is almost as high as the five stars and above categories. In such
type of hotel concept of HR is more or less followed.

3. Three Star Hotels – These are mainly economy class hotels located in the bigger
and smaller cities and catering to the need of budget travelers. Lesser in amenities
and facilties, these hotels are value for money and gives good accommodation and
related services on the reduced price. Services would be stripped down version of
the higher categories of hotel but sufficient to fulfill customer’s basic needs. In such
type of hotel concept of HR may or may not be present. If present all functions of
HRD are curtailed.
4. Two Star Hotels – These hotels are most available in the small cities and in
particular areas of larger cities. Catering to the backpacker tourist traffic, these
hotels provide all the basic facilities needed for general accommodation and offers
lowest prices. In this type of hotel concept of HR is absent.
5. One Star Hotels- These hotels with most basic facilities, small number of rooms’,
location in the far flung areas are grouped under One Star Hotels. These hotels
are best when customer is looking for cheapest available accommodation option.
In this type of hotel concept of HR is allen words.
3.2.2 On the basis of Nature

1. Heritage Hotels – Heritage Hotels in India are best if one is looking for sheer
elegance, luxury and loyal treatment. They are not just another accommodation
options but tourist attractions in themselves. Exquisitely designed and decorated,
meticulously preserved, high standards of service and ethnic cultural motifs help
the tourist get the complete experience of an India.
A new classification of heritage hotels has been introduced to cover functioning

hotels in a palace, haveli, castle, fort and residence built prior to 1950. As the
traditional structures reflect the ambience and lifestyle of the bygone era and are
immersely popular among the tourists, the scheme is aimed to bring such
properties not to be lost due to decay or unused.
2. Beach Resort Hotel – Peninsular India bounded by Arabian Sea, Bay of Bengal,
Indian Ocean and the two emerald archipelagos of Lakshwadeep and Andaman &
Nicobar have a long coast line of around 7500 km, offering an amazing array of
beaches, some popular, some not so well known. Thus location of resort is the
basic point of attraction for tourists.
3. Wild Resorts Hotels – A wildlife tour is incomplete if one does not actually, live in
a forest for a few days. It means living in a rest house or a tent in the midst of the
dense wilderness and waking up to the twittering of birds.
4. Government Approved Hotels – These are the hotels which might not have
applied for star categorization or small enough to find them in the list. Many of the
wild life resorts, lodges and hostels are government approved providing a minimum
level of accommodation facilities at far off places.
5. Residential Hotels – The residential hotel work as apartment house. Often we call
them apartment hotels. The hotels charge rent on monthly, half yearly or yearly
basis. They are generally located in big cities and towns where no meals are served
to the customers. Initially, the Resident hotels were developed in USA. The
services offered here are comparable to an average well managed home.
6. Commercial Hotels – The commercial hotels are meant for the people who visit a
place of trade and commerce or business purposes and therefore these hotels are
found located at the commercial or industrial centres. They focus their attention on
individual travelers and are generally run by owners.

7. Floating Hotels – The floating hotels are located on the water surface. The places
are sea, river and lake. These hotels provide with all the facilities and services
made available in a good hotel. In the leading tourist generating countries of the
world, we find the practice of using old luxury ships as floating hotels.
3.2.3 World Record Setting Classifications

1. Largest – In 2006, Guiness World Records listed the First World Hotel in Genting
Highlands, Malaysia as the world’s largest hotel with a total of 6118 rooms.
2. Oldest – According the the Guiness Book of World Records, the oldest hotel still
in operation is the Hokshi Ryoken, in the Awazuonsen area of Komastu, Japan
which opened in 718.
3. Tallest – Burj Al Arab in United Arab Emirates is the tallest building used
exclusively as a hotel. However, the Rose Tower, also in Dubai, which has already
topped Burj Al Arab height at 333 m (1093 ft) will take away this title upon its
opening.
3.3 Different Departments in Hotel

The departments are classified on account of its function. They are as follows:
3.3.1 Core Funcitoning Department

1. Food and Beverage Department (F&B) – F & B deals mainly with food and
beverage service allied activities. Different divisions are there in F & B like
Restaurants, Speciality restaurants, Coffee shop (24 hrs), Bar, Banquet, Room
Service etc. Apart from that they have utility services (cleaning).
2. Front Office Department – The front office is the command post for processing
reservations, registering guests, settling guest accounts (cashiering), and checking
out guest. They also handle the distribution of guestroom keys and mail, messages
or other information for the guests.
3. Housekeeping Department – The housekeeping department is another important

department in hospitality world. Housekeeping is responsible for cleaning the
hotels guestroom and public areas. This department has the largest staff,
consisting of an assistant housekeeper, room inspectors, room attendant, a house
person crew, linen room attendants, and personnel in charge of employee
uniforms.
4. Food Production Department – Food Production deals with the preparation of

food items. It is basically engaged in preparing those dish, which are ordered by
the guest and afterwards is catered by the F & B department.
3.3.2 Support Department (Cost Centres)

1. Marketing & Selling Department – Sales and marketing has become one of the
most vital functions of the hotel business and an integral part of modern hotel
management. It includes packaging for selling, sales promotion, advertising and
public relations. The markeging department is charged with the responsibility of
keeping the rooms in the hotel occupied at the right price and with the right mix of
guests.
2. Engineering & Maintenance Department – The energy crisis throughout the

world has given a great importance to the engineering department of the hotel. This

department provides on the day to day basis the utility services, electricity, hot
water, steams, air conditioning, and other services and is responsible for repair and
maintenance of the equipment, furniture and fixtures in the hotel.
3. Finance Accounting & Control Department – A hotel’s accounting department

is responsible for keeping track of the many business transactions that occur in the
hotel. The accounting department does more than simply keep the books –
financial management is perhaps a more appropriate description of what the
accounting department does. Whereas the control department is concern with cost
control guidelines by way of reducing in investment, reduction in operating cost,
control of food service costs, control of beverage costs, labour cost control etc.
4. Safety & Security Department – The security of guests, employees, personal

property and the hotel itself is an overriding concern for today’s hoteliers. In past,
most security precautions concentrated on theft, however now crimes such as
rape, murder etc also needs to be concentrated upon.
5. Administrative Department – Top Organizational members usually supervise the

administration department in a hotel. This department is responsible for all the work
connected with administration, personnel, manpower, employee’s welfare,
medical, health and security.
6. Human Resource Development – This department has newly taken step in hotel
industry and within a short span of time it has become a very important part of the
organization. It plays role of a facilitator between the bargain able cadre and non-
bargin able cadre.
3.4 Hotel Industry in India

3.4.1 Background
Prior to the 1980’s the Indian Hotel Industry was a nascent and slow growing industry
primarily consisting of relatively static, single hotel companies. However, Asian games
in 1982, and the subsequent partial liberalization of the Indian economy generated
tourism interest in India with significant benefits accruing to the hotel and tourism
sector in terms of improved demand patterns.
Fortunes of the hotel industry are tied to the fortunes of the tourism and the general
business climate in the country, which is why the economic liberalization initiatives
implemented since 1991, led to a soaring demand and supply gap in the hotel industry.
The hotel sector forms one of the most important segments of the tourism industry with
high potential for employment generation and foreign exchange earnings. To give
impetus to this sector, the government provides tax benefits and other incentives. The
industrial policy has now placed hotels and tourism related activities as a priority
industry. The Ministry of tourism classifies functioning hotels under the star system into
various categories from one to five stars deluxe and a newly introduced category of
heritage hotels. The Ministry also reclassifies these hotels after every three years to
ensure that they maintain the requisite standard.
Hotel industry in India has witnessed tremendous boom in recent years. The thriving
economy and the increased business opportunities in India have acted as a boom for
Indian hotel industry. The arrival of the low cost airlines and the associated price wars
has given domestic tourists a lot of options. The “Incredible India” destination campaign
and the recently launced “Atithi Devo Bhava” campaign have also helped in the growth
of domestic and international tourism and consequently the hotel industry.

3.4.2 Present Scenario of Hotel Industry in India

With a consistently growing middle class and increasing disposable income, the
tourism and hospitality sector is witnessing a healthy growth and accounts for 7.5% of
the country’s GDP. According to a report by KPMG, the hospitality sector in India is
expected to grow at 16.1 percent CAGR to reach Rs 2,896.9 thousand crore in 2022.
The Ministry of Tourism statistics reveals that in financial year 2016, the number of
rooms in the country amounted to about 113,600 compared to the previous financial
year’s 108,500 rooms. There were approximately 79879 hotels till 31st December 2016,
in all the states and UTs of the country.
According to data collated by CARE ratings, while the inventory for branded hotels
grew from 84,313 rooms in FY12 to 1,07,695 in FY15 at a compounded annual growth
rate (CAGR) of 8.5%, the growth slowed to 5.5% in FY16 and it rose to 1,13,622 at the
end of March 2016. The industry is however expected to add 50% more rooms in the
branded hotel category over the period of five years till 2021 and will primarily be driven
by the mid market segment, which is expected to contribute almost 45% of the total
additional inventory.
Major Players in the Hotel Industry
In the large/ luxury hotels segment there are about 11 long standing players such as
ITC Hotels, Asian Hotels, the Oberoi Group of Hotels, Hotel Leela Ventures, ITDC, the
Indian Hotels Company, The Park Hotels, and international players like Hilton Hotels,
Marriott International, Le Meridien Hotels & Resorts. There are about 16 listed hotel
groups in the mid segment including Bharat Hotels, Oriental Hotels, Nehru Place
Hotels, Jaypee Hotels, Piem Hotels and Taj GVK Hotels.
Following figure presents the total operating inventory for the 20 largest hotel brands
in the country as of August 2017.
3.5 Hotel Industry in Gujarat

The increase in tourism in Gujarat has led to increase in interest by international hotel
players that is fuelled not only by leisure tourism but also the soaring demand in

business travel. The entrepreneurial spirit of the state, coupled with well developed
infrastructure, increasing air connectivity, and the progressive policies of the
government have encouraged foreign investments especially from countries such as
Japan, USA and Canada.
The city of Ahmedabad has witnessed an aggressive growth of 7.1% in its room
inventory from 2944 rooms in 2011-12 to 3154 in 2015-16. A proposed increase in
supply of rooms by 39.3% is proposed till the end of 2020-21. While large scale events
such as Vibrant Gujarat and DERMACON have given a boost to MICE travel, the large
NRI base continues to drive occupancies during the wedding season.
Courtyard Marriott Ahmedabad was one of the first international brands to set shop in
the city of Ahmedabad in 2010. The four star hotel features 164 rooms including 12
suites, 7500 sq.ft of event space including a pillar free ballroom, boardrooms and
outdoor lawns, and three food and beverage options. Within three years of operation
the hotel has witnessed a remarkable growth in market share from 29% in 2010 to 35%
in 2012-13.
As per the State Ranking Survey 2013 taken up by HVS of Hospitality Industry, Gujarat
stands 4th of the total states in India and is the second biggest mover from 2009 to
2013 and the biggest mover from 2011 to 2013, jumping from 7th position to 4th in two
years. Increased supply of branded hotel rooms, a higher per capita income and a
better ranking of its state tourism website have all contributed to this achievement.
Following can show the reason of potential of hospitality industry in Gujarat
3.5.1 Hotels in Gujarat

The large number of hotels in Gujarat offers a wide range of accommodation option to
the tourists. The hotels in Gujarat welcome tourist with warm hospitality and admirable
service. Tourists can be at ease in choosing from the wide range of hotels in Gujarat,

which ranges from a luxurious five star hotel to a cheap budget hotel accommodation.
These hotels are designated to suit the budget. The hotels in Gujarat are equipped
with modern comforts and are beautifully decorated. The hotels of Gujarat also provide
facilities for dining, business and recreation for the guests coming in.
The rooms and suites of the hotels in Gujarat are tastefully furnished to make the
tourists feel at home when they are away on a leisure tour or on a business tour.
Although the amenities provided at the Gujarat hotels differ with the star category of
the hotels, but the basic facilities that are required by a tourist while touring are
provided to the guests in all the hotels of Gujarat.
Hotels in Gujarat also venture out to provide excellent business facilities to the
corporate travelers. The conference halls and the board rooms of the hotels facilitate
the guests organize business meetings, corporate events and formal banquets.
3.5.2 Challenges faced by Hotel Industry in Gujarat

Luxury hotels in Gujarat are facing an acute shortage of manpower. With a number of
new hotel projects checking into the state the number of rooms have doubled in the
past 18 months – existing players are finding it tough to retain employees. International
brands like Aloft, Radisson, Park Plaza, Crowne Plaza, Hyatt among others are set to
start operations in the state.
Existing players have little supply of manpower, although the salaries of all category
employees are 15-20% higher than hotels in neighbouring states. Cut throat
competition and poaching activities have resulted into unreasonable salaries at all
levels.
3.6 Hotel Industry Market Analysis in Bhuj and Dhordo

Bhuj
The target market for the hotel in Bhuj is dominated by leisure tourist, both domestic
and foreign, followed by the film industry people who often visit this place for shooting.
The major subsections are foreigners, NRG/NRI and all class domestic tourists.
Bhuj is a fair historic town situated in the central Kutch district on the west coast of
Gujarat. The town is a fascinating tourist attraction with amazing handicrafts and
gigantic palaces that poses an errie beauty. Moreover, it is an ideal textile tourism
destination and attracts millions of people from across the world.
In the city there is no dearth of accommodation options, from hotels to hostels here
one can find everything.
However, taking into consideration the tourism opportunity that Bhuj offers, the
government policies to develop heritage cities, and the investment options available,
the market is quite productive for more resorts and hotels.
Dhordo
The target market for the hotel in Dhordo is dominated only by people visiting white
Rann of Desert in the months November to March. These are the leisure tourists both
domestic and foreign followed by the film industry people who often visit this place for
shooting.
Dhordo is a village in Bhuj taluka of the Kutch district of Gujarat. The village is drawn
under water during monsoon and rest of the time is covered under white salt. No scope
for any agriculture of animal husbandry. But the same eco-system not conducive for

any other activity boosted tourism like anything. The Rann Utsav which operates every
year in the winter months has become the main driver for tourism in Gujarat.
This transformation of the most dull and deserted Dhordo White Rann to the most
happening tourist destination of Gujarat has led to many temporary and permanent
accommodation structures in and around Dhordo.
Currently there are 16-20 properties around Dhordo that offer accommodation for Rann
Utsav. The most popular of them all is the Rann Utsav Tent City organized with the
support of Gujarat Tourism.
Taking into consideration the opportunities that the White desert and the Salt Rann
offers, the investment options available there is a good market available for more
resorts and hotels.
3.6.1 Hospitality Demand Drivers

Rann Utsav is the major demand driver for hospitality in Dhordo. Following this, the
other demand drivers for hospitality in Dhordo are Kala Dungar, Rann of Kutch lake,
Gandhi nu Gaam Village (which was destroyed in earthquake and then adopted by
Sabarmati Ashram and now is famous for its handicrafts). Bollywood shooting, wildlife
sanctuaries, fairs and festivals like Uttarayan, Navratri, Rann Utsav etc also form the
demand drivers for hospitality in Dhordo.
Bhuj (80 km from Dhordo), the capital of Kutch district through its rich and royal
heritage makes a great tourist destination. Apart from heritage, there are many other
places to visit in the city like Aina Mahal, Prag Mahal, Kutch Museum, Darbargarh
Palace, Rudra Mata Mandir and many more. Many people also visit Bhuj as it has
some very good wildlife sanctuaries and it is a retreat for birdwatchers and animal
lovers. Bhuj has a better connectivity with the major destination in India and abroad.
Tourists require room for:
 Guests and clients visiting the city for Rann Utsav, Kutch Desert Festival etc.
 Birdwatchers and people visiting for wildlife tourism.
 People visiting for Shooting in Films
 People visiting for business purpose to ports and for handicraft export.
 Guests visiting other parts of Kutch and visiting Mandvi.

3.7 Existing Supply

There are many hotels that have come up in and around Dhordo, of which four are four star hotel, and three are three star hotels. There
are many other budget accommodations also. The details of prominent existing hotels are provided in the table below:
Accomodation
S.No Hotel/Re Nearby
Name Address Category No of Total
. sort Cities Category Rates
Rooms Rooms
The Darbari Suite
The Rajwadi suite

Rs. 10,000/- (per Person) (1 night/2 days)
The Premium Tents Rs. 17,600/- (per Person) (2 night/3 days)
Tent City, Dhordo, Bhuj, Bhuj,
1 Rann Utsav Resort 4 star 350 Rs. 24,200/- (per Person) (3 night/4 days)
Kutch, Gujarat, India Bhuj- Kutch
Rs. 8900/- (per person)(1 night/2 days)
370001, Gujarat, India Deluxe AC Swiss
Cottages
Rs. 7100/- (per person)(1 night/2 days)
Deluxe Non AC Swiss
Cottages
Bhirandiyara, Char Rasta Deluxe Rooms 2 Rs. 3000/per night
Bhuj, Family Room 2 Rs. 10,500/- per night ( 8 person)
2 Rann Rajwadi Resort Resort Glasgow,, Bhuj, Gujarat 9
Kutch
370510 Rajwadi Suite 5 Rs. 3500/- per night
Kutchi Cottages Rs. 4000/per night
Gorevali (Banni),T.A.- Bhuj- Bhuj,
3 Rann Kandhi Resort Resort Kutchi Bhungas Rs. 3500/per night
370510 Kutch
Rajwadi Tents Rs. 5000/per night
Bhunga Room 13
Opp. to Rann Utsav Tent
Bhuj,
4 Gateway to Rann Resort Resort City, White Dessert Road, 3 star 21
Kutch Darbari Room 8
Dhordo, Gujarat 370510
White Dessert khavda Bhuj, AC Tents Rs. 3500/per night

5 White Rann Camp Resort 3 star 30
Road, Dhordo, Gujarat Kutch Non AC Tents Rs. 3000/per night

Accomodation
S.No Hotel/Re Nearby
Name Address Category No of Total
. sort Cities Category Rates
Rooms Rooms
Rs. 12,750 + 18% GST (per Person)
Premium AC Tent
Package 02 nights/ 03 days
Dhordo, Kutch, Kutch, Bhuj,
6 White Rann Resort Resort 4 star
Gujarat 370510 Kutch Rs. 7,000 + 18% GST (per Person)
Rajwadi AC Bhunga
Package 01 night/ 02 days
Premium AC 10 Rs.3750/- (1 Night)

patgar Bus Stop, Patgar
Bhuj, Dormitories 16 Rs.7500/- (2 Night)
7 Nova Patgar Tents Resort Village, Kutch District, 4 star
Kutch
Gorewali, Gujarat Rs.22500/- (3 Night)
Budget Double Room Rs. 4130/-

Village Hodko, Near Desert
Tents Rs. 4720/-
8 Kutir Craft Village Resort Resort King Hotel, Dhordo, Gujarat Kutch 4 star
Family Suite Rs. 5900/-
370510
Family Double Room Rs. 8526/-
Nr. Gorewali Water Tank,, Bhungas 7 Rs. 6000/-

9 Kutch Resort Resort Gorewali, Dhordo,, Kutch,, Kutch 3 star 10
Dhordo, Gujarat 370510 Tents 3 Rs. 5000/per night
Non A/c Bhunga Rs. 5500/-

Bhirandiyara Dhordo Road,
10 Raan Home Stay Resort Kutch
Gorewali, Gujarat 370510
Swiss Cottage Tent Rs. 5000/per night
Mahefeel e rann hodka, Bhuj, Bhunga Rs. 5500/-

11 Mahefeel E Rann Resort Resort 8
Bhuj, Gujarat 370510 Kutch
Tents Rs. 5000/
Near Bhirandira Border Bhunga AC Rs. 3750/- per Night

Bhuj,
12 Rann Village Resort Resort Check Post, Khavda White
Kutch
Rann Raod, Dhordo, Bhuj Bhunga NON AC Rs. 3000/- per Night

LOCATION & SITE ANALYSIS

4.1 An Overview of Dhordo and Bhuj
4.1.1 Introduction
Dhordo is a small village/hamlet in Bhuj taluka in Kutch district of Gujarat State. It

comes under Gorewali Panchayat. Dhordo is surrounded by Anjar taluka towards east,
Mundra taluka towards south, Nakhatrana taluka towards west and Rann of Kutch
towards north. Bhuj, Adipur, Mandvi, Gandhidham are the nearby cities to Dhordo.
Dhordo is situated 80 km north of Bhuj city. And the White desert in Rann of Kutch is
just 6-10 km north of Dhordo. The Great Rann of Kutch is a vast chunk of salt marshes
located in the region called Kutch. This region is the only big swamped dense
grasslands zone in the entire Indo- Malayan ecozone region. The vast part of this Rann
of Kutch is a shallow wetland which submerges in water during the rainy period and
becomes dry during rest of the year. In winter season, this marshy salt lands gets
converted into snow white land after the shallow water dries up in the heat before the
monsoon rains.
Bhuj is a city and a municipality in the Bhuj taluka of Kutch District in the Indian State
of Gujarat. It’s known for its centuries-old buildings, many of which were damaged in
a 2001 earthquake. Close to Harmirsar Lake, the 18th-century Aina Mahal palace is
elaborately decorated with chandeliers, mirrors and semi-precious stones. Nearby, the
Italian Gothic–style Prag Mahal palace has a bell tower that overlooks the city, and a
courtyard containing a Hindu temple.
The Kutch district is surrounded by the Gulf of Kutch and the Arabian Sea in south and
west, while northern and eastern parts are surrounded by the Great and Little Rann of
Kutch. There are ten talukas in the Kutch District. Bhuj taluka falls in the centre of Kutch
district. The Bhuj taluka is surrounded by Mundra and Mandvi taluka towards its south,
Nakhatrana and Lakhpat taluka towards its west, Anjar taluka towards its east and
Rann of Kutch towards its north.
Bhuj is the district headquarters of Kutch district, the largest district in India. It is almost
333 km away from the major Gujarat city of Ahmedabad. Bhuj was founded in 1510 by
one of the local ruler Maharao Hamir, but however Rao Khengarji I made Bhuj his
capital in 1549. Till Bhuj became a part of India in 1947, Bhuj remained an independent
princely state under the rule of the British.
The princely citadel of Bhuj is named after its Bhujia fortress, which overlooks the city
from a hill nearby named Bhujio Dungar. The region is said to have witnessed the
Indus Valley Civilization, exile of the Pandavas during the Mahabharatha period and
the invasion of the Alexander the great. The golden period of Bhuj came when the
Jadeja Rajput rulers shifted their capital from Anjaro to Bhuj in the mid 16th century.
The population of Bhuj city as per census 2011 is 143,286 inhabitants, of which the
urban population is 188,236 inhabitants.

Figure 0-2: Location Map of Dhordo
Dhordo
Bhuj
4.1.2 Connectivity
Dhordo is well connected to Bhuj and some well known tourist spots in Kutch through
roads.
Road – Dhordo is well connected by road with Bhuj in Kutch (80 km ) and other major
cities of Gujarat, including Ahmedabad, Rajkot, Jamnagar, Porbandar, Veraval via
National Highway 8 and 8A.
Rail – The nearest railway station of Dhordo is in Bhuj. Bhuj is connected to

Ahmedabad, Baroda, Surat, Mumbai, Delhi, Kolkata, Pune, Ghaziabad, Jaipur, Ajmer,
Hapur, Moradabad, Bareilly, Kharagpur, Ujjain and other cities of India by railway.
Air – The nearest airport from Dhordo is in Bhuj. Bhuj has a domestic airport from
which daily flights connect to Mumbai, with flights operated by Jet Airways and Air
India.
4.1.3 Demography
According to Census 2011 Kutch district has a population of 2,090,313 roughly equal
to the nation of Macedonia or the US State of New Mexico. This gives it a ranking of
217th in India (out of a total of 640). The district has a population density of 46
inhabitants per square km. Its population growth rate over the decade 2001-11 was

32.03%. Kutch has a sex ratio of 907 females for every 1000 males and a literacy rate
of 71.58%.
Bhuj city has a population of 143,286 inhabitants as per Census 2011. The city has an
average elevation of 110 metres and is spread over an area of 40 sq.km. It has a
density of 37400 inhabitants per sq.km.
4.1.4 Economy
4.1.4.1 At District Level
Kutch has reemerged from the ruins of one of the most disastrous earthquakes in the
history that took place in January 2001 and today has become a major industrial hub.
Over 60% of the salt production is contributed by the district. With large reserves of
limestone, bauxite, lignite and bentonite, Kutch district is one of the preferred
destinations for most of the mineral based industries. It boasts of being the world’s
largest manufacturer of Submerged Arc Weilded (SAW) pipes.
A good number of medium and large scale industries are supported by a sizeable
number of Small scale industries. Due to the presence of two important ports, Kandla
and Mundra, kutch district accounts for a very high cargo movement. Kutch is also
known for handicrafts. Out of the total industrial cooperative societies more than 50%
belongs to handicrafts.
Palaces, temples, forts and festivals of Kutch attracts a large number of tourist in the
district. Madhapar village in Kutch is considered to be Asia’s richest village due to
foreign remittances by NRIs in Africa, the Gulf Countries, UK and the USA.
The major crops being produced in the Kutch district are oilseed, bajra, jowar, cotton,
pulses, date palms and brinjal. Among various oilseeds, groundnut, castor seeds, rape
and mustard seeds are the most important crops. Kutch is an important producer of
psyllium (isabgul), cumin and coriander. The district accounts for the highest
production of date palms in Gujarat.
Kutch is rich in non metallic minerals. The district has the highest production of Lignite
and china clay in Gujarat. Panandhro city has the largest lignite reserve in Gujarat.
Because of its high calorific value and low moisture content, Kutch’s lignite is
favourable for power generation.
Welspun, Adani Group, Sanghi Group are the key industry players present in the
district. Adani group owns a fully functional multi purpose port in Mundra in the Gulf of
Kutch and has set up an edible oil refinery in the district. Sanghi Industries has setup
a cement plant at Sanghipuram village in Abdasa having its own captive mines, power
plant, desalination plant and a captive jetty. Welspun power and steel has one of its
largest facility of steel saw pipes in Kutch.
There are 6128 small scale industry units in the district with a maximum number of
units in the Gandhidham taluka.
Economy Drivers
Kutch has emerged as a hub for chemicals, minerals, textiles, engineering, oil and gas
and port based industries. Kutch is an ideal gateway to Asian, African and American
markets as Mundra Port offers shortest land route from any port to the vast hinterland
of western and northern India. Presence of Mundra, Kandla and Mandvi ports has

made the district a trade and logistic hub.
Industries in the district such as minerals, port based, engineering and auto, steel
pipes, cement, salt, textiles, tourism and infrastructure projects are the drivers of the
economy.
Rich mineral wealth of the district is an attraction to the investors. Many foreign
companies are expected to invest on lignite, limestone and bauxite reserves. Presence
of large number of SEZs, industrial estates and parks in several sectors such as power,
port based, textile and engineering, may further augment the economic growth of the
district.
The tourism sector is experiencing a strong resurgence. The palaces, wildlife, fairs and
festivals of the district are witnessing a large influx of national and international tourists.
4.1.4.2 At City Level – Bhuj
The business and economy in Bhuj has got a huge leap compared to the rest of India.
Earlier Bhuj’s economy was mainly based on handicrafts especially the Bandhani
designs, net works on leather, but nowadays many industries are associated with this
city. After the devastating earthquake of 2001, there are NGO’s like Shrujan, which are
helping the artists to present their piece of work to the rest of the country as well as to
the world and earning handsome livelihood.
Many new business entrepreneurs are finding Bhuj very lucrative for diverse business
opportunities. New business are helping the owners to earn good profit and at the
same time they are helping in the upscale of standard of living of the residents of Bhuj.
Bhuj being a wonderful tourist attraction for all genres of tourists, the economy is
getting boost with tourism businesses. Bhuj is also an important hub for businesses
like export-import, IT sectors, packaging and mineral businesses.
IT business in Bhuj is also proliferating at high speed. Website development, SEO jobs,
and many other software projects taken up by various IT companies in Bhuj will surely
help in accelerating the economy and business in Bhuj. Real Estate is also witnessing
continuous growth in Bhuj. Markets, shopping malls, multiplexes are getting built and
at the same time residential townships and complexes are in huge demand in Bhuj.
4.1.4.3 At Village Level – Dhordo
The business and economy in Dhordo is limited to the tourist inflow. In earlier times,
the village Dhordo was a place where local villagers were struggling to find enough
work to sustain their lives as this was a place which was either drawn under water in
monsoon or covered with white salt the rest time of the year. There was no scope for
agriculture or animal husbandry. However, the same ecosystem that was not
conducive of any other activity boosted tourism efficiently.
Gujarat Tourism is one of the aggressive tourism promotion body, trying to promote
inbound flow to Gujarat. This was the effort and vision of the Gujarat Government that
converted the once most dull and deserted Dhordo White Rann into one of the most
happening tourist destination of Gujarat. This annual affair has become the main driver
for tourism in Gujarat and proved to be a model for many more such events across
Gujarat and other parts of India.

4.1.5 Tourist Inflow of the City

The inflow of tourist in Bhuj in the year 2016-17 is as given below:
Within Gujarat Other Indian State NRI from Abroad Foreigners Total
3,71,405 1,88,447 10,950 14,121 5,84,923
4.1.6 Tourism Resources
Bhuj has many important tourist places and is also visited by people from all over the
world for its heritage sites and archealogical remains. Tourists also come here to enjoy
the Desert Festival or Rann Utsav and to visit surrounding villages of weavers and
artisans to get the feel of rich culture and heritage of Bhuj.
In Dhordo, The Rann Utsav festival also known as the Desert festival is celebrated
every year starting from November and culminating in February/March and most of the
time it coincides with the Mahashivratri festival. The highlight of the Rann Utsav is the
demonstration of traditional handicrafts, cultural events and tours in and around the
city.
Hotels and Resorts are opening in Dhordo for accommodations; restaurants serving
local delicacies as well as catering to the sight seeing demands near White Rann.
Many travel and tourism companies are opening in Dhordo that plan tour programs for
their clients, offer cars, jeeps and other vehicles on rent and thereby doing quite a good
business in Dhordo. As tourism sector is flourishing, local people are getting good
earnings through it.
There are many attractions in and around Dhordo that are described as below:
1. Banni Grasslands Reserve
Banni grasslands reserve form a belt of arid

grassland ecosystem on the outer southern
edge of the desert of the marshy salt flats of
Rann of Kutch in Kutch District, Gujarat
State, India. They are known for rich wildlife
and biodiversity and are spread across an
area of 3,847 square kilometers. They are
currently legally protected under the status
as a Protected or Reserve Forest in India.
The word 'Banni' comes from Hindi and Sanskrit word 'banai', meaning made. The
grasslands are home to mammals such as the Nilgai, Chinkara, Blackbuck, Wild
boar, Golden Jackal, Indian Hare, Indian Wolf, Caracal, Asiatic Wildcat and Desert
Fox etc. among others. This grassland reserve as one of the last remaining
habitats of the Cheetah(Yiger) in India

2. Chari Dhand Wetland Conservation Reserve
The Chari-Dhand wetland conservation reserve is located on the edge of arid

Banni grasslands and the marshy salt flats of the Rann of Kutch in Kutch District,
Gujarat State in India. It is currently legally protected under the status as a
Protected or Reserve Forest in India.
Chari means salt affected and Dhand
means shallow wetland, Dhand is a Sindhi
word for a shallow saucer shaped
depression. This is a seasonal desert
wetland and only gets swampy during a
good monsoon, receiving water from the
north flowing rivers as well as from the huge
catchment areas of many surrounding big
hills. It is spread over an area of 80 sq.km.
It is home to nearly two lakh birds with
migratory and endangered species of birds
flocking into the area in thousands during
monsoon and winters.
3. Kutch Desert Festival –
A visit to Kutch Desert Festival, offers

access to the interior and beautiful recesses
of the region of Kutch, situated in Gujarat,
India. A visit to Kutch Desert Festival, offers
an insight into the region which comprises
of expansive wastelands and eerie
landscapes to the excitement of a large
number of tourists who come to visit
Gujarat, situated in India. Kutch is a large
inundated section of land bearing
similarities with the American Wild West.
Kutch, situated in Gujarat, India, can also be
equated with a Desert in some terrains.
The Kutch Festival, is celebrated in Kutch, near the days when Shivratri is
celebrated in Gujarat, India. During the celebration of Kutch Desert Festival,
colorfully attired dancers, music concerts, Sindhi Bhajan performances, Langa
Desert Music and shops selling embroideries and jewelry are too, the hallmarks
of the Kutch Desert Festival, being celebrated in Gujarat, India.
4. Rann Utsav
Rann Utsav is a celebrated event

patronized by Government of
Gujarat to boost tourism in Kutch
region, its unique and one of its kind
arrangement where entire tent city is
built on a white desert where one
would otherwise see water in the
rest of the year except winters.
This tent city is a specially built temporary city that captures the ethnic beauty of
rural Kutch while providing a memorable experience. Sprawling across an area of
5,00,000 sq.mt it is the largest tent accommodation in India.

The festival starts every year in November onwards and marks this celebration till
Holi. Lots of tourist visit from different parts of the world just to feel the view of
shimmering landscape at Rann Utsav. This is celebrated in Dhordo village of
Kutch which is 85km from Bhuj.
5. The Black Hills (Kalo Dungar)
This place is located at a

distance of 25 kms from
the north of Khavda. The
Black hills is considered
to be the place having
the highest elevation in
Kutch. It stands at a
mighty 462 metres of
height. An ancient
temple is present on the
hill. The temple dates back 400 years ago. The temple is dedicated to Dattatreya
who was the personification of Lord Brahma, Lord Vishnu and Lord Shankar in
the same physical form.
6. Gandhi nu Gaam (Ludiya Village)
Gandhi nu Gaam is the word

coined for a settlement in Ludiya
village post 2001 earthquake
when the redevelopment of the
village was carried out through a
holistic and participant viewpoint
and it maintained the socio
cultural tradition and building
systems of the local area as well
as improving the local economic
conditions.
Gandhi nu Gaam inhabitied by the Meghwal community flaunts beautifully painted

circular huts organized around the temple. Between the vibrant Kanjari blouse of
the women and the men hunched over the various corners carving wood in the
village is an aesthetic delight.
The main occupation of the
women folk in the village is
making beautiful embroidery
work and traditional crafts while
the men make decorative
furniture. The village has no
streets. The space between the
two houses is used as pathway.
The houses of the village have a
typical structure called bhunga
with intricate decorations both outside and inside. While the outside is decorated
with vibrant motifs the inside has clay designs with mirror work. The houses are

really an architecture marvel. The thick walls keep the house cool even when the
temperature reaches close to 50 degrees centigrade in summer.
7. Narayan Sarovar
Narayan Sarovar is one of the most

sacred pilgrimage site for Hindus. It is
located in Lakhpat taluka of Kutch
district at a distance of about 117km
from Dhordo and 153 km from Bhuj.
The ancient Koteshwar temple is just
4kms from this site.
It is one of the five holy ponds in India

mentioned in Shri Bhagvad Gita.
8. Koteshwar Temple
Name of an ancient Lord Shiva temple

located on western tip of India in
Lakhpat taluka of Kutch district. It is
situated at a distance of 154 km from
Bhuj and 118 km from Dhordo.
The story of Koteshwar begins with

Ravana, who won this Shiva Linga as a
boon from Lord Shiva for an outstanding
display of piety. However, Ravana in his
arrogant haste dropped and it fell to
earth at Koteshwar. To punish Ravana for his carelessness the linga turned into
a thousand identical ones, due to which Ravana could not identify the real one
and took one of them leaving the original one here around which this temple was
built.
9. Mata no Madh
It is the name of place where famous

temple Ashapura Mata is situated 78
km from Dhordo and 95 km from Bhuj
City. It was built in 14th century by two
Karad Vanias – Ajo and Anagor. The
earthquake in 1819 damaged the
temple which was then repaired in the
following five years. The ancient
temple is now 58 ft long 32 ft wide and
52 ft tall. Once again the earthquake of
2001 shook it and its dome tumbled down, however it was soon repaired and once
again stands with new grandeur.

The State’s colourful festivals such as Navratri and the International Kite Festival falling
in the months of Oct-Nov and January respectively are the major tourist drawing
months. The famous Rann of Kutch Festival (Rann Utsav) also attracts a huge number
of tourists, which is held from the month of Nov – Feb every year
4.2 SWOT Analysis of Dhordo as Tourist Destination
Strengths
 The governments, both the state and local are known to be proactive, relatively
transparent and effective implementers.
 The village has an amazing eco system one of its kind in India.
 It is the closest village to Rann Utsav where one can witness the mesmerizing white
desert.
 The entire region is rich in handicraft, bandhani work, heritage, culture, wildlife and
scenery.
Weaknesses
 Lack of proper air and rail connectivity with major cities. The connectivity is through
road only that takes long travelling hours.
Opportunities
 The Dhordo village has salt pans and salt desert throughout its northern side. This
rich ecosystem of the area loaded with natural minerals could be used as an
opportunity to develop various other therapeutic and health tourism in and around
the village.
 Dhordo village along with various other villages around it are famous for its
embroidery art work, intricate wooden items and other crafts. The proposed
development of Resort in Dhordo would help in attracting tourists.
 The recent Vibrant Gujarat Global Investors’ Summit saw memoranda of
understanding (MoU) worth Rs 45000 crore for hotels, convention centres, resorts
and adventure tourism in the State. This definitely is good opportunity to tap tourist
in the State.
 The Tourism Corporation of Gujarat is engaged actively in promotion and
marketing campaign of different Tourist places in the State. Like they have roped
in Mr. Amitabh Bachchan for promoting tourist destinations in Gujarat of which one
is Kutch Bhuj
Threats
 Entire Kutch falls in high risk zone for earthquakes. This may pose a threat to
tourism at times.
 Absence of any infrastructure, development in and around Dhordo could pose
threat to further development.

4.3 Site Location and Description
The Proposed project site is situated 14 kms

from the Rann Utsav Tent City in between
Dhordo and Bhitara Village. The site is
located between the salt pans of twon
industries Archean Chemical Industries Pvt.
Ltd. and Agrocel Industries Private Limited.
The site is a land parcel measuring 500 x 500
sq. mts, which accounts for 2,50,000 sq.mts
of area.
The Site is surrounded by salt pan areas of the both the Chemical Industries and is 4.4
kms off the approach road. Although the distance of the factory is as far as 14 kms
from the site. There is a proposed road that would link the site to the road that links
Dhordo Village to Rann Utsav Tent City to
Udhmo Village to Bhitara Village. The site is
just surrounded by vast open land on all the
sides with the existing road 4.4 kms away on
the south side. The site is about 15 km from
Dhordo Village and 96 km from Bhuj. The
main attraction of this site is that it is in close
proximity to the Tent City and falls on the salt
marshy land.
The Site Specifications are:

 Extent of Land/ Site Area : about 2,50,000 sq.mt (out of which about 2,00,000 sq.
m. will be reserved for the said project.
 Coordinates: Latitude 23°48'13.8"N
 Longitude 69°22'00.0"E

4.4 Linkages and Connectivity:

The Site can be approached by a proposed road 4.4 km in length that merges with 6m
wide existing road connecting Tent City and Bhitara village. The Site is currently not
having a direct connectivity and is accessible through kutcha land from the 6m wide
road.

4.5 Site Topography and Vegetation

The Site is situated in the seasonal salt marsh land of Kutch also known as Rann of
Kutch. This land is a seasonal terrain and it turns into a large expanse of the salty and
isolated mud islands on the vast plains during the dry season. The region also turns
into the flooded grasslands with the onset of monsoon and gets covered with variety
of tall grasses.
4.6 Site Access and Connectivity

The Proposed Site is currently surrounded by one
6m wide road 4.4 km to south of the site and with
barren open salt marsh land on all other sides.
The site has a clear visibility from the roads
mentioned above. There is Archean Chemical
Industries that is located to the west of the site
and Agrocel Industries in the east. The site, once
connected by the proposed road will have good
connectivity to Dhordo village, Bhuj town, various
craft villages and tourist spots in the area.

4.7 Proximity to Key Areas
The proposed Site is located with open salt marsh land on all sides with a 6m approach
road towards south at a distance of 4.4km from the site. The site lies in close vicinity
to Rann Utsav Tent City (14 km) which is towards the south eastern side of the site.
The Archean Chemical Industries are located to the west of the site. The site is well
connected to different parts of Kutch through the 6m road running south of the site.
4.8 Existing Infrastructure

Site Access
The Site is currently not accessible by

any road. The nearest road to the site
is 4.4 km south of the site. There is a
proposed road that will come up in
future connecting the site and the
existing 6m road.

Power & Water
There are no power lines currently on

the site. But the site has three four
villages, Rann Utsav Tent city and
Archean and Agrocel Industries in
vicinity, where there is supply of Power
and Water. So there would be no
problem in extending the lines to the
site.
Sewage
The Soak pits / Septic tanks will have to be used for sewage treatment in the area.
Telecommunication
There is functional Tent City in the nearby area that suggests that telecommunication
can be available on the site. Moreover, mobile networks are also available.
4.9 SWOT Analysis
Strengths
 As the site is located within the salt marsh land, it could be well developed for
therapeutic or medical tourism due to the availability of good minerals on site.
 The site has ample amount of land.
 The location also offers good view due to salt marsh land all around.
 The site is situated near vibrant village settlements engaged in a variety of unique
art forms and crafts which are passed from generations to generations.
 The site falls on the way from Rann Utsav and white desert.
 A PPP format limiting risk.
Weaknesses
 The site is situated on salt marsh land that means it would be submerged in water
in monsoon and can only be used during winter months as in case of Tent City.
 The site is located in a sparsely populated area with negligible commercial
development or infrastructural development.
Opportunities
 The Kutch region is famous for its embroidery art work, leather items and other
crafts. Every year, the region receives a large number of visitors primarily
interested in culture and crafts of Kutch. The proposed development of Resort at
the site would enhance its appeal in attracting tourists.
 The proposed development can also attract local populace from Bhuj and
surrounding settlements.
 The government is exploring the tourism possibilities of this area and envisaging

to tap this vast beauty of white ran in more possible ways.
Threats
 The project might become a victim of excessive commercialization and hence

leading to unsustainable growth of surrounding area.
 The absence of any infrastructure, position of the site between salt pans of two
chemical industries and being sparsely populated poses a risk on the feasibility of
the resort.

FINANCIAL ANALYSIS
5.1 Introduction
The broad activity-mix for the project has been worked out based on the analysis of
the advantages associated with the project location and potential opportunities vis-a-
vis prevailing demand in the market.
The products/activities for the envisaged development are derived based on following
factors:
 Demand pattern for various product components/ activity types.
 Product mix of other similar facilities which are successfully running.
 Standards, guidelines and current industry practice for various activities
5.2 Project Design and Product Mix
Development of Resort at Dhordo is conceived as a combined development with following
main elements:
Mandatory Components and Minimum Sizes– (Minimum Development
Obligations or “MDOs”)
 A Leisure Resort
 Minimum 45 keys (Cottages/rooms) & 15 swiss tents
 Banquets
 Adventure and Sports Activities
 Food Courts/Lounge/Restaurants
 Provision of car parking to be made as TCGL/ Local Building Bye-Laws
 Other common and support facilities such as internal roads, street lights, water
harvesting system, solid waste disposal, storm water drainage system, main sewer
line, water supply including storage tank(s), transformer, electrical sub-station,
green patches etc.
To estimate the project cost and operating projections following assumptions have
been made:
 The construction areas specified in this report have been assumed to be the
minimum which may exceed while implementing the project.
 Project cost estimates have been arrived at assuming efficient construction and
prevalent market norms & standards.
 The entire facility will be constructed, managed & operated in a highly professional
manner.
A broad activity mix for the envisaged development has been derived based on
combination of above mentioned factors and is presented below:

Sr No. Facilities/Components Nos. Capacity Total Capacity
1.00 LEISURE RESORT 60

a LUXURY PREMIUM COTTAGE 25
Packages includes Foods and site visits
Months - October, November and Feburary 1 -
Months - December, Janurary and March 1 -
b PREMIUM COTTAGE TENTS 20
c DELUX COTTAGE TENTS - NON AC 15
2.00 ARTIFICIAL LAKE, FLOATING LAKE,
RECREATION CENTER, SPA, MUD THERAPY AND HEALTH UNIT 1 30 30
3.00 ADVENTURE AND SPORTS ACTIVITIES
No. of
Capacity of
Components units Total Capacity
per unit
Required
Jeep Safari (Set of 5 modified vehicles) 1 4 4

Camel Riding (Set of 6 Camels along with the Stables) 1 1 1
Hot Air Ballooning 2 2 4
Powered Parachute 2 2 4
All Terrain Vehicles (6 modified ATV's) 2 1 2
Archery (archery lane with all equipments and lane deelopment) 3 1 3
Para Gliding 1 1 1
4.00 FOOD COURT / LOUNGE / RESTAURANTS

a Multi Quisine/ Speciality Resturant / Coffee Shop 1 10 10
5.3 Assumptions for Financial Analysis

5.3.1 Construction Period
Construction period for the components under MDOs has been assumed as 24
months.
5.3.2 Concession / Lease Period
Concession/Lease Period including constrction period has been assumed as 35 years
for the component.
5.3.3 Capital Cost Assumptions
While calculating the project cost certain assumptions have been made based on
market feedback and experiences in the past.
The project cost consists of following components:
 Buildings
o Land Development
o Landscaping

o Civil Works – Basic Skeleton

o Civil Finishes – Exterior
o Civil Finishes – Interior
o Parking Area
 Plant & Machinery
o Mechanical HVAC
o Plumbing and Fire Fighting
o Electrical, Telephone
 Furniture & Fixtures
o Interior- Rooms
o Interior- Common Area
 Pre Operative Expenses
o Design and Project Management (as % of services cost)
o Loan Processing and Syndication (% of Debt)
5.3.4 Financing & Taxation Assumptions

 Debt Equity Ratio: Debt Equity Ratio has been assumed as 60:40 for the entire
project component.
 Interest Rate: The rate of interest has been assumed as 12% per annum for term
loan.
 Debt Repayment Period: 4 years debt repayment period after a moratorium
period of 3 years, a total tenure of 7 years has been considered for loan repayment
for the component.
 Taxation: The tax rates for Corporate Sector have been considered as 26% and
for MAT as 19.24%.
 Depreciation: Depreciation on the buildings, plant, equipment and fitting
components has been considered as per the Company’s Act and the Income Tax
Act through Written Down Value (WDV) method.

5.4 Project Cost

Estimated project cost of Ehtnic Tourism Resort is Rs. 18.07 cr.; details of which are
given below:
(Rs. Lakhs)
ARTIFICIAL
LAKE,
FLOATING
ADVENTURE
LEISURE LAKE,
Particulars % % AND Total
RESORT RECREATIO
SPORTS
N CENTER,
ACTIVITIES
SPA, MUD
THERAPY
Project Cost - Direct

Buildings 40.00% 600 65.00% 488 - 1,088
Plant & Machinery 15.00% 225 15.00% 113 - 338
Furniture, Fixtures & Furnishing 45.00% 675 20.00% 150 - 825
Total-Direct 1,500 750 - 2,250
Other Project Cost

Pre-operative Expenses 2.00% 30 15 - 45
Interest During Construction Cost 11.00% 165 83 - 248
Other Expenses 2.00% 30 15 - 45
Total-Other Project Cost 225 113 - 338
Grand Total 1,725 863 - 2,588

Capital Structuring
Debt 50% 863 431 - 1,294
Equity 50% 863 431 - 1,294
Total Capital (Debt+Equity) 1,725 863 - 2,588
5.5 Sources of Finance

Capital structure assumed for the project is as given below
1 Debt : Equity Ratio 60: 40 for the project
2 Cost of Debt 12%
3 Loan Tenure 7 years
4 Loan Repayment 4 years for the project after a moratorium
Tenure period of 3 years
5.6 Project Revenue

The Project Revenue has been taken into consideration from following activities:
 Rooms tariffs
 Multi Cuisine Restaurant
 Speciality Restaurant
 Coffee Shop
 Banquets
 Adventure and Sports activity

5.7 Combined Cash Flows, DSCR and IRR Working

Cash flows have been worked out for 35-year along with the above mentioned
assumptions. The pricing for various components has been assumed as per current
market practices and norms observed in the case of other similar projects. The project
components have broadly been assumed as per the TCGL sugestions with
modifications/additions ascertained through market studies.
Years Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Mar-28
Cash Flow from Operations - - 150 300 350 358 387 405 424
Less: Interest on Loan - - - 125 89 53 18 0 0
Less: Tax - - 14 4 20 28 48 62 72
Cash Flow After Tax & Interest - - 136 172 241 277 321 343 352
Capital Repayments - - - 324 324 324 324 - -

Surplus\(Deficit) in the year - - 136 (152) (82) (47) (2) 343 352
Surplus\(Deficit) Brought Forward - - - 136 (15) (98) (144) (146) 196
Cummulative Surplus\(Deficit) - - 136 (15) (98) (144) (146) 196 548
Cumm Inflows - - 136 433 763 1,093 1,432 1,775 2,127
Cumm Outflows - - - 448 861 1,237 1,579 1,579 1,579
Cumm DSCR #DIV/0! #DIV/0! #DIV/0! 0.97 0.89 0.88 0.91 1.12 1.35
Debt Service Cover #DIV/0! #DIV/0! #DIV/0! 0.66 0.80 0.88 0.99 - -
Average Debt Service Cover Ratio: 3.33
5.8 Cash Flows/IRR/DSCR

The Cash-flow statement has been prepared assuming ‘standard’ loan format with 7
years repayment-period. Interest rate for the term loan is assumed at 12% p.a.
Years Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Mar-28
Cash Flow from Capital Investment -1,035 -1,035 -518
Project IRR -1,035 -1,035 -381 296 330 330 339 343 352
Project XIRR (Pre Debt Service) 15 years 13.7%
Project XIRR (Pre Debt Service) 10 years -0.7%
Project XIRR (Post Tax + Debt Service) -1,035 -1,035 -381 172 241 277 321 343 352
Project XIRR (Post Tax + Debt Service) 15 years 12.9%
Project XIRR (Post Tax + Debt Service) 10 years -2.8%
Equity IRR -414 -414 -207 172 241 277 321 343 352
Equity XIRR (Post Tax + Debt Service) 15 years 23.5%
Equity XIRR (Post Tax + Debt Service) 10 years 13.7%
IRR computations ignore capital appreciation or residual value
With these assumptions the equity IRR has been worked out as 23.5% and Project
IRR (post tax) as 12.9% which is higher than the cost of debt and hence can be
considered reasonable for a project of this nature. The project DSCR comes to 3.33.
5.9 Conclusion and Summary
Based on the site conditions, market analysis and envisaged project components, it is
suggested that TCGL may go ahead with the project. The current project configuration
seems acceptable in the market under following assumptions:
1. Land Cost: Land costs calculations have not been done as the primary aim of
TCGL is to create the facilities and then to expect some recurring revenue out of
the project. The only stream assumed to yield recurring revenue to TCGL is the

Annual Premium throughout the concession period and yet retain rights of
ownership of all the project assets at the expiry of the concession period.
2. Other Assumptions: All the prices/rates have been considered as per current
market practices and norms adopted in other similar projects. The assumptions
include the following.
a. Lease Period: Feasibility has been worked out for a lease period of 35 years
for the entire project component.
b. Project Development Fee: Success Fee @2.0% of Project Cost plus
applicable taxes payable by the developer has also been included in the
analysis.
5.10 Recommendations
 Concession / Lease Period : It is suggested that TCGL may opt for leasing out
the Project Site on following basis:
o Lease period of 35 years including construction period for the component.
o Annual Lease Rental: The Annual Lease Rental for the Project Site shall be
Re. 1.00 per acre plus taxes, as applicable.
 The land areas specified under MDO component shall not be utilized or converted
for commercial, residential and any other purposes at any point of time during the
entire concession/lease period.
 Total Annual Premium is Reserve Annual Premium + Additional Annual Premium.
o Reserve Annual Premium: Reserve Annual Premium has been fixed at Rs.
25.00 Lacs per annum plus taxes, as applicable.
o Additional Annual Premium shall be offered by the bidder over and above
the Reserve Annual Premium plus taxes, as applicable.
 Total Annual Premium shall be payable on annual basis throughout the
concession/lease period and shall be escalated by 12% every three years on
compounding basis.
 Suggested Bidding Parameter: total of the following amount to be offered by the
bidder:
o Total Annual Premium (Reserve Annual Premium + Additional Annual
Premium) with escalation by 12% every three years on compounding basis
 Upon Expiry of Concession Period: The entire project facilities including the
project site, will revert to TCGL at end of the concession period of 35 years at
terminal value of Re. 1.00 (Rupee One Only).
The proposed project structure has many advantages / merits from TCGL / State
viewpoint some of which are listed below:
 Developers generally make huge investments on PPP projects only when the
concession period is of sufficiently longer duration. Hence, 35-year concession
period should instill confidence amongst potential bidders.
 Kutch is a city in Kutch District in state of Gujarat. Kutch offers ample opportunities
for tourists / visitors ranging from art n craft to white sand to beaches to heritage
buildings
 Stretching along the Tropic of Cancer, from Rajasthan to the edge of Pakistan and
the Arabian Sea, Kutch covers a little over 45,000 sq km and is geographically one
of India's largest and most distinctive districts. Other than places of tourist

importance like Dholavira, Great Runn of Kutch, Anjar, Mandvi in Kutch, roping in
Amitabh Bachchan as the tourism ambassador and the launch of Vibrant Gujarat
investor summit has also led to a growth in people visiting the state.
 Determining the above factors, Bhuj Kutch has been popular tourist hub in Gujarat
state. There are hotels available at Bhuj as well as Dhordo; however, the existing
facilities are not on the same scale as envisaged in this Project. Although it may
take sometime to take-off, it is likely that the proposed project would successfully
meet out the growing tourist demand with decent returns in future.

Resort PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Resort PDF

Uploaded by

Copyright:

Available Formats

TOURISM CORPORATION OF GUJARAT LIMITED

CHAPTER 1.0 INTRODUCTION.............................................................................................. 3

Tourism Corporation of Gujarat Limited Page | 1

Tourism Corporation of Gujarat Limited Page | 2

The effective development in infrastructure undertaken by the Corporation has helped

Tourism Corporation of Gujarat Limited Page | 3

1.2 Need for the Study

1.3 Objectives of the Study

Tourism Corporation of Gujarat Limited Page | 4

1.5 Approach and Methodology

Tourism Corporation of Gujarat Limited Page | 5

2.1.1. General Overview

Figure 1 Gujarat State

Tourism Corporation of Gujarat Limited Page | 6

By Air: Ahmedabad, the premier Airport

By Rail: Gujarat comes under the

By Sea: Gujarat State has the longest

By Road: Gujarat State Road Transport

Tourism Corporation of Gujarat Limited Page | 7

2.1.2. Economic Overview

The economy of Gujarat has significant agricultural as well as industrial production.

2.1.3. Tourism Overview

Tourism Corporation of Gujarat Limited Page | 8

substantial excavations of Indus Valley Civilization period at Lothal (near Ahmedabad),

The archeological zone of Champaner –Pavagadh have been acclaimed by UNESCO

2.1.4. Growth of Tourism in Gujarat

2.2. Tourism Scenario in the State

Tourism is a major phenomenon of the modern society, which has emerged as an

Tourism Corporation of Gujarat Limited Page | 9

2.2.1. Key Tourist Circuits of Gujarat

b) The Saurashtra Circuit - Bhavnagar, Palitana, Velavadar, Ahmedpur Mandvi,

c) The North Gujarat Circuit - Dasada, Mehsana, Modhera, Patan, Siddhpur,

Tourism Corporation of Gujarat Limited Page | 10

2.2.2. Gujarat – The Tourist Hub

Gujarat is a proactive government and aggressive marketing, untapped tourism

b) Archeological and Heritage Tourism

Tourism Corporation of Gujarat Limited Page | 11

f) Wild Life Tourism

2.2.3. Trend in Tourist Arrival

Table 0-1: Domestic and Foreign tourist arrivals in Gujarat

Within Other Indian Foreigners Total Growth

2013-14 221.61 77 60.61 21 5.66 2 287.88 100 13.30

2014-15 245.94 75 74.63 23 6.33 2 326.91 100 13.56

2015-16 281.80 73.5 93.99 24.5 7.33 2 383.12 100 17.19

2016-17 324.00 72 114.76 26 9.24 2 448.00 100 16.94

2017-18 367.86 72 131.31 26 10.61 2 509.78 100 13.79

Source: GITCO estimates

2.2.4. SWOT Analysis of Gujarat as Tourist Destination

Tourism Corporation of Gujarat Limited Page | 12

Wildlife, Heritage and Culture, Pilgrimage, Rural/Tribal Culture, Handicrafts,

Tourism Corporation of Gujarat Limited Page | 13

It is also considered to be a place where tourist stops, cease to be travelers and

3.2. Classification of Hotels

3.2.1 On the basis of Standard

Tourism Corporation of Gujarat Limited Page | 14

3.2.2 On the basis of Nature

A new classification of heritage hotels has been introduced to cover functioning

Tourism Corporation of Gujarat Limited Page | 15

3.2.3 World Record Setting Classifications

3.3 Different Departments in Hotel

3.3.1 Core Funcitoning Department

3. Housekeeping Department – The housekeeping department is another important

4. Food Production Department – Food Production deals with the preparation of