Resort at Chorwad PDF

TOURISM CORPORATION OF GUJARAT LIMITED
FEASIBILITY STUDY
DEVELOPMENT OF RESORT AT
CHORWAD, JUNAGADH, GUJARAT
March 2019
Development of Resort at Chorwad, Junagadh 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
2.2 Tourism Scenario in the State 9
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 Functioning 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 Chorwad 20
3.6.1 Hospitality Demand Drivers 21
3.7 Existing Supply 22
CHAPTER 4.0 LOCATION & SITE ANALYSIS 24
4.1 An Overview of Chorwad 24
4.1.1 Introduction 24
4.1.2 Connectivity 25
4.1.3 Demography 25
4.1.4 Economy 26
4.1.5 Tourism Resources 27
4.2 SWOT Analysis of Chorwad as Tourist Destination 29
4.3 Site Location and Description 29
4.4 Present Site Conditions: 31
4.5 Linkages and Connectivity: 31
4.6 Site Topography and Vegetation 32
Tourism Corporation of Gujarat Limited Page | 1

4.7 Site Access and Connectivity 32

4.8 Proximity to Key Areas 33
4.9 Existing Infrastructure 33
4.10 Restoration Option 34
4.11 SWOT Analysis 34
CHAPTER 5.0 FINANCIAL ANALYSIS 36
5.1 Introduction 36
5.2 Project Design and Product Mix 36
5.3 Assumptions for Financial Analysis 37
5.3.1 Construction Period 37
5.3.2 Concession / Lease Period 37
5.3.3 Capital Cost Assumptions 37
5.3.4 Financing & Taxation Assumptions 38
5.4 Project Cost 39
5.5 Sources of Finance 39
5.6 Project Revenue 39
5.7 Combined Cash Flows, DSCR and IRR Working 40
5.8 Cash Flows/IRR/DSCR 40
5.9 Conclusion and Summary 40
5.10 Recommendations 41

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
48,100 sq. mt near Chorwad 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
Chorwad a coastal city located in the western part of India consists of one of the
popular beaches on the Gujarat border. The presence of Daria Mahal Palace (the only
Palace beach resort in the country) allows Chorwad beach to get listed with exquisite
beaches of the country. The beaches with unpoilt beauty and isolation offer an
advantage to the people visiting the place. 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 together
accounting for about 61% share as noted by ASSOCHAM (The Associated Chambers
of Commerce & Industry of India) study. 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.
Chorwad beach is the major demand driver for hospitality in Chorwad followed by the
famous Palace and the fact that it lies on the way from Somnath to Dwarka. All this
has added to the demand for rooms in Gandhinagar. The present supply of few lodges
and budget hotels with none in luxury hotel category makes Chorwad feasible for a
Four Star Plus Hotel. Moreover, the Royal Chorwad Palace has a great potential for
becoming a luxurious and a grand extravagant hotel.
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 four star plus Hotel in Chorwad
 Research the potential market demand for the Hotel of the size proposed.
 Estimate the capital cost of the facility (exclusive of land).
 Provide indicative five year 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 Hotel 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 or/and 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.
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 Chorwad

The Chorwad beach was once home to the royal palace of the Nawab of Junagadh.
Today it remains in a ruined state. The beach is unsafe for swimming, but it is relatively
clean and ideal for relaxing and enjoying the ocean breeze. It currently does not offer
any accommodation facilities but serves as an ideal excursion from Somnath.
It is the best place to view rocky shores, boat rides and the colourful fishing villages.
There is a resort which was previously a palace built by Nawab Saheb Mohabbat Khan
as a vacation spot for the hot summer days where he held wedding of his dogs, royal
banquets and processions amidst cool breezes from the sea. This resort however, is
not functional anymore due to lack of infrastructural facilities. Moreover, the
government has handed over the work of preparing the estimation of restoration cost
of Chorwad Palace to the IIT, Roorkee.
Chorwad beach is an interesting and alluring amalgamation of rocky crags and

bowlderish seafront along with jaunty boat rides across the Chorwad seafront and to
cap it all with opportunities to visit Porbandar and Somnath and other nearby beach
destinations and other travel destinations worth their salt in terms of beauty and
ambience.
Chorwad beach is a beautiful beach with vast expanse of white, sandy beaches. It is
a beautiful example of nature at its best. It is exhilarating to enjoy a stroll across the
beach and enjoy the divine sight of vast and pristine seashore. This beach and the
palace if marketed well can figure high in the itinerary of the domestic and international
tourists.
The lack of infrastructure, good hotel/resort in such potential tourist place makes
developing a three star plus resort a lucrative offer.

3.6.1 Hospitality Demand Drivers

Leisure travel is the major demand driver for hospitality in the city. The second major
demand driver for hospitality in Chorwad is the fact that Late Shri Dhirubhai Ambani
has his roots from this city and recently inaugurated Dhirubhai museum will attract
more tourists.
Though Chorwad is a beautiful beach, there is lack of infrastructure. Many people also
visit Chorwad on their way to Dwarka from Somnath or vice versa. Mostly tourist visit
Chorwad through either Somnath or Porbandar. Veraval and Porbandar has better
connectivity with the major destination in Gujarat and India as compared to Chorwad.
Tourists not only have demand for rooms but a proper resort, adventure sports etc in
the city. They require room for:
 Guests and clients visiting the city
 Guests travelling from Somnath to Porbandar & Dwarka and halting in between.
 Guests & relatives of Ambani family visiting the city.

3.7 Existing Supply

The Chorwad Palace that was taken up by The Tourism Corporation of Gujarat was converted into a resort, however, due to poor
infrastructure, is currently not in a functioning mode. There are accommodation options available in nearby places like Somnath, Gir,
Porbandar and Junagadh, the details of which are as given below:

There are some budget hotels nearby Chorwad Road Railway Station and near Somnath
Mandir and in Gir Forest. However there is no hotel in Chorwad city, apart from Chorwad
Palace that is currently non functional.
These hotels in map are as shown below:

LOCATION & SITE ANALYSIS

4.1 An Overview of Chorwad
4.1.1 Introduction
Chorwad is a city and a municipality in Junagadh district in the state of Gujarat, India.
Chorwad is an ancient town, its first written evidence is seen in history 796 AD. In the
earlier times, the town was situated on sea shore. However, due to natural mishap, it
moved to a location that is 4 km away from the earlier one. The actual period is
unknown but it is assumed that it would have happened a thousand year ago.
In ancient time, Chorwad was a trading harbor. Initially, the population of the business
class locally called “banias” was the dominant. Most population in Chorwad is of KOLI
caste, which is the part of ancient tribes of India.
Chorwad is famous as an idyllic beach destination in Gujarat. The beach of Chorwad

used to be a famous summer retreat of the Nawabs of Junagadh. The beach at
Chorwad has a beach palace resort. Initially, Chorwad was a fishing village. Chorwad
shot to fame when Nawab Saheb Mohabbat Khan, the Regional Governor of
Junagadh, built a palace on the Chorwad beach facing the sea. The Nawab used to
retreat to this place on hot summer days.
The Chorwad Palace or the Daria Mahal Palace was constructed in the 1930s and it
exhibits a unique blend of colonial, Muslim and Italian Architectural styles. The Nawab
conducted royal banquets, processions etc at this summer palace. In the year 1974,
the Tourism Corporation of the state of Gujarat took over the summer palace on the
Chorwad beach and transformed it to a holiday resort.
Chorwad beach is one of the most visited beaches of India. The proximity of Chorwad
to places like Somnath, Porbandar etc makes it a popular relaxing spot for both
weekend getaways and family picnics. Visitors can go trekking along the rocky shores
or boat riding. The fishermen who live in the adjacent villages also offer catamaran
rides and fishing trips.
Famous and legendry industrialist Shri Dhirubhai Ambani hails from this place. He
spent his childhood and little part of adolescent before moving abroad in pursuit of his
dreams. This town is now being recognized by the name of business legend’s home
town.

Figure 0-2: Location Map of Chorwad
4.1.2 Connectivity
Chorwad is well connected as it lies between Somnath and Porbandar.
Road – Chorwad is well connected through NH-8 by Junagadh (70 km away) and
Porbandar (100 km away) town and to the important tourist spot of the State such as
Dwarka, Veraval (25 km away), GIR National Park (35 km away), Girnar Mount and
Somnath (37 km away) by roads. Nearest bus station is at Keshod & Veraval.
Rail – Chorwad is connected to Junagadh, Porbandar, Veraval by Rail also and the
nearest railway station is at Chorwad Road which is 5 Kms away. However in order to
connect to other cities of Gujarat, the nearest railway station is Veraval (20 kms) away.
Air – The nearest airport to Chorwad is Keshod Airport which is 35 kms away but it is
not in operation for transportation. The next nearest airport of Chorwad is Porbandar
airport which is 100 kms away.
4.1.3 Demography
According to the 2011 census Junagadh district has a population of 2,742,291, roughly

equal to the nation of Jamaica or the US state of Utah. This gives it a ranking of 142nd
in India (out of a total of 640). The district has a population density of 310 inhabitants
per square km. Its population growth rate over the decade 2001- 2011 was 12.01%.
Junagadh has a sex ratio of 952 females for every 1000 males. It had a literacy rate of
67.7% in 2001 which increased to a literacy rate of 76.88% in 2011.
Chorwad city has population of 22,720 as per 2011 census of India with decadal growth
rate of 6.96%. Chorwad is spread in an area of 21.54 sq.km and has a density of
1054.8 inhibitants per sq.km.
4.1.4 Economy
4.1.4.1 At District Level
Agriculture is the backbone of the district

economy. 70% of the population is engaged in
primary sector, 22% in secondary sector and 8%
in tertiary sector. Fish processing industry is a
major sector in Junagadh. Processed fishes from
Junagadh are exported to Singapore, China,
Hongkong, Japan, Dubai and other parts of the
world. The industry giant Hindustan Lever Ltd
has a frozen fish packing unit in Maliya taluka of
the district.
Presence of huge reserves of Limestone, makes

the cement industry a thriving industry sector in the district. The major business of the
Junagadh district includes, mineral based industries such as, cement and soda ash,
agriculture based industries like edible oil, groundnut units, solvent plants and oil
cakes and Marine based industries like fish processing units and frozen fish.
Major crops produced in the district are wheat, oilseeds, cotton, mango, banana,
onion and brinjal. Junagadh is the largest producer of Groundnut and Garlic in the
state contributing 26% and 34% to total production respectively. Mango and Onions
are produced in large quantities in the district.
There are over 40 medium and large scale industries present in Junagadh district,
involved in sectors such as, cement plants, edible oil, refinery plants and fish
processing units. Most of the medium and large scale industries are concentrated in
Junagadh and Manavadar talukas of the district.
There are over 7000 small scale industries operating in Junagadh district in sectors
which includes food products, chemicals, electrical equipments, textiles and repairing
and servicing. Maximum number of SSI units (3018 units) related to repairing and
servicing are located in Junagadh followed by food product industry with over 503
units.
Economy Drivers
The economy of Junagadh is mainly based on Agriculture. With the new government
policy of biotechnology, Junagadh has been identified as one of the agriculture
biotechnology zone. This will boost setting up of agro-biotech industries in the district.
Cement has been a key industry of the district and will experience further growth with
upcoming cement units thereby leading to economic development of the district.

Junagadh boasts of some of the best tourist destinations in the State and hence
experiences a huge influx of tourist every year.
4.1.4.2 At City Level
Chorwad town is characterized by low level of economic and industrial activities. There
are many industries planned but only few could be operational and almost all of them
are closed today such as Delaware Syndicate, Kathiawad Industries, Ceramic pottery,
vegetable Ghee and tanneries and match box industries. Only fisheries related
industries are survived like Hindustan Liver Ltd, Krupa Sagar Marine Food and Krupa
Sagar Cold Storage
The work participation ratio of the city is very low as compared to other towns of the
State. The employability options are limited to agriculture sector which is bound to be
seasonal in nature. Other employment avenues are in a position to provide year long
employment to the workers due to seasonality factor in the farming.
4.1.5 Tourism Resources
Chorwad is a small fishing town which gained importance when Nawab Sahib
Mohabbat Khan of Junagadh built a palace by the sea for retreat. It was well known
for rocky beaches and the unique flora and fauna. At some point of time it was known
as “Kashmir of Gujarat” but now the situation has changed a bit.
Tourism Corporation of Gujarat has attempted for taking special care of the beaches
and especially the Holiday Camp Resort. There isn’t adequate physical and social
infrastructure and now it has become imperative to provide proper infrastructure facility
in the the town to maintain its status in the world of tourism.
Following are the attractions in and around Chorwad
1. Chorwad Beach
Chorwad Beach is an ideal picnic spot

for tourists coming to this beach village
in the state of Gujarat. There is a famous
Chorwad Palace situated near this
beach, which was constructed during
1930s. This palace has been
transformed into a luxury beach resort
which provides comfortable
accommodation to tourists.
The Chorwad Palace is also known as the Daria Mahal Palace and faces the
Chorwad beach. The Chorwad Beach is suitable for leisure beach walks, boating,
swimming, fishing and many other water activities.
2. Somnath Temple
The temple is located in Prabhas Patan near Veraval in Saurashtra on the western
coast of Gujarat, India, around 37 km from Chorwad. It is the first among the
twelve Jyotirlinga Shrines of Shiva. It is an important pilgrimage and tourist spot
for pilgrims and tourists.

The temple is considered sacred due to

the various legends connected to it.
Somnath means “Lord of the Soma”, an
epithet of Shiva. Somnath Temple is
known as “The Shrine Eternal”.
3. Kirti Mandir –
Kirti Mandir is the memorial temple built in the

memory of Mohandas Karamchand Gandhi in the
city of Porbandar, Gujarat which also is his
birthplace. The foundation stone of the striking Kirti
Mandir was laid in 1947, but the building was
completed in 1950, by which time Gandhiji was no
more.
Kirti Mandir is the main tourist attraction of the town
of Porbandar. The place where Gandhiji was born is
marked with a Swastika for identification. The site of
Gandhi’s birth has been converted into small
museum about him. This is located around 100 km
from Gujarat.
Attractions with respect to distance:

4.2 SWOT Analysis of Chorwad as Tourist Destination
Strengths
 The governments, both the state and local are known to be proactive, relatively
transparent and effective implementers.
 Connectivity through Rail and road to other major urban centres of the state.
 The city has good accessibility to sea water face.
 Chorwad is ecologically rich region.
 It is an important tourist spot for domestic tourism, as it lies in between the road
connecting two major religious destinations Somnath and Dwarka.
Weaknesses
 Lack of diversity in economic base.
 Poor infrastructure of the city.
 Inadequate Growth and land management.
Opportunities
 Development of industrial sector is a reality – establishing agro processing export
unit, fish export unit, coir industry etc.
 The tourism policy of State has identified Chorwad to be developed as one of the
main tourist destination.
 It is also going to be developed as port.
Threats
 Large out migration for education and employment opportunities is leading to
severe threat.
4.3 Site Location and Description
The Proposed project site is located on the Chorwad Beach around 3.6 km from the
Chorwad city towards the south west side. The site incorporates the already built
Chorwad Palace and few hutments and is located just on the Chorwad Beach. The site
is surrounded by Arabian Sea towards south and west, by the coastline towards
northwest and southeast, some settlement on the north and east side. The site is about
21.8 km from the Chorwad Road Railway station, 29.3 km from Veraval Railway
Station and about 41 km from the Keshod Airport and around 106 km from Porbandar
Airport. The main attraction of the site is that it is located right on the beach and also
incorporates the ancient Chorwad Palace once built by Mahabbat Khan.
The Site Specifications are:
 Extent of Land/ Site Area : 48,102.5 sqm.

 Coordinates: Latitude 21°0'2.43"N
 Longitude 70°13'40.11"E
 Ownership of Site: Tourism Corporation of Gujarat Limited (TCGL)


4.4 Present Site Conditions:

There is the Chorwad Palace facing the beach towards the west side of the site. There
are many hutments built towards the north and northwest side of the site and the entry
to the site is through east direction. There are some buildings towards the north and
south of the building also. There is a green patch of trees and grass on the site from
the centre towards east and the rest of the land is kutcha.
4.5 Linkages and Connectivity:

The project site is
located on the beach
and is connected to
Chorwad city through
Chorwad Holiday
Camp Road 7.5 m
wide. This is the only
road connecting the
site to Chorwad city
and then through
Chorwad city to other
destinations. The
National Highway 8E
passes through the
Chorwad city
connecting it to
Veraval and
Porbandar.

4.6 Site Topography and Vegetation
The site is on the beach and has a little slope

down towards the Arabian Sea. The Chorwad
Palace is also on a high level compared to the
beach level. The Chorwad Palace and the
entry to the site are on the same level. The site
has a green patch in between from the centre
towards east side of the site. Moreover, there
are quite a number of trees on the eastern
boundary, northern and southern boundary
and some patches in between.
4.7 Site Access and Connectivity
The Proposed
site is currently
approached
by, one
Chorwad
Holiday Camp
Road from the
east side, and
surrounded by
narrow roads
on the three
sides, north
east and
south. The
approach road
to the site from
Chorwad
enters into the
site and ends
there. The site is located 3.6 km away from the Chorwad city and about 21 km from
Chorwad Road Railway Station and 29 km from Veraval Railway Station. The Chorwad
city is well connected to Veraval and Porbandar through NH 8E.

4.8 Proximity to Key Areas
The proposed site is dramatically located on a beach with an ancient palace within it.
There is Arabian Sea to the west and southwest of the site. However the site is
surrounded by few inhabitants towards east and northeast side of the site and coastal
line on north and south. It also has few temples in its vicinity.
4.9 Existing Infrastructure
Site Access
The Site has good accessibility. The site is situated on the Chorwad beach and is
accessible from the Chorwad Holiday Camp road connecting it to the Chorwad city.
The site is surrounded by road on three sides i.e north, east and south with minor
roads.
Power & Water
This site incorporates a palace that was used before, and there is little settlement
behind the site. Hence power seems not an issue. However, currently as the site is not
in use, there is no power on the site. Chorwad city gets water from Narmada pipeline
which is not extended till the site. However, as the water table is not low in this area
water can be found at 60- 80 feet, however potable water can be found at 200-300
feet.

Sewage
There is no proper planning of sewage treatment available on site.
Telecommunication
Currently there is no infrastructure of telecommunication on the site.
Parking Area
At present ample surface parking area is available at the site and moreover, due to
sufficient land availability there should be no problem in parking.
4.10 Restoration Option

The site has following elements
 Historic Palace / Summer Palace
 Building added at a later stage – Dining area and historic building replica
 Hutments built towards the north and northwest side of the site
As per the survey and analysis, view towards development of the same is as under:
4.11 SWOT Analysis
Strengths
 Ideally located on a beach with a distance less than 4 km from the Chorwad
city.Moreover lies on the way from Somnath to Porbandar and Dwarka, which gives
it an added advantage.

 The site was already used in past for retreat purpose and the beach is considered
good for leisure beach walks, which goes accordance with the purpose of the site
development.
 Good land availability for the proposed Resort.
 Good accessibility and connectivity to the site.
 A PPP format limiting risk.
Weaknesses
 Distance from the Railway Station and Airport.

 The Site is poorly maintained and the existing Chorwad Palace is also in a ruined
state.
Opportunities
 The Government has recognized this place to be developed as Tourist destination.

 The ancient Palace if restored properly can attract a number of tourists both
domestic and international.
Threats
 Violent Sea at Chorwad at specific times (full moon and no moon days) makes the
beach risky for tourists.
 Poor infrastructure along the coast is a major constraint in developing beach
tourism.

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 Chorwad is conceived as a combined development with following
main elements:
Mandatory Components and Minimum Sizes– (Minimum Development
Obligations or “MDOs”)
 A Leisure Resort including Health Club
 Minimum 60 keys (50 Cottages and 10 Tents)
 Recreation Centre, Spa, Mud Therapy and Health Unit
 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 INCLUDING HEALTH CLUB 60

a LUXURY PREMIUM COTTAGE 50
Packages includes Foods (Breakfast)
Months - October to Janurary, May and June 1 -
Months - Feburary to April, July to September 1 -
b PREMIUM COTTAGE TENTS 10
c DELUX COTTAGE TENTS - NON AC -
2.00 RECREATION CENTER, SPA, MUD THERAPY AND HEALTH UNIT 1 20 20
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 25 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 Restoration
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 50:50 for the entire
project component.
 Interest Rate: The rate of interest has been assumed as 11% 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 proposed Resort is Rs. 26.22 cr.; details of which are given
below:
(Rs. Lakhs)
LEISURE RECREATION
RESORT CENTER, SPA, ADVENTURE
Particulars % INCLUDING % MUD THERAPY AND Total
HEALTH AND HEALTH SPORTS
CLUB UNIT ACTIVITIES
Project Cost - Direct

Restoration of Building 0.00% 500 0.00% - - 500
Buildings 40.00% 660 40.00% 100 - 760
Plant & Machinery 15.00% 248 15.00% 38 - 285
Furniture, Fixtures & Furnishing 45.00% 743 45.00% 113 - 855
Total Project Cost - Direct 2,150 250 - 2,400
Project Cost - Other

Pre-operative Expenses 1.50% 32 4 - 36
Interest During Construction Cost 6.00% 129 15 - 144
Other Expenses 1.75% 38 4 - 42
Total Project Cost - Other 199 23 - 222
Grand Total Project Cost 2,349 273 - 2,622

Capital Structuring
Debt 50% 1,174 137 - 1,311
Equity 50% 1,174 137 - 1,311
Total Capital (Debt+Equity) 2,349 273 - 2,622
5.5 Sources of Finance

Capital structure assumed for the project is as given below
1 Debt : Equity Ratio 50: 50 for the project
2 Cost of Debt 11%
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 38-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.
(Rs. Lakhs)
Years Mar-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Mar-28 Mar-29
Cash Flow from Operations 194 307 323 330 391 412 434 484
Less: Interest on Loan 144 126 90 54 18 - - -
Less: Tax - 5 16 24 51 66 76 93
Cash Flow After Tax & Interest 49 175 218 252 322 346 358 391
Capital Repayments - 328 328 328 328 - - -

Surplus\(Deficit) in the year 49 (153) (110) (76) (6) 346 358 391
Surplus\(Deficit) Brought Forward - 49 (103) (214) (289) (295) 51 409
Cummulative Surplus\(Deficit) 49 (103) (214) (289) (295) 51 409 800
Cumm Inflows 194 495 803 1,109 1,448 1,794 2,152 2,543
Cumm Outflows 144 598 1,016 1,398 1,744 1,744 1,744 1,744
Cumm DSCR 1.34 0.83 0.79 0.79 0.83 1.03 1.23 1.46
Debt Service Cover 1.34 0.66 0.74 0.80 0.98 - - -
Average Debt Service Cover Ratio: 3.31
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 11% p.a.
With these assumptions the equity IRR has been worked out as 19.8% and Project
IRR (post tax) as 12.2% 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 3.31.
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 25 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 25 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 sq m 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 25 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, 25-year concession
period should instill confidence amongst potential bidders.
 Violent Sea at Chorwad at specific times (full moon and no moon days) makes the
beach risky for tourists.Poor infrastructure along the coast is a major constraint in
developing beach tourism.
 The site lies on the way from Somnath to Porbandar and Dwarka, which gives it an
added advantage.

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TOURISM CORPORATION OF GUJARAT LIMITED

CHAPTER 1.0 INTRODUCTION 3

Tourism Corporation of Gujarat Limited Page | 1

4.7 Site Access and Connectivity 32

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

1.4 Constraints and Limitations

Tourism Corporation of Gujarat Limited Page | 4

project site, requirements, commercial viability, potential of project and project

1.5 Approach and Methodology

Tourism Corporation of Gujarat Limited Page | 5

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