A Report On COMPARATIVE STUDY OF HOSPITALITY INDUSTRY FOCUSES ON FIVE STAR HOTELS IN INDIA

Gallup India Ltd. 5/16/2009

Project Status: - Final report

A REPORT ON

COMPARATIVE STUDY OF HOSPITALITY INDUSTRY FOCUSES ON FIVE STAR HOTELS IN INDIA

By Kshitiz Jain

Gallup India Ltd. Date of Submission: 16th May, 2009

AUTHORISATION

“The report is submitted as partial fulfillment of the requirement of MBA Program of IBS, Dehradun as authorized by Miss Mona Pandey, Interviewing manager, Gallup India organization vide letter/email number 1 dated 13th JAN, 2009 ”.

in the study. All the employees of Gallup India Organization deserve special thanks for their cooperation and help in the collection of necessary and relevant material for this work.ACKNOWLEDGEMENT My sincere thanks to faculty guide Prof. Also. However. Shaw and company guide Miss Mona Pandey under whose able guidance and kind cooperation I was able to complete the project work titled “A Comparative Study of Hospitality Industry Focuses on Five Star Hotels in INDIA". _______________________ . if any. Every effort has been made to enhance the quality of work. I owe the sole responsibility of the shortcoming. I do thank and remember my friends for their kind effort and helping hand. T.N.

It depends upon many factors. It initially focuses on knowing the engagement of customers towards satisfaction derived from their visits to the five star hotels. a periodical check is necessary to know its impact on the market. . With so many five star hotel chains being operated in the market with their unique and differentiated steps to attract customer. which varies from person to person. Then project studies the factors influencing customers to use various services.Executive Summary The project first of all focuses on the Indian Five star hotel chains. A deep analysis about the industry. This project simultaneously studies about the factors which may attract more customers and retain them. the degree of loyalty and recommendations with respect to the age of the customer. Followed by the market share of leading hotel chains and knowing the expectations of the customers with his/her feedback by giving rating on 5 pointed Likert’s scale on certain services that he / she has experienced. The project finds out these factors and how important it is in deciding which strategy to implement to lure customers. Then the project includes the study of customer’s satisfaction. its annual growth and future opportunities and threats are being suggested by the project. This project draws a line between the reel and real picture of the industry. evaluating their brand equity and positioning in the customers who had an earlier experience with the five star hotels.

It presents the market analysis of Indian hotel industry in terms of structure & segmentation. which ruled India from time to time. satisfaction on cuisines. what they think about the hotel. gym etc. market size. Knowing the customer’s mindset for a product or about a company is very important so a study related to the same is included in the project.Each of the chain’s hotels pays architectural tribute to ancient dynasties.e. what queries arises in their mind while choosing or selecting a particular hotel. The pattern of buying behavior. frequency and purpose of choosing the hotel of a particular hotel chain by a customer is also taken into consideration. We also came to know what is the degree of awareness of other hotel chains in the industry to know the ‘Brand positioning’. . spa. An attempt is made to study the customers engagement with the hotel chains i. and problems that may faced by the customers. major hotels etc. The design concept and themes of these dynasties play an important part in their respective style and decor.

11 1.10 Herfindhal Hirschman Index [HHI]………………31 2.2 Scope of the research………………………………………….18 2.5 Methodology and sources………………………………….1 About Gallup…………………………………………….1 Purpose of the research………………………………………3 1.30 2.4 Market size and growth rate………………………………21 2..7.1 Overview of Indian hotel industry…………………….13 1.4 Subsidiary Co’s of Gallup…………………………14 Chapter 2: Industrial Analysis………………………………………………….15 2.4 Perspective of the research…………………………………5 1.3 1.9 1..7 SWOT analysis……………………………………………………27 2.3 Organizational structure…………………………………….7.9 PEST analysis / Macro Variable analysis…………….1 Background of the research……………………….2 Founder of the Gallup…………………………….7 Report organization profile…………………………………9 1.4.3 Research objectives…………………………………………….2 Expectations from the research…………………5 1.6 Porter’s 5 forces analysis……………………………………25 2.16 2.7.5 Major players in industry……………………………………22 2.6 Limitations of the research…………………………………8 1.7.20 2.TABLE OF CONTENTS Page Number Authorization Acknowledgement Executive Summary i ii iii Chapter 1: Introduction……………………………………………………………1 1.2 Classification of hotels……………………………………….33 .6 1..5 1.11 Market structure……………………………………….4 1..29 2.8 Micro variable analysis……………………………………….3 History of the Gallup……………………………….4.

60 Chapter 6: References…………………………………………………………….37 3.52 (Relationship between age.38 Chapter 4: Data analysis and interpretation……………………………..35 3..39 4.5 Satisfaction measurement……………………………….2..1 Descriptive………………………………………………………. satisfaction etc.…..37 3.…36 3.2 Market share of the hotel industry….36 3..2 Research environment……………………………………….Page Number Chapter 3: Main text & literature review [Research Design]……...………46 4.40 4.55 (Factors influencing customers) Chapter 5: Conclusions and suggestions……………………………….34 3.63 .7 Variables taken to measure……………………………….44 • Industry wise occupation level break up…45 4.41 • Gender wise break up…………………………….51 4.3 Sampling trend………………………………………………….4 Sample size……………………………………………………….6 Questionnaire designing…………………………………..………48 4..8 Statistical tools used………………………………………….1 Profile of the respondents……………………...2 Inferential ………………………………………………………….) 4.43 • Education wise break up……………………….1.1 Type of study……………………………………………………....1 Multiple Regression………………………………..35 3.....2 Factor Analysis ………………………………….36 3..1.3 Brand positioning of the hotels……….1.42 • Age wise break up………………………………….2..

58 Scree Plot [Factor Analysis]……………………………………59 Component Matrix [Factor Analysis]…………………….LIST OF FIGURES Page Numbers Fig 1: Fig 2: Fig 3: Fig 4: Fig 5: Fig 6: Fig 7: Fig 8: Fig 9: Fig 10: Fig 11: Fig 12: Fig 13: Fig 14: Fig 15: Fig 16: Fig 17: Fig 18: Fig 19: Methodology steps………………………………………………….54 Correlation Matrix [Factor Analysis]………………………55 KMO and Bartlett’s test [Factor Analysis]………………56 Communalities [Factor Analysis]……………………………57 Total Variance Explained [Factor Analysis]…………….45 Market share………………………………………………………….47 Brand positioning………………………………………………….51 Model Summary [Multiple Regression]………………….50 Detail Analysis [Multiple Regression]…………………….42 Age wise Breakup……………………………………………………43 Education wise Breakup………………………………………….60 .52 ANOVAs [Multiple Regression]………………………………53 Coefficients [Multiple Regression]…………………………....25 Gender wise Breakup……………………………………………..7 Organizational structure…………………………………………20 Porter’s 5 force analysis…………………………………………....44 Industry wise occupation Breakup………………………….

43 Table 7: Education wise Breakup……………………………………….46 Table 10: Brand positioning………………………………………………...44 Table 8: Industry wise occupation Breakup…………………………45 Table 9: Market share……………………………………………………….31 Table 4: Herfindhal Herschman Index [HHI] part – II……………32 Table 5: Gender wise Breakup…………………………………………….42 Table 6: Age wise Breakup………………………………………………….49 ..LIST OF Tables Page Numbers Table 1: History of Gallup…………………………………………………..13 Table 2: Subsidiary co’s offices……………………………………………14 Table 3: Herfindhal Herschman Index [HHI] part – I…………….

CHAPTER 1 INTRODUCTION .

. This had attracted more and more people traveling not only for business but also for leisure reasons. This condition of the inns prevailed for a long time.INTRODUCTION According to the British laws a hotel is a place where a “bonafied” traveler can receive food and shelter provided he / she is in a position to pay for it and is in a fit condition to receive the services. Hotel today not only cater to the basic needs of the guest like food and shelter but provide much more than that. They first catered to travelers and provided them with a mere roof to stay under. like personalized services etc. Hotels today are a “Home away from home”. way back in the 6th century BC when the first ‘inn’ in and around the city of London began to develop. Which lead to the actual development of the hotel industry as we know it today. The invention of the steam engine made traveling even more prominent. Hotels have a very long history. which brought about new ideas and progress in the business at ‘inn’ keeping. but not as we know today. until the industrial revolution in England.

Hilton group etc. brand equity of hotels and etc. • Capacity of area. Scope of the research This project is completely related with the five star hotels in India and covers the responses of the customers who had an earlier experience with major players in the Indian hotel industry like Taj group. Emphasizing on the following areas: • Satisfying the objectives of research. its annual growth.  A deep analysis about the industry. a periodical check is necessary to know their impact on the market. This project helps in analyzing various factors which compares the hotels. The study is targeted to be conducted in whole India with filling up of indepth expert questionnaires.Purpose of the research  With so many five star hotel chains being operated in the market with their unique and differentiated steps to attract customer. • Sample size taken. . There are two types of person who will be get benefited by this particular project.  To know about the factors that may attract more customers and retain them. It is necessary to draw a line between the real and reel picture of the industry. Oberoi group. With this project we came to know that customer’s engagement to the hotels. the different hotel chains and myself. future opportunities and threats are required in order to expand the industry.

and to suggest possible solutions to attract more customers.  To evaluate the brand equity of the hotels.  To estimate the market size and future aspects of the growth.Research objective The objective of this project is to comparatively study the different aspects of the different Five Star Hotels in India – there brand positioning.  To analyze the buying behavior of the customer. Oberoi group and etc. Taj group. . related factors.  To suggest strategies if any which can be applied on the areas of improvement.  Drawing the inferences to know the market share of leading players in the industry.  To study the customer engagement to the services of the hotel.  To study preferences of the customer among the different hotel chains in the industry i.e. In order to achieve the main objective of the study the following sub objectives are framed:  To collect and review the available information on five star hotels.  To study the degree of loyalty and recommendations for the hotels by the visitors.  To study the degree of awareness of hotel chains in the industry.

2.Perspective of the research 1. These range from one star to five star deluxe depending upon size and amenities. Expectations from the research Hotels form one of the most important support service that affect the arrival of tourist to a country. To find out the present status of this industry a complete analysis is necessary. Followed by the market share of leading hotel chains and knowing the expectations of the customers with his / her feedback by giving rating on 5 pointed Likert’s scale on certain services he / she experienced. The research is targeted on both domestic and foreigner tourist with ages above 30 years differentiating the respondents between holiday tourist and business concern. owned and operated by the Indian Tourism Development Corporation (ITDC). The major players in the industry are Indian Hotels Company Ltd (IHCL) operating under the Taj brand. Background of the research The project first of all focuses on the Indian Five star hotel chains. This will help us in understanding this industry and also identify the weak spots.10. Hotels are classified into six categories according to the star rating assigned by the Department of Tourism. About 30% of the rooms fall under the 5-star deluxe categories.There are around 1000 classified hotels and the total room availability is pegged at 1. Welcome Group of Hotels. Hotel Leela Venture and the Ashoka chain of hotels. the Oberoi.000 rooms. evaluating their brand equity and positioning in the customers who had an earlier experience with the five star hotels. . It initially focuses on knowing the engagement of customers towards satisfaction derived from their visits to the five star hotels.

The work relating to data entry compilation. The details of the methodology adopted are presented below:  The Questionnaire A pre designed questionnaire was provided to the interviewing managers and trainees. This questionnaire has been designed by the world class researchers and statisticians to collect the primary data while making a close check on the variables and factors that may play a crucial role in the analysis part of the research. the questionnaire was administered to the chosen respondents by contacting them. data analysis and report writing constituted the third stage. Responses to the descriptive questions though very few but was valuable for the purpose of study. a highly structured questionnaire with objective and question was provided to interviewers at initial stage.  Data entry and analysis It has been an uphill task to enter the enormous data received through the questionnaire which consisted nearly 15 pages fully loaded with the deep information. Hence these were further structured in time with the system adopted for compilation and data analysis. During the second stage. The researcher individually contacted the employees to get response on the questionnaire with an expert interviewing session. .  Response to Questionnaire In all 50 questionnaires were given to respondents falling in the category of as suggested by the project.Methodology and sources The project work has been carried out in various stages.

Primary data 2. journals and newspapers etc. .The step-by-step diagrammatically: methodology adopted is shown below Identifying the potential respondent In-depth expert interview Collection and review of potential data Macro and Micro level analysis of the various factors Evaluation of variables and interpretation of results Recommendations Figure no. websites of the hotels and department of tourism and from various magazines. 1 Data Collection Sources: The various data collected during the study are classified into two categories: 1. Secondary data Primary data: This was collected during the interactions with the respondents for an in-depth expert interviews and questionnaire filling. Secondary data: Data from company sources.

 The answers of the respondents may not be fair and true so the results can be biased.  Certain facts and figures are likely to change owning to the time lag between the collection stage and presentation stage.Limitations of the research  All hotels and there services in the market cannot be compared completely.  Since the sample size taken is of special application.  The coverage attempted in this study is as per the companies requirement and as per the reach of the participants.  The respondents were found to be reluctant to provide all the information Due to time constraint. .  Some of the questionnaire could not be completed due to reasons other than time factor. the analysis can run the risk of exhausting the supply of respondents.

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CHAPTER 2 INDUSTRIAL ANALYSIS .

Industrial Analysis
Overview of Indian Hotel Industry

The Indian hotel business focuses largely on foreign tourists with only 30% of the business coming from the domestic business and the leisure travels. The tourist arrivals in India are seasonal in nature, with the best season being from September to December followed by a steep fall till May. The period June to September gains momentum once the monsoons are over. The slack season is generally used for renovation work and the period is characterized by discounts to attract clients. Each of the chain’s hotels pays architectural tribute to ancient dynasties, which ruled India from time to time. The design concept and themes of these dynasties play an important part in their respective style and decor. Hotel industry is an essential part of tourism. The expansion of tourism is well inevitable bringing out development of the hotel industry. Hotel industry is so closely linked with the tourism industry that it is responsible for about 50% of the foreign exchange earnings from tourism trade and enterprises. The rising volume of tourism influx brought into light the shortage of hotels in important tourist centers. Keeping in view the changing standards in the international hotel keeping. The Indian industry is ready to make a number of improvements. It’s not enough to have adequate hotel accommodations, it is equally necessary to have at various levels, low priced, moderately priced, high priced, and a few luxury hotels.

Effect of recession on hotel industry As the Indian economy has been booming in the last few years, the India hotel industry was expanding too. There were new budget hotels and private players coming in to play and thus making the industry more competitive in the process. As there were more hotels coming in to business, the number of job opportunities in the industry has also gone up. Students started signing up for courses like hotel management, senior chef, etc. Then the US economic recession came. Slowly the effects of recession have reached India too. And it affected the hotel industry of India too. As the cash starved managements started looking for cost cutting measures, layoffs started to come in to action. Some people have lost their jobs already. The new recruitments are going at a slow rate. For the time being, the market is not great for the hotel industry in India. It is the same case scenario for the rest of the world as well.

Effect of terrorist attack on hotel industry The hotel industry is in setback after the 26/11 terrorist attack in Mumbai. Thousands of lives lost, millions of property was destroyed. This has pulled back the growth of the industry to somewhat near to nadir. Tourists lost their interest to explore the country. With the political and economic instability being more visible, both tourists as well as business arrivals were showing negative or slow growth. Security is the major concern for the hotels as tourists will not choose a unsecured stay and on the other hand if a security check will be conducted for every entry to the hotel, it will mark a decrease in foot falls as visitor comes in a hotel after trusting it and wants the same response back. With Lok-sabha elections-2009 the industry is waiting for the new government and the actions taken by them to revive the economy and the hotel industry.

Classification of Hotels

Hotel can be classified into different categories or classes, based on their operational criteria. For example the type of accommodation they provide, location of the property, type of services provided, facilities given and the clientele they cater to can help categories hotels today.

Awarding of Class: Awarding of class is done by the HRACC in India. These are a few things listed down that are taken into consideration while awarding star category to any hotels as: • Number and types of rooms the hotel has. • Elegant and comfortable surroundings. • Room’s efficiency. • Cleanness and sanitation. • Staff size and specialization. • Range and level of services. • Number of Restaurants. • Bars and Beverage services. • Concierge services. • Accessibility to entertainment. • Availability of transportation. • Spa and swimming pool facility. • Reservation and referral services.

banqueting facility. They in addition to five star properties have 5 to 7 dining rooms. information. fitness centers. The establishment may or may not have banqueting facility. The property must have 24 hour coffee shop. and a minimum of 1 gourmet restaurant. a bar. which have all the qualities of a three star property and a few additional. All the rooms must be spacious. The staff must be well-trained and proper standards for hygiene and sanitation must be followed. The property must have proper banqueting facility. The building of the property must be an attractive one. Also the ambience and decor of the place must be ecstatic. Five Star Deluxe Categories: They are more or less like five star properties with the only difference is that they are on a larger scale. Proper and wellmaintained pool and health club a spa is optional. They should provide reservation and information facility apart from reception. They should provide high levels of personalized services. business center. . 24-hour coffee shop. Spas. Five Star Categories: Five star category is only allotted to properties. bell service at least two gourmet dining facility should be available. Like the entire property must be centrally air conditioned. At least 50% of the rooms must be air-conditioned. a bar. Also all properties have to keep in mind that proper waste management is done. The staff must be highly trained and a degree of specialization must be shown. Five star deluxe properties maintain a very high staff to guest ratio and very high levels of service is maintained. round the clock room service.Star category of hotels in India Three Star Categories: For a hotel to be recognized as a three star property the architectural features and general features of the building should be very good there should be adequate parking facilities. business centers etc.

2 .Organizational structure of Indian Hotel Industry Indian hotel industry always keep in mind to deliver the world class service with world known Indian hospitality and cultural heritage with this regard the following structure is found in most hotels in India. Figure no.

6mn in FY 2007 to 5mn in FY 2008. High capital expenditure acts as an entry barrier in the industry with the availability of prime land at economically viable rates being a major constraint. both tourists as well as business arrivals are likely to gather momentum in the remaining part of the year. The gestation period is long and break even normally takes five to eight years to happen. Due to this the established players like Indian Hotels. About 30% of the rooms fall under the 5-star deluxe categories. have an advantage over foreign majors as they already have well establishments at prime locations. The devaluation of the Asian currencies.000 rooms.a. . The situation is gradually moving back to normal with the tourist arrival figure marginally increasing from 4. E.I. These range from one star to five star deluxe depending upon size and amenities. Hotels are classified into six categories according to the star rating assigned by the Department of Tourism. With the political and economic stability being more clearly visible the Indian hotel industry is growing at 9% p.H.Market size and Growth rate OF 5 star hotels IN INDIA There are around 1000 classified hotels and the total room availability is pegged at 1. etc.10. the Taj mahal terrorist attack issue and the unbalanced political atmosphere had affected growth in the tourism industry. With the political and economic stability being more clearly visible.

Oberoi Vilas hotels The Oberoi Group has pioneered a distinctive style of hotels in India.Major players in the industry Oberoi group of hotels The Oberoi Group. fountains. operates 27 hotels and three cruisers in five countries under the luxury ‘Oberoi’ and five-star ‘Trident’ brands. Mr. The Vilas properties in Rajasthan combine traditional Rajput architectural styles with elaborate gardens.S. The latest addition is Vanyavilas. Hilton Hotels became the first coast-to-coast hotel chain of the United States in 1943. Oberoi is recognized as best practice for training and developing its people. the flagship company of The Oberoi Group. founded in 1934.R. Hilton Hotels are either owned. . P. managed. a deluxe jungle camp in the buffer zone of Ranthambore National Park. terraced lawns. As of 2008 there are 533 Hilton branded hotels across the world. You can stay at a 'vilas' property in Agra. Jaipur and Udaipur. The Oberoi Group also supports philanthropic activities and conservation of natural and cultural heritage. Hilton Group of Hotels Hilton Hotels is an international chain of full-service hotels and resorts founded by Conrad Hilton and now owned by the Hilton Hotels Corporation. pools and pavilions. or franchised to independent operators by the Hilton Hotels Corporation. Oberoi is the Chairman and Chief Executive Officer of EIH Limited. the emergence of which provides a level of service and comfort that more than satisfies the most exacting traveler.

The Taj Mahal Palace Hotel. a symbol of Indian hospitality.Taj Hotels The Indian Hotels Company Limited (IHCL) and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces and is recognised as one of Asia's largest and finest hotel company. Africa. Palaces and Resorts. Canada." The first Le Méridien property was a 1.Chola Sheraton in Chennai. completed its centenary year in 2003.Welcomgroup Hotels.000-room hotel in Paris — Le Méridien Etoile. each Taj hotel reinterprets the tradition of hospitality in a refreshingly modern way to create unique experiences and lifelong memories. is today one of India’s finest hotel chains. South America. Incorporated by the founder of the Tata Group. Le Méridien The internationally renowned Le Méridien brand was established in 1972 by Air France "to provide a home away from home for its customers. authentic Rajput palaces and rustic safari lodges. The group continued to grow and. Bombay in 1903. Mr. the total number of Le Méridien properties had risen to 58. Jamsetji N. the company opened its first property. ITC – Sheraton / Welcome Group ITC’s hotel division was launched on October 18. the French West Indies. idyllic beach resorts. with its distinctive logo of hands folded in the traditional Namaste is widely recognized as the ultimate in Indian hospitality. Within the first six years the number of hotels had risen to 21 hotels in Europe. Tata. by 1991. modern business hotels. with the opening of its first hotel . Within two years of operation the group had 10 hotels in Europe and Africa. With more and more hotels being added at strategic destinations. ITC . the group has joined hands with the Sheraton Corporation to strengthen its international marketing base. 1975. Spanning world-renowned landmarks. The Taj. the Middle East and Mauritius. .

is one of the world’s premier hotel companies. Yet. As a lodging leader. service and value at more than 2. Hyatt Resort. operator of Hyatt Vacation Club. its long and distinguished history of innovation and growth provides a remarkable insight into what lies ahead. tastes and comfort trends to the guests. headquartered in Chicago. Park Hyatt. ambience and performance distinguish The Leela Group from other hotels. The hotels owned. Inc. managed or franchised by its subsidiaries provide authentic hospitality to guests in 45 countries through a passionate commitment to personalized service. Marriott’s capacity for adaptability was clearly evident in the 2006 renovation and reopening of the Hurricane Wilma-ravaged JW Marriott Cancun Resort & Spa. whose new windows can now withstand Category Five hurricane winds.800 hotels. Marriott has a tradition of providing exceptional quality. and the environment. individuality. Leela Group Excellence in service. operate. it is innovation that perpetually drives the company forward—by providing a product that is relevant and current to meet the changing expectations. Global Hyatt Corporation is also the owner of Hyatt Vacation Ownership. operated. Hyatt Summerfield Suites and Andaz brands with additional properties under development on five continents. The strategic locations. The success of Global Hyatt is driven by the commitment and energy of the thousands of men and women around the world who provide exceptional service to hotel guests. Hyatt Regency. lush greens and the intrinsic Indian culture holds true for every Leela property. Marriott Group As Marriott embarks on its 80th year as a hospitality provider. cultural relevance.Hyatt Group Global Hyatt Corporation. manage or franchise more than 365 hotels and resorts worldwide under the Hyatt. Hyatt Place.. architectural aesthetics. Global Hyatt subsidiaries own. . Grand Hyatt.

If borrowing is cheap. but don't be fooled. then the likelihood of more hotels entering the industry is higher.Porter’s 5 force analysis Figure no. 3 1. you might think that the hotel industry is pretty tough to break into. The more new hotels that enter the market. the more saturated it becomes for everyone. . You'll need to look at whether there are substantial costs to access bank loans and credit. Threat of New Entrants At first glance. Brand name recognition and frequent visitors loyalty point also play a role in the hotel industry. A hotel with a strong brand name and incentives can often lure a customer even if its prices are higher.

Obviously. This can spell disaster when times get tough in the economy. 5. Is the comfort at one place is more comfortable than another? Probably not unless you are analyzing a luxury liner. In other words. 3. Competitive Rivalry Highly competitive industries generally earn low returns because the cost of competition is high. Also. the threat might be a little higher than low budgeted hotels. 4. Power of Suppliers The hotel supply business is mainly dominated by specialization of services. there are high costs involved with switching hotels. but also take a look at the ability to compete on service. Availability of Substitutes What is the likelihood that someone will take a low rated hotel or a guest house to stay? For regular visitors in the city. Power of Buyers The bargaining power of buyers in the hotel industry is quite low.2. money. For this reason. personal preference and convenience in the hotel industry. When determining this you should consider time. . the likelihood of a supplier integrating vertically isn't very likely. there isn't a lot of cutthroat competition among suppliers. you probably won't see suppliers starting to offer hotel services on top of providing it to established hotels.

India offers a readymade tourist destination with the resources it has. It is not comparable to the existing world standards.000 hotel rooms are available in India today. There are international players in the market such as Taj and Oberoi & International Chains. Thus. The services currently offered by the hotels in India are only limited value added services. luxury tax and sales tax inflate the hotel bill by over 30%.10. Strong management and organizational structure. Only 1. Effective tax in the South East Asian countries works out to only 4-5%. Thus the magnet to pull customers already exists and has potential grow. this ratio is 1:1 for international hotel companies. This can be gauged from the facts that while Indian hotel companies have a staff to room ratio of 3:1. Weakness: The cost of land in India is high at 50% of total project cost as against 15% abroad.SWOT Analysis of Hotel industry Strengths:         A very wide variety of hotels is present in the country that can fulfill the demand of the tourists. This acts as a major deterrent to the Indian hotel industry. In India the expenditure tax. which is less than the Bangkok hotel capacity. the needs of the international tourists travelers are met while they are on a visit to India.   . High tax structure in the industry makes the industry worse off than its international equivalent. The hotel industry in India is heavily staffed. Manpower costs in the Indian hotel industry are one of the lowest in the world. This provides better margins for Indian hotel industry.

Unique experience in heritage hotels          Threats: Guest houses replace the hotels. Lack of training man power in the hotel industry. thus diverting the hotel traffic. This is a growing trend in the west and is now catching up in India also. Political turbulence in the area reduces tourist traffic and thus the business of the hotels. The economic conditions of a country have a direct impact on the earnings in hotel industry. Huge requirement of working capital. Poaching of efficient staff by another related industry like airline industry. Changing trends in the west demand similar changes in India.49% of the global figures. This is because India is an ideal destination for tourists as it is the only country with the most diverse topography. For India. generally the summer months. This number is expected to increase at a phenomenal rate thus pushing up the demand for the hotel industry. the inbound tourists are a mere 0.Opportunities:  Demand between the national and the inbound tourists can be easily managed due to difference in the period of holidays. 26/11 Mumbai terrorist attack. For international tourists the peak season for arrival is between September to March when the climatic conditions are suitable where as the national tourist waits for school holidays. which here are difficult to implement due to high project costs. In India examples of the same are Insurgency in Jammu Kashmir and the Kargil war.g. Terrorist attacks also pull back the growths e. . In the long-term the hotel industry in India has latent potential for growth.

Oberoi group. are there. If the workers are working fine and providing the proper facilities to customers.Micro variables analysis Micro variables affecting the hotel industry The industries micro variables consist of elements that directly affect the industry such as suppliers. competitors. Taj group. Leela group etc. more it will do better. Generally the specialize services of leisure and its part are sourced from the specialize persons which directly affect the industry. Marriot hotels. Competition: There is lot of competition in industry of hotels which directly affect the country. Hilton group. Workers: The workers directly affect the industry. Regulating agencies: In every country there are some rules and regulations which are created by regulating agencies for proper and ethical working. . workers. The different micro variables are explained as below: Suppliers: The suppliers of the hotels are affecting the industry. More the company is providing the best facilities to customers. In India. the company will do the best.

Pest analysis / macro level analysis The macro variable consists of broader. • Hotel industry ensures a level playing field for so many companies. Social Factors: • In order to get world class infrastructure and facilities. • There is effect of rising of cost of raw-material which directly affects the economic condition of hotel industry. • Interface from other agencies. • A lot amount of investment is needed to enter in hotel sector. . • Entry barriers for new players. Technological Factors: • The growth of e-commerce is very necessary in this industry. legal and technological setting within which company and individual are placed. social. political. The different macro variables are explained as: Political Factors: • Excise duty and sales tax on services being regulated by respected ministries. economical. • In this industry. the development in hotel properties is necessary. This means it will provide 24-hours facility with global coverage which is necessary for the industry. Economic Factors: • The hotel industry has a good contribution to economy of countries. • The internet based booking systems is very necessary in hotel industry. • Modernization of hotel properties to provide the world class facilities. the safety regulations are required. • Hotel industry provides opportunities to lot of persons and with good salaries. This safety regulations are applied for every person of all the religions and class.

154 Hyatt 4.43 Park 33.009% 5.12% . whereas decreases indicate the opposite.24184 Leela 126. it can range from 0 to 10.02% 22.16% .99% 40.54 Hilton 572 Itc-maurya 1001.34% . 3 Hotels Profit after tax (in millions) Taj 322.96% 17.Herfindahl Hirschman Index (HHI) In order to measure market concentration HHI is used as an indicator of the amount of competition among the different firms in the industry.27% .1184 Marriot . moving from a huge number of very small firms to a single monopolistic producer.573 Total 2487.08% 1. The major benefit of the Herfindahl index in relationship to such measures as the concentration ratio is that it gives more weight to larger firms.06837 Market share 12. The resultant HHI may belong between any of the below index: Index below 1000 as "un-concentrated" Index between 1000 and 1800 as "moderately concentrated" Index above 1800 as "highly concentrated" Table no.000.39 Oberoi(hotels/villas) 423. Increase in the Herfindahl index generally indicates a decrease in competition and an increase of market power.62133 Le meridian 3.

96% 17.08% 1.02% 22.000081 25.9616 289.34% Square of market Share 167. 4 Market share 12.0144 .0256 .Market share = profit after tax of a hotel x 100 Total profit of all the firms HHI calculationsHotels Taj Oberoi(hotels/villas) Hilton Itc-maurya Le meridian Hyatt Marriot Leela Park Total Table no.5401 1621.6804 528.407081 HHI is 2335.16% .12% .6729 . .8064 1.407081 Since the HHI calculated is above 1800 the market structure is “Highly concentrated”.27% .7056 2335.99% 40.009% 5.

 Firms sells either identical or differentiated products (the only differentiation here being in service quality and frills offered). especially with regard to premium and luxury classes. and  The industry has significant barriers to entry (which holds true both with respect to regulations and huge capital investment required). follows a strictly oligopoly-type structure with the characteristics as follows:  An industry dominated by a small number of large firms.Market structure Market Structure and Implications The hotel industry in India. The following characteristics with respect to the Indian hotels market :         Few number of firms contributing to majority of the market share Products are differentiated in terms of service quality and offerings MR=MC P > MC Entry Barriers Firm is a price-setter Long run profit >= 0 Strategy dependent on individual rival firm’s behavior .

CHAPTER 3 MAIN TEXT & LITERATURE REVIEW .

‘field conditions’.e.  Research environment This research has occur under : Participant controlled environment and .  An ‘In-depth Expert’ interviewing has been done. .  Actual environmental condition i.Main Text and Literature Review Research Design  Type of study  Research is based on ‘Basic Explanatory study’ with an essence of ‘Longitudinal study’.

In this way ‘Intercept Judgmental Sampling’ has been done to proceed with the research study. Sampling trend In order to collect the data a specific population has been chosen to survey upon considering upon many factors like age.  Satisfaction measurement It focuses on knowing the engagement of customers towards satisfaction derived from their visits to the five star hotels by using “Multiple Regression” . market position. and to reach the other objectives of the study for the five star hotels in India.  Sample size A sample size of 50+ has been taken to evaluate the brand equity. qualification and etc.. occupation..

This questionnaire has been designed by the world class researchers and statisticians to collect the primary data while making a close check on the variables and factors that may play a crucial role in the analysis part of the research. Questionnaire designing A pre-designed questionnaire was provided to the interviewing managers and trainees.  Variables taken to measure           Age of the respondents Qualifications Occupation Preferences Loyalty Number of competitors Number of visits in a specific period Spontaneous brand Satisfaction Frequently used services .

 Statistical tools used to measure factors In order to derive at a consensus certain statistical tools has been used. . which is a dependent variable. In order to measure the satisfaction level. ‘Factor analysis’ has also been used to determine the variables that influence customers. ‘Multiple Regression’ and ‘ANOVAs’ has been used.

CHAPTER 4 DATA ANALYSIS & INTEREPRETATION .

Data analysis and interpretation After collecting the data of the respondents. Targeting Indian residential. data was Analyzed and interpreted.) Descriptive I. Profile of the respondents The project focuses on the customers who had an earlier experience with the five star hotels. The respondents covered in the study belong to various cast and colors irrespective of the religion or any tribe they belong to. In all total 50 respondents has been interviewed. The various break-ups of the respondents profile which played a crucial role in study are explained as follows: . The various topics covered for analysis and interpretation of data are: A. NRI and Foreign citizens was the ultimate objective of the study. The respondents who has been to five star hotels in last 12 months has been targeted so as to reach a fair result. with age above 30 and required education and occupation level. Initial focus was to cover a diversified range of people so as to reach a wider result.

4 Out of total respondents 40% are Females and rest 60% belongs to Males category.A. Gender wise breakup of the respondents Table no. . 5 Gender Male Female Total No. of People 30 20 50 Gender wise break-up of respondents Male Female Female = 40% Male = 60% Figure no.

5 Out of total respondents 36% belongs to Age-group of 30-40.B. of Respondents 18 18 14 50 Age wise breakup of respondents 30-40 40-50 50 and Above 28% 36% 36% Figure no. Age wise break up of the respondents Table no. 6 Age group 30-40 40-50 50 and Above Total No. 36% belongs to Age-group of 40-50 and rest 28% belongs to 50 and above Age category. .

C. of Respondents 14 24 12 50 Education Level wise break-up of Respondents Under-Graduate Graduate Level Courses Post-Graduate 24% 28% 48% Figure no. 48% belongs to Graduate level courses and rest 24% belongs to Post-Graduate category. 7 Education Under-graduate Graduate level courses Post-Graduate Total No. 6 Out of total respondents 28% belongs to Under-Graduate level of education. . Educational Level wise break-up of the Respondents Table no.

8% belongs to Consulting and rest 16% belongs to others category which includes Media. Industry wise Occupation Level break-up of the Respondents Table no. of Respondents 18 18 2 4 8 50 Industry wise Occupation Level breakup of Respondents 16% Manufacturing company 8% 4% 36% Retail company Financial company Consulting Others 36% Figure no. 4% belongs to Financial industry. 7 Out of total respondents 36% belongs to Manufacturing and Retail Company each. Teaching etc. . 8 Industry Manufacturing company Retail company Financial services Consulting Others Total No.D.

The market share calculated here is based on the customers response and based on the respondents chosen for study. Total 10 hotel chains and 1 other category has been listed out in order to find out the market share of the hotel industry. of Respondents 16 6 12 0 4 2 2 2 0 6 0 50 . Market share of the hotels Below is the market share calculated of the hotels in India based on the responses of the respondents. Following is the details of hotel group and the people staying in it in last 12 months: Table no.II. The data included for market share is based on the stay of the respondents in last 12 months. 9 Hotel Group Taj Group of Hotels Oberoi Group of Hotels Hilton/Trident Group of Hotels Oberoi Villas Hotels ITC – Sheraton/Welcome Group Le Meridien Hyatt Group Marriot Group Leela Group Park Hotels Others TOTAL No.

Market Share of the Hotels Others 0% Marriot Group Leela Group 4% 0% Hyatt Group 4% Le Meridien 4% ITC – Sheraton/Welcome Group 8% Oberoi Villas Hotels 0% Hilton/Trident Group of Hotels 24% Park Hotels 12% Taj Group of Hotels 32% Oberoi Group of Hotels 12% Figure no. The third position is shared by Oberoi Group of Hotels and Park Hotels each having 12% of market share The industry is highly concentrated as top 4 players pocketing about 80% of market share. 8 The Taj group of hotels stands top in the market share with a 32% of total market followed by Hilton/Trident group of hotels which holds 24% of market share. .

e. 50 for top of mind responses + 50 for spontaneous responses) . income level of respondents. In order to calculate the brand positioning every respondent was asked the names of hotels they are aware off. The brand positioning with the customers can be influenced be many micro and macro factors such as political and economical factors. In all 100 responses has been taken to study (i. In order to reach a fair brand positioning the first two responses were taken off to consideration.III. Brand Positioning of hotels with customers Brand positioning is calculated here to know the customers awareness about the hotels in the industry. there frequently visits and their perceptions. Name of first response is noted as “top of mind” brand and second response as “spontaneous” brand. The data following shows the brand and its positioning in customers mind.

Delhi Le Meridien. Delhi Trident / Hilton. of Responses 4 6 5 6 4 5 3 1 2 18 6 2 2 1 1 4 1 2 2 2 12 4 3 1 3 100 . Chennai Trident / Hilton. Hyderabad Novotel. Mumbai Grand Hyatt. Delhi The Oberoi Hotel. Mumbai JW Marriott.Table no. Mumbai Taj Banjara. Gurgaon ITC Maurya Sheraton.Bangalore The Oberoi. 10 Hotel Names Taj Mansingh. Goa Park Hyatt. Mumbai Hilton Towers. Delhi Shangri La. Hyderabad ITC Grand Kakatiya. Delhi Taj Mahal Hotel. Chennai The Park. Bangalore Taj Holiday Village. Chennai Leela Palace Kempinski. Hyderabad Le Meridien. Delhi Hyatt Regency. Delhi The Park Hotel. Goa TOTAL No. Mumbai The Oberoi. Hyderabad Marriott. Delhi Taj Palace.

Gurgaon The Oberoi Hotel. Chennai The Park. and Taj Palace. Mumbai. The Oberoi. Chennai Novotel. of Responses Figure no. . Mumbai The Oberoi. Hyderabad ITC Grand Kakatiya. Hyderabad Marriott. Goa Taj Holiday Village. Goa The Oberoi. Delhi The Park Hotel. Mumbai JW Marriott. Chennai Le Meridien. Delhi Hyatt Regency. Delhi Trident / Hilton.Park Hyatt. Followed by the Hilton / Trident hotels.Bangalore Trident / Hilton. 9 After analyzing the graph it can be clearly inferred that Taj Mahal hotel. Delhi ITC Maurya Sheraton. Hyderabad Taj Banjara. Delhi Shangri La. Mumbai Taj Mahal Hotel. Hyderabad Grand Hyatt. Delhi 0 5 10 15 20 No. Bangalore Leela Palace Kempinski. It clearly shows that Taj Group of hotels has a good image with the customers and a high “Brand Positioning”. Chennai. Mumbai is top in the brand positioning of the customers. Delhi shares the third position in brand positioning with customers. Delhi Taj Mansingh. Mumbai Le Meridien. Delhi Taj Palace. Trident / Hilton. Mumbai Hilton Towers. Gurgaon.

008 X3 Which means as the age of the customer is increasing the satisfaction level. Enter a. rec ommen d. loyalty and recommendation. Relation of Age of respondents with satisfaction.155 X1 + 4. So there exists a positive relation between dependent and independent variables.B. the Multiple Regression has been used.) Inferential I. satisaf acti a on V ariables Remov ed Method . 10 . loyalty and recommendation (Multiple Regression) In order to find the relation between age of the respondents with the satisfaction. loyalty and recommendation is also increasing. A ll requested variables entered.165 X2 + 2. The detailed analysis is as follows: V ariables Enter ed/Re m ovebd Model 1 V ariables Entered loyalty. Statistical result of the Multiple Regression is Y = 8. Dependent V ariable: age Figure no. b.398 + 3.

loyalty. 3. Error of the Estimate 5.2 % of the variance in the dependent variable is explained by the independent variables. Predictors: (Constant).612 A djusted R Square .A.467 variation of the dependent variable values around the regression line. ) M odel Sum m ary Model 1 R .2 % considerable variance between the dependent and independent variables. . recommend. 2.782 a R Square . satisaf action Figure no. The R square: The R square shows that 61. error of the estimate: It estimates that 5. The adjusted R square: The adjusted R square is the reduced R2 by taking into account the sample size and the number of independent variables in the regression model.587 Std. 11 Interpretation: 1. correlation coefficient R: The value of the correlation coefficient R indicates that there is 78.467 a. The Std. 4.

3546.069 1374. TSS = the sum of SSE and SSR (i.000) 2. The objective is to obtain the smallest possible sum of squared errors as a measure of prediction accuracy. Sum of Squared Errors (SSE) = the variance in the dependent variable not accounted for by the regression model = residual. Total Sum of Squares (TSS) = total amount of variation that exists to be explained by the independent variables.000 a Regression Residual Total a. Predictors: (Constant).B. loyalty. 12 Interpretation: 1. 3.690 29.000 df 3 46 49 Mean Square 723.931 3546. Degree of freedom: The total number of observations minus the number of estimated parameters. . Dependent Variable: age Figure no.890 F 24. .) ANOVAb Model 1 Sum of Squares 2171. recommend.e.212 Sig. satis af action b.

733 3.000 .165 1.05 ). 2. Beta interpretation = for every unit of the satisfaction X1 beta increases by .182 Sig. Beta is highly significant ( i. 3.092 .052 2. Dependent Variable: age Figure no.e. Equation for multiple regression is Y = 8.034 a.920 Standardized Coef f icients Beta . beta >= .398 + 3.362 units.008 .154 4. .298 t 1. it is the value on the Y axis (dependent variable axis) where the line defined by the regression equation crosses the axis.362 .) a Coe fficients Model 1 (Cons tant) satisaf action rec ommend loyalty Unstandardiz ed Coef f icients B Std.155 1. Error 8.381 .398 4.008 X3 .718 2.888 3.C. 13 Interpretation: 1. 4.009 . Constant term (b0) = also referred to as the intercept.155 X1 + 4.958 2.165 X2 + 2.

252 -.058 -.034 .114 spa -. 14 Interpretation: The correlation matrix gives the correlation coefficients between one variable and every other variable.000 .000 .108 .059 -.000 -.114 .130 -.119 .046 -.055 .II.000 .184 .091 .114 . Determinant = .180 .047 Figure no.108 .051 .119 1.108 1.108 .067 . In order to reach the objective the factors taken are “room service”.965 .059 .130 . The detailed analysis is as follows: A.111 .059 yoga .000 a.058 -.000 .111 1. “spa”.051 .) a Cor relation Matrix Correlation roomservice cuisines coffeshop yoga spa sw immingpool location games roomservice 1.046 -.000 -.034 -. Here the correlation between room service and cuisines is .191 1.059 -. Factors influencing the customers [Factor Analysis] In order to identify some specific factors which influence customers in it’s spending and choosing services in a hotel “Factor Analysis” has been used. “games”. These factors also suggest what are the factors that may attract more customers are.184 location .180 1.129 .129 .106 .067 -. “location”.055 -.021 -.965 sw immin gpool -. “swimming pool”.252 .114 .191 .055 -.132 -.056 1. “yoga”. “cuisines”.030 -. “coffee shop”.092 1.106 cuisines coffeshop .000 .056 games -.021 -.030 -.132 .091 .092 .

B.000 1.787 .931 .971 28 .000 1.) KMO and Bartle tt's Te s t Kais er-Mey er-Olkin Meas ure of Sampling A dequacy.000 1.736 . Bartlett's Test of Sphericity A pprox.) Com m un alitie s roomserv ice cuis ines cof f eshop yoga spa sw immingpool location games Initial 1.387 . .000 1. C. Here 93.1% of the variance in spa has been taken into consideration.930 Ex traction Method: Princ ipal Component A naly sis. Chi-Square df Sig.000 Figure no.529 .000 1. 16 Interpretation: The table of communalities gives the extent to which the variance in the variables has been accounted for by the factors.488 which is less than 0.000 Ex traction .000 1.630 . Here the adequacy is .488 138. Figure no.698 . 15 Interpretation: The Kaiser-Meyer-Olkin ( KMO ) and Bartlett’s test measures the adequacy of the sample. .000 1.5 which is not satisfactory.

e.262 57.800 57.034 .539 .158 14.032 Extraction Method: Principal Component Analysis. room service has the highest significance.341 Rotation Sums of Squared Loadings Total % of Variance Cumulative % 2.605 43.043 26.341 11.124 26.420 12.420 1. Here first factor i. 17 Interpretation: The total variance explained shows the Eigen values which represent the extent of coverage of the critical factors included in the factor analysis.141 1.D.925 .104 70.034 12.237 1.312 16.141 14. . Figure no.438 1.000 Extraction Sums of Squared Loadings Total % of Variance Cumulative % 2.552 26.262 57.043 1.909 10.184 14.124 1.856 6.876 .595 .947 92.341 Component 1 2 3 4 5 6 7 8 Total 2.) Total Variance Explained Initial Eigenvalues % of Variance Cumulative % 26.328 1.921 70.405 100.552 16.568 81.328 16.158 1.552 1.083 26.739 99.552 26.395 42.048 13.921 70.605 43.

0 Eigenvalue 1.0 0.) Scree Plot 2.5 0.5 1.E.0 1 2 3 4 5 6 7 8 Component Number Figure no. 18 Interpretation: The scree plot will help in taking decision for the numbers of factors to be retained. Therefore four factors are kept.5 2. Here the curve begins to even out after the extraction of the fourth factor. .

824 .615 -.5 are not shown as the ‘suppress loadings less than 0. 4 components extracted.956 4 .729 .855 Ex traction Method: Princ ipal Component A nalys is .) a Com ponent Matrix Component 1 rooms erv ice cuis ines cof f eshop yoga spa sw immingpool location games 2 3 . . 19 Interpretation: The Component Matrix shows the loadings of the variables on the four extracted factors. Figure no. The loading value tells about the extent to which the factor contributes to the variable.5’.F.616 .960 -. Loadings less that 0. a.

CHAPTER 5 CONCLUSIONS & SUGGESTIONS .

.  From factor analysis it can be inferred that room service plays a vital role in order to attract customers . as people belonging to age group 30-40 are less satisfied and are less loyal.  Hotel companies need to evaluate their performances and services in order to sustain with larger profits. This is an psychological reason as people of this age group are not much stable and demands for more. hotels should design their strategy in accordance with them.  The terrorism in the industry is the major threat to the industry.  The industry at present is offering excellent career opportunities.CONCLUSIONS & SUGGESTIONS Conclusion The analysis and interpretation of data on comparative study of 5 star hotels led to the following conclusions:  The Age of the customers plays an important role in choosing a hotel.  Since the most of the business comes from foreign and business travelers.

In order to target these customers a different low budget meal should be offered in Buffet system so that when the people enter first if budgeted food they will come to know about other services of the hotel and in this way business will increase. since visitors won’t feel comfortable every time they enter or leave.  Hidden security: Security is the biggest concern for the industry. So. Open kitchen or visit to kitchen concept can also help the customers for frequent visits. . And common man generally hesitates to enter a 5-star hotel due to financial constrains. inspite of checking the customers the infrastructure should be checked and protected.  Single dormitory system: There is a huge number of business travelers travelling across the country who generally cannot afford the expensive stays at 5-star hotels. A single bed dormitory system should be given to the customers. in this way cheap guest houses eats a very big pie of the industry.Suggestions / Recommendations The study undertaken brings some interesting result:  Focus on lower budget meals: since the food available in 5-star hotels is beyond the reach of the common man.  Vegetarian meals with transparency: A majority of customers in India belongs to vegetarian class.

CHAPTER 6 REFERENCES .

May .gourkanjilal.com/india/hospitality/overview/swot http://www. Business Research Methods.com [Accessed regularly] http://www.com [Accessed 10 may 2009] http://www.co.org/wiki [Accessed 1 may 2009 – 15 may 2009] http://www.com/index. Business Research Methods.coursework4you. ICFAI Centre for Management Research [2005]  References from electronic resources          www.References  References from print materials  Donald R.uk/sprtcasec. Supplement to Business Research Methods.htm [Accessed 3 may 2009] http://www. ICFAI Centre for Management Research  ICMR.2009 [Television series].com [Accessed 17 may 2009]  References from television telecasts  The lifestyle .com [Accessed 13 may 2009] http://en.oberoihotels.zoomtra.gallup. Tata McGraw Hill Publishing Company Ltd.unclaw.tajhotels. New Delhi [2000]  ICMR.htm [Accessed 25 April 2009] http://www.Zee business news channel .com [Accessed 10 may 2009] http://www.Schindler.naukrihub.Cooper and Ramela S.wikipedia.