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Orchid Ecotel Case

Submitted by Group 2
Anchal Sahai PGP/24/129

Radhika Nema PGP/24/233

C R Vinuthna PGP/24/384

Nigil Kumar S PGP/24/164

Kartik Narayana PGP/24/467

 FINANCIAL CHALLENGES FOR EXPANSION
• Basic infrastructure – In Heritage hotels which are
taken over from owners, revamping of basic
infrastructure has to be done for converting the
hotels to Ecotels
• Operational strategies are different for each of the
verticals and investment is required to bring in
modifications so as to suit Ecotel hotel operations
• As all four verticals are targeting different customer
segments, not all the customers would be ready to
pay extra bucks for eco friendly rooms
• Awareness has to be created among employees
regarding the eco friendly initiatives and practices
being adopted - Expenses shall be incurred to
conduct training workshops
• Investment is required for spending on eco friendly
gadgets and environment friendly material
• Investment in Ecotels would reap benefits in the
long term and there will not be any immediate
returns
• Obtaining Ecotel certification is a comprehensive
process requiring them to look into energy
management, solid waste management, water
management, employee education and community
development
• To achieve operational efficiency at Ecotels
synchronising of front end(customer service) and
back end(inventory management, supply chain etc)
needs to be done which also requires planning and
investment
• Eco initiatives like triple glazed windows, R22 air
conditioning etc involve high initial and upfront
investment
• Low occupancy rates and less inflow of income due
to economic slowdown
• Budget shall be required for conducting programs
and activities promoting eco friendly solutions
• Expenses for membership referral programs and
other promotional offers for spreading positive word
of mouth about the environmental initiatives taken
up
• Investment is needed for introduction of budget
hotels as consumer preferences have changed
• Adherence to different laws and by laws in different
nations also has a bearing on the project cost
• As they are not going for franchising for expansion
and are choosing to manage the properties, the
same would also require investment
 Ecotel Industry- Porter’s Five Forces Analysis
I. Threat of New Entrants- Medium III. Threat of Substitutes- High
● The demand for tourism in India is expected
grow at 8.2% between 201-19
● New age travelers look for experience
● Differentiation and capturing new opportunities
to grow will draw new players and existing
players to enter into ecotel
II. Bargaining Power of Buyers- High
● The new age travelers are looking for new
experiences different from traditional ones
● The level of acceptance and adoption of eco
friendly practices during their stay also
determine the success of ecotel
● People satisfied with the level of
sustainability offered by the ecotel would be
willing to pay more
V. Bargaining Power of
● The wide range of offerings in the ecotel industry Suppliers- High
right from budget stays, home stays to luxury ● For sustainability of Ecotel huge
hotels, resorts and retreats focus has to paid on
● The threat of substitutes is high because if a infrastructure & human
traveler does not find it satisfactory they will resources
readily switch to alternate forms ● To reap the benefits of eco
hoteling a proper infrastructure is
IV. Threat of Competition- Low needed (waste management,
electricity, water etc.,) right from
● While there are substitutes available in the
design and requires suitable
industry, the number of firms offering ecotel kind
suppliers
of hotels in the industry due to the high level of
● For HR, right selection and
specialization required is low
training of personal to ensure the
● The high degree if specialization required
sustainability of operations
warrants huge capital investments in terms of
considering the values and
infrastructure and human resources
culture fit has to de done
● The above reasons makes it feasible for only the
few large companies like Oberoi, Taj etc., to enter
such industry as they have deep pocket
Building an environmentally sustainable hotel
regarded as a core competency?
YES Being an environmentally sustainable hotel
can be regarded as a core competency
when it is used as a point of differentiation
in all the marketing activities.
The implementation should guarantee that
the hotel is able to develop a unique selling
point in the market on which to compete.
Every aspect of the company involved in
making the operations environmentally
friendly.
NO Sustainability is becoming a growing
concern amongst masses and
businesses are pursuing it to attract
customers at an ever growing scale.
Hence, the hotel might lose its USP
if it takes the common sustainability
measures like using sensors to
conserve power, water management
etc.
An eco-friendly strategy deployed by Taj Hotels
Environment Awareness & Renewal at Taj Hotels - EARTH

Taj Hotels, Resorts and Palaces, today a global hospitality chain with 77
properties in over 60 locations, has been a steward of social responsibility
since its founding in Mumbai, India, in 1903. In 2009, they launched a project
as a commitment to energy conservation and environmental management.
This project, EARTH has received certification from Green Globe, the only
worldwide environmental certification program for travel and tourism.

Green Globe is the international benchmarking and certification programme

for the travel and tourism industry based on the Agenda 21 principles for
Sustainable Development endorsed by 182 Heads of State at the United
Nations Rio Earth Summit in 1992. Green Globe, is the only worldwide
environmental certification program for travel and tourism.

The EARTH movement works to minimise the impact of its businesses on the environment. The initiatives under this
include environmental training for all employees, energy audits every three years, and a phased reduction of freshwater
consumption. Few of them are listed in the following slide:
Energy: Taj hotels use CFL lights, which consume 78% less energy; Taj Coromandel, Chennai, generates
energy from windmills; Solar water heating systems at the Taj West End, Bangalore, have saved over 51,000
litres of fuel over the last 3 years; a biogas plant at Rambagh Palace, Jaipur, helps in cutting energy cost.

Waste management: In hotels where land is available, kitchen waste and dry leaves are converted into
compost; waste paper from printing is reused as writing pads; pipe steel waste is used as safety railings or in
barricades; and old bed sheets are used to make linen bags and cotton napkins. Located in a sensitive
ecological zone, the Taj Exotica, Maldives, focuses on waste management. The use of plastic bags is
restricted and hazardous substances such as lead acid batteries are sent to Thilafushi Island, a landfill area
allocated for refuse.

Environment: The Taj Garden Retreat and Bird Sanctuary which are located at Kumarakom is a favourite
haunt of several species of migratory birds. The hotel uses special lighting to reduce the glare so as not to
disturb animal life, and wastewater is treated before being discharged.

At Pichola Lake, the Taj takes care to avoid spoiling the lake water and harming its marine life. The hotel
uses battery-operated boats instead of those powered by gasoline, and wastewater is recycled and used for
irrigation.

The Taj Coral Reef, located on a tropical atoll, takes great care to protect the delicate ecosystem of the coral
reefs. Trees are planted near the beach and extraction of sand from the beach is not permitted. Organic
wastes are processed and converted to fish food.
Thank you.