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Jun 14, 2012

Classification and hotel concepts

Abstract
Hotels in India can be broadly classified into two segments - star hotels and hotels awaiting classification. In addition, there are several important hotel concepts, depending on the nature of service provided. This is independent of the broader classification standards.

Key Issues
- How are hotels in India classified?
- What are the various hotel concepts?
-

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No part of this Report may be published/reproduced/distributed in any form without CRISIL’s prior written approval.

The hotel industry in India can broadly be classified as follows:

Classification of hotels by Ministry of Tourism

Source: CRISIL Research

Starred hotels
Star Hotels
As per guidelines given by the Ministry of Tourism, hotels are classified into, 5-star deluxe, 5-star, 4-star, 3-star, 2-star and 1-star. The ministry re-classifies hotels every 5 years.

Facilities and services in star hotels

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No part of this Report may be published/reproduced/distributed in any form without CRISIL’s prior written approval.

Instances of starred hotels

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No part of this Report may be published/reproduced/distributed in any form without CRISIL’s prior written approval.

Heritage Hotels
Heritage hotels include old palaces, forts and havelis that have been converted into hotels. To be classified as a heritage hotel, the structure should have a minimum of 50 per cent of the floor area built before 1950 and no substantial change is to be made to the facade.

Heritage hotels are further classified into:
Heritage basic: This category covers residences, havelies, hunting lodges, castles, forts and palaces built prior to 1950 and subsequent to 1935. The hotel should have a minimum of five rooms (10 beds). Heritage grand / heritage classic: This category covers residences, havelies, hunting lodges, castles, forts, palaces built prior to 1935. The hotel should have a minimum of 15 rooms (30 beds).

Awaiting classification hotels
This includes hotels that have not yet been classified into any star category by the Ministry of Tourism.

Hotel concepts
Apart from ratings, hotels can also be classified based on certain characteristics.

Classification of hotels based on concepts

Source: CRISIL Research

Based on location
City hotels
These hotels are located near the cityâ??s central business district. Due to its location, these properties typically charge high

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No part of this Report may be published/reproduced/distributed in any form without CRISIL’s prior written approval.

average room rates (ARRs). Further, occupancy rates (ORs) are generally higher on weekdays because of a higher number of business travellers. Hotel Leela Chanakyapuri in New Delhi, Taj Banjara in Hyderabad and The Oberoi in Bengaluru are examples of city hotels.

Suburban hotels
These are located in suburban areas, catering to customers travelling for business or leisure. These hotels are situated far from the central business district. For e.g., Sohna Road, a suburb near Gurgaon, is a weekend getaway for the residents of Delhi. Westin Sohna Resort and Spa operates in this region.

Airport Hotels
These hotels are located near an airport and act as transit hotels for guests who need a place to stay between flights. Novotel Airport Hotel in Hyderabad and Clarks Exotica in Bengaluru are examples of airport hotels. Resorts

Resorts are usually located at hill stations or near beaches. Resorts can be further classified into hill resorts, health resorts, beach resorts, summer resorts and winter resorts. Since these places are frequented by travellers for the purpose of relaxation or recreation, occupancy rates in resorts are generally higher on weekends and public holidays. Motels

The word motel (a portmanteau of "motor and hotel" or "motorists' hotel") initially referred to a single building of connected rooms whose doors faced a...
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