Hospitality Industry

Topics: Tourism, Hotel, Hotel chains Pages: 7 (1957 words) Published: September 14, 2010
* Overview
Hospitality is about serving the guests to provide them with "feel-good-effect". "Athithi devo bhavha" (Guest is God) has been one of central tenets of Indian culture since times immemorial. In India, the guest is treated with utmost warmth and respect and is provided the best services.Today hospitality sector is one of the fastest growing sectors in India. It is expected to grow at the rate of 8% between 2007 and 2016. Many international hotels including Sheraton, Hyatt, Radisson, Meridien, Four Seasons Regent, and Marriott International are already established in the Indian markets and are still expandingNowadays the travel and tourism industry is also included in hospitality sector. The boom in travel and tourism has led to the further development of hospitality industry. | * Classification

The Indian hospitality sector can be broadly classified into two broad categories: 1. Hotel industry
2. Travel and Tourism industry

* Sector outlook
Hotel industry depends largely upon the foreign tourist arrivals further classified into business travelers (around 65% of the total foreign tourists) and leisure travelers. The following figures show that business as well as the leisure travelers (both domestic and international) formed major clientele for hotels in 2004 Over the last two years, the hotel industry has seen higher growth rates due to greater number of tourist arrivals, higher occupancy rate (being around 75% in FY'06) and significant increase in average room rate (ARR). The major factors contributing to this growth include stable economic and political conditions, booming service industry, FDI inflow, infrastructure development, emphasis on tourism by the central as well as state governments and tax rationalization initiatives to bring down the tax rates in line with the international levels.

The number of tourists visiting India is estimated to touch the figure of 4.4 million. With this huge figure, India is fast becoming the hottest tourist destination in the region. The visitors include business travelers, leisure travelers and persons of Indian origin with foreign passports. Growth is expected to continue over the next few years. It is being predicted that India may achieve an average growth of 12% per annum in tourism for many years to come. Apart from international tourists, the domestic tourist market, including business and leisure travelers, is also flourishing. This market is estimated at around 300 millions tourists per year. The industry also expects a boom in spiritual and medical tourism in the domestic sector at a growth rate of 10% to 15% over the next few years. Growth in tourism will definitely lead to a boom in hotels and restaurants. Though there is a shortage of rooms at present, it is going to be over soon enough, as top international players are heading towards India to establish themselves here. A steady growth of about 10% in new hotel projects is expected for the next few years.

* Trends in hospitality sector
Trends that will shape the future of hospitality sector are: 1. Low Cost Carriers
2. Budget Hotels
3. Service Apartments
4. Technology
5. Loyalty Travel

1. Low cost carriers: Travelers in general are more price sensitive to airfare than they are to hotel room rates. Often a low airfare will stimulate demand for travel even if hotel prices are increasing. LCCs are a good option for business travelers, as they have advantages like low costs, more options and connectivity. 2. Budget hotels: More than 50 per cent of occupancy of a majority of hotels comes from the business travel segment. The average room rate (ARR) realized from business travelers is normally higher than from leisure travelers. Heightened demand and the healthy occupancy rates have resulted in an increase in the number of budget hotels. Some of the new players entering into this category of hotels include Hometel, Kamfotel, Courtyard by...
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