4.1.2 Legal
The legal environment is also a major determinant for the industry. The laws that govern the industry are not the same in all the parts of the country. Laws like the Urban Land Ceiling Act limit the amount of land any organisation can hold and this severely limits the growth of hotel rooms in many areas of the country. Many of the laws that are in effect are old and archaic, and not geared to meet the challenges of the 21st century.
4.2 Economic
The tourism industry not unlike the other industries grows with the increase in the spending of the people. The more the people spend the more the industry grows. The spending power of the people has been increasing in the country and all over the world. Since we are concentrating on the international tourists, the large increase in the spending power in most developed countries has left a large amount of idle cash in their hands. This has lead to the tourism boom the world over and India has been no exception. There have been more people coming into the country with more cash than ever before. This has lead to an increase in the demand for better hotels. People who previously used to come to the country on a shoestring budget and used to hunt around for the cheapest accommodation now can afford to go for luxury hotels. This has lead to an increase in the number of hotels in the country. However, an increase in the spending does not only limit itself to accommodation. The increase in the spending is also evident in the increase in the number of people travelling by air. Even the number domestic tourists travelling by air has dramatically gone up.
4.3 Social
Tourism was always looked upon as something that always leads to the destruction of the social fabric of a place. The more the amount of outside people coming into a place, the more the risk of that place loosing its identity. Prime example is Goa. From the late 60's to the early 80's when the Hippy culture was at its height, Goa was a heaven for them. Here they came in the thousands and changed the whole culture of the state. This had a ripple effect on the country. People became cautious, especially of the international tourists. Whenever a certain place became famous, the example of Goa was cited to discourage the inflow of international tourists.
Although the above may sound discouraging, the scene is fast changing. Those places that have been able to strike a balance between their own culture and the demands of the international tourist have profited handsomely. The examples that come to mind are Kerala and Rajasthan, as discussed ahead in the report. People are now adopting themselves to the fact that tourism pays and it can be a major source of income for them.
Even people themselves have started travelling. In addition, tourism as a form of recreation has really caught on. People are willing to travel to a place that is out of way and exotic. When previously travelling on a holiday meant going to a hill stations and beach, now people are willing to go in for adventure tourism as well as visit places that cannot be really be called hospitable. Now places like Leh and Lakswadeep are mentioned in the same breath as Goa or Kashmir.
4.4 Technological
Technology although does not seem to be a major influence at the first glance, still it plays a major part in the promotion of a place. Better communication facilities are one of the first prerequisites for growth in the inflow of tourists. This has been made possible with technology. Better technology in the field of communication with cheaper costs have seen many remote and inaccessible areas of the country get connected to the rest of the world. This connectivity has made these places visible to the world. Better communication means access to media. And that is very important if any place wants to be on the world tourist map.
Similarly better transportation facilities have lead to a dramatic increase in the number of tourists visiting any particular place. The presence of an airport and the availability of frequent flights are a great convenience to any traveller.
5. TOURISM : A SUM TOTAL
5.1 The Different Parts
We have seen in the PEST analysis how various environmental forces influence the tourism industry. The other aspect of this industry is that it is heavily dependant on a set of other industries who are in turn dependant on the tourist flow for their business. This combination of various industries has to work as one to increase the tourist traffic of the country. This set of industries takes care of the activities like travel, accommodation, sightseeing, entertainment etc. Major industries that support tourism industry are:
· The Hotel Industry
· Airlines
· The Railways
· Road Networks
· The Tour Operators
· The Government
These facilities decide the status of a place in a tourist's portfolio. They on one hand attract tourists to a particular destination and on the other act as a major demotivating factor if they are unable to fulfill the expectations of the visitors. We feel that the major bottlenecks to this industry are to be found here. In the subsequent pages we have tried to analyse some of these services and detect areas that need attention.
5.2 Hotel Industry
Hotels form one of the most important support service that affect the arrival of tourist to a country. The major players in the industry are Indian Hotels Company Ltd (IHCL) operating under the Taj brand, the Oberoi, Oriental Hotels, Hotel Leela Venture and the Ashoka chain of hotels, owned and operated by the Indian Tourism Development Corporation (ITDC).
There are around 1000 classified hotels and the total room availability is pegged at 60,000 rooms. Hotels are classified into six categories according to the star rating assigned by the Department of Tourism. These range from one star to Five star deluxe depending upon size and amenities. About 30% of the rooms fall under the 5-star or 5-star deluxe categories.
To find out the present status of this industry we have done a strength, weakness, opportunity and threat (SWOT) analysis. This will help us in understanding this industry and also identify the weak spots.
SWOT Analysis
Strengths
1.A very wide variety of hotels is present in the country that can fulfill the demand of the tourists.
2.There are international players in the market such as Taj and Oberoi. Thus, the needs of the international tourists travellers are seen to while they are on a visit to India.
3.Manpower costs in the Indian hotel industry is one of the lowest in the world. This provides better margins for Indian hotel industry.
4.India offers a readymade tourist destination with the resources it has. Thus the magnet to pull customers already exists.
Weaknesses
1.The cost of land in India is high at 50% of total project cost as against 15% abroad. This acts as a major deterrent to the Indian hotel industry.7
2.The hotel industry in India is heavily staffed. This can be gauged from the facts that while Indian hotel companies have a staff to room ratio of 3:1, this ratio is 1:1 for international hotel companies.8
3.High tax structure in the industry makes the industry worse off than its international equivalent. In India the expenditure tax, luxury tax and sales tax inflate the hotel bill by over 30%. Effective tax in the South East Asian countries works out to only 4-5%.9
4.Only 58,000 hotel rooms are available in India today, which is less than the Bangkok hotel capacity.10
5. The services currently offered by the hotels in India are only limited value added services. It is not comparable to the existing world standards.
Opportunities
1.Demand between the national and the inbound tourists can be easily managed due to difference in the period of holidays. 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, generally the summer months.
2.In the long-term the hotel industry in India has latent potential for growth. This is because India is an ideal destination for tourists as it is the only country with the most diverse topography. For India, the inbound tourists are a mere 0.4% of the global figures. This number is expected to increase at a phenomenal rate thus pushing up the demand for the hotel industry.
Threats
1.Guest houses replace the hotels. This is a growing trend in the west and is now catching up in India also, thus diverting the hotel traffic.
2.Political turbulence in the area reduces tourist traffic and thus thee business of the hotels. In India examples of the same are Insurgency in Jammu Kashmir and the Kargil war.
3.Changing trends in the west demand similar changes in India, which here are difficult to implement due to high project costs.
4.The economic conditions of a country have a direct impact on the earnings in hotel industry. We can see that the present economic slowdown in India has let to a 51.6% fall in the industry average net profits for the second quarter of the current financial year, 2000.11.
5.3 Transport Facilities
A well knit and coordinated system of transport plays an important role in the sustained economic growth of the country. The present transport system of the country comprises of several modes of transport including rail, road, air transport etc. Tourism industry is also affected by the performance of these services.
5.3.1 Airline Industry
Airports are the primary infrastructure facility that a country has to offer to the international tourists. It would be surprising to note that renowned tourists destinations like Jaipur and Goa do not have an international airport. Foreign guests, who constitute more than 60% of the tourists destined for these cities, currently have to travel via Mumbai, unless they are ready to charter a flight. This makes things cumbersome and time consuming, thus discouraging many time conscious tourists from visiting these places. Similar is the case of cities like Agra, Udaipur and Varanasi where foreign tourists account for approximately 50% of the total tourists arrival.
SWOT Analysis
Strengths
1. Airline is the most preferred mode of transportation by the foreign tourists as the convenience provided by the airlines is higher.
2. The savings in time that this mode of transport offers is immense.
Weaknesses
1. Inefficiency of the domestic airlines- there are number of instances of flight being cancelled or delayed. Secondly frequent strikes by the pilots and maintenance problems are a major cause of concern. This is one of the reasons that make a tourist disheartened.
2. Lack of basic facilities at the airport. When international airports offer such services like free transportation facilities, private lounge facilities at airports, food etc, it sometimes become impossible to find a usable toilet in our international airports.
3. Government does not allow the capacity of existing airports to increase and private and foreign operators are not given clearances to operate in the country.
Opportunity
1. As the tourism industry expands the airline industry is also in for a boom.
2. Development and upgradation of the present airports
3. India's geographic location makes it an ideal location to serve as a link between the East and the West.
Threat
1. Domestic airlines (Air India and Indian Airlines) face major competetion from other transnational airlines.
5.3.2 Road Network and Railways
Airports being a weak links in Indian tourism, tourists are forced to use roads. More than 80% of the tourists have to use road network but the deplorable road conditions in India do not make the traveling easier. The major factor that hampers the development of road sector is the government control over all the road properties. Internationally, all the major cities within the country are connected with six lane highways. But in India, even the four metros are not well connected. Thus, the basic infrastructure to support the tourism industry is missing.
Strength
1. India has one of the largest road networks in the world. The country's total road length was 30,15,299 km in 1994-95.13
2. Trains like Palace on Wheels provide a feel of Indian majesty of the days gone by.
Weakness
1. The road condition in India is very bad. The roller coaster ride is not what is expected while travelling by the tourists.
Opportunities
1. The smaller places that cannot be accessed by the air, road and railways are the next best options.
Threat
1. There are no major threats to this industry as there is no substitute at present. Airlines are the only threat, which will take time to develop to come up to have such extensive distribution as rail or roadways.
5.3.3 Travel agents and tour operators
Travel agents and tour operators form the backbone of the industry. They play an important role in promoting the country as a tourist destination. An example, City Cross Travels Private Limited, Mumbai is promoting tourism in Jammu and Kashmir despite the violence that took place some time ago. Similarly other travel agencies are also trying to project a peaceful picture of India abroad. The travel agencies provide package tours that lure the foreign tourists towards our country. These packaged tours extract the best out of places and gives a foreign tourist a feel of the rich cultural diversity of our country.
Strengths
1. Travel agents are moving from being mere ticket issuers to travel consultants taking complete responsibility for the consumer's needs.
2. Travel agencies not only provide the picture of the country to the interested parties but also lure them to visit a country by the attractive packages
Weakness
1. Travel agents are most affected by the taxes that are part of the industry.
Opportunity
1. As the number of tourist is increasing, there is a need to identify their requirements and the travel agencies can tap this segment.
Threat
1. With the advent of internet the role of travel agents is changing and the whole industry faces a threat of extinction unless they change to meet the need of tourists.
6. THE BOTTLENECKS
The analysis in the previous pages has very clearly shown us the reasons, which are responsible for the lack of growth in the tourism industry. In this section we attempt to list the factors that are responsible for this state of affairs.
· The role of Government: the plethora of taxes and procedural complications
· Poor infrastructure
· Inadequate world class accommodation and Untrained personnel manning key facilities
· Unfocussed marketing of the Indian tourism product package (a recent example being Andeman Nicobar islands which is going to be the first place in the world to officially herald the coming of the new millennium)
· Apprehensions about the law and order situations
Some of these bottlenecks have been discussed detail in the subsequent sections.
6.1 Government
One of the most glaring reasons that the study has brought out is the lacuna in the Government's policies towards the industry. The government is the most important player in this industry and all the other players have to follow the lead taken by it. However, the actions of the government have not been proactive. Rather it has been late in rising to the opportunity that the tourism industry offers. There are not enough incentives been offered to the other players like Hotels and the travel agencies. There is no incentive for the hospitality industry to set up shop in area, as is the case with other industries. The government should be taking the lead and attracting the industry to places that have vast tourist potential but have still not fully developed. Incentives like tax holiday or a reduced rate of duties would go a long way in the promotion of the places. Secondly, the various restrictions those are in place in areas like Sikkim and the North-East should be relaxed so that more people can visit those places.
Even when the Government is in charge of maintaining the sites of historical importance, it has been greatly hampered due to resource crunch. The sites that are under the Archaeological Survey of India are in pathetic condition as they agency does not have enough manpower or the money to look after all of them. This has lead to the gradual decay and destruction of many important sites both by nature as well as because of vandalism. There have been cases where whole temples have been systematically stripped and completely dismantled without the agencies in charge being aware of them.
6.2 Poor Infrastructure
The infrastructure has been a major reason why the international tourist has been skipping the country. Delayed or absence of connectivity to different locations, lack of proper accommodation facilities, bad roads and no communication facilities are some of the factors that are stopping people from visiting many places. Unless the infrastructure is properly developed, a large majority of tourists will give the country a skip. Again this is linked to the above bottleneck. The lack of a Government that is proactive. Unless the government sanctions the infrastructure projects there will be no improvements in the situation. A very recent example that has been in the news is the airport project in Bangalore. Although the proposal has been lying with the government for three years, still now it has not been implemented. There is an acute lack of proper accommodation facilities for the tourist. So more hotels have to be built. Even now there are some places that are not properly connected by even good and navigable roads. These also need to be developed.
6.3 Apprehensions about the law and order situations
The lack of security that is faced by a lot of international tourist is also a major cause for concern. There have been many instances where tourist have been physically assaulted, robbed and sexually harassed. Any such incident reflects badly on the country and creates a negative image in the country from which the tourist has come. In the mid nineties, when insurgency was thought to be on a decline in Jammu and Kashmir, five foreign tourists were kidnapped. This lead to a lot of clamour and the State Department of the US issued a specific warning to its citizens not to visit Jammu and Kashmir. Although the notice was only for J&K still then it affected the total inflow of tourist into the country. Similarly a French national was sexually assaulted in New Delhi and that too had attracted international attention. Apart from these, there are hundreds of other incidents like cheating to murder that tarnish the image of the country. All these concerns have to be meet.
6.4 Misconception about the Country
The image of the country has taken a long time for the change from the old image of the land of snake charmers. There are many places where the image of India is one of poverty, superstition, and diseases. One of the main reasons why tourist do not visit the country has been the fear of been infected by some exotic disease. The case of Plague in Surat in 1994 led to a decrease of 36% in arrival of foreign tourists in India (Appendix1). All these misconceptions unless addresses immediately will create a problem for the growth of the industry.
7. WHAT WE SUGGEST
To increase the inflow of tourists in India a combined effort by all the major players will have to be made. The government's role is critical, as it will have to provide the conducive environment for the supporting industries to function properly.
To begin with, the tourist has to be given the status of a customer. The treatment he receives is summed up nicely in the words of Mahatma Gandhi-
"a customer is the most important visitor on our premises: He is not dependant on us. We are dependant on him. He is not an interruption on our work. He has the purpose of it. He is not an outsider to our business. He is a part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so." This definition clearly brings out the areas which need defining.
1. Which type of customer is a tourist?
No formal definition could be found but their exists a debate on the profile of the tourist. One of the classifications given by Aderhold says that there are three major types, they are-
Type 1 is your conventional beach holidaymaker who seeks sun and sand, shuns contact with the locals, and heads for organised package tours and club vacations.
Type 2 combines sightseeing with some bathing in seas or lakes, is reasonably curious but not overly interested in local culture, and also prefers organised packages.
Type 3 is the 'alert, independent traveller' who is eager for new impressions and experiences, as well as social and cultural contacts. He or she prefers small hotels typical of the host country's architecture and materials, and arranges trips on an individual basis, not through charters or packages. These travellers are also often richer, better educated and married.
Now India has to decide which type does it want to attract and thus structure its resources for the same.
2. What are the premises of the tourist industry?
3. What is the product offered by the tourist industry?
Define the product: in a vast country like India with its diverse culture, languages, flora and fauna and architecture, it is difficult to define the product to the whole world. Unlike a country like say Kenya, with its safaris or Singapore with its shopping and electronics industry, India means a lot of things to a lot of people. Every place in the country has a different appeal. Here each place or package can be defined. Officials must decide on the main features that are and then go about attracting international tourist on that basis. Example is Rishikesh, which has turned itself as a major white water rafting destination on the world tourist map.
4. What is the inventory of the resources?
The inventory keeping of such a resource pool is a magnanimous task. Are the Indians ready to take it up?
To improve the state of the tourism industry this task has to be handled and handled efficiently.
5. What is the market for the tourism industry?
Is it only the West where we sell our country or there are other places where it can be marketed? This decision will help India tune its resources to the needs of the tourists.
The resources of the country have to be managed intelligently. The problem of too many cooks is present here this has to be sorted out.
6. Who manages the affairs?
We have seen that root to most problems lie in Management not being in the hands of professionals. This should be rectified.
7. What is the image that should be projected?
Should the various areas be marketed as different packages or the country as one?
We have already seen the diversity of this country and feel that projecting it as a single pack does not do justice to its various flavours.
These fifty years have given some type of image to India as a tourist destination and this image needs to be fitted to the image that India wants to project. The tourism-marketing department has its work cut out for it.
8. What is the role of the Government agencies?
The most important area still remains that various government agencies have to learn that a tourist is the customer of the country and should be treated in the same way.In this section, we have given a few examples of things, which have gone right, like Rajasthan and Kerala. Also of the things which went wrong like Sikkim and Simla. These are small case studies, which try to bring out the peculiarities to Indian tourism.
8.1 RAJASTHAN -THE LAND OF KINGS
Rajasthan, the Land of the Kings, is India at its exotic and colourful best. It is the home of the Rajputs, a group of warrior clans who have controlled this part of India for 1000 years according to a code of chivalry and honour akin to that followed by medieval Europe's knights. Although the fortunes of its former rulers may be in tatters, the culture of Rajasthan, with its battle-scarred forts, amazing palaces, riotous colours and sense of gallantry, is still very much alive.
The harsh Rajasthani landscape and tribal customs have fashioned a people and culture which are visibly different from those found in the rest of India - from the huge, pastel-coloured turbans and soup-strainer moustaches sported by the men to the bright mirrored skirts and chunky silver jewellery of the women. They have also endowed the state with a magical air of romance, speckled with desert forts, lush oases, and exotic cities that rise out of the landscape like shimmering backdrops to Tales of the Arabian Nights. No-one visits Rajasthan without taking home superb memories, a parcel of folk art and a lot of sand in the eye.
Though these resources are there, so what? They are also present in other states like Madhya Pradesh. Then what is different for Rajasthan?
Before deciding what to offer to the international tourist, a state should first find out that what is it that this tourist wants? Rajasthan seems to have found an answer to it and thus has become a favoured destinations of tourists.
What Rajasthan offers is not a mere site-seeing tour like any other historically significant place, but treats the tourists to an experience of times bygone. It may be a ride aboard 'Palace on Wheels' or a stay in any of the Heritage hotels strewn across the state, for the right price Rajasthan makes you royalty for your stay there and this is what attracts the people. This has not been any easy task to accomplish. The combined efforts of the public and the state government has made it possible for desert state to triumphantly march in the country's otherwise funereal tourism scenario. Some of the noteworthy state government actions are wholehearted endorsement of private investment in the hotel industry leading to the number of hotel rooms growing at a fair rate. The loans and subsidies are being given on liberal terms to owners of forts and palaces to convert their properties into hotels. The other side also embraced this idea fully as it gave the royalty a chance to once again play kings and queens. There are 17 heritage hotels recognised by the department of tourism, 30 other operating heritage properties and 12 are in the planning stages. And as many as 56 properties have expressed interest in offering themselves for the heritage status.
A few of these turnaround stories are:
Luni Haveli -A dream in red sandstone
Luni is a small village some 30 km from Jodhpur and the haveli is at least two centuries old. No one lived there after 1860, save bats and sundry reptiles. In 1992-93 it all changed, extensive renovations were carried out and today the Luni Haveli is one of Rajasthan's more impressive heritage hotels. The property extends over two and a half acres, has 19 rooms and will soon offer its guests a swimming pool. It has achieved a 50 per cent average occupancy
It is run by 27 years old Vikram Singh and Yamini his wife who till date thank a certain hotel chain who approached them to develop the property. However, the deal could not be made but the idea was implanted and today Luni Haveli is beginning to find itself on tourist itineraries.
Dera Dundlod Kila
Dera Dundlod Kila, a 250-year-old fort in the heart of Shekhawati. Its reins are in the hands of Thakur Raghubir Singh and his dynamic son, Kunwar Raghavendra Singh, better known as Bonnie. The father-and-son duo decided to convert the property into a hotel with a dual purpose in mind: it would, on the one hand, save the sprawling fortress from turning into a ruin and, on the other, generate some badly needed income for the family. Today, with 27 rooms and an annual turnover of Rs 10-12 lakh, the Singhs are reaping the rewards of their sagacity.
Narain Niwas Palace- a rest house for camel caravans!
Today the palace in the golden city of Jaisalmer has a yearly turnover of a neat Rs 70 Lakhs. Also the local crafts are finding a new lease of life with the increase in their demand. The various local arts are also reviving due to the same. Thus we see that if managed properly tourism is beneficial to all.
All's not well in Paradise
The Indian tourism industry needs to address a perception most tourists go away with - of having been cheated. This problem manifests itself in so many different ways - from being overcharged by the cab driver to even a premium travelling experience leaving tourists feeling short-changed. The experience of Claudia and Alfredo Canetta describes this. They took a journey on Palace on Wheels and returned very enchanted by the sights and smells of Rajasthan. However, the Canettas could not shrug off the feeling of having been somewhat cheated. The journey cost the young Italian couple nearly $5,000 (it's $2,275 per person for seven nights) and, they later lamented, even at that price they had to share their coups with two complete strangers. "It is a memorable journey and you are paying a phenomenal price and still there's no privacy. You can't cuddle up with your wife or change into your pyjamas at night. At no stage was there any indication given by the organisers that there would be other people in the same coups. One feels cheated."
8.2 KERALA -GOD'S OWN COUNTRY
Kerala is a perfect example of tourism in India that has succeeded in pulling the international tourists towards our country. This change is evident if one looks at the previously sleepy hamlets like, Varkala, Kovalam and Kumaragom. Tourism and its related activities has led to creation of numerous job opportunities, improved infrastructure and also a better quality of life. It has proven that tourism aids the development of the state.
The Government of Kerala has for the last couple of years been running an aggressive campaign to promote tourism in the state. The campaign has been christened `God's Own Country'. The Unique Selling Proposition as promoted by the campaign is not the run of the mill features like sun and sand, as every other tourist promotion brochure claims, but rather sun and sand, Kerala style. Local is the catchword, and there is no dilution or compromise on that. Even if comfort levels in resorts such as Coconut Lagoon are five-star, the feel is local. The products --Ayurvedic massages, backwater cruises, treetop houses or Cochin's fishing boats, as also the arts and crafts -- are all uniquely Kerala. And while tourists are encouraged to experience the state's cultural attractions, it is made clear that respect for local customs and traditions go hand-in-hand.
Tourism development has often taken place with complete disregard for the carrying capacity of that particular destination -- Mussoorie, Shimla and several other hill stations prove this point. Kerala, however, presents a different picture. The reason why the negative impact of tourism is minimal here is because the local populaces, while tourism friendly, also act as watchdogs. An example, when it was found that speedboats were detrimental to the backwaters, the locals protested and their operations were stopped. Also, State Industrial Development Corporation is featuring floating cottages built in the traditional Kerala style using local, eco-friendly material. Riceboats are an icon of the laid back luxury of a Kerala backwater holiday.
But then everything is not picture perfect. The experience of Sam Reynolds and Elena Zubulake, young theatre artists from Philadelphia, on their first trip to Kerala shows that poor service and the rude behaviour of the local can drown the mood of the tourists. (See Appendix 2). The annual state-wide Tourism Week celebration during the Onam festival is another example that puts off the serious tourists. Despite a melange of Kerala sights and sounds, the crowds and the din put off more serious tourists. Invariably, officials fly into a last-minute tizzy to rope in white-skinned foreigners to sit atop floats, which meander down the main streets of Kerala's towns. Equally offensive to some is the annual Great Elephant March (the Gajamela in Malayalam) where, between Trichur in the north of Kerala and Thiruvananthapuram in the south, 101 caparisoned tuskers are led through a show of rides, feeding and even a tug-of-war. As one disgruntled homelier said, "It is an embarrassment for any self-respecting tourist to be dragged to festivals and Gajamela. If it's part of a local traditional festival, he wouldn't mind partaking."23
So we see that though tourism is booming in Kerala, but in large doses the local tastes are difficult to enjoy. The degree of this has to be decided keeping in mind the profile of people visiting Kerala. The flip side of it is, to what extent are the locals ready to allow the tourists to encroach in their territory.
8.3 SIKKIM-AN IGNORED LAND
Sikkim the tiny Himalayan state and one of the smallest of the Indian union has the potential of becoming a large tourist attraction. Nestled in the magnificent Himalayas this state is nature at its most beautiful. In addition, the untouched air of this state takes one back to the time when man and nature coexisted harmoniously.
The pure air and clean water does wonders for one's senses. Everywhere one marvels at sites of a spring stream or an orchard bloom.
Despite being endowed with virgin resources, which could turn it into a major international destination for special kinds of high-value tourism, the state remains in the backwoods of such activities. The tourism in the state is virtually absent, the reasons sited by the office bearers are -the security-oriented approach of the centre, which virtually throttled the development of the state is tourism. To visit this state one has to go through number of clearances and if one is a foreign national then this number increases exponentially.
But this seems to be a silly excuse by the government to hide its inefficiencies. The infrastructure in the state is so poor that the locals would not rely on them, what of the international tourists. Basic facilities like roads are absent what to talk of the rest.
One could really question government's decision about security here when it is itself encouraging tourism in border states like Rajasthan. It has cities like Jaisalmer and Jodhpur open to tourism which share border with Pakistan.
Whatever the reasons this jewel of the Himalayas lays wasted when India is crying out for international tourists.
8.4 SHIMLA -`QUEEN OF HILLS'
Once the summer capital of the British in India has over the years lost much of its imperial grandeur. Today, the `Queen of hills', as fondly called by the Britons, is a picture of fallen glory, inflicted with malaise of rapid population growth, traffic congestion, lack of infrastructure and sanitation. Water shortage, especially in summer months, can be pretty acute. It resembles more a small urban centre than the beautiful resort it had been once upon a time.
While some of its priceless monuments have been gutted by fire, others lie in a shambles. Its extensive green cover has fallen prey to increased trading activity and unplanned urbanization. A large number of staid-looking buildings housing central and state government offices and banking and other private institutions have come up after Independence, tarnishing the regal magnificence of the hill town.
In this rat race of development complete disregard was shown to the spirit of Simla. An example of the same is the state guest house. This building stands over the site where the trial of Nathu Ram Godse, the assassin of Mahatma Gandhi, was held. Similar was the fate of the open grounds at Annandale, which played host to various events like Gymkhana, horse races, polo, cricket and annual Durand football tournaments. Now it is in possession of the Army and a helipad has been built on it.
Now the government has finally woke up and it is trying to undo the damages already been done, but whatever is lost is gone forever. The heritage of this place is partly lost and this lack of sensitivity on the part of the office bearers is unforgivable. ]
Contents
1. Introduction
2. Hotel Industry Analysis
3. Modern Hotel Industry--An Overview
4. About Hotel International
Ø Services provided
Ø Problems Faced in providing these services
Ø Competitors
5. Areas where hotel lacks behind
6. Recommendations
1. INTRODUCTION
India HOTEL INDUSTRY SCENARIO
The hotel industry is the second largest net foreign exchange earner in the country. Manpower costs in the Indian hotel industry is one of the lowest in the world, providing better margins for the Indian hotel industry. Albeit, only 58,000 hotel rooms are available in India today which is less than the Bangkok hotel capacity and the number built by China in one year, i.e. 60,000 rooms. The scarcity of hotel room availability spells out a great opportunity to the hotel industry investors. This also indicates tough competition in future.
1. The economic liberalisation of the early 90s led to a boom in the hotel industry, especially in 1994. The boom led to hotels charging room rates at parity to those in New York city. Later years saw a decline in room occupancy and today hotels have pruned room rates and some are even ready to bargain for discounts. Table 1 below gives a clearer picture of the situation. Statistics in Table 1 are in terms of percentage, and are compounded on Annual Growth Rates (CAGRs) for the four-year period 1995-96 to 1998-99. Table 1:
2. An unstable political situation in India made the foreign investor cautious, leading to a slowdown both in foreign investment and business travel. Though hotels are the second largest foreign exchange earners in the country, Indian tax rates are among the highest in the world. Further, tax structures vary across states, adding to the problem. The hotel industry also suffered due to the recession faced by the country. Devaluation of the Southeast Asian currencies further aggravated the situation. Thailand, Malaysia and Indonesia appeared more attractive destinations to foreign leisure tourists. Therefore, room occupancy in India dropped, net profits dropped and share prices of the key industry players plummeted.
3. Future: The new Indian government has inspired an air of optimism all around. On the economic front too, inflation is at a low of two percent and GDP is expected to grow at over 6 percent. Foreign Direct Investment (FDI) is entering Indian shores and foreign institutional investors (FIIs) are increasing their exposure to India. All these positive signals spell more business travellers and better times for the hotel industry. Large Indian hotels have realised the value of branding in the hotel industry. The Central Government and the State Governments are expected to be taking various opportune steps in the hotel sector.
HOTEL INDUSTRY ANALYSIS
Some of the Key facts of the Indian hotel industry are listed below:
* Tourist hotels have customers staying for just one night while business hotels usually have customers staying for more than three nights.
* Goa, which is considered a tourist heaven, has the maximum number of five-and-four star hotels compared to any other tourist destination in the country
Project cost break up in India is listed in Table 2.
Table 2.
Typical lodging customer profile is listed in Table 3.
Table 3.
Profile of length of stay of business and leisure segment is listed in Table 4.
Table 4.
Hotels in India earning above approximately USD 1.4 million (Rs.60 million) foreign exchange revenue are granted export house status. This enables them to import capital goods at zero duty. The Oberoi Group is the only private sector chain that operates 14 hotels in foreign countries, 13 in Asia and one in Australia. Major hotels except East India Hotels (The Oberoi Group) have Marketing joint ventures with top international hotel chains. They also use their partner' brands. In India, the fee for brand management services in the hotel industry is either around 3 percent of the total revenue or about 7 percent of the gross profit.
THE MODERN HOTEL INDUSTRY: AN OVERVIEW
1. New Product Patterns
* Segmentation of the Product Line
* Economy Hotels Ø Hard Budgets
* All-Suite Hotels, Casino Hotels, Other Hotel Segments
* Conference Centers ; Spas
2. New Market Patterns
* Marketing to the Individual Guest
*The Guest Profile
* Business/Leisure Travelers;The International Guest
* Frequent-Guest Programs
* The New Amenities
* A New Look at an Old Amenity
* Non guest Buyers
* Marketing to the Group
* Tourist/Leisure Guests
* The Tour Package; The Inclusive Tour (IT) Package
* Business/Commercial Guests
* Conventions; Trade Shows ,The Single Entity; Incentive Tours
3. New Ownership Patterns
* The State of the Industry From Turmoil to Health A Consolidating Industry "The Global Village"
* Ownership and Financing Alternatives
* Individual Ownership Real Estate Investment Trusts Condominiums and Timesharing
* Condominium Ownership Timeshare Membership
* Joint Ventures
4. New Management Patterns
* Chains
* Parties to the Deal Membership Organizations
* Management Companies and Management Contracts
* Leases
* Franchises
Condominiums and Timesharing:
Condo and timeshares (now interval ownership or fractionals) have given hotel financing an interesting twist. Essentially, the builder/promoter borrows from the occupant/owner rather than from more traditional banking sources. With the condominium, the buyer/lender buys the real estate. With the original timeshares, the buyer/lender bought nothing but the right to use the property for a fixed number of years. Interval ownership, which long suffered a questionable reputation, has gained respectability with the entry of Disney, Marriott, and Hilton into the field. Equally important, "deeded" timeshares now allow the buyer/lender to actually take title to the unit. Although the chance of resale is still very marginal, resale opportunities are now possible.
Packages and Breakage:
Packaging products adds to their market appeal. That's why both the hotel industry and its third-party "partners" offer leisure guests room, meals, entertainment and transportation for one fixed price. (Except hotels have stayed away from the high-risk transportation ingredient.) The guest pays for all the services with one fixed figure. Breakage is created if some guests do not use certain features that have been included in the package. The sum has been collected but the service is not delivered. If the hotel has sold the package, the breakage accrues to it. If wholesalers create and sell the package, the breakage accrues to them. Wholesalers pay the hotel for each guest service used, evidenced usually by a colored charge slip or voucher. If the guest doesn't buy the service, no voucher changes hands and the hotel has no evidence with which to charge the wholesaler.
THE STRUCTURE OF THE HOTEL INDUSTRY :
The Organizational Structure
*The General Manager
*From Host to Executive Support Departments, Food and Beverage Department
* The Hotel Manager
* Housekeeping Uniformed Services Concierge
* The Concierge Floor
* Telephone Other Departments
* Security
The Structure of the Front Office
* Managing Rooms
Front-Office Clerks
Other Front-Office Functions
Room Reservations
Cashiers
* Design of the Front Office
* The Lobby
The Desk
* Working Hours of the Front Office
* The Shift (or Watch)
Forecast Scheduling
*The Split Shift
The Building Structure
*The Old versus the New
* The Old: Inside Rooms
The New: Suites and All-Suites
Corner Rooms
Motor Inns
* Numbering for Identification
* Floor Numbering Room Numbering
* Adjoining or Connecting Rooms
*Room Shape and Size
* How the Room Is Used
* Bed and Bath
* The Bed
* Bed Sizes and Bed Symbols: Single Bed; Twin Bed; Double Bed; Queen and King Beds; Hollywood Bed; Studio Bed (Room); Sofa Bed; Rollaway Bed (Cot); Water Bed
*The Bath
The Bath: The hotel bath - that's the room, not the tub -- has a split personality. In the low and mid-priced hotels, it serves as a basic necessity. In upscale hotels the bath has become an amenity: large in square footage, as much as 100-120 square feet, with many extras from hair dryers to Jacuzzi baths.
The Old Design and the New: There are many reasons behind the rise in room rates. The changing design of hotels and hotel rooms is one major contributor. The open design of today's hotels requires far more land - has a larger footprint - than their predecessors. More square feet per room and larger footprints in design add immensely to construction costs, and hence to the room rate needed to recover the investment.
The Hotel, Its Desk and the Market: The organizational structure presented here is, of necessity, a composite picture. It shows that hotels differ as to size, plan, type, purpose, markets and so on. As they differ, various organizational structures emerge. Large hotels differ from small ones. Hotels soliciting discounted packages structure reservations, registration and billing differently than hotels pitched toward, say, conventions. Even the physical design of the lobby and the desk may differ. In turn, the organization and design of convention hotels differ from that of hotels selling individual FITs at high ADRs. The configuration of the resort is certainly not that of an urban high rise. Casino hotels differ quite dramatically from traditional houses both in organization and physical design. Obviously then, the structure of the desk is a reflection of the hotel's market.
From Host to Executive: Without question the host-guest relationships that one likes to picture in the colonial tavern have not existed for sometime, if ever. Managing facilities with hundreds or thousands of employees, with capital investments of hundreds of thousands, or millions of dollars restructures the priorities of management. The shift has moved the hotel executive into the role of chief operating officer and away from the role of Mine Host.
Changing Methods for Making Today's Reservations
Global Distribution
The Airline Systems
Seamless Connectivity
Last Room Availability
Electronic Switch Technology
On-Line Reservations Bookings
Taking the Reservation
The Travel Agent
The Hotel/Travel Agent Relationship
In-House Reservations Center
Central Reservations Center
Processing the Call
The Hotel Representative
Independent Reservation Services
Other Electronic Reservations Trends
Voice Recognition
Mapping Capabilities
CD-ROM Reservation Technology
Guest History Databases
Automated Revenue Management Systems
The Yield Management Revolution
Brief History of Yield Management
The Airlines' Role
Market Demand
Corporate Guests
Leisure Guests
Group Guests
The Price-Occupancy Mix
Revenue per Available Room
Automated Yield Management Systems
Artificial Intelligence
Rules and Triggers
Centralized Yield Management
Yield Management Controls
Nests and Hurdles
Fenced Rates
Global Distribution:
The Global Distribution System (GDS) refers to all electronic reservations channels, which connect to a hotel's reservations system. To be part of the GDS, the hotel must first be interfaced to a chain's central reservations system (or they could subscribe to an independent reservations system). Connected to the CRS through switch technology are the world's major airline reservations systems. And then connected to the airline systems are travel agents and on-line subscription services.
Last Room Availability:
Hotels that are on-line, real-time with their chain's central reservations system are said to have last room availability technology. This technology got its name because the chain's central reservations office can literally sell the last available room at a given property. In other words, reservations taken through the CRO (or any other channel along the GDS) are directly entered into the individual hotel's reservations system.
Switch Technology:
Because all hotel and airline reservations systems were originally developed with their own proprietary software language and code, the various systems did not communicate well with each other. This presented problems for travel agents and others who found the different codes confusing when moving between systems. The various switch companies (e.g. THISCO) developed technology which can interpret codes from different systems into one universal code.
Yield Management in Theory:
The theory behind revenue management suggests that rate-sensitive guests book their rooms far in advance (even a year ahead) to take advantage of limited packages and advanced purchase discounts. Date-sensitive guests make reservations just days (even hours) in advance as business needs dictate immediate travel. Because they book at the last minute, corporate guests generally pay top dollar for rooms while leisure guests--who reserve far in advance--receive sizeable early purchase price incentives.
Yield Management in Practice:
In large, fully automated properties, literally every room sold is examined through a revenue management system before price and availability is quoted. Although manual yield management decisions can be made by any hotel regardless of the availability of sophisticated technology, expert computer systems are proven money-makers. Once programmed with a predetermined set of rules and triggers, an expert computer system can be expected to enhance a hotel's average room rate by several dollars annually. In addition, an expert system releases the reservations manager to perform other tasks and then merely alerts the manager when a given rate on a given date is reaching a critical decision point (rule or trigger).
Forecasting Availability and Overbooking
Forecasting Availability
A Simple, Unadjusted Room Count
Inventory Tracking Systems
Automated Systems
Simple Room Count
Committed Rooms
Adjusted Room Count
Computing Rooms Available
Out-Of-Order Rooms
Out-Of-Inventory Rooms
Computing Rooms Occupied Last Night
Computing the Number of Stayovers
Understays
Overstays
Computing Today's Reservations
No-Shows
Cancellations
Early Arrivals
Adjusting Today's Reservations
The Adjusted Result
Putting the Room Count to Use
Periodic Recounts
Adjusting by Reservation Quality
Overbooking
Reservations as Legal Contracts
Looming Legislation
Others at Fault
Common Hotel Overbooking Policies
Overbooking and the Antiservice Syndrome
No-Show Policies
Cancellation Policies
Minimizing the Overbooking Problem
Increasingly Restrictive Policies
Early Departure Fees
Third-Party Guarantees
Trip Insurance
Credit Card Guarantees
Travel Agent Guarantees
Advance-Deposit Reservations
Adjusted Room Count:
Rather than assigning 100 percent certainty to every reservation scheduled to arrive and every stayover projected to stay, a hotel's past arrival data provides valuable information for adjusting future statistics by their historical likelihood of occurrence. Statistics surrounding each element which affects the day's rooms availability (overstays, understays, cancellations, no-shows, and early arrivals) can be refined over time. Recomputing the room count with these adjustments can make a substantial change to availability.
No-Shows:
Some guests who hold reservations never arrive at the hotel. These guests are referred to as no-shows. No-shows present the hotel with a unique problem, namely, it is difficult to know when to classify the reservation as a no-show. Because guaranteed and advance deposit reservations are promised a room all night long, it is risky for the front office to sell a committed reservation. Yet, as a means of generating additional revenues, it is common practice for hotels to sell reserved rooms late at night when their chance of arrival seems remote.
Overbooking:
Overbooking is the natural consequence of a forecast gone awry. When more rooms are committed than are available, the hotel finds itself with a negative room count, and may need to walk arriving guests to another property. Reservations are legal contracts, and hotels have an obligation to provide accommodations to reserved guests. When rooms are unavailable, guests dealing with a reputable chain or independent operation can generally expect the hotel to "walk" them to a comparable property, pay the difference in room rate, the cost of transportation to the other hotel, and one or two telephone calls, as well as offer a formal apology from management.
Simple, Unadjusted Room Count:
In its simplest form, the unadjusted room count attempts to compare the rooms available in the hotel against anticipated stayovers and expected reservation arrivals to determine the exact number of rooms available for sale. When the total of incoming reservations plus stayovers (known as "committed rooms") equals something less than the number of rooms in the hotel, the hotel has rooms available sale. If the total of committed room is higher than available rooms, the hotel is overbooked.
Managing Guest Services (THROUGH QUALITY MANAGEMENT)
Quality Management in Manufacturing
Quality Management in Inn keeping
Examples of Quality Management
Quality Management
The Basic Product
Bedding and Cleanliness
Noise and Temperature
The Buyer's View
The Seller's View
Leadership
Empowerment
The Employee
Selecting the Right Employee
Quality Management Denied
Implementing Guest Service
Measuring Guest Service
Moments of Truth
Quality Control through Inspection
Quality Guarantees
Physical Accommodations
Signage
Complaints
Still Another Calculation
Preventing the Complaint
Early Warning
Comment Cards
Quality Circles
Handling the Complaint
Preparing for Complaints
Responding to Complaints:
By listening
In a proper venue
By making a record
With a settlement
By asking the guest
