SERVICE MARKETING REPORT ON

SAYAJI HOTELS LIMITED, INDORE

        

CONTENTS

  1. INDUSTRY OVERVIEW

  1. ORGANIZATIONAL OVERVIEW

  1. ORGANIZATIONAL CHART

  1. SAYAJI OPERATIONS

  1. VARIOUS DEPARMENTS AT SAYAJI

  1. 7 Ps MODEL OF INTEGRATED SERVICE MANAGEMENT

  1. SAYAJI AS A SYSTEM

  1. SAYAJI MARKETING (OPERATION WISE)

  1. SUGGESTIONS

INDUSTRY OVERVIEW

The hotel industry has reported impressive earnings and revenue growth for the year ended March 2003. This was after a slack period in the financial year 2002, when net profits dipped on a negative sales growth.

Highlights: 

  • The Indian hotel industry is metro dependent, as 75 to 80 per cent of the revenues of top hotel chains come from the five metros. Mumbai and Delhi are the most profitable hotel markets currently.
  • The hotel industry is heavily taxed. Expenditure tax, luxury tax and sales tax inflate the hotel bill by over 30 per cent. The effective tax in Southeast Asian countries works out to only 4 to 5 per cent. As these taxes are the domain of the state government, the rates vary accordingly. Among the metro cities, the luxury tax rate in Chennai is the highest.
  • The average room rate (ARR) and occupancy are the two most critical factors that determine the profitability. ARR, in turn, depends on location, brand image, star rating, quality of facilities and services offered and the seasonal factor.
  • In the long term, the hotel industry in India has a 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. India attracts approximately 2.5 million tourists every year that is just 0.4 per cent of the world tourist arrivals. Countries like Thailand and Malaysia attract thrice as many tourists.

Industry Structure:

The hotel industry in India can be broadly classified into the following categories depending upon the target segment and nature of services provided,

Premium or Luxury Segment 

This segment comprises of the high-end 5 star deluxe and 5 star hotels, which mainly cater to the business and up market foreign leisure travellers and offers a high quality and range of services to cater to the target segment.

Budget Segment

This segment comprises of the 3 and 4 star hotels, which are generally located in smaller towns and tourist destinations and cater to the average foreign and domestic leisure traveller. This segment also caters to the middle level business travellers since it offers most of the essential services of luxury hotels without the high costs as this segment is not as heavily taxed as the premium segment and enjoys a lot of incentives from the government.

Heritage Hotels 

In the past four decades, certain architecturally distinctive properties such as palaces and forts, built prior to 1950, have been converted into hotels. Such hotels are classified by the government as heritage hotels.

Others 

These comprise of the 1 and 2 star hotels and categories awaiting classification by DOT. These categories do not offer as many facilities as the other segments but provide inexpensive accommodation to the highly price conscious segment of the domestic and foreign leisure travellers.

Premium Segment

The premium segment of the hotel industry comprises of the following players,

Hotel Chains comprise of 5 major players namely Indian Hotels Company Limited (Taj Group) and associate companies, EIH Limited (Oberoi Group), ITC Hotels Limited (ITC Welcomgroup), ITDC and Hotel Corporation of India (Public Sector). Most of these chains had an established presence in one or more metro cities prior to the tourism boom in the eighties. Subsequent, to the tourism boom these chains aggressively expanded their presence in other locations.

Stand Alone Hotels are companies that have come up after the tourism boom of the eighties and nineties. Due to a lack of prior experience in the hotel industry, these players have preferred to opt for operating/ management arrangements with international players. Some of the companies in this category are Hotel Leelaventure (with Kempinski), Asian Hotels (Hyatt International Corporation), Bharat Hotels (formerly with Holiday Inn, Hilton and now with Inter-Continental). As late entrants, most of these hotel companies have only one or two major hotel properties. Off late there have been many new additions to this category with the second property of Hotel Radisson going into operation in the first half of calendar year 1998 and Hotel Marriott well on its way to completion by end of 1999.

Localized hotel companies comprise of mainly early entrants like the Surya, Ritz who have not preferred to expand during the tourism boom and have instead focused on building and catering to a loyal guest base.

The private players among the hotel chains are industry leaders. The public sector ITDC and HCI, though currently profitable, are not as efficiently run and are relative under performers.

Competitive Environment:

Out of a total of about 57000 hotel rooms in India, about 30% are in the premium segment. Most hotel rooms (over 25%) in India are concentrated in Mumbai and New Delhi. The premium segment of the Indian hotel industry is dominated by IHCL and EIHL. 22% of the premium segment capacity in India is accounted for by these two players. During prolonged downturns and periods of slow business activity, this segment is usually among the first to be hit on account of switchovers to the 4 star category of hotels in order to cut costs. However, in the long term the threat of substitutes is minimal. Prohibitive costs of building new hotels, scarcity of land in good locations, regulatory bottlenecks, strong brand equity and reach of existing players represent significant barriers to entry and insulate the market leaders from any serious threats from newer chains or less established existing players.

Hotel Industry: Indore

Indore was the best performer in last year’s Indian Hotel Industry survey conducted by HVS International; however, in 2002-03 it witnessed a 16.6% decline in occupancy coupled with an 8.0% decrease in average rates.  As explained earlier, these large variations could partly be due to a different mix of hotels responding to the survey questionnaire.

Following is the tabular representation of characteristics of Hotel Industry in Indore:

Avg. no. Of F&B Outlets per hotel

Typical Room Profile of an Average Hotel

Guest Analysis

Avg. no. Of Total Employees per hotel

Avg. no. Of Trained Employees per hotel

Financial Report                                % of Revenue                Per Room

Market segmentation

Country of Origin of Guests

Average Monthly Occupancy

Average Daily Occupancy

Percentage Of Hotels Using Each Marketing Media

Percentage of Hotels Using Each Technology

ORGANIZATIONAL OVERVIEW

Sayaji Hotels Ltd. Indore is an arm of Sayaji Group of Hotels & Clubs, one of India’s fastest growing hospitality giants. Sayaji Group started its operations from Vadodara (Gujarat) in the year 1990 with a 54 rooms hotel property. Then in the year 1994 the Group moved on to Gandhidham (Gujarat) where they established a 94 rooms hotel that has been lost in earthquake.

 Sayaji Group then inaugurated Sayaji Club in Indore in 1995. Later, on 2nd November’ 1996 they added a new wing in the organization as Sayaji Hotels Ltd. Sayaji Hotels Ltd., Indore is a 207 rooms property of Sayaji Group (excluding Club) with 154 rooms currently under operation. They have recently added 30 new rooms, which are ready to be fully operated.

Sayaji Group is looking forward to start with two more Hotels at Banglore & Ankaleshwar. Ankaleshwar property will be a 54 rooms hotel for which construction has already been started.

Total employee strength working at Sayaji Hotels Ltd., Indore is around 234 whereas at Vadodara there are around 100 people working in the organization.


ORGANIZATIONAL CHART

                                                        

        


SAYAJI OPERATIONS

Being in the hospitality sector Sayaji’s operations extends in to all the major sections within this sector, like restaurant, accommodation, club & recreation. Sayaji’s major operations can be classified as:

    SAYAJI GROUP

                SAYAJI INDORE                      SAYAJI VADODARA

                   (club & hotel)                                      (hotel only)

SAYAJI CLUB

SPORTS                OTHER

                          FACILITIES

                                       

ACCOMMODATION           RESTAURANT                       ENTERTAINMENT             BANQUET

CLUB:

        

        The Sayaji Group launched its operations in Indore in 1995 with Sayaji Club. The club is the core service of Sayaji in Indore. The club has approximately 1385 members presently & provides a wide array of fitness, games, sports & recreation facilities to its members. It is headed by Retd. Inspector General Mr. Ziaullah who is GM-Club.

The club activities has been further subdivided in to:

  1. Games Activities (16)

  • Lawn Tennis
  • Badminton
  • Swimming
  • Billiards
  • Squash
  • Table Tennis
  • Carom
  • Chess
  • Shooting
  • Gym
  • Card Room
  • Jogging Track
  • Chip & Putt Golf Course
  • Yoga
  • Kids Zone
  • Tambola
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  1. Various Facilities (14)

  • Sona Bath
  • Steam Bath
  • Restaurant (40% off)
  • Bar (Blue-Lagoon)
  • Sham-e-Gazal
  • Valet Parking
  • Free pass for events in Sayaji
  • Free entry to Critical Mass
  • Go Bananas (25% off)
  • Complementary room for a night at SAYAJI HOTELS LTD., INDORE for anniversary
  • Hotel facilities (15% off)
  • Affiliation with 30 clubs throughout India
  • Library under construction
  • Acupressure & Massage

Other than these regular entertainment & sporting activities the club also hosts number of musical concerts, theatre, workshops, contests & tournaments.

The daily club attendance is around 15-20% & in order to encourage its members ...

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