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OVERVIEW:

Indian Tourism and Hospitality Industry is a key driver of growth among Indian facility service sectors. Tourism in India is an impending game changer, an employment generator, a significant source of Foreign Exchange. The WTO (World Travel Organization) predicts that India will receive 25 million tourists by the year 2015.

The Travel and Tourism sectors have developed into an Industry with an annual economic report (direct, indirect and induced) of around US$ 6.5 trillion worldwide. The global hotel industry generates approximately between US$ 400-500 billion in revenue each year, one third of that revenue is attributable to the United States.

Major charms in India are the world's highest mountains, coastlines with magnificent beaches, tropical forests and wildlife, lagoon backwaters and ancient monuments, thereby promoting ecotourism among foreign tourists.

PROBLEMS ADDRESSED:

1. India currently has over 200,000 hotel rooms spread transversely hotel categories and guest-houses and is still facing a shortfall of over 100,000 rooms (Source: FHRAI).

2. The country is witnessing an unprecedented growth in hotel constructions and will be adding almost 114,000 hotel guest rooms to its inventory over the next five years. (Source: HVS)

3. The earlier setbacks in global tourism have braced the Department of Tourism, resolve to promote India's tourism through belligerent marketing strategies through its campaign 'Incredible India'.

4. The 'marketing mantra' for the Department of Tourism is to position India as a global brand to take advantage of the ongoing global travel and trade.

2015 INDIAN HOSPITALITY DEVELOPMENTS:

  • Loyalty program has always been and will continue to be a key differentiator. In the midmarket and budget-end of the market where differentiation is harder to achieve, however,brands must focus on implementing value with experience to entice consumers by adding points to a guest account which the guest can redeem and get benefits.
  • ‘Game-changing’ approach to loyalty programs - recognition to reward is preferred and a direct emotional appeal and the need to feel ‘special’ can drive loyalty of the customers and make them feel privileged Embracing the sway of social media to engage consumers to build awareness and community, increase web traffic and search rankings, and draws potential new guests, encouraging the guests to upload “selfies” on Facebook , Twitter of their stay in the hotel.
  • Endowing in talent management – Develop innovative talent programs and re-design operating models to effectively execute the talent strategy
  • 360-degree view of sustainability to develop an environmentally responsible brand as price, quality, brand and convenience will continue to drive consumer spending, but sustainability will increasingly be part of the decision-making process 
  • Research & Development focus to develop and invest in research and development for staying ahead of the consumer’s needs and desires
  • Reinforcing data security - Organization has to take all the necessary safeguards to protect guests data and the reputation of the brand
  • Crisis Management - Reconfigure each crisis as an opportunity to reinforce brand values and enhance the consumer relationship through SIX SIGMA.
  • Brand-value to the consumer, the growth in emerging markets, the importance of consumer-facing technology and the sourcing, development and retention of human capital have helped shape the hospitality industry over the past five years.
  • Emerging Markets: By 2015, China and India will each have absolute year-on-year tourism growth equal to or greater than the UK, France or Japan. Emerging Markets - forecast most international hospitality groups have launched expansion programs into the key emerging markets, not only to cater for western tourists and business travelers, but also to build brand recognition and loyalty among the local populace who are expected to be one of the largest groups of outbound tourists across the globe.
  • Technology: Ensure that their services fit the consumer’s needs more than the offerings of their competitors by launching an iPhone application to enable guests to manage their bookings • websites are mobile-friendly in order to maximize the benefits of mobile technology • include interactive maps/GPS, reward programs for quick mobile bookers, confirmation texts and pre-arrival texts Airlines continue to lead the way in technology: •Online check-in from mobile devices. • Selecting seats and in-flight meals online.
  • Back office systems: ‘Food wastage revolution’ - Sustainability is moving up the hospitality agenda. All businesses are coming under mounting pressure to consider the environment in their everyday activities • By 2015, AI-based technologies will be used to forecast food and beverage demand with a higher degree of accuracy, enabling hoteliers to reduce food wastage and manage labor costs more efficiently
  • Facility Hotel rooms of the future Hotel room of the future • Alarm clocks to wake upguests by increasing the light in the room, rather than emitting a noise • Floors to have builtin sensors to light the way for guests, to avoid the midnight stumble to the bathroom •Televisions may work via voice recognition to answer any questions guests may have, avoiding the obligatory call to reception for service offerings • Instead of keys, doors may be unlocked via mobile phone interface • Rooms are likely to be fitted with iPod docks, broadband, laptop docking and universal phone chargers • Guests should be able to text or email their exact preferences in advance through their mobile device so that rooms are set up to their requirements upon arrival. They could be able to request a room on their preferred floor, temperature and lighting set to their required specification, music chosen for a particular ambience, and perhaps a cold drink waiting.
  • High employee engagement is correlated with customer satisfaction customer retention and corporate performance • Proactively evaluate their talent management programs Develop innovative talent programs and solutions aimed at reducing employee turnover as well as attracting and retaining top talent
  • Turning consumers into customers: In 2010, India saw a 50 per cent jump in visitors to travel sites compared to one year prior.
  • Sustainability: Gen X (born 1965-1979) are most likely to work and travel for companies that value sustainable partners • Gen Y (born 1980-1994) are most likely to pay extra to stay at a green establishment
  • Consumerism: Across its $10 billion supply chain a major hotel brand has asked vendors for products, such as green key cards, “room-ready” towels, recycled pens, low volatile organic compound (VOC) paint, biodegradable laundry bags, green laundry detergent, low-energy light bulbs, low environmental impact carpet, water-efficient toilets and shower heads, and Eco Smart pillows
  • Green Consumerism: • Engaging consumers begins with an understanding of their behavioral drivers • at the point of sale, a customer’s inclination to buy green is often inhibited by 1) lack of information on how to act, 2) confusion about priorities, or 3) a limited understanding of the costs and benefits of living more sustainably • Hence, specifically communicating a green value proposition is essential to generating awareness and influencing purchasing

PRESENT INVESTMENTS MADE BY 5 STAR HOTELS IN INDIA:

The tourism and hospitality sector is among the top 15 sectors in India to attract the highest foreign direct investment (FDI). During the period April 2000-February 2015, this sector attracted around US$ 7,862.08 million of FDI, according to the data released by Department of Industrial Policy and Promotion (DIPP). With the rise in the number of global tourists and realizing India’s potential, many companies have invested in the tourism and hospitality sector. Some of the recent investments in this sector are as follows:

  • US-based Vantage Hospitality Group has signed a franchise agreement with India-based Miraya Hotel Management to establish its mid-market brands in the country.
  • Lalit Suri Hospitality Group is soon going to open its first international hotel in London. The company has acquired a heritage building called St Olave's near Tower Bridge in central London, which is now undergoing restoration to be converted into a five star hotel.
  • Thai firm Onyx Hospitality and Kingsbridge India hotel asset management firm have set up a joint venture (JV) to open seven hotels in the country by 2018 for which the JV will raise US$ 100 million.
  • In Carlson Rezidor Hotel of Guwahati, Dharmpal Satyapal has invested close to Rs 300 crore (US$ 47.51 million) in the hotel for which they will get Rs 30 crore (US$ 4.75 million) annually.
  • ITC is planning to invest about Rs 9,000 crore (US$ 1.42 billion) in the next three to four years to expand its hotel portfolio to 150 hotels. ITC will launch five other hotels – in Mahabalipuram, Kolkata, Ahmedabad, Hyderabad and Colombo - by 2018.
  • Goldman Sachs, New-York based multinational investment banking fund, has invested Rs 255 crore (US$ 40.37 million) in Vatika Hotels.

CONCLUSION:

India’s travel and tourism industry has huge growth potential. The medical tourism market in India is projected to hit US$ 3.9 billion mark this year having grown at a compounded annual growth rate (CAGR) of 27 per cent over the last three years, according to a joint report by FICCI and KPMG. Also, inflow of medical tourists is expected to cross 320 million by 2015 compared with 85 million in 2012. The tourism industry is also looking forward to the E-visa scheme which is expected to double the tourist inflow to India. Enforcing the electronic travel authorization (ETA) before the next tourism season, which starts in November, will result in a clear jump of at least 15 per cent, and this is only the start ICRA ltd rating agency expects the revenue growth of Indian hotel industry strengthening to 9-11 per cent in 2015-16.

India is projected to be number one for growth globally in the wellness tourism sector in the next five years, clocking over 20 per cent gains annually through 2017, according to a study conducted by SRI International.

  • Despite the global recession, inflation, terrorism and other factors, the overall outlook for the Indian hospitality market is optimistic and will remain so says HVS
  • India remains the second fastest growing economy in the world and the economic growth of the country is at 7.1% of the GDP
  • The Tourism Ministry, Government of India, has set a target of 10 million tourists to India by 2010
  • The WTO (World Travel Organization) predicts that India will receive 25 million tourists by year 2015

References: Media Reports, Ministry of Tourism, Press Releases, Department of Industrial Policy and Promotion (DIPP)

AUTHOR BIOGRAPHY:

Aaritra Nath is presently a sophomore of Institute of Hotel Management (IHM) PUSA, New Delhi, pursuing his B.Sc. in Hospitality Management. He has worked in the Hotel Industry as an intern at ITC Sonar during July to December, 2014, Kolkata and has been honored ITC Certificate of Appreciation. He is actively involved in Event Management in Delhi and Kolkata.

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