Decleration: Marketing Feasibility and Financial Viability 07UMC07031

Marketing Feasibility and Financial Viability 07UMC07031
DECLERATION
I Mohit Kumar, here by declare that the dissertation on marketing and feasibility of 3 Star Hotel is an
original piece of work and has not been copied from anywhere, and has been in partial fulfilment of
the course BHM degree course. This project has been completed by studying various things on the
topic and taking information from the internet and various resources. It has not been presented
earlier by anyone for award of any degree course.
PLACE: BANGALORE
DATE: Mohit Kumar
Army Institute of Hotel Management & Catering Technology

ACKNOWLEDGEMENT
I take this opportunity to extend my heartfelt thanks to my institute AIHM & CT for
providing me with the opportunity to complete my project. I would also like to thank
my Principal Mr. P Sen Themizhan for allowing me to work on this project.
Also i would like to extend my heartfelt gratitude to my project co-ordinator for extending
her cooperation in terms of knowledge, guidance and support at each and every stage of
the project.
Mohit Kumar

LIST OF CONTENTS
CHAPTER-1 INTRODUCTION TO TOURISM
CHAPTER-2 SCOPE, OBJECTIVE, METHODOLOGY AND LIMITATION
CHAPTER-3 PROFILE OF PLACE
MARKETING FEASIBILITY
CHAPTER-4 DEMAND QUANTIFICATION
CHAPTER-5 TECHNICAL DETAILS OF THE PROJECT
CHAPTER-6 RECOMMENDED MARKETING MIX
CHAPTER-7 CONCLUSION
FINANCIAL VIABILTY
CHAPTER-8 INTRODUCTION TO THE FINANCIAL ASPECTS OF THE PROPOSED PROJECT
CHAPTER-9 COST OF THE PROJECT
CHAPTER-10 MANPOWER REQUIREMENT AND COST
CHAPTER-11 SALES REVENUE

CHAPTER-12 OERATIONAL EXPENSES
CHAPTER-13 WORKING CAPITAL REQUIREMENT
CHAPTER-14 FINANCING THE PROJECT
CHAPTER-15 PROFITABILITY STATEMENT
CHAPTER-16 CASH FLOW STATEMENT
CHAPTER17 COST BENEFIT ANALYSIS
CHAPTER-18 BREAK EVEN ANALYSIS
CHAPTER-19 DEBT SERVICE COVERAGE RATIO
CHAPTER-20 SENSITIVITY RATIO
CHAPTER-21 CONCLUSION AND ANNEXURES

CHAPTER – 1
INTRODUCTION TO TOURISM

INTRODUCTION TO TOURISM
Travel and tourism is world’s largest industry bigger by far than steel, automobile and electronics.
Tourism is directly linked with the global economic outlook. According to recent indicators, the
world gross domestic product (GDP) should grow by 3.4% per year over the decade. The 3.4% are a
composite of growth averaging 4.5% for developing countries and 2.5% for countries with mutual
economics. A rising GDP translates into increased travel demand. However due to natural political
and induced circumstances there are great disparities in the earning from tourism.Travel and
journey for pleasure have been man’s favourite occupation ever since the Advent of trains, the jet
aeroplane and fuel efficient cars, with all these modes available Today, the jet aeroplane has
brought nations closer than ever before. Tourism has been greatly affected by the political and
economic conditions of the countries. Countries like India have learned in the recent years that they
are getting only a fraction of percentageof total tourist earning with increasing power available to
the people. The study notes that China, Indonesia and Philippines earned 7,323 million, 4,786 million
and 2090 million respectively from tourism in 1994. These three were among the top grosser among
Asian countries.
The most spectacular gains are expected to be registered in the Asia-Pacific region. Where Travel
and tourism is growing at almost twice the pace in comparison with the rest of the World. More
than 528 million tourist arrival recorded all over during 1994 registered as 3%of increase over 1993.
The report says the international tourist receipts rose to 321 billion,registering a 5.1% increase over
93.Long term prospectus for the travel and tourism market remains positive. All major travel
markets and either growing or beginning to show signs of strong recovery. Tourism industryis the
world’s largest economic force with a yearly turnover of 3.5 trillion.Tourism play an important role in
the economy of country as it gains a lot of foreign currency through foreign guests. So every country
tries to improve the tourism position in their country.

GROWTH OF TOURISM
The word tourism has come from the word “TOURS” derived from the latin word “TAURUS” Meaning
(Turn Wheel). Tourism provides temporary stay for people to stay in different Countries and location
for a few days or month. Tourism these days has become the second largest industry in the world.
The purpose tour can be associated with business, sports, historical places, expedition, relaxation
etc.
Tourism plays an important role in developing of country as it gains a lot of foreign currency through
foreign guests. So every country tries to improve the tourism position in the country. India has
developed a lot in tourism business. In the very known as country of saints, diseases,poverty but due
to efforts of ITDC, India has developed a lot in tourism industry.Tourism is also a part of socio
development as any other activity. The development and growth of tourism also develops the
culture, infrastructure etc of a particular place India is known for its large number of hill stations like
Shimla, Darjeeling, Manali and Ooty etc and Cave temples and historical places. The number of
foreign tourist visiting India is 0.28% of the total tourist traffic.
Co-operatively India receives a less number of foreign tourists although it has a much larger
dimensions and unique variety of tourist attractions, it has tremendous scope for expanding and
developing tourism traffic in the region. Tourism can be a major factor in economics development of
less backward regions. It also helps in generation of employment, with development of tourism
people gets job in various fields like hotel industry, as tourist guides or travel agents etc.

DEVELPOMENT OF TOURISM
Modern Tourism: The concept of modern tourism today is relatively new, not more then 10 yrs the
World has become so small that every place on earth is now known and is shown in map.The
barriers of distance have been broken up during the last two centuries by the inventions of Steam
engine, ships, railways, planes, motorcars and latest in the line aero plane.
Tourism has become a major economic earning industry since the World War-II. Besides promoting
International understanding it helps the national economy in its development and raises the
Standards of living of the people. Unlike other export industry there is comparatively little
investment needs for promoting tourism.
Types of Tourism: Man is a social animal who tries to explain beauty from his childhood.
DifferentPeople travel for different motives. There is an unbound inspiration in every man to travel.
In earlytimes travellers was often though as if rather “Super Craft” easy to place addition lost in an
environment of hotels and environment. But in 1970’s the tourists acquired a much more
respectable status. Tourist are now classified into following categories.
1.Explorer: These types of tourist are very rare in numbers. They like to look for discover and
involvement with local people and nature.
2.Off Beat: These types of tourist like to get away with the crowd and move into cool and peaceful
areas.
3.Mass:The general package tour market heading the tourist encloses overseas.
4.Unusual:They visit with particular objectives such as physical danger.
TECHNICAL INFORMATION
People employed in tourism promotion services are required to be technically skilled. The spirit of
pay professionalism brings friction in the smooth flow of tourism industry. GOVT. has taken
measures by opening hotel and tourism management courses in order to promote tourism.
BENEFITS
Tourism also results in economic and non economic benefits. The prime aim of economic benefit is
to calculate return in terms of national economy, employment, foreign exchange and state of

revenue while non economic benefits are ranging offering social, cultural and other political values.
It also helps in promoting international understanding.
LIMITATIONS
Tourism is quite important in the economy of the country. However it has some ill effects on the
environment that should not be over looked. Mobilization more people has led to air and water
pollution. Sophistication and furnishing causes littering surroundings with rubbish damaging the
delicate balance of eco system. Commercial establishment also join the race resulting in declination
of nature, which should be checked and out awareness induced.
INTRODUCTION TO GLOBAL TOURISM

Tourism=nature+ wildlife+ man and his activities + environment+ ecology
Tourism is directly linked with global economic outlook . According to local indicators, the world
gross domestic product should grade by 3.4% per year over the next decade. The 3.4% is a
composite and 2.5% for the countries with the nature economics . A rising GPD translates into
increased travel demand.
Almost every country in the world is reading benefits from or looking hopefully for the potential of
tourism. In addition to the direct revenues earned by the supply of basic tourism needs (Hotels,
restaurants , railways , airlines etc)tourism expenditures per handicap down through money levels of
economy
The study notes that china , Indonesia , Philippines have earned $7, 323 millions , $4,785 million &
$2,090 million respectively from tourism in 1994 . These were among the top gainers among Asian
countries.
Long term prospects for the travel and tourism market remain positive. The entire major travel
markets are either growing beginning to show signs of strong recovery. Tourism industry is the
world’s largest industry or economic force with yearly turnover of $3.5 million .The most spectacular
gains are expected to be register in Asia.-pacific regions where travel and tourism is growing at
almost twice the pace in comparison with the rest of the world.
TOURISM IN INDIA
Tourism is one of the most important industries, which earns sizeable amount of foreign exchange
from foreign tourists and huge amount of domestic tourist. India attracts a lot of tourists because of

its heritage and exclusive culture, thus promoting tourism to a large extent. To promote tourism
both in foreign countries and India , it is very important to organize and for this the Indian Tourism
Development Corporation was formed. It started exploring new destination in order to promote
tourism. It increased the inflow of foreign tourists and gave India the foreign exchange earnings.
If we see the past of India, it is one of the oldest civilizations with a Kaleidoscope variety and rich
cultural heritage. It has achieved socio-economic progress during the last 55 yrs of its independence.
India’s social structure is unique blend of diverse religious cultures and racial groups.
Historically India has been a hospital land to numerous immigrants and in due from distant part of
Asia and Europe. Tourist facilities in India are adequate in terms of hotels, motels and resorts,
facilities like agent tour operational and auxiliary services. India is located away from the effluent
tourist market in the world and is not known as a holiday country in abroad. India should give
advertisement internationally about its tourist spots and tourist areas.
India should develop the tourist spots also adding to the tourist spots such as attractive gardens,
well furnished bars and restaurants, discotheques, pubs i.e. extra decoration of tourist spots and
areas also as to compare with the European country’s tourist spots and American country’s tourist
spots.
BASIC STATISTICS OF INDIA
Land area - 32, 88,090 sq. Km
Population - 100 crores
Average annual growth - 2.1%
Literal life expectancy - 52%
Average life expectancy - 62 yrs
Agriculture (% of GNP) - 41.9%
Industry (%of GNP) - 22%
Religion - Hindu
Hindu - 83%
Muslims - 11%

Christians - 2.6%
Sikh - 1.9%
Buddhists - 0.9%
Others - 0.3%
Currency - Rupee
Language - English, Hindi & 27 state languages
Capital - New Delhi
Tourism Industry In India

Tourism was recognized as industry in India way back in mid 80’s but it is yet to enjoy the status in
terms of properties. If the manufacturing unit can avail duty free import facilities, why is tourism
industry denying that opportunity?
Asks Mr. C.P Krishnan Nair, Chairman of Leela Hotels. It makes to provide investors and new entrains
in the tourism infrastructure, the dept of tourism would soon be launching a tourism equity fund.
State tourism secretaries from Andhra Pradesh, Rajasthan, Gujarat, Pondicherry, Mariana, Uttar
Pradesh and Bihar attended the workshop with each state saving investment by during visitors with
attraction package and infrastructure.
Cultural Tourism In India

Cultural tourism has a special place in India because of its vast civilization. A survey undertaken by
rent of tourism confirms that most of the tourists are interest in the culture of India for a foreigner a
visit to India who profound cultural impact. Opportunities to learn about ancient history and culture
India appointed UNESCO expert Dr. Auchin to study cultural tourism and more recommendatory.
The report was about 54% of the tourism enjoyed their study because there was such a large
beautiful creation of man building temples and churches. The monument heritage could be divided
into temples and churches.
The monument heritage could be divided into:
 Buddhist monuments.
 Hindu monuments
 Indo-Islam
 Monuments of British
The European association Dr. Allay ways tht India is a popular country with great part and great
tradition. India has a tradition of civilization life. It is one of the greatest civilizations.
Current Tourism Scenario in India
The hospitality industry in India has seen many ups and downs these days though the trend is
generally upward. This is because India is growing importantly as a tourist destination and therefore
there is an upward trend in room occupancy in hotels and in their profits, but at the same time, the
positive fluctuation because the country does not yet have any unique selling point (USP)to attract
any type of particular foreign tourists.
Another reason why India does not have a strong position in the world tourist map because the
country still has poor tourist destinations. Recent years has not been good with room occupancy
decreasing due to September, 11 attack. The number of foreign tourists arriving in India during the
year touching 2.62 million on an increase of 5.7%.
The second half of the year was better than the first half, with tourist arrivals going up by 7.5% to
reach 1.07 million. The second half of the year is always better than the first half.
The hospitality industry is the one, which has actually benefited from the depreciation of the rupee.
When the rupee depreciates the holiday in India becomes cheaper for foreign tourists because they
can now spend more rupees for same number of dollars or pounds etc. So more tourists are
expected to come. As their own current gives them benefit s of depreciation hotels claims that 1%
depreciation in the rupee increases profits.
The Oberoi group have reported a 35% increase in profit and the ITC hotels ( welcome group)
reported an even more spectacular 93% growth in profits in the recent years. However the Taj group
and the Hyatt group has not shown their profits because they have taken loans and raised money to
refurbish and renovate and the interest on loans ate up the profit.
Globalization of tourism in India

India has an ancient tradition of tourism. It has exited as an industry in the informal section since
ancient time and was indulged by all classes of the people. The maharajas or the ruling class were
less free to tour than others because their natives could be politically suspicious. They generally
travelled for the purpose of attending. Durban’s of neighbouring states, attending important
marriages of those belonging to the exclusive club o the ruling class on for “Firth Yare” which
involved visiting to holy places for performing religious duty and propitiating the gods for
condemnation of sins and asking for future benefits. The business class travelled with long caravans
of animals and ponies carrying their merchandise from place to place for selling. Trans – sub
continental travels were the norm of this class of people and ancient routs for travelling were
known. A recent of their travels, sales incomes and modern operandi are available in records known
as basis which were account kept by these merchants are available in large number for Rajasthan,
Uttar Pradesh and Bengal. The next important class of travel are sirloins and spiritual seekers who
travelled from place to place. Lean search of higher knowledge and to take part in discussing and
discourse on religious subject for visiting “Tirth Sthan”.
All tourism industry existed in the informal section and all facilities for the tourist were available
throughout the country in the form of Dharamshalas, Sarais, Havelies, Dakbangalas available in most
famous “Tirth Sthans” in the industry in general was in unorganized section. An organized industry of
tourism of 20th century phenomenon came into existence for catering to foreign tourist who wanted
to live in style during their visit to India. As a result of intense efforts made both in the centre and
state sector we have expanded the tourism industry by way of increasing allocation for tourism
through planning from Rs. 364.64 crores in the eighth plan. The tourism arrival have increased from
17000 in 1951 to 2.12 million in 1995-1996. Hotels have been increased from 16.6 in 1993 to 19766
at the end of 1998 and accommodation in terms of rooms has increased to 57,435 as on 31.03.1996.
clearance have been given for the creation of 683 new hotels as a result of which 35452 more rooms
will come into existence. Tourism industry has already become the 3 rd biggest industry after
readymade garments and gems and jewellery. It is estimated that during the year 1995-1996 foreign
earning of this sector are likely to be 9186 crores. India GDP is forecasting to grade 5.6%. India could
earn more than $ 10,020 million.
Some names of tourist spots are as follows:-
 TAJ MAHAL (U.P.)

 AJMER SHARIF(U.P.)
 RED FORT (DELHI)
 GOA SEA BEACH(GOA)
 AJANTA ELLORA CAVE TEMPLE(MAHARASHTRA)
 GOLDEN TEMPLE(PUNJAB)
 DARJEELING(W.B.)
 300 YEARS OLD CITY CALCUTTA(W.B.)
 DAL LAKE(J&K)
 HYDERABAD PALACE(A.P.)
 INDIA GATE(DELHI)
 SHIMLA(H.P.)
 DALHOUSIE(H.P.)
 MANALI(H.P.)
 OOTY(T.N.)
 KODAI KANAL(T.N.)
INTRODUCTION TO THE HOTEL INDUSTRY
In the past, present and perhaps the future of hospitality industry are closely linked with today
boarding and restaurant industry and are the result of many centuries of social and cultural
evaluation .Advances in transportation enable more people to travel great distances at less cost
spreading tourism across the globe.
There are different reasons why people spend their time away from home to work for business
purposes, to go to school or colleges & to go for shopping for leisure etc &many more reasons. they
need accommodation or food and drinks or both .It is reasonable to assume that the provision of
these needs have created industry with a common aim to supply accommodation food &drink
when & where required.
ORIGIN OF HOSPITALITY INDUSTRY

When ancient human first ventured beyond their tribal settlement .There were of course no hotels
to accommodate them. Most likely these early travellers were either warrior of tenders early
travellers traded merchandise ,such as ornaments, cloth &animals for lodging. Almost certainly “inn
keeping” is of first service for which money was exchanged. The most famous lodging event is
related in the king James version of the bible. Marry and Joseph was funned away by the Bethlehem
inn keeper because “ there were no rooms at the inn”. According Biblical Scholars, the inn keepers
may have meant to give birth. The stable where Marry and Joseph spent the night was probably
almost as comfortable as and certainly more private than the inn itself.
In the 3rd century A.D the roman empire developed an extensive system of brick paved roads
throughout the Europe and Asia minors for the constructed along the major through fares,
extending from Spain and Turkey.

It was not until the industrial revolution of the 1770’s that the European travellers began to continue
food and beverage service with lodging. Very little attention was given to sanitation. Bed as well as
rooms still had to be shared with other travellers and rates were step. To accommodate wealthy
travellers “ Luxurious travellers” structures were expected with private rooms, individual sanitation
and all the comforts of a European castle.
On colonial America, inns were modelled after European tverns, with sleeping quarters shared by
two or more guests. In the novel “moby dick” by Hero Men Melville, a way faring seman chicks into a
19th century. New England inns and later walks up to find himself sharing a bad with another guests.
Although not every client found himself sleeping with a Melanesian warrior, sharing beds with
strangers was common practice ib early American and European inns.
GROWTH OF THE HOTEL INDUSTRY

The hotel industry is one of the oldest commercial endeavours of the world. The British hotel
properties act 1956 define a hotel “ as an establishment offering food and beverages and sleeping
accommodation, it required any travellers who is able and willing to pay for the biling of service and
facility provided”. The hoteliers must provide food and lodging to travellers on payment, has in term
the right to refuse if travellers drinks disorderly and in position to pay.
DEVELOPMENT OF INNS
A house of public entertainment has been maintained in all countries from early times. The first inns
goes back to 6th century B.C. and where the products of the urge to travel. Spurred by invention of
wheel. Therefore Greek inn were places gathered for gossip and amusement. The roman inns along
with the highways were of questionable reputation landlord, predatory and robberies to travellers
were very common. English inns were noted as cleanest and more attractive inns in the world. They
also provided food, thirst quenchers like wine etc.
Industrial revolution in England gave fare ideas for the progress of hotel industry and the most
important thing was the development of railways and steam skips which made travelling more easy
and champed travelling social to business travel. It was in Europe were the birth of organised hotel
industry took place. And there were small hotels which provided a number of services, patronised
only by the aristocracy of the day.
Evolution of mankind, led to evolution of travel and man is directly related to it as he is a tourist. A
tourist can be defined as any person outside his house for more than 24 hrs. Thus invention of wheel
took place which was an important milestone in the march of tourism, and the word tour which
means turn wheel.
With the industrial revolution of the late 18 th century and early 1990’s , the focus of the American
society stuffed from the upper class to the common citizens. E M Statler , built the first full service
hotel designed to accommodate business travellers in 1908. Until the World War II the hotel chants
were divided ibto two categories i.e travel and businessman who were extremely wealthy. In the
late 1940s and 1950s American began taking the roads on automatic vehicles. A motel primarily of
lodging to motorist and has ample parking facilities. The internal chain operations provided
individual hotels the following facilities:
1- Partnership: that shares equity and profit

2- Franchise: a license is obtained to operate a hotel by investor is called the franchise that
pays a fee to the hotel company.
3- Management: expertise in management. Professional techniques, mammals, systems etc.
on the basis or mgmt. Fees and shares or profits as incentive payments.
MODERN HOTEL AND CATERING INDUSTRY

Hotel for the traveller and catering industry, provision of hospitality, an important service whose
origin may be tracked back to ancient history. The inns and taverns of ancient Rome met the needs
of a wide diversity of travellers and dinners. However, the hotel and catering industry of today is
vastly more diverse and more complex than that of Rome or even that of the entrepreneurs who
build the savoy, ritz and the great railways hotel a century ago.
The hotel and catering industry today is essentially concerned with providing accommodation ood
and drink for those who are away from home. The industry is normally defined as consisting of those
businesses whose principal activity is the commercial provision of hotel and catering services. A new
definition, however, emerges from the united kingdom standard industrial classification 1992 (HMSO
1992). This classification extends the definition of hotel and catering to include canteens serving
factories, offices, schools and colleges as well as university dining halls and messes for members of
the armed forces. The industry employs over 2 million people in the united kingdom, i.e approx 10%
of the work force. A similar propoetion of the work force is employed in the industry in most
developed countries of the world. The wide ranging scope of the industry includes, as
accommodation providers, hotels, motels. Guesthouses, inns, farmhouses. Holiday chalets, another
self catering accommodation (such as caravan, parks and camp sites). Among food and drink
providers are restaurants cafe, cafeterias and fast food outlets such as burger bars. Take away foods
shops such as sandwich bars, fish and chips bars, kabab shops are included. Licensed bars/clubs of
London are also part of the industry. Catering for people at work is carried out either by specialist
contractors or by people employed by the organisation requiring for service. In addition, catering
services are needed by hospitals, transport systems, shops, banquets and conferences, corporate
hospitality, sporting venue and social occasions such as wedding.
Catering is so much a part of modern lives that it is estimated that upto a quarter of all food is now
consumed away from home or taken into the home in a form it is ready to eat. Inspite of occasional
setbacks there is a steady growth in a need for hotels and cayering services in past decades. There is
good evidence to indicate that this growth will continue.
The industry is becoming increasingly international in its activity with many well known brands, for
e.g., Mc Donald’s and burger king in catering. Holiday inn, Hilton and intercontinental in the hotel
sector. Many companies compete on an international scale and the consumer of their services are
frequently international travellers, who may be business people or tourists, but may be influenced
by the reorganization of a brand. Companies owned by U.K. operators are now major global
providers, these includes holiday inn, Hilton and forte.
The French ACCOR owns international hotel brands such as Novotel and Sofitel with representative
establishments in many counties .
Inspite of the growth of international brands, however, the typical hotel or restaurants is still likely
to be owned by national or regional company or to be an independent establishment. Frequently,
independents form themselves into associations or consortia for the purpose of marketing there
services . They may be assisted in their marketing efforts by local and regional tourists boards and
other agencies disseminating tourist information. For some establishments, consumer guides may be
an important means of reaching new clients, but for most hotels it is necessary to engage in some
form of advertising and promotional expenditure. The future growth of the industry will depnd upon
it ability to attract consumer expenditure against competition from the goods and services supplied
by other industries. A key factor in this will be the maintenance and growth of economic and
efficient travel system, especially air travel. Travel and tourism , including hotels and catering, are
predicted to become the world’s largest industry by the end of the century. In the united kingdom
one in every seven jobs will be in travel and tourism activity. A similar pattern is predicted for other
developed countries , making it certain that travel and tourism will play an even more vital role in
the world’s economy n the 21st century.
HISTORY
The ancient Romans had several kinds of establishments. On highways and in the towns, inns and
taverns were set up to meet the needs of travellers and local population. None of these survived the
fall of he roman empire. By the 14 th century inns and taverns offering lodging and food drink had
become firmly established. Inns were usually small and lodgings provided with stabling for horses,
was fairly rudimentary. The taverns of this period were usually confined to serving food and drink ,
mainly to meet local requirements. They could not be used to put up guests. Ale houses provided an
alternative source of refreshments, but were mainly for beer drinking rather than dining. Laws were
introduced to control prices charged by inns and taverns and to ensure reasonable quality in the
service provided.
By the mid 16th century, inns had grown in importance in consequence of the growth of trade in
Tudor England. Roads and water ways were still the primary means of travel, so inns developed a
could take upto a 100 guests and separate rooms were available although it was quite common for
travellers to share rooms with strangers . The inns would provide extensive stabling for horses and
wagons , and the large courtyards might provide the scene for evening entertainments , perhaps
even the performance of a play by Shakespeare or Marlowe .
By the 17th century the stagecoach had emerged as a means of reasonably rapid travel. Inns could
provide both hospitality and a change of horses for he next stage. Stagecoach services were
established on main routes from the capital leading to provincial cities , some of which were operate
by inn keepers . in the 18th century , the stagecoach became the main means of travel , while growth
in trade brought about a considerable need to get around. The standard in hospitality rose in
demand from increasingly wealthy travellers.
Seaside resorts developed in the later part of the 18 th century in response to a popular belief in the
health giving properties of sea bathing. Some of the earliest hotels and boarding houses were built
during this period in the resort. The introduction of the steam locomotive and the development of
the railways i the 19th century revolutionized transport and produced phenomenal growth of sea
side towns. Large resorts such as blackpool and Bournemouth scarcily existed until they were
reached by the railways.
For the first time, the large working population of the industrial towns could reach the resorts easily
and cheaply. Workers in the north of England could reach blackpool and south port quickly while
Londoners could obtain ready to access to resorts on the south coast. Hotels and boarding houses
were built in 1000s. these were often built and owned by the railway companies themselves and
offered prestigious accommodation to the well healed traveller. Other entrepreneurs undertook
construction of large luxury hotels in the capital, such as the savoy in 1899 and the ritz at the turn of
the century. The new establishments offered fine dining, with meals prepared by French chefs
available for residents and occasional diners.
The rise of the motor car as a means of transport in the 20 th century caused a new wave of
development which did much to restore the traditional wayside in but also provided alternative
access to the resorts and to the country sides where many hotels and guesthouses were to be found.
For eg. The lake district. In the later of the20th century the motorcar and the aeroplane became
dominant modes of travel. Resorts and city hotels tend now to be larger especially where they are
designed to meet the needs of international travellers arrived by air. In general such hotels are
designed to meet the needs of particular sections of the consumer markets. For the car traveller a
great diversity of hotels is available from the luxurious country house hotel with fine restaurant to
the modern budget hotel or motel with simple accommodation and service.
MORE RECENT TRENDS

The patterns of catering have changed dramatically in the last half century. Before World War II
eating out for pleasure was a regular pass time only for the well off. Since 1950 there has been
tremendous growth in popular restaurants with meals available at reasonable prices. Mass travel
has made dining out more dramatic. Relatively cheap meals are now available in a diverse range of
establishment from branded restaurants to public houses as well as ethnic and speciality
restaurants. There was a remarkable boom in catering in the 1980s when the consumer choice was
considerably increased in variety and new services such as home delivery of meals were successfully
introduced.
Future growth in catering is highly dependent on economic growth generally, but social factors, such
as female employment, also play a role. It seems likely that such factors, coupled with increased
travel will drive the industry forward to provide increased variety, quality and the value for the
consumer as the industry pursues expansion.
HOTEL INDUSTRY IN INDIA

Before independence the travelling was very limited and mostly by the pilgrims. In many places
there was dharamshalas where shelter was provided and some places with food.
There are different periods which set the evolution of hospitality industry in India. They are as
follows:
 Indus valley civilization

 Mauryan period
 Mughal period
 20th and 21st centuries- present scenario
INDUS VALLEY CIVILIZATION

The Indus valley civilization saw shelter and food basically for travellers. The civilization should
arrange houses in sequence of 9 to 12 construction of house based on vaastu shastra. They had
underground drainage system, they had two course meals. They foresaw the necessity of providing
exact shelter to the travellers. Usually first row of houses was given food and shelter and were
allowed to keep their bullock carts.
MAURYAN PERIOD
Authentic proof is available though the historians that food shelter and reservations were available
on payment under the mauryan period. This period was under administrators Vishnu gupta and
kautilya . In the time of Mauryan period there were some houses, which offered different type of
accommotdatio with all comforts, luxury and food. It was commonly known as ashram. It also
offered wine, food and entertainment except these facilities were also was offered to chariots but a
payment. Today advance reservation is also done. It is a trade for the civilized people the traveller
had to come through authorized post set by the kingdom. Every traveller had to give his or her
purpose of visit. The kingdom also wanted trade to improve.
MUGHAL PERIOD
Sher Shah Suri foresaw the requirement of transport and shelter. It was Grant trunk Road that he
built from Peshawar to Delhi. It is known as National Highway no. I. During the period of 1000 A.D
the Mughals only improved and renovated it. They introduced the courier system called “dhak” .one
more change had come ,the soldier started cooking food local ingredients &gave a different name
“Shane”. The British also followed and used there accommodation set up during earlier times . but
they introduced postal system on a large scale . T he Mughal accommodations , which were known
as sarais , got converted to travellers bungalow and inspection bungalows which were called as dak
bungalows but they were served only for night . The problem grew into a major problem started the
earliest known commercial establishments.
THE 20TH&21ST CENTURY –PRESENT SCENARIO

Hotels are no more restricted to a room which provides shelter and food to travellers ,it has a wide
meaning and is categorized as follows:-
1.DOWN TOWN HOTELS: It is located in the heart of the city with a short distance from shoppig
areas , theatres ,public building . Rates in these hotels are normally high due to their location .
Normally business clients prefer such type of hotels.
2.SUBURBAN HOTELS:Located in the suburban areas .It has advantage of quote surroundings, rates
are generally low.
3. RESORT HOTELS:These types of hotels are generally located in the hills at beaches or in the
outskirts of the city.
4.AIRPORT HOTELS:As the name indicates these hotels are located near the aiport and are ideal for
transit passengers who have to stay only for a few hours in the city , rates are at European plan.
5.MOTELS:This is derived from the phrase “motor hotels” which are located principally onto
highways . They provide modest boarding and lodging to highway travellers . Rates are quoted on
European plan .
6.INNS:they are small hotels with modest boardings and lodging facilities. They may be located
anywhere within or outside .
7.HERITAGE HOTELS:The hotels which reflect the heritage and culture of a century is known as
heritage hotel.
8.FLOATEL:Pride of Goa as it is aptly named ,will be Indias first floating hotel by previous yera’s end.
Moving through the back quarters and in land waterways in goa.
9. AQUATEL: in Osaka, japan with 100 rooms and 3 outlets and completely 100 feet below water
with one glass to see the roof. It is transparent to see the fishes and other marine animals.
10. SHOTEL: hotel on the ship.
11. RESIDENTIAL HOTEL: located in commercial areas and the guest are of long staying. Thy are
provided with special facilities and rates.
ORIGIN OF HOSPITALITY IN INDIA

The origin of food and accommodation facilities could be traced back to the mohanjodaro and
Harappa civilization colonies were established for the travellers only.
For eg. A category of house provided for chief traveller who may have come for business dealing.
The second category of travellers who have come with his family.
This between 1500 B.C. to 300 B.C. the country has visualised the commercialisation of tourism.
Several roads were constructed and the transportation network developed considerably during this.
The houses that began to provide food and accommodation was known as ashraya under the
mauryan period, ashrayas offered different types of accommodations with luxury and comfort.
With the arrival of british, India has visualised that what could be termed the foundation of modern
tourism set up. They also introduced the system of carrying official documents from one place to
another and set up dakghar at different contents which could be termed as the foundation at
different destinations and centres greased up rapidly.
The Hotel Industry and Indian Economy
The hotel industry is one of the major industries in any economic system, the hotel industry is the
world’s second largest industry of all other industries next to oil industry. In India it has been
introduced through several attitudes towards service industry. Hotel industry is most important
sector in tourism infrastructure. It is a growing industry because of increase in leisure time. The
standards of hotels has increased since 1958. This was done under proper and planned scheme
development. We are proceeding with a second five year plan of this plan again. The hotel doesn’t
play any part in this plan, it was a planning commission who took interest. It also included the
ministry of tourism, it kept in view the requirements of the industry fir the next 15 yrs or so. Hotel
and tourism industry represents the fastest and largest element of economist called invisible trade
and its earning.
ECOTOURISM
INTRODUCTION
Holiday ideas adventures trails aayurveda shalas beaches of India drive destination ecotourism
heath resorts hill stations. Hindu pilgrims, metro guides, palace of wheels, palaces religion is stone
the back waters of Kerela the bud shed circuit, the desert adventure, the golden triangle, the heart
of heritage, the lure of jungles, the north east, the Punjab circuit, the temple trail, world cultural
heritage sites. Experience Indian arts culture by rail shopping religion wedding search.
Home--------->Holiday---------->Ecotourism
Ecotourism
The united nations has designed 2002 as the “international year of ecotourism” and righly. So today
only highly responsible tourism will help the world preserve and sustain its environment and cultural
heritage.
Fundamentally ecotourism means making a little environmental impact as possible and helping to
sustain indegenious population thereby encouraging the preservation of wildlife and habitats while
visiting a place.
DONT’S
Do not use pollutants such as detergents in strams on springs while washing and bathing.
 Don’t use wood as fuel to cook food at the working sites.

 Don’t leave cigarette butts or make open fires in forests.
 Don’t consume aerated drinks, alcohol, drugs or any other intoxicants and do not throw
bottles in the wild.
Chapter - 2
Scope, Objective,
Methodology And Limitation
Of The Project

Chapter - 2
Scope, Objective, Methodology And
Limitation Of The Project
1. To access the market feasibility and details in the technical outline,

2. To collect the basic data pertaining to tourism location and transport facilities about
Lucknow
3. To access the present status of accommodation
4. To study the planning aspects of the hotel and to develop draft policy
Scope
The study carried out to access the commercial viability and to find out the feasibility of
starting a three star hotel. For the market survey hotels with some star status were covered.
Methodology
The data information required for the study was obtained from two sources:
Primary Data
Secondary Data
Primary Data
This was the first hand information collected by interviewing the hotels using the
questionnaire provided by the college.
Secondary Data
This is the information obtained from books, journals, newspapers, brouchers, leaflets and
reports.
Limitations
Due to lack of time all the required information was not collected.
The hotel officials were not ready to reveal some strategic information.
Financial aspects are not covered.

Chapter – 3
Profile Of The Place

Lucknow (Uttar Pradesh)
Time zone IST (UTC+5:30)
Area,345 km2 (905 sq mi) Elevation – 123 m(404 ft)
Population 2,800,000(2006)
Density 331/km2 (857/sq mi)
Languages – English, Hindi, Urdu
Mayor – Dinesh Sharma
District Magistrate – Chandra Bhanu
Website : lucknow.nic.in
Coordinates : 26051’38’’N 80054’57’’E/26.860556, 80.915833
Luknow is the capital city of Uttar Pradesh, the most populous state of India. It had apopulation of
2,541,101 in 2006, Lucknow is also the administrative headquarters of Lucknow district and Lucknow
Division.
Located in what was historically known as the Awadh(Oudh) region, Lucknow has always been a
multicultural city. Courtly manners, beautiful gardens, poetry, music, and fine cuisine patronized by
the Persian-loving Shia Nawabs of the city are well known amongst Indians and students of South
Asian culture and history. Lucknow is popularly known as The City of Nawabs. It is also known as the
Golden City of the East, Shiraz-i-Hind and The Constantinople of India.
Today Lucknow is a vibrant city that is witnessing an economic boom and is among the top 10 fastest
growing non major metropolitan cities of India. It is the second largest city in Uttarpradesh. The
ancient history of Lucknow is believe to begin after the Suryawanshi king lord ram ordered is
younger brother Lakshman to establish a town at the present site of Lakshman tila. After 1350 AD
the Lucknow and parts of Awadh region have been under the rule of the Delhi Sultanate, the Mughal
Empire, the Nawabs of Awadh, the East India Company and the British Raj. Lucknow has been one of
the major centers of First War of Independence, participated actively in India's Independence
movement, and after Independence has emerged as an important city of North India.
Until 1719, subah of Awadh was a province of the Mughal Empire administered by a Governor
appointed by the Emperor. Saadat Khan also called Burhan-ul-Mulk a Persian adventurer was
appointed the Nazim of Awadh in 1722 and he established his court in Faizabad near Lucknow.
Awadh was known as the granary of India and was important strategically for the control of the
Doab, the fertile plain between the Ganges and the Yamuna rivers. It was a wealthy kingdom, able to

maintain its independence against threats from the Marathas, the British and the Afghans. The third
Nawab, Shuja-ud-Daula fell out with the British after aiding Mir Qasim, the fugitive Nawab of Bengal.
He was comprehensively defeated in the Battle of Buxar by the East India Company, after which he
was forced to pay heavy penalties and cede parts of his territory. The British appointed a resident in
1773, and over time gained control of more territory and authority in the state. They were
disinclined to capture Awadh outright, because that would bring them face to face with the
Marathas and the remnants of the Mughal Empire.
In 1798, the fifth Nawab Wazir Ali Khan alienated both his people and the British, and was forced to
abdicate. The British then helped Saadat Ali Khan to the throne. Saadat Ali Khan was a puppet king,
who in the treaty of 1801 ceded half of Awadh to the British East India Company and also agreed to
disband his troops in favor of a hugely expensive, British-run army. This treaty effectively made the
state of Awadh a vassal to the British East India Company, though it notionally continued to be part
of the Mughal Empire in name until 1819.
The treaty of 1801 formed an arrangement that was very beneficial to the Company. They were able
to use Awadh's vast treasuries, repeatedly digging into them for loans at reduced rates. In addition,
the revenues from running Awadh's armed forces brought them useful revenues while it acted as a
buffer state. The Nawabs were ceremonial kings, busy with pomp and show but with little influence
over matters of state. By the mid-nineteenth century, however, the British had grown impatient with
the arrangement and wanted direct control of Awadh.
In 1856 the East India Company first moved its troops to the border, then annexed the state, which
was placed under a chief commissioner - Sir Henry Lawrence. Wajid Ali Shah, the then Nawab, was
imprisoned, and then exiled by the Company to Calcutta. In the subsequent Revolt of 1857 his 14-
year old son Birjis Qadra son of Begum Hazrat Mahal was crowned ruler, and Sir Henry Lawrence
killed in the hostilities. Following the rebellion's defeat, Begum Hazrat Mahal and other rebel leaders
obtained asylum in Nepal.
Geography and Climate
Situated in the heart of the great Gangetic plain, Lucknow city is surrounded by its rural towns and
villages like the orchard town of Malihabad, historic Kakori, Mohanlal ganj, Gosainganj, Chinhat,
Itaunja. On its eastern side lies Barabanki District, on the western side is Unnao District, on the
southern side Raebareli District, and on the northern side the Sitapur and Hardoi districts. The Gomti
River, the chief geographical feature, meanders through the city, dividing it into the Trans-Gomti and
Cis-Gomti regions. Lucknow city is located in the seismic zone III.
Climate
Lucknow has a warm humid subtropical climate with cool, dry winters from December to February
and dry, hot summers from April to June. The rainy season is from mid-June to mid-September,
when Lucknow gets an average rainfall of 1010 mm (40 in) mostly from the south-west monsoon
winds. In winter the maximum temperature is around 25 degrees Celsius and the minimum is in the

2 to 3 degrees Celsius range. Fog is quite common from late December to late January. Summers are
very hot with temperatures rising to the 40 to 45 degree Celsius range.
Demographics
Currently the population of Lucknow is more than 5 million.The majority of Lucknow's population
comprises people from Central and Eastern Uttar Pradesh. However, Bengalis, Punjabis and Anglo-
Indians have also settled in large numbers. Hindus comprise about 71% and Muslims about 26%.
There are also small groups of Sikhs, Jains, Christians and Buddhists. As per 2001 census literacy rate
of Lucknow is 69.39% (61.22% for females and 76.63% for males).
Economy and Business
Lucknow is not only a major market & trading city in Northern India, but is also an emerging hub for
producers of goods and services. Being the capital of Uttar Pradesh state, the Government
departments and the public sector undertakings are the principal employers of the salaried middle
class. Liberalization has created many more opportunities in the business and service sector and self-
employed professionals are burgeoning in the city.
Lucknow also provides a good catchment area for the recruitment of quality personnel by
information technology companies for the BPO hubs of nearby Noida and Gurgaon as well as for
Bangalore and Hyderabad.
Large number of expatriate labour and NRIs from lucknow serve in the Gulf and middle east
countries and send considerable remittances their families back home.
The city is the headquarters of both the Small Industries Development Bank of India (SIDBI) and the
Pradeshiya Industrial and Investment Corporation of Uttar Pradesh (PICUP). The Regional office of
the Uttar Pradesh State Industries Development Corporation (UPSIDC) is also located here.
The other business-promoting institutions that have a presence in Lucknow are the Confederation of
Indian Industry (CII) and Entrepreneurship Development Institute of India (EDII).
Traditional Trade
Traditionally, Lucknow has been a mandi town for mangoes, melons, and grains grown in the
surrounding areas. Sugarcane-growing plantations and sugar industries are also in close proximity.
This attracted Edward Dyer to set up a unit based on molasses in the city. Dyer Breweries was
incorporated in 1855 and was Asia's first commercial brewery.
Lucknow is famous for its small scale industries that are based on unique styles of embroidery,
namely, Chikan and Lakhnawi Zardozi, both of which are significant foreign exchange earners. Chikan
has caught the fancy of fashion designers in Bollywood and abroad. Information technology is now
being introduced in the industry for increased productivity, with the help of world bank funded
projects.

During the period of the Nawabs, kite-making reached a high level of artistry, and is still a small-scale
industry. Lucknow has also been an industrial producer of tobacco products like 'Kivam', edible
fragrances like 'attars' and handicrafts such as pottery, earthen toys, silver and gold foil work, and
bone carving products.
Manufacturing and Processing
The city had a big paper mill, one of the oldest in the country. Among the bigger manufacturing
units, Lucknow has Hindustan Aeronautics Limited, Tata Motors, Eveready Industries and Scooters
India Limited. Processing industries include milk production, steel-rolling units and LPG bottling.
The city's small-scale and medium-scale industrial units are located in the industrial enclaves of
Chinhat, Aishbagh, Talkatora and Amousi.
Emerging businesses
Lucknow, with its excellent education, commercial, banking and legal infrastructure, is witnessing
rapid growth in information technology, banking, retailing, construction and other service sectors.
Private coaching institutions for preparing aspirants of competitive exams and services is another
business that is flourishing in Lucknow.
All the major public and private sector banks of India, Reserve Bank of India (RBI) and foreign banks
like Citibank, Standard Chartered Bank, ABN-AMRO and HSBC have their presence in the city. The big
oil marketing companies like Indian Oil Corporation, Hindustan Petroleum, Bharat Petroleum, and
Reliance have their offices in Lucknow.
Leading IT companies like TCS and IBM are also operating in Lucknow.
Insurance companies, both public and private, as well as leading cellular phone companies are
present in the city as well.
Currently, biotechnology and information technology are the two focus areas to promote economic
development in and around the city. The Ministry of Science and Technology is setting up a biotech
park in the city. Lucknow is also one of the selected cities for the Smart City project of STPI, under
which IT is being used to promote economic development.
Transport
Auto Rickshaws
The available multiple modes of public transport in the city are taxis, city buses, cycle rickshaws,
auto rickshaws and CNG Low Floor AC or Non AC Buses. CNG has been introduced recently as an
auto fuel to keep the air pollution in control.The city bus service is run by Lucknow Mahanagar
Parivahan Sewa a division of Uttar Pradesh State Road Transport Corporation (UPSRTC).
Inter-city/Inter-state travel.

lucknow has good road, rail and air links with the rest of the country.
Road
From Hazratganj intersection in Lucknow city, four Indian National Highways originate, viz, NH-24 to
Delhi, NH-25 to Shivpuri, Jhansi (M.P. Border), NH-56 to Varanasi and NH-28 to Mokama (Bihar).
There are two bus stations. The major bus terminals is Dr. Bhimrao Ambedkar bus station at
Alambagh. It has very modern facilities and is the main inter- and intrastate terminal in Lucknow.
Another important bus station is at Qaiserbagh. Earlier, another bus terminal operated at Charbagh,
directly in front of the main railway station, but this has now been reestablished as a City bus depot.
The move was taken to remove congestion in front of the railway station. Now inter-city travel in
private cars is also becoming very common.
Railways
The main railway station is Lucknow Railway Station at Charbagh. It has an imposing structure built
in 1923. The main terminal belongs to Northern Railway (NR) (station code: LKO) division of Indian
Railways and the second terminal is run by the North Eastern Railway (NER). Lucknow is a major
junction with links to all major cities of the state and country. Lucknow has a further thirteen
railway stations viz. Alamnagar, Malhaur, Utretia, Transport Nagar, Dilkhusha, Gomti Nagar,
Badshahnagar, Manak Nagar, Amausi, Aishbagh junction, Lucknow City, Daliganj and
Mohibullapur.The first eight stations cater for broad gauge only whereas the others have meter
gaugeas well as except for Mohibullahpur which has only meter gauge. All the stations are within
city limits and are well connected with each other via road networks and public road transport.
Other suburban stations include Bakshi Ka Talab and Kakori, which had witnessed a famous
nationalindependence act (see kakori train dacoity). The Barabanki-Lucknow-Kanpur track (101 km)
is electrified. Its electrification was done in 2002-03 when Shri. Atal Bihari Vajpayee was Prime
Minister of India and he was MP from Lucknow.
Air
Lucknow is directly connected by air with New Delhi , Patna, Kolkata and Mumbai and other major
Indian cities. The Amausi airport at Amausi is located around 20 km from the city centre. It is an
international airport and is the 13th online station for Air India. International destinations include
Dubai, Jeddah, Muscat and Sharjah. Flights to London, Bangkok and Hongkong may also commence
soon. During Haj special flights are also operated from Lucknow.
Oman Air and Cosmo Air are a few international airlines that are operating direct international flights
from Lucknow to international destinations & vice-versa.
Language and Poetry
Both Hindi and Urdu are spoken in Lucknow, but Urdu has been the lingua franca of the city for
centuries. Under the rule of Nawabs, Urdu flourished and turned into one of the most refined
language. Hindu and Muslim poets like Brij Narayan Chakbast, Khwaja Haider Ali Atish, Ameer Minai,

Mirza Hadi Ruswa, Nasikh, Daya Shankar Kaul Nasim, Musahafi, Insha and the great Meer Taqi Meer
took Urdu poetry to dizzy heights and established the Lakhnavi form of language.
Lucknow is one of the greatest city for Shiitte culture. Two poets, Mir Anis and Mirza Dabeer,
became legendary exponents of a unique genre of Shia elegiacal poetry called Marsia centred on
Imam Hussain’s supreme sacrifice in the battle of Karbala which is commemorated during the annual
observance of Muhharam.
In recent years the use of Urdu has reduced significantly. Day-to-Day transactions in the city are
typically performed in Hindi or English. Nevertheless Lucknowites are still known for their polite and
polished way of speaking which is noticed by visitors to this charming city. The revolutionary Ram
Prasad Bismil, who was hanged by british at Kakori near Lucknow, was largely influenced by poetry
and wrote verses under the pen name of “Bismil”. The surrounding towns like Kakori, Daryabad,
Barabanki, Rudauli and Malihabad produced many eminent poets and literaturers of Urdu like
Mohsin Kakrovi, Majaz, Khumar Barabankvi and Josh Malihabadi.
Cityscan
Roomi Gate: view from Asafi Imambara
The Asafi Imambara ( popularly known as Bara Imambara), the Chhota Imambara, Residency and
Shah Najaf are monuments of architectural importance at lucknow. Some other places of interest
are the Picture Gallery, Chattar Manjil, State Museum/ Lucknow zoo, Shaheed Smarak, Dilkusha,
Ambedkar memorial, Planetarium and Ram Krishna Math.
Lucknow Zoo
The British-built architectural sites in Lucknow include the Vidhan Sabha(State legislative Assembly),
the clock tower and the Charbagh Railway Statiob, with its distinctive domes, arches and pillars.
Husainbad Clock Tower
Some of the oldest schools in India are also situated in Lucknow.La Martiniere Lucknow, St. Francis’
College and the Colvin Taluqdar’s college.
Ambedkar memorial
Lucknow has severalwell kept parks that attract the citizenry in large numbers on evenings, holidays
and weekends. The bigger parks are Ambedkar Memorial and Lohiaa park in Gomtinagar, swarn
Jayanti Park and Aurobindo park in Indiranagar. The sprawling National Botanical Garden at
Sikandarbagh on the banks of Gomti river is also worth visiting.
Shopping
Sahara ganj mall

Aminabad, a quaint bazaar like Delhi’s Chandni Chowk, is situated in the heart of the city. It is a
large shopping centre that caters a wide variety of consumers.
Chowk and Nakkhas are markets in the old lucknow area where you can get a feel of traditional
Lucknow. Some other important shopping centres are Alambagh, Kapoorthala, Indiranagar,
Mahanagar and Nishatganj.
The Hajratganj area is an upscale shopping market with colonial style buildings interestingly a
populae passtime among the locals is window- shopping in the Hajratganj market. The Janpath
market, lovers lane, Mayfair building, kwality, and the universal book stores are some popular
landmarks of the area.
REAL ESTATE
Real estate is one of the many booming sectors of the economy. There are several malls, residential
complexes and business complexes throughout the city. Real estate giants like Prashvanath, DLF,
Sahara, Unitech. API are here.
Lucknow is one of the few Indian cities that follows vertical outgrowth plan like Delhi, Mumbai, Surat
and Ghajiabad. The city boasts handsome skyline in Gomti nagar, Hajratganj and Kapoorthala. The
highest under construction building is Sahara hospital which will have 35 floors followed by Metro
city (30 floors) and Omaxe heights (23 floors). Presently the highest buildings are Shakti bhawan (21
floors) and OCR (20 floors). The city boasts a high property expansion rate. It is expectedthat city will
have $2.5 billion organised real estate by 2010.
Tube (Metro) Train
After Delhi and Kolkata, Metro trains are planned to be included in city transportation. The fesibility
study of this project is going on and metro trains will beruning in Lucknow by 2012.
Cuisine
When it comes to the dining, Lucknow is a culinary delight as the Awadh region has its own distinct
Nawabi style cuisine with various kinds of biryanis, kababs and breads like sheermal/ roomali oti all
very popular delicacies.
Seekh kababs
Lucknow has also pioneered the slow- fore cooking called Dum-Pukht. The world famous chef Imtiaz
Quereshi hails from Lucknow.
With several bakeries in town, the sweet toothed are never go unsatisfied. The delicious cakes,
pasteries and the traditional Keiser-pista are sure to make you comeback for more.
The city has a wide range of fine restaurants catering to all tastes and budgets.

The chaat in Lucknow is on par with the best you will get anywhere in the country. There are quite a
few places serving outstanding chaat like Shukla Chaat in Ganeshganj, Moti Mahal. Radhey lal in
Aliganj Chappan bhog in Sadar and Mahesh sweets in Nirala nagar.
Localities
The urban area is spread equally on both sides of the gomti river. The commercial and residential
areas on cis-gomti are Hahratganj, Alambagh, Charbagh, Aminaabad, Husainganj, Lal Bagh,
Golaganj, Wazirganj, Rajendra Nagar, Malviya Nagar, Sarojini Nagar, Aishbagh, Rajajipuram,
Haiderganj, THAKURGANJ, Chowk and Saadatganj.
The residential settlements in the Trans-Gomti area are Nirala Nagar, Aliganj, Daliganj, Mahanagar,
Old and new Hyderabad, Nishatganj, Indira nagar, Gomtinagar, Nilmattha cantt, Vikas nagar and
Janakipuram.
Culture
Lucknow is bravely struggling to retain its old world charm while at the same time acquiring a
modern lifestyle. Regarded as one of the finest cities of India, Lucknow represents a culture that
combines emotional warmth, a high degree of sophistication, courtesy and a love for gracious living.
The pehle-aap(after you) culture. Popularised as a tagline for the society of Lucknow as waning. The
sublime cultural richness famous as Lakhnawi tehzeeb blends the culture of two communities living
side by side for centuries, sharing similar interests and speaking a common language.
Many of the cultural traits and custom peculiar to Luvknow have become living legends today. The
credit for this goes to the secular and syncreis traditions of the nawbas of Awadh, who took a keen
interest in every walk of life, and encouraged the traditions to attain a rare degree of sophistication.
Dance and Music
Kathak, the classical Indian dance from south took shape here. Wajid Ali Shah. The last nawzb of
Awadh, was a great patron and passionate champion of kathak. Lachhu Maharaj and Birju Maharaj
have kept this tradition alive.
Lucknow is also the city of eminent Ghajal singer Begum Akhtar. She was a pioneer in Ghazal singing
and took this aspect of music to great heights. “Ae mohabbat tere anjaam pe rona aaya” is one of
the best musical renditions of all times.
The Bhatkhande music University at Lucknow is named after the great musician Pandit Vishnu
Narayan Bhatkhande.
Lucknow has given music legends like Naushad Ali, Talat Mehmood,mAnup Jalota and Baba Sehgal to
the entertainment industry. It also incidentally the birthplace of British pop legend sir Cliff Richard.

PRESENT STATUS OF HOTEL
INDUSTREY IN LUCKNOW
PRESENT STATUS OF HOTEL INDUSTRY IN LUCKNOW
HOTELS
Five Star
:The Piccadily, sector B Bara Birwa, Kanpur Road
: The Taj Residency,Gomti Nagar
: Hotel Clarks Avadh,8 Mahatma Gandhi Road
Four Star
: Hotel Sagar International, 14-A ,Jopling Road
: Hotel Gemini Continental, 10, Rani Laxmi Bai Marg
: Hotel Deep Palace , Cantt Road

CHAPTER 5
TECHNICAL ASPECTS OF THE
“ BLUE LOTUS”

Chapter - 5
Technical Aspects Of The Blue Lotus
It is clear from the demand analysis that a hotel with 100 rooms is feasible in Gomti
Nagar in Lucknow Technical details of the Htel BLUE LOTUS are discussed in this chapter. As the cost
involved for the contribution of single room is more or less equal to that of double rooms. Nowadays
only double rooms are constructed.
BREAK-UP OF THE ROOM
TYPES OF ROOMS NO OF ROOMS

DOUBLE 90
SUITE 10
TOTAL 100
SIZE OF THE ROOM
a. Double Room => 15 X 14 =210 sq.ft.

Total area of double rooms = 16800 sq.ft. b.
Suite => 20 X 16 = 320 sq.ft. Total
area of Suite room = 3520 sq.ft.
Therefore
Total area of room = Area of Double Room + Area of Suite Room
=16800 + 3520
=2000 sq.ft.

HOTEL BUILDING
Basement
Basement Layout Square Feet

Accounts Department 340
Personal Department 300
Time Office 200
Receiving Area 300
House keeping 100
Fire escape 2000
Passage and corridors 500
Laundry 500
Staff cafeteria 400
Locker(male) 400
Locker(female) 400
Stores 400
Purchase department 200
Uniform exchange room 200
Linen exchange room 2000
General manager office 200
Engineering and maintenance department 230
Centralized A/C 700
Service lift 100
Security office 200
T.V. channel music 170
Total 800 sq. Ft

GROUND FLOOR
Ground floor Square feet

Reception 700
Reservation 200
Telephone 200
Back office 300
Bell desk 200
Cashier 200
Lobby 1000
Travel desk 330
Flourists 100
Guest stairs 60
Guest lift 70
Service lift 100
Service stairs 60
Shos\business center 600
Kitchen and room service cabin 1000
House keeping pantry 80
Setback corridors 100
Fire escape 80
Bar cum restaurant 1000
Banquet hall 1250
Coffee shop 750
Guest toilet 160
Guest safety locker 60
Health club 640
TOTAL AREA 7480
First floor
First floor Square feet

Service lift 100
Fire escape 80
Guest stairs 60
Service stairs 60
Guest lift 70
Set back area and corridors 600
Double room (15*14)25 5240
Speciality restaurant 1200
Room service 140
TOTAL AREA 7710 sq. Ft

Second Floor
SECOND FLOOR SQUARE FEET

Service lift 100
Fire escape 90
Guest stairs 150
Service stairs 60
Guest lifts 70
Set back areas corridors 1700
Double room(20) 4200
Suites(3) 640
Room service pantry 190
TOTAL AREA 7400sq. Ft
Third floor
THIRD FLOOR SQUARE FEET

Service lift 100
Fire escape 80
Guest stairs 60
Service stairs 60
Guest lifts 70
Suites(3) 960
TOTAL AREA 7400
Fourth floor
FOURTH FLOOR SQUARE FEET

Service lift 100
Fire escape 80
Guest stairs 60
Service stairs 60
Guest lifts 70
Suites(5) 1600
TOTAL AREA 7400sq. Ft

Therefore
Land area required is =65,000sq. Ft.
Total build up area =45,390sq. Ft.
Covered land =7,800sq. Ft.
Open area(garden and parking) =5,200sq. Ft.
1. By place we mean that selection of best location for the hotel. The location is considered as
one of the most important decision. Considering various barometers. Connected with
choosing of the location, a suitable site was finalised. The site for the construction of the
proposed hotel is in gomtinagar lucknow.
Distance From Important Places
Airport - 18 km
Bus stand – 12 km
Railway Station – 17 km
Main market - 10 km
The place selected , for the proposal project is also very calm nad not very densely populated, so it
gives privacy and peace to the guest
Hospitality Products Offered
a. Proposed hotel will recruit professional managers and skilled professionals

b. Shall invite the culture of excellent service in the proposed hotel
c. Shall provide guest with many cuisins like continental, Chinese ,awadhai
d. Shopping arcade :this is attached toreeption counter. It consist of
>Travel desk
>Handicraft soft
>Chemist
>Banking facilities
>Beauty parlour
These are the basic needs and should be provided because for these ,guest may find it difficult to ut
of the hotl every now and then.the travel desk does the looking for the guest travel through railways
or nav. Other passenger carrieage system. They conduct tourswithin and out side the city.banking
facility is a necessaty for the tourist to exchange their deposits , cheque or currency.at the parlour
attached to the health club will provide all facilities, which the guest needs.the chemist will wok rond
the clock as an emergency can arrive anytime .

e. Business center
The hotel provides facilities for :
i.fax
ii.Telex
iii.E-mail service
iv.Internet
v.Xerox
These facilities provide efficient secretarial and other service which can increase the no of
business clients.
f. Lockers: this is to help the gest who are carring valuable like jewelley,currency or very doc.
Etc.,to safe guard abd prevent theft
g. Car park : this is provided at the side of te hotel.about 35-45 cars and 15 wheelers can be
arked here .
FOOD AND BEVERAGES OUTLETS OF THE HOTEL
MOKSHA 24 HOURS COFFEE SHOP

DAWAT E KHAS Awadhi cuisine specislity restaurant
11 am – 3 pm
7 pm – 11.30 pm
MINGS GARDEN CHINESE SPECIALITY
RESTAURANT
11 am – 3 pm
7 pm – 11.30 pm
ROOM SERVICE 24 HOURS
BALL ROOM BANQUET HALL(UP TO 97 PAX)
GUFTAGOO BANQUET HALL(UP TO 500 PAX)
MEHFIL – BAR 11 am- 11.30 pm
FACILITIES IN THE ROOM
All rooms will have wall-to-wall carpeting. The minimum furniture will be abed, wardrobe, suit
case rack, writing desk,chair, sofa set and refrigerator .the suit will have an attached living room
with the required furniture provided with refrigerator provided with wine and bar. All rooms wil
have channel music ,colour t.v. ,a.c. and a telephone . all rooms will have attached bathrooms
with 24 hr hot and cold water supply. The bathroom will also have the required toiletries such as
soap, shampoo, toothbrush, paste, shaving kit, hairbrush, powder, towels etc.

Guest stationary and a sewing kit will be provided with special room service menu card , house
keeping cards and telephone directory
: In order to ensure price for the products the hoel sells, is has to follow a method of fixin the
price .the two methods are
a. Follow the leads methods

b. Market penetration method
In this case market penetration method is used by keeping the price slightly lower than the
competition
TYPES OF ROOMS NO OF ROOMS

Double rooms 90
Suite rooms 10
TARIFF
Type of rooms Single occupancy (in Rs.) Double occupancy (in Rs.)
Double rooms 2500 2750
Suite rooms 3700 3950
The pricing of the speciality restaurant and coffee shop will e finalized after construction of
the hotel and after studying the pricing policy of other in lucknow
4. PROMOTION
a. Before Inauguration : some of the methods that will be adopted in the promotion of the
hotel.
before inauguration are
i. Advertising : the advertising of the hotel will begin when the project is nearing
completion. The different that will be adopted are through local media , national media, bill
board and banners. By the appointments of sale executives , VIPs company officials and head
of institute can be contacted aong with leaflets and folders.
ii. Data Base : this is sending personalised letter to executives of certain selected companies
all over India .
iii. Travel agent : the travel agent operating i the local market and those who passes
necessary license to represent the important domestic carries such as Airlines, Railways and
road transport are informed to promote the guest into the hotel
b.After Inauguration : after the inauguration of the hotel the promotion of the hotel can be
done by
i. Food Festivals : food festivals should be held with wide publicity from time to time
ii.Discounts.: certain discount will be given to selected groups like :
-Children below the age of 5
- regular guest
-Educational tour groups
- VVIPS
A complimentary fruit basket and cookies canbe provided for teh residential guest. Special
service are provided for VIPs and VVIPs
ROOM SERVICE
The room service will operate 24 hours. They will have a slightly concise form of the coffee shop
menu.
BUSINESS CENTER
A well equipped business centre will be incorporated to provide services to all machine, OHP, etc.
FRONT OFFICE
As front office is a critical department in a hotel in view of its revenue generating capacity and
influencing hotel image. This department will contain a reception, cashier, telephones, bell desk and
reservation office.
LOBBY
The lobby will be aesthetically decorated. It will be furnished with sitting arrangement. There will be
two elevators in the lobby.
FOOD AND BEVERAGES PRODUCTION
This department will handle the production of all F & B items. The food will be nutritionally prepared
and aesthetically presented.
HOUSE KEEPING
The housekeeping office will be situated in the basement area. This department is very important to
upkeep the hotel the hotel. The laundry comes under this department.
PERSONNEL DEPARTMENT
This department controls the staff in the hotel and also controls the administration of the hotel. Its
office is located in the basement.
ENGINEERING AND MAINTENANCE
This department is responsible for the maintenance of furniture, fixture and for rectifying faults in
electric equipments, etc. This department will be situated in basement.
ACCOUNTS DEPARTMENT
This department handles all different accounts of all departments in the hotel and settles them
accordingly. This department will be situated in the basement area.
CHAPTER 6
RECOMMENDED MARKET
MIX
Chapter – 6
Recommended Market Mix
The data collected in Lucknow helps to show that a 100 room 3 star hotel is commercially feasible,
located in Gomti Nagar Lucknow
To endure a successful promotional strategy, it is essential to implement the 7 P’s of marketing in

the most efficient names the main purpose of strategy option is to create and maintain demand for
the facilities in the proposed hotel.
The 7 P’s are
PRODUCT
PRICE
PLACE
PROMOTION
PEOPLE
PROCESS
PHYSICAL EVIDENCE
PRODUCT
The hotel will be well equipped with all the necessary items.All the rooms will have necessary items
and few rooms will also offer extra services.Hotel will have a coffee shop and a specialty restaurant.
PROPOSED HOTEL
Land area required :65,000 sq. Ft.
Total built-up area :45,390 sq. Ft.
Expected clients tourists, business & holidays
Types of room Double rooms-90
Suite Rooms-10
Total-100
The balance requirement of manpower is adjusted by appointing trainees from various hotel
management institutes of lucknow and other states. In marketing planning , we use market
information to access situation.We have to select specific marketing target for each segment on sub
division of the market. We formulate a combination of marketing programming to reach a
particular target on maket segment .The combination of these marketing methods on devices is
known as the marketing mix , as well as a target market for whom the market mix is prepared. The
basic elements on
Variables that make up a marketing mix are as follows :
1. Place
2.Product
3. Price
4.Promotion
These four p’s of Marketing are closely interrelated. Another way the marketing mix to the blending
of these four ingredients.
1.PLACE: By place we mean that selection of the best location for the hotel. The location is
considered as one of the most important decision . Considering various barometers connected with
choosing of the location a suitable suite was finalized . The site for the construction of the proposed
hotel is located in Gomti nagar , Lucknow .
Distance From Important Location
Airport -18km
Bus stand-12km
Railway station -12km
Main market -10km
The place selected for the proposed project is also very calm and not very densely populated, so it
gives privacy and peace to the guest .
PRICE: The pricing of a room may play an important role and with so much of competition already
existing . One has to be very carefull without letting the hotel image suffer , initially the rates should
be kept lower to attract customers who are economy minded and tourist.
PLACE:By place we mean the best location for the hotel. The location decision is considered to be
one of the most important decision which can make or break a hotel. In the hospitality business
therefore location decision have a prime place . Keeping this in mind the prime location for the hotel
is Lucknow which is near to ISBT and AIRPORT.
PEOPLE: The staff employed will act as an image builder of the hotel . Therefore there are required
to have an impressive personality . A well dressed , articulate, efficient staff reflects the food
standard of a hotel . The sales person of the hotel are ones , who market the hotel . Therefore it is
necessary to recruit well trained staff for managerial position. Person with suitable qualification
should be recruited.
PROMOTION: Under the promotion category following are considered :
1.Advertisement
2.Personal Selling
3.Sales Promotion
4.Publicity and Public relations
In todays world advertising is very important to have business. This can be done through media .
Media can be of different types:
a)The personal selling efforts can be achieved by appointing sales executives and guest relation
executives. They can contact companies , VIP’S , officials or heads of institutions , along with
coloured brochures , leaflets, etc of hotel property.
b)The sales promotion effort can be advocated through incentives like food , package towns ,
transport with discount .
As regarding publicity it is recommended that once the decision is taken there should be a grand
foundation laying ceremony when the hotel is ready for operation.
PROCESS: Marketing has to follow a set procedure associated with the operation of the hotel. They
have to be very systematic for efficient and effective service.
PHYSCAL EVIDENCE: This deals with creating a congenial environment for both guest and staff. This
will include the layout , working condition, architecture , proper space utilisation with locality , type
of hotel, etc.
CHAPTER 7
CONCLUSION
CHAPTER 7
CONCLUSION
Tourism is one of the fastest growing and the largest industry in the world. It had tremendous
potential for earning foreign exchange. Yielding tax revenue, providing employment and promoting
the growth of backward region. The objectives of this report are to find out whether a 3 star hotel
will be feasible in Lucknow or not. This was done by survey to find out the potential demand of 3-
star hotels as well as the study on the already existing supply.
So this project is undertaken to find out the feasibility of the proposed hotel. According to the survey
on the demand analysis it has been noted that a 122 room hotel is feasible. Hence a hotel with 100
rooms has been proposed. This proposed hotel will be having the best facilities, which are up to the
best standards provided in the industry.
FINANCIAL VIABILITY OF THE PROJECT

CHAPTER 8
INTRODUCTION TO THE
FINANCIAL ASPECTS OF THE
PROPOSED PROJECT
CHAPTER – 8
INTRODUCTION TO THE FINANCIAL ASPECT OF THE PROPOSED PROJECT
Name of the industry : 3 Star Business Hotel
Location : Gomti Nagar Lucknow
Name of Hotel project : The BLUE LOTUS
Room statement : Total no. Of rooms - 100
1st floor : Double Rooms - 30
2nd floor : Double Rooms - 25
: Suites - 02
3rd floor : Double Rooms - 20
: Suites - 03
4th floor : Double Rooms - 15
: Suites - 04
TARIFF STRUCTURE
TYPE OF ROOM SINGLE OCCUPANCY DOUBLE OCCUPANCY

DOUBLE 2500 2750
SUITES 3700 3700
Note : 1) Service charges of 6% on food and beverage

2) 15 % luxury tax on room
All Public Area : Ground Floor
All Guest Rooms : 1st , 2nd , 3rd and 4th FloorFACILITIES PROVIDED
Restaurant – DA WATE KHAS (Awadhi Cuisine) AND MINGS GARDEN (Chinese Speciality)
Coffee Shop – MOKSHA
Bar - MEHFIL
Banquet Hall - BALL ROOM, GUFTAGOO
Channel Music System
Centralized AC
Shopping Arcade
Travel Desk
Bank
Locker
Health Club
24 Hours Room Service
Cable TV
Parking
Laundry
Double Rooms and Suite Rooms
Capsule Elevator
Managing finance is essential for the firms or business concerns , because finance occupies a very
important role in any business enterprise. As an entrepreneur he has to have the capacity and
efficiency in managing different kinds of finance. A complete study of financial management
determines the financial viability of an industry with the help of concepts of financial management
and the organizer takes the decision for the industry. The decision can be investment decision,
financial decision and dividend decision. So far investment decision has been converted to indulge
long term and short term investment within the industry. It also includes different types of cost and
expenditure.
The financial decision includes the decision pertaining to management of capital during the long run
and short run. Thus anytime an industry needs two types of finances :
1) Long term finance

2) Short term finance
Long term finances includes borrowing from financial, using funds from share, etc. The short term
includes the management of working capital. Analysis has to be made with majority long term
finance and short term finance. With regards to this certain management concepts have been used
in this project to arrive at the financial viability pertaining to the proposed hotel. The concept used
all debt equity ratio, revenue and expenditure, operating profit, return on investment, net cash flow
chart determining through making provision for depreciation, taxes, interest on loans, break even
analysis, break even percentage to analyze whether the entrepreneur can survive in the business or
not.
It is not only enough if the entrepreneur manages long term finances but he also has to manage day-
today expenditure in his firm. This has to be studied under the concept of working capital
management which includes the statement called funds flow statement comprising of sources and
application of funds. Apart from this, the financial management satisfies the entrepreneur in
achieving his target not only in short term but also over a period of time.
With the above said information I would like to determine financial viability of a 3 star hotel in
lucknow called BLUE LOTUS.Any firm or industry needs to be studied under the condition of the
financial surroundings ,financial management plays a very important role in the financial viability of
this project. This is possible with reference to the performance of the industry in the revenue
earning,expenditure incurring , working , capital , etc.
Financial management
Is manly concerned with the procuring funds in the most economic and productive manner
deploying the funds in the most profitable way in the given situation , planning, future operation,
and controlling current and future performance and development through different tools . the key
bjective of financial management is to maximise the value of the copany regarding the investment,
dividend and current assets
Financial decision
The decision whether the entire capital should be raised from the equity capital or a part of it is to
be raised from loans
Investment decision
It is concerned with how much the company should invest in what project
Current asset management

It is necessary for maintenance a balance between current assets and current liabilities.
Dividend decision
it is basically a financial decision . this is so because profit is source of fund. The dividend decision is
a comprehensive decision between paying reasonable dividend and rating balance profit in revise.
Debt service coverage ratio

It is the ratio whih shows whether the revenue covered every year after statutory deduction are
efficient to service the debt. In other words , if the break even point is not attained its an indication
of profitability in the business , such as a situation will have o be maintained for the future year to
come.
OPERATIONAL DEFINATIONS
Cash flow and fund flow statement
It refers to the rearrangement of the various financial data as to clearly indicate the various sources
from which there is inflow of cash and fungs and the purpose for which they are applied.
Ratios
A ratio is a numerical value which exposedin the form of co-efficient percentage or as proposition.
Returns on investments
It refers t the ratio which indicates the profit that will be earned every year when compared to the
investment in the project
CHAPTER-9
COST OF PROJECT
CHAPTER-9
COST OF PROJECT
ANALYSIS AND INTERPRETATION
The current chapter deals with the analysis and interpretation of the collection data .
financial tools such as ratio analysis, the funds flow statement, the breake even analysis
suchsimilar analytical tools have been made to arrive at a clear and accurate understanding .
facts are observed from the analysis, interrelated descriptively for the understanding of the
project concepts
The analytical asprects of the project study begins with the cost of the project and means of
financial and proceed on with the estimation of revenue and expenditure for six years into
the future while also providing a fair understanding of the working capital requirements , to
understand the depreciation of fixed assets , the statement of profitability and return on
invest and the likes
ESTIMATED COST OF PROJECT
PARICULARS Rs. in lakhs

Cost of land 1484.00
Building and civil work 395.15
Plant and machinery 140.85
Furniture and fixtures 45.02
Miscellaneous fixed assts 14.25
Margin for contingency 91.82
Preliminary and pre-operation expenses 41.38
TOTAL COST OF THE PROJECT 2213
CHAPTER-10
MANPOWER REQUIREMENT
MANPOWER REQUIREMENTS
The success of any service department depends to a large extent on the manpower and the
productive of its, work force. Success is personal management might be attached only with good
planning.
The shift time for the personal hotel will be :
Morning shift : 7am to 4pm
Afternoon shift : 3pm to 12am
Night shift : 11pm to 8am
The manpower of the hotel will be disturbed as below
ADMINISTRATIVE
General manger -1
Assistant manager-1
PA to General manager -1
Total- 3
FRONT OFFICE
Front office manager 1
Lobby manager 1
Bell captain 1
Bell boys 4
Telephone operators 2
Telephone supervisor 1
Front office assistant 2
Total 12
FOOD AND BEVERAGE (PRODUCTION)

Executive chef 1
Sous chef 2
Chef de partie 5
Commis 20
Total 28
FOOD AND BEVERAGE (SERVICE)

F&B manager 1
Restaurant manager 2
Banquet manger 2
Captains 4
Stewards 16
Barmen 3
Total 25
ROOM SERVICE
Room service manager 1
Rom service order taker 3
Steward 6
Total 10
HOUSE KEEPING
Executive housekeeping 1
Assistant house keeper 1
Floor supervisor 4
Linen room supervisor 2
Uniform room supervisor 2
Housekeeping stores 1
House men 15
Gardeners 2
Total 28
KITCHEN STEWARDING
Kitchen stewarding supervisor 1
Assistant kitchen stewarding 1
Dish and pot washers 4
Total 6
ENGINEERING AND MAINTENANCE

Chief engineer 1
Technicians 5
Total 6
SECURITY
Chief security manager 1
Security personal 4
Door man 2
Total 7
SALES AND MARKETING

Sales and marketing manager 1
Executive 2
Assistant 2
Total 5
PERSONAL DEPARTMENT
personal manager 1
Assistant personal manager 1
Assistant 2
Total 4
ACCOUNTS DEPARTMENT
Accounts manager 1
Cashier 2
Clerks 2
Total 5
PURCHASE DEPARTMENT
Manager 1
Assistant 2
Total 3
TOTAL NO. OF EMPLOYEES = 144

CHAPTER-11
SALES REVENUE

CHAPTER-11
SALES REVENUE
ESTIMATED SALES REVENUE FOR SIX YEARS
The fooling illustrated table shows the estimation from different sources for the six years of
operation under varied occupancy. The revenue generating areas of the hotel are the rooms which
gives the maximum sales followed by revenue generating areas are the travel desk , book shop,
laundry, florist, etc.
70% of the revenue is expected from the rooms ,25% from the F&B outlets and rest 5% from the
other revenue generating areas . majority of the revenue apprx. 65% comes from the standard
rooms and 35% from the suite rooms
SALES REVENUE (IN LAKHS)

Years I II III IV V VI
Occupancy % 60 65 70 75 80 90
Double room 486 522 567 603 648 729
Single room 534 574 623 663 712 801
Suite room 79 86 93 99 106 119
Total (a) 1099 1182 1283 1365 1466 1649
Coffee shop 146.89 150.32 152.50 159.54 164.93 170
Speciality restaurant 144.75 159.62 161.8 165 169.43 171.28
Bar 187.71 199.83 219.17 280.34 338.92 392.86
Banquets 96.61 108.14 132.17 176.18 265.19 315.23
Room service 63.58 87.24 105.83 169.13 239.28 296.45
Total (b) 347.9 395.21 457 645.45 842.39 1004.54
Laundry 39.74 49.97 59.05 63.6 65.83 68.24
Health club 15 16.9 17.93 18 18.47 19.04
Car rental 14.485 18.17 21.47 23.12 23.97 24.78
Shopping arcade 13.75 14.21 14.98 15.64 16 16.96
Business centre 18.06 22.17 26.84 28.91 29.9 30.97
Travel desk 13.75 14.21 14.98 15.64 16 16.97
Others 15 16.9 17.93 18 18.47 19.04
Total (a+b+c) 1518 1668 1847 2125 2428 2778

CHAPTER-12
OPERATIONAL EXPENSES

CHAPTER-12
OPERATIONAL EXPENSES
ESTIMATED OPERTAING EXPENDITURE FOR SIX YEARS
The table illustrate different levels of expenditure for the first six years of the operation. The cost
revenue ratio is estimated from figures available from the industry. It can be noted that the cost
percentage are based on the fourth and sixth year. This is due to the maintenance and
refurbishment cost which is expected to occur at the end of this year
However , the bank overdraft brings an additional in expenditure for the firm as interest which is
payable per annum
INTERPRETATION
The above table shows the statement of expenditure for six years. This calculation is used to
calculate the net expenditure during the year.A certain percentage of sales is taken to calculate the
expenditure like fuel, water, telephone , F&B cost , maintenance cost, various taxes , etc.,The total of
all expenditure is taken and later subtracted with the revenue to get the profitable statement.
YEAR I II III IV V VI
Occupancy 55% 65% 70% 80% 85% 90%
ITEM
Fuel 25.29 39.97 55.83 64.75 69.46 70.01
Water 11.38 17.99 25.12 29.14 31.25 33.45
F&B cost 45.53 71.96 100.56 116.56 125.03 133.81
Telephone 12.64 19.99 27.91 32.37 34.73 37.17
Electricity 13.91 21.98 30.71 35.61 38.20 40.88
Maintenance 17.70 27.98 39.08 45.33 48.62 52.03
Wages 25.29 39.97 55.83 63.75 69.46 74.34
Admn/marketing 26.59 29.84 48.56 59.00 64.58 72.34
Replacement 35.41 55.96 78.17 90.66 97.25 104.07
Repairs 15.71 23.98 33.50 38.85 41.67 44.60
Corporation/Tax 18.71 29.98 41.87 48.56 52.09 55.75
Misc expenses 6.32 9.99 13.95 16.18 17.36 18.58
Total 252.96 399.78 558.37 647.58 694.66 743.40

CHAPTER-13
WORKING CAPITAL
REQUIREMENT

CHAPTER- 13
WORKING CAPITAL REQUIREMENT
WORKING CAPITAL REQUIRED FOR SIX YEARS
The working capital funds are planned to be met partly by banks as overdraft and partly by
promoters. A months capital requirement for raw material is estimated to be 15% and F&B cost at
the corresponding year
Half of this is planned to be the raised as bank overdraft and half to be met by promoters.
Corresponding year and to be borne at 50% overdraft and 50% promoters funds 20% of teh months
revenue is expected to be from the credit sales and thus shares between bank and promoters ta a
proportion of 4:1
The salaries and wages expenditure has o be met by the promoters itself. The liquid cash portion,
which is 1 lakh also has to be raised by the promoters fund.

Year Bank Raw Bills Salaries Cash Rs. in Lakh
Owner Material Receivable Flow
Ratio & Wages
1:1 4:1 0:1 0:1
1st year Bank 2.7 8.96 11.66
11.66
Owner 2.7 2.24 3.78 0.12 8.84
8.84
Total 5.4 11.20 3.78 0.12 20.50
2nd year Bank 3.29 10.32 13.61
Owner 3.29 2.58 3.78 0.13 9.78
rd
3 year Bank 3.91 2.95 3.78 0.14 10.78
Owner 3.91 2.95 3.78 0.14 10.78
Total 7.82 14.76 3.78 0.14 26.50
4th year Bank 4.59 13.85 18.44
Owner 4.59 3.46 4.16 0.15 12.36
Total 9.17 17.31 4.16 0.15 30.79
th
5 year Bank 5.29 16.02 21.31
Owner 5.29 4.00 4.16 0.16 13.61
Total 10.58 20.02 4.16 0.16 34.92
6th year Bank 6.52 17.25 5.01 0.17 22.83
Owner 6.52 4.47 22.57 0.17 14.50
Total 13.04 22.57 37.84

CHAPTER 14
FINANCING THE PROJECT
CHAPTER 14
FINANCING THE PROJECT

MEANS OF FINANCE
 ICICI@ 16% pa - 1438.45 lakhs

 SHARE CAPITAL - 221.3 lakhs
 PROMOTORS - 331.95 lakhs
 Government subsidy - 221.3 lakhs
DEBT= Rs. 1438.45 Lakh (term loan from ICICI)
Equity= (Subsidy+ Unsecured loan+ Promoters Capital)
=(221.3+221.3+331.95) = 774.55
a) Debt Equity Ratio (D.E.R) : 1438.45: 774.55= 1.85: 1

b) Break Even Point (B.E.P) : 24%
ESTIMATION OF INCOME
Items 1st year 2nd year 3rd year 4th year 5th year
Operating 65.00% 70.00% 75.00% 80.00% 85.00%
levels
Room Sales 1099 1182 1283 1365 1466
F & B Sales 323.93 394.28 469.02 550.08 634.91
General 2.40 2.40 2.50 2.70 2.76
Stationery
In-house 38.32 43.21 49.64 56.65 63.80
service
Health Club 29.20 35.51 43.80 53.33 60.22
Total In Lakhs 1492.8 1657.2 1848 2027.76 2227.6

CHAPTER 15
PROFITABILITY STATEMENT

CHAPTER 15
PROFITABILITY STATEMENT
STATEMENT OF PROFIT PROFITABILITY AND CASH FLOW
This table illustrates the profits and also the cash position at the end of the year.
Depreciation in all fixed assets is calculated by diminishing the value method ( W D V-
Written Down Value Method). This is written off at the rate of 15% per annum on building
and structures, 33.3% per annum on miscellaneous fixed assets.
The term loan and unsecured loans are to be paid back in 7 years after starting the
operations, owing to fluctuating occupancy rates and expenditure levels, by which time the
business is expected to have stabilized.
The balance amount would be paid back in the following years by which time the business
would be stabilized.
The income tax payable is 40% on profit before tax with 8% surcharge on tax.
The preliminary and pre-operative expenses made during construction period is to be
written off in the first 10 years of operation.
A higher degree of depreciation and interest rates cause a project loss in revenue and due to
this, income tax and profit before tax are the loss in the first year.
On the other hand the depreciation that is accounted does not affect the fund position. All
this results in a higher level of net cash flowing in the first year.
Items 1st year 2nd year 3rd year 4th year 5th year 6th year
Operating 1265.04 1268.22 1288.63 1477.42 1733.34 2034.6
profit
Interest on 230.18 191.68 153.38 115.02 76.67 38.2
long term
loan
Depreiciation 77.66 58 45.65 36.14 29.68 25.04
chap- XII
Preoperative 41.38 41.38 41.38 41.38 41.38 41.38
&
preliminary
expenses
written off
Interest on 44.26 35.4 28.32 22.56 18.14 14.5
Unsecured
Loan
Profit before 868.94 938.7 958.48 1280.74 1562.68 1910.41
tax
Tax 40% 347.58 375.48 383.29 512.29 625.07 764.16
Surcharge 27.8 30.03 30.67 40.98 50 61.13
(8%)
Profitable 549.16 593.25 605.86 809.43 987.61 1207.38
tax
Depriciation 77.66 58 45.65 36.14 29.68 25.04
Preoperative 41.38 41.38 41.38 41.38 41.38 41.38

&
preliminary
expenses
Available 668.2 692.63 693.1 886.95 1058.67 1273.8
surplus
Long term 230.18 191.68 153.37 115.02 76.67 38.2
loan
instalment
Unsecured 44.26 35.4 28.32 22.56 18.14 14.5
loan
Net cash 393.76 465.55 511.41 749.37 963.86 1221.1
flow
CHAPTER 16
CASH FLOW STATEMENT
CHAPTER 16
CASH FLOW STATEMENT
Source of Construction 1st year 2nd year 3rd year 4th year 5th year
find (3 year
period)
Promoters 331.95
contribution
Long term 1438.45
loan
Share capital 221.3
Govt subsidy 221.3
Gross profit 393.76 465.55 511.41 749.37 963.86
Depreciation 77.66 58 45.65 36.14 29.68
Preoperative 41.38 41.38 41.38 41.38 41.38
&
preliminary
exp.
Total in 2213 512.8 564.93 598.44 826.89 1034.92
Lakhs

CHAPTER 17
COST BENEFIT ANALYSIS
CHAPTER 17
COST BENEFIT ANALYSIS
Cost benefit analysis
a) Total fixed assets Rs. 2079.27

Add :- total working capital Rs. 1233.64
TOTAL (A) Rs. 3312.12

Total sales for 6 years= Rs. 12364 lac
Less:- a) Cost of F & B expenses (for 6 years) Rs. 5173.04
b) Cost of fuel (for 6 years) Rs. 345.18

c) Cost of power (for 6 years) Rs. 431.5 Rs. 5949.72
TOTAL(B)= Sales – (a+b+c)= 6414.28
C. Capital intensity of a project
C= B/A
= 6414.28/3312.12= 1.94
MORE THAN 1 IS BENEFICIAL FOR THE ECONOMY
LESS THAN 1 IS NOT BENEFICIAL FOR THE ECONOMY

CHAPTER 18
BREAKEVEN ANALYSIS
CHAPTER 18
BREAKEVEN ANALYSIS
BREAK EVEN ANALYSIS
It is a study of cost revenue and sales. It finds out the volume of sales required by the firm cost and
revenue to be equal. The break even point is the point when the net incomes zero. It is a situation of
no profit and no loss.
The Break even analysis explains to us the relationship between cost revenue and output that helps
a firm sell to its full competence. This analysis forms an important bridge between the plans of the
firm and business behaviour.
LIMITATIONS OF BREAK EVEN ANALYSIS
This analysis has a number of limitations as the data collected is not on the cost and revenue
functions. The limitations are as follows:-
 If in static, everything is sold at constant selling price but in reality larger volumes may not
be sold at same price.
 The way future is projected with the part is not correct.
 Factors like technological changes, improved management have been overlooked.
 The cost revenue output relation is linear which is true for a small volume of
output.Assumed for the 3rd year operation occupancy= 75%
Sr. No. Particulars Rs. in lakhs

1. Estimated revenue 1848
2. Fixed costs (fixed overheads)
a. Power 40% 17.71
b. Salaries and wages 45.28
c. Interest on long term 153.38
loan
d. Insurance and legal 1.77
exp.
e. Depreciation 45.65
f. Advertisement and 88.54
publicity
g. Administration & 17.71
general expenses
TOTAL 370.04
3. Variable cost
a. Raw material 187.60
b. Electricity and power 28.40
60%
c. Repairs and 10.00
maintenance
d. Interest on working 3.54
capital
e. Misc expenditure 50
TOTAL 279.54
4. CONTRIBUTION TOWARDS OVERHEADS
= Income- Variable Cost
=1848-279.54= 1568.5
5. BREAKEVEN POINT
= [ Fixed overheads/Contribution] x 100
=[ 370.04/1568.5] x 100
=24 %
6. ABSOLUTE BREAKEVEN POINT
= [ Breakeven point x % of occupancy] / 100
= 18
7. BREAKEVEN TURNOVER
=[ estimated revenue x absolute breakeven] / 75
= 443.52 ( Rs. in lakhs)

CHAPTER 1
DEBT SERVICE COVERAGE
RATIO
CHAPTER 19
DEBT SERVICE COVERAGE RATIO
DEBT SERVICE COVERAGE RATIO ( DSCR) for the year is calculated by dividing the total coverage
including tax, depreciation, preliminary and pre-operative expenses by the total debt from first year
to sixth year. The average DSCR is calculated by dividing the total of all debt ratios by six. Thus
average DSCR comes out to be
Coverage-A 1st year 2nd year 3rd year 4th year 5th year 6th year
Profit before 549.16 593.25 605.86 809.43 987.61 1207.38
tax
Depriciation 77.66 58 45.65 36.14 29.68 25.04
Interest on 230.18 191.68 153.38 115.02 76.67 38.2
long term
loan
Preliminary 41.38 41.38 41.38 41.38 41.38 41.38
and
preoperative
expenses
Total 898.38 884.31 846.27 1001.97 1135.34 1312
Coverage -B 1st year 2nd year 3rd year 4th year 5th year 6th year
Interest on 230.18 191.68 153.38 115.02 76.67 38.2
long term
loan
Instalment 239.7 239.7 239.7 239.7 239.7 239.7
on long
term
Total 469.88 431.38 393.08 354.72 316.37 277.9
Average DSCR= Coverage A- Coverage b
= 6078.27/ 2243.33= 2.7
It is more than one so it is beneficial.

CHAPTER 20
SENSITIVITY RATIO
CHAPTER 20
SENSITIVITY RATIO
Sensitivity Ratio
A. Change in income for 1% change in occupancy

= income (3rd year)/ occupancy (3rd year)
= 1847.0/ 70
= 26.38
B. Change in cost for 1% change in occupancy

= variable cost (3rd year)/ Occupancy (3rd year)
=558.37/ 70
=7.97
C. Sensitivity in income for 1% change in occupancy

=A/ B
= 26.38/ 7.9
= 3.3

CHAPTER 21
CONCLUSION
CHAPTER 21
CONCLUSION
Conclusion
Lucknow is a heritage city which is developing at a very fast rate and provides an immense potential
for growth an all sectors specially in hospitality.
The proposed hotel is to be constructed in Gomti nagar. The total cost of the project is estimated at
Rs. 2213 lakhs. There are 100 rooms out of which 90 are double rooms and 10 are suite rooms. The
hotel also provides facilities like coffee shop, conference hall, speciality restaurant, bar, travel desk,
business centre etc.
The estimated income and expenditure have been arrived by keeping in view the economic cost in
which service can be offered to the prospective customer. The debt equity ratio is 1:85:1 a well
combination of debt and equity finance. The ratio of depreciation of assets and preliminary and
preoperative expenses has been kept down fairly reasonable limit, which should prove to be
satisfactory.

ANNEXURES

ANNEXURE 1
Land and site development
1) Total land area = 65000 sq ft

a) Cost/ sq ft = Rs. 2200
b) Levelling, gardening,
fencing, gates etc. (6% of land cost) = Rs. 1337837.9
c) Registration & conversion charges = Rs. 4136148.8
(17% 0f land cost)
TOTAL = Rs. 148473986.7

ANNEXURE 2
Building & other civil works
1) Cost of construction, electrification, =super built up area x cost/ sq ft

Drainage, plumbing etc = 38974 x 1000 =Rs. 38974000
2) Garden
Total garden area x Rs. 30 = 1710 x 30= Rs. 41300
3) Tanks = Rs. 500000
TOTAL = Rs. 39515000

ANNEXURE 3
Furniture and Fixture Rs(in lakh)
1 Double Room =22.40
2 Suites =5.69
3 Restaurant =3.09
4 Bar cum Restaurant =1.70
5 coffe shop =2.19
6 room service =0.42
7 banquet bar =2.84
8 stores, purchasing&H/k =0.99
9 Administration Office =1.18
10 Reception and lobby =2.69
11 reception and lobby =1.52
12 staff cafeteria =0.35
Total =45.020

ANNEXURE 4
Plant and Machinery Rs
1. Lifts (2no.) @6,00,000 =1200000

2. Lifts (1 no.) @10,00,000 =1000000
3. Generators 1no =100000
4. Transformers =100000
5. Stand by generators =50000
6. Stand by transformers =50000
7. Borewell and pumps =100000
8. Transportation and vehicles =1500000
9. Boilers 2 no @1.5 lakh =150000
10. Deeps , exhaust and coolers =500000
11. AC centeralised =2000000
12. CCTV and music =500000
13. Fire fighting equipment =100000
14. Administrative and p &m =1500000
15. Kitchen equipment =5385000
Total =1,40,85,000

ANNEXURE 5
Miscellaneous Fixed Assets (FA) Rs. (in lakhs)
1 Restaurant = 0.66
2 Bar = 0.50
3 Coffee Shop = 0.33
4 Banquets = 0.81
5 Double Room = 6.32
6 Suite Rooms = 2.92
7 Kitchen Stewarding = 1.84
8 Staff Cafeteria = 0.06
9 Housekeeping = 0.81
10 Machinery = 0.80
11 Staff uniform = 1.84
TOTAL = 14.25

ANNEXURE 6
Margin of Contingencies Rs.
1. Cost of Land and Site development = 275,00,000

2. Building & other civil works = 395,15,000
3. Furniture and fixture = 45,02,000
4. Plant and machinery ( P & M) = 140,85,000
5. Miscellaneous fixed assets (FA) = 14,25,000
TOTAL = 918,20,000
10% of FA = 91,82,000

ANNEXURE 7
Preliminary and preoperative expenses (PL & PO) Rs. ( in lakhs)
1. Salaries and wages = 11.32

2. Loan possessing and application fees = 1.25
3. Project and report fees = 1.00
4. Registration and establishment fees = 1.50
5. Insurance adds 1.45% = 8.42
6. Advt. & publicity deposit = 2.50
7. Electricity board = 1.00
8. Telephone = 0.95
9. Water supply board = 1.85
10. National saving certificate = 1.25
11. Misc. Expenses = 1.50
12. Margin for working capital = 8.84
TOTAL = 41.38

ANNEXURE 8
Repayment of long term loans
Term loan from ICICI @ 16% p.a

Total loan amount = 1438.65/6
Instalment/ year = 239.7 lakhs
Year Loan amount Instalment Interest @ 16%

1st 1438.65 239.7 230.18
2nd 1198 239.7 191.68
3rd 958.6 239.7 153.37
4th 718.9 239.7 115.02
5th 479.2 239.7 76.67
6th 239.5 239.7 38.2

ANNEXURE 9
Statement of depreciation for 6 years
Description 1 2 3 4 5 6
Building & 430 375.25 356.49 338.69 321.76 305.68
other civil
works (5%)
F & B(15%) 45.02 38.29 32.55 27.67 23.52 20
P & M(33%) 140.85 94.37 63.23 42.37 28.39 19.03
Misc 630.12 517.46 458.67 412.02 375.88 346.2
FA(33%)

ANNEXURE 10
Details of unsecured loan repayment

Unsecured loan amount = 221.3/6
Installment/year = 36.83
Year Loan amount Installment Interest(20%)

1 221.3 36.83 44.26
2 177 36.83 35.4
3 141.6 36.83 28.32
4 113.28 36.83 22.56
5 90.72 36.83 18.14
6 72.58 36.83 14.5

Decleration: Marketing Feasibility and Financial Viability 07UMC07031

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Marketing Feasibility and Financial Viability 07UMC07031

DATE: Mohit Kumar

Army Institute of Hotel Management & Catering Technology

my Principal Mr. P Sen Themizhan for allowing me to work on this project.

Army Institute of Hotel Management & Catering Technology

CHAPTER-1 INTRODUCTION TO TOURISM

CHAPTER-2 SCOPE, OBJECTIVE, METHODOLOGY AND LIMITATION

CHAPTER-3 PROFILE OF PLACE

CHAPTER-4 DEMAND QUANTIFICATION

CHAPTER-5 TECHNICAL DETAILS OF THE PROJECT

CHAPTER-6 RECOMMENDED MARKETING MIX

CHAPTER-8 INTRODUCTION TO THE FINANCIAL ASPECTS OF THE PROPOSED PROJECT

CHAPTER-9 COST OF THE PROJECT

CHAPTER-10 MANPOWER REQUIREMENT AND COST

CHAPTER-11 SALES REVENUE

CHAPTER-12 OERATIONAL EXPENSES

CHAPTER-13 WORKING CAPITAL REQUIREMENT

CHAPTER-14 FINANCING THE PROJECT

CHAPTER-15 PROFITABILITY STATEMENT

CHAPTER-16 CASH FLOW STATEMENT

CHAPTER17 COST BENEFIT ANALYSIS

CHAPTER-18 BREAK EVEN ANALYSIS

CHAPTER-19 DEBT SERVICE COVERAGE RATIO

CHAPTER-20 SENSITIVITY RATIO

CHAPTER-21 CONCLUSION AND ANNEXURES

Army Institute of Hotel Management & Catering Technology

Army Institute of Hotel Management & Catering Technology

Army Institute of Hotel Management & Catering Technology

Army Institute of Hotel Management & Catering Technology

Marketing Feasibility and Financial Viability 07UMC07031

Army Institute of Hotel Management & Catering Technology

INTRODUCTION TO GLOBAL TOURISM

Army Institute of Hotel Management & Catering Technology

BASIC STATISTICS OF INDIA

Land area - 32, 88,090 sq. Km

Population - 100 crores

Average annual growth - 2.1%

Literal life expectancy - 52%

Average life expectancy - 62 yrs

Agriculture (% of GNP) - 41.9%

Industry (%of GNP) - 22%

Army Institute of Hotel Management & Catering Technology

Language - English, Hindi & 27 state languages

Capital - New Delhi

Tourism Industry In India

Cultural Tourism In India

The monument heritage could be divided into:

Globalization of tourism in India

Marketing Feasibility and Financial Viability 07UMC07031

Some names of tourist spots are as follows:-

 TAJ MAHAL (U.P.)

Marketing Feasibility and Financial Viability 07UMC07031

ORIGIN OF HOSPITALITY INDUSTRY

Marketing Feasibility and Financial Viability 07UMC07031

GROWTH OF THE HOTEL INDUSTRY

Marketing Feasibility and Financial Viability 07UMC07031

1- Partnership: that shares equity and profit

MODERN HOTEL AND CATERING INDUSTRY

Marketing Feasibility and Financial Viability 07UMC07031

Marketing Feasibility and Financial Viability 07UMC07031

Marketing Feasibility and Financial Viability 07UMC07031

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