The business of heritage

A Kanvic study
This note is prepared by Kanvic for the Client.
It can not be circulated, copied or reproduced for any other purpose without express consent of Kanvic. Copyright Kanvic 2007. All rights reserved
Hotels are classified according to star rating and heritage status in India

5-star deluxe

5-star

Star 4-star
rating
3-star

2-star

1-star
Hotel
classification

Heritage Grand

Heritage
Heritage Classic
status
Heritage
Heritage hotels have lower occupancy levels but command higher room rate

Heritage hotels have only 42.9% occupancy ... However, the average rate for heritage hotels is
compared to over 75% for the five star category... more than 4 star properties

Average occupancy, percent Average rate per hotel, Rupees

80 7,000

64
5,250
48
4,123
75.2 3,500 6,667
32 72.3 71.0 3,501
62.9 64.2 63.9
2,880
42.9 1,750
16
1,504
864
0 0 556

Five-star Deluxe Five-star Four-star Three-star Two-star One-star Heritage

Source: HVS International

Both domestic and international tourists are important for heritage properties...

SEGMENT MARKET SHARE, %

47.1% 13.1
Business

Domestic Lesiure/FIT 26.4

Tour groups 7.6

44.1% Business 7.5

Heritage hotel
International Lesiure/FIT 20.5
guests

Tour groups 16.1

8.8% MICE 4.9

Others Complimentary 2.3

Others 1.6

Source: HVS International, Kanvic analysis MICE- Meeting, Incentive, Conferences & Exhibition FIT- Free Independent Traveler
... but we need to understand their profile to market the property effectively

Average stay for domestic and international tourists Only three countries France, Germany and the UK
is same however leisure travelers stay more than constitute close to half of the international tourists’
the business ones market for heritage hotels

Average stay, number of days Country of origin, International tourists

Domestic 2.5
France
ROW 13.1%
22.2%
International 2.5 Germany
12.9%

USA
Leisure 2.6
13.4%
UK
19.8%
Other European
Business 1.9 18.6%

0 1.6 3.2 4.8 6.4 8.0

Days

Source: HVS International ROW- Rest of the World

For heritage hotels, travel agents and tour operators play a crucial role in reaching
to customers

Sources of reservation for hotels

Source of advance Five star Five Four Tour operators and travel
Heritage agents are crucial links for
reservations deluxe star star
heritage hotels to provide their
Chain reservation customers access for
18.9% 13.4% 7.5% 8.0%
system reservation. This is in contrast
Direct enquiry/Hotel to five star hotels where tour
40.0 47.3 54.4 27.9 operators play a secondary
representative
role.
Global distribution
6.0 1.9 0.7 0.7
system
Direct enquiry and website are
Hotel/chain website 4.8 3.9 3.0 8.8 also important and need to be
taken into account while
Travel agent/tour targeting customers and
13.4 22.2 23.8 45.2
operator designing service approach.
Other online
8.7 5.8 4.3 3.3
reservation system Other sources such as global
distribution systems and other
Other websites 2.9 0.5 1.5 2.8
websites play a minor role.

Others 4.6 5.0 4.9 3.3

Source: FHRAI
Heritage hotels need to excel in key business processes to become a hotel of
choice for their guests

Customer
Customer Yield Customer
relationship
acquisition management service
management

Employee recruitment & training

Heritage
Hotel of
Procurement choice

Technology management

Brand management

Core process Support process

About Kanvic

Kanvic is a management consulting firm helping businesses develop winning strategies, drive profitable
growth and achieve operational excellence to reap long lasting rewards in fast growing Indian economy.
We work with C-level executives to develop innovative solutions for business challenges of 21st century India
by bringing in leading edge management thinking informed by in-depth research and sound analysis.

Contact

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