Hospitality Services In India

Presented by
Dr. Sanjay Manocha

Hospitality Services
The word hospitality comes from the French term hospice,
meaning to provide care/shelter for travelers.
Hospitalityrefers to the relationship between a guest and a host,
wherein the host receives the guest with goodwill, including the
receptionandentertainmentofguests,visitors,orstrangers.
Hospitalityisthecordialandgenerousreceptionandentertainmentof
guestsorstrangers,eithersociallyorcommercially.
InIndiahospitalityisbasedontheprincipleAtithi Devo Bhava,
meaning"the guest is God".
FromthisstemstheIndianpracticeofgraciousnesstowardsguestsat
homeandinallsocialsituations.
The Hospitality Industry is comprised of those businesses which
practice the act of being hospitable; those businesses which are
characterizedbygenerosityandfriendlinesstoguests.

Welcome to You, the Future

Hospitality Industry leaders
Hospitality industry is an exciting place to be:

Its fascinating
Its fun
It offers competitive pay
It offers advancement opportunities

Workstocreatememories
Everydayguestsrelyonusforservice
Passionisintheserviceelement
Peoplewithaservice spirit arehappytodosomethingextrato

maketheguestsexperiencememorable

Components
of
Hospitality
Industry
1. Lodging Operations
-such as hotels, resorts, motels etc.
2. Transportation Services
-such as taxi, train, cruise ships, etc.
3. Food and Beverage Operations
-such as restaurants, bars, etc.
4. Retail Stores
-such as A gift shop or souvenir shops, etc.
5. Activities
-such as recreations, festivals, etc.

Characteristics of the Hospitality

Industry
Ourservicesaremostlyintangibletheguestcannottest-drive
anightsstayortastethesteakbeforedining
The products are for use, not possession
Thereisinseparabilityofproductionandconsumptionofthe
serviceproduct,duetoeachguestsuniquedemands
Thereisalsotheperishabilityofourproduct
For example, wehave1,40roomsininventory,butwesell
only1,20rooms.Whatdowedowiththe20unsoldrooms?
Nothingwelose20roomnightsandtherevenue.

Characteristics of the Hospitality

Industry
Thehospitalityindustryisopen365days24hoursaday.
Theindustryreliesheavilyonshiftworkandsometimeshours
extendbeyondthenormalworkday
Therearefourbasicshifts:
7:00AM to 3:00PM
10:00AM to 6:00PM
3:00PM to 11:00PM
11:00PM to 7:00AM

Growth Drivers of Indian Hospitality Industry

External Drivers
1. FDI Inflow:
OutofthetotalFDIinflowinthelastdecade,thehospitalitysectorcontributed

~3%oftheinflow.
ThehospitalitysectorrequiresoverUS$10Bninvestmentinthecomingfiveyears
forwhichthegovernmentisrelyingonFDIbymakingregulatorychangesin-line
withthepastinvestmenttrends

2. Increasing Domestic Travel Visits and Foreign Travel

Arrivals (FTAs):
From269.60Mndomestictravelvisitsin2002,thenumberroseto1.04Bnin

2012.
Overthelastdecade,thedomestictravelvisitsincreasedbyaCAGR(Compounded
AnnualGrowthrate)of14.41%.TheMinistryofTourismsvisionistoachieve
3.22Bntravelvisitsby2022withacompoundedannualgrowthrateof12%

Growth Drivers of Indian Hospitality Industry

ThenumberofForeignTouristArrivals(FTAs)hasgrownata
CAGRof3.7percentto5.29lakhyear-on-yearinMay2016.
ForeignExchangeEarnings(FEEs)duringthemonthofMay2016
grewatarateof8.2percentyear-on-yeartoRs10,285crore(US$
1.52billion).
Thenumberoftouristsarrivingone-TouristVisaduringJune2016
reachedatotalof36,982touristsregisteringayear-on-yeargrowth
of137.7percent.
OnlinehotelbookingsinIndiaareexpectedtodoubleby2016due
totheincreasingpenetrationoftheinternetandsmartphones.

Growth Drivers of Indian Hospitality Industry

3. Changing Consumer Dynamics and New Schemes for
easy Finance:

Changing Consumer Dynamics

IndiahasthesecondlargestplasticcardsbaseintheAsiaPacific
region.
Theoutstandingplasticcardsin2007were~130Mnandin2012,the
numberrosetomorethandoubleat~296Mncards.
35%ofthosewhouseplasticcardsuseitfortravelanddining
New Schemes for easy Finance
PlayerssuchasThomasCook,Cox&KingsandSOTChavetie-ups
withICICIBank,CitiBankandKotakMahindratoofferholiday
nowpaylaterschemes.
Thesebanksalsoofferabasketofproductssuchaspersonalloansfor
thepurposesofbusiness,wellnessorsportstravel

Growth Drivers of Indian Hospitality Industry

Internal Drivers

1. Demand-Supply Gap:
StatisticsonthedemandandsupplyforhotelroomsindicatethatIndia

currentlyhasaround1,28,000hotelroomsspreadacrossthevarious
hotelcategories,whereastherequirementofroomsinIndiaisestimated
atmorethan2,00,000rooms.
Theimpactofthisdemandandsupplygapisfeltbywayofincreased
roomtariff.Inmetrocities,theroomrentshavesimplyskyrocketed.
Thisisespeciallythecasewithmidsegmentandbudgethotel
categorieswherealargegapinsupplyexistsatthemoment

Growth Drivers of Indian Hospitality Industry

2. New Entrants in the Sector:
Apartfromthedemandandsupplygap,thereareotherinternalfactorsthat

drivegrowthfortheindustry.
Healthyperformanceoftheservicessector(speciallyITandITes)hasledto
increasednumberofbusinesstravelers(bothdomesticandinternational)inthe
countrywhichmakesitimperativeforsuchcompaniestoeitherbuildtheirown
hospitalityinfrastructureorusehotelsetc,othersuchexamplesareasunder:
Internal Diversification
EmaarGroupofDubaiandArmaniBrandhavelaunchedboutiqueluxury
hotelsinIndia
IT Companies
Infosyshasaroominventoryof13,000andWiprohas500rooms
Low Cost Carriers
CheapAirfaresboosttourismandencouragepeopletotravel

The Future of Hospitality Services

TheIndianeconomycontinuestointegratewiththeworldeconomy.
Therefore,theadvantagesofconductingbusinesswithandinIndiaare
enormous.
ThishasresultedincreationofvarietyofjobsinIndia,bringinginits
waketransittravelers,businesstravelers,businessmeetsandholiday
seekers.
Indiaistheninthlargestcivilaviationmarketintheworldin2014.
Thesectorisforecastedtobethethirdlargestaviationmarketglobally
by2020.
Indiasaviationmarketcatersto118milliondomesticand44million
internationalpassengersin2014.
Overthenextdecadethemarketcouldreach338milliondomesticand
85millioninternationalpassengers.

Government Initiatives
TheIndiangovernmenthasrealisedthecountryspotentialinthetourism
industryandhastakenseveralstepstomakeIndiaaglobaltourismhub.
SomeofthemajorinitiativestakenbytheGovernmentofIndiatogiveaboost
tothetourismandhospitalitysectorofIndiaareasfollows:
ITCLtdhasrenewedits40-yearpartnershipwithStarwoodHotels&
Resortstooperate11luxuryhotelsinIndia,andthreemoreluxuryhotelsin
Hyderabad,AhmedabadandKolkatawhichwillbecompletedinthenext
fouryears,thusincreasingthetotalnumberofhotelsto15 .
Thee-TouristVisa(e-TV)schemehasbeenextendedto37morecountries
therebytakingthetotalcountofcountriesundertheschemeto150
countries.
TheUnionCabinethasapprovedthesigningofMemorandumof
UnderstandingbetweentheMinistryofTourismofIndiaandtheMinistryof
TradeIndustryandTourismofColombiainordertoboostcooperationin
thefieldoftourismbetweenthetwocountries.

Government Initiatives
TheCentralGovernmenthasgivenitsapprovalforsigningofa Memorandumof
Understanding(MoU)betweenIndiaandCambodiaforcooperationinthefieldoftourism
withaviewtopromotebilateraltourism betweenthetwocountries.
MinistryofTourismhassanctionedRs844.96crore(US$125.26million) toStatesand
UnionTerritoriesfordevelopingtourismdestinationsandcircuitsduringFY2014-15,which
includesprojectsrelatingtoProduct/InfrastructureDevelopmentforDestinationsand
Circuits(PIDDC),HumanResourceDevelopment(HRD),FairsandFestivals&Rural
Tourism.
TheGovernmentofIndiahasmadeaprovisionofRs500crorei.e.,US$79.17million for
thefirstphaseoftheNationalHeritageCityDevelopmentandAugmentationYojana
(HRIDAY).The12numberofcitiesinthefirstphaseare Varanasi,Amritsar,Ajmer,
Mathura,Gaya,Kanchipuram,Vellankani,Badami,Amaravati,Warangal,PuriandDwarka
GovernmentofIndiaplanstocover150countriesundere-visaschemebytheendoftheyear
besidesopeninganairportintheNCRregioninordertoeasethepressureonDelhiairport.
UnderProjectMausamtheGovernmentofIndiahasproposedtoestablishcrosscultural
linkagesandtorevivehistoricmaritimeculturalandeconomicties with39IndianOcean
countries.

Investments
The tourism and hospitality sector is among the top 10 sectors in India to attract
the highest Foreign Direct Investment (FDI). During the period April 2000March 2016, the hotel and tourism sector attracted around US$ 9.23 billion
of FDI, according to the data released by Department of Industrial Policy and
Promotion (DIPP).
With the rise in the number of global tourists and realising Indias potential,
many companies have invested in the tourism and hospitality sector. Some
of the recent investments in this sector are as follows:
Marriott International Inc, the US-based hotel chain, is now looking for
expanding its operations in North India, including prominent cities in Uttar
Pradesh like Kanpur, Varanasi and Agra.
Steigenberger Hotels, a German luxury hotel company, and MBD Group , a
Delhi-based firm which runs 5-star Radisson Hotels in Noida and Ludhiana,
have formed a joint venture to build five luxury hotels and manage another
15 luxury hotels in India by 2030.
Keys Hotels, a premium brand of Berggruen Hotels , plans to launch three
new hotels in India at Vishakhapatnam, Calicut and Jaipur, and further add
up to 10 Keys Hotels in the country by the end of FY 2017.
Japanese conglomerate SoftBank will lead the Rs 630 crore (US$ 93.4
million) funding round in Gurgaon based OYO Rooms.

Investments
Stayzilla, a budget hotels, has raised over US$ 13 million from Matrix Partners
and Nexus Ventures, which will be used to improve product, technology and
marketing initiatives for its alternate stay business.
Travel Tripper, a US-based hotel technology firm, has entered the Indian market
by setting up its second global delivery centre outside the US in Hyderabad, which
will serve as a development and client service centre for the company's worldwide
operations.
Indian Railway Catering and Tourism Corporation (IRCTC) has partnered with
OYO Rooms, India's largest branded network of hotels, to provide standardised
accommodation options to train travellers through its convenient booking platform.
Ctrip.com, China's largest travel portal, has bought a stake in India's largest travel
portal MakeMyTrip for US$ 180 million via convertible bonds, which allows Ctrip to
increase its share in MakeMyTrip up to 26.6 per cent.
Global investment banking major Goldman Sachs has invested Rs 441 crore (US$
65.37 million) to acquire an equity stake in Gurgaon-based hotel development and
investment start-up SAMHI Hotels which will help fund SAMHI's expansion plans.
MakeMyTrip will acquire the travel planning website Mygola and its assets for an
undisclosed sum, and will together look to focus on innovating the online travel
segment.

CUSTOMER RELATIONSHIP MANAGEMENT IN

HOSPITALITY SECTOR
Customer relationship management (CRM) is a business strategy to select
and manage the most valuable customer relationships.
Customers are the backbone of any kind of business activities, maintaining
relationship with them yields better result.
By capturing, tracking and analyzing customer service data, CRM enables a
firm to identify new performance issues.
Customer data will help a firm in identifying new product development
opportunities, provide personalized services to customer based on their
behavior and responses.
CRM is a powerful management tool that can be used to exploit sales
potential and maximize the value of the customer to the hospitality industry.

CUSTOMER RELATIONSHIP MANAGEMENT IN

HOSPITALITY SECTOR

Benefits of using CRM in Hospitality Industry

CRM has some obvious benefits for the hotel industry, but these are not
especially different than they are for any other industry.
The principal benefits that come to mind are fairly obvious
Increasedcustomersatisfactionandretention,
increasedrepeatbusiness,
Increasedshareofcategoryspend,
Increasedlikelihoodofreferralbusiness.

Theseresultscomefromastrategyofstrengtheningcustomerrelationshipsby
constantlyprovidingcustomervalueleadingtosatisfaction.

CUSTOMER RELATIONSHIP MANAGEMENT IN

HOSPITALITY SECTOR
Amajorbenefitcanbethedevelopmentofbetterrelationswithyourexistingcustomers,
whichcanleadto:
increasedsalesthroughbettertimingbyanticipatingneedsbasedonhistorictrends
identifyingneedsmoreeffectivelybyunderstandingspecificcustomerrequirements
cross-sellingofotherproductsbyhighlightingandsuggestingalternativesor
enhancements
identifyingwhichofyourcustomersareprofitableandwhicharenot

Thiscanleadtobettermarketingofyourproductsorservicesbyfocusingon:
effectivetargetedmarketingcommunicationsaimedspecificallyatcustomerneeds
amorepersonalapproachandthedevelopmentofneworimprovedproductsand
servicesinordertowinmorebusinessinthefuture
Ultimatelythiscouldleadto:
enhancedcustomersatisfactionandretention,ensuringthatyourgoodreputationinthe
marketplacecontinuestogrow

CUSTOMER RELATIONSHIP MANAGEMENT IN

HOSPITALITY SECTOR
Here are five top tips from industry experts to help ensure business
in the hospitality industry provide their customers with a positive
and memorable service.
Customer expectations
Satisfiedcustomersarelookingforamemorableexperienceandanenergeticservice,
whereitmattersthemost.Businessesneedtobeawarethatitsbecomingevermore
popularforgueststoleaveareviewoftheirexperienceonanumberoffeedbacksites,
whethertheirexperiencewasagoodorbadone.Hospitalityoutletsneedtomemindfulof
thisasbadfeedbackcanbeextremelydamaging.
Deliver on your promise
Anybusinessneedstokeepcustomersandclientshappy,butinthehospitalityindustry
itssoimportanttokeepguestsengagedinorderforrepeatbusinessandforreferral
purposes.Forthecustomertoreturnallyouneedtodoisdeliverwhatwaspromised,if
youcanexceedexpectationwherepossiblethisisalwaysagoodtooltohelpgain
referrals.
Be realistic
Remembertoberealistic,dontbigyourbusinessupifitsnot5star,dontsaythatitis,
asthisonlysetsexpectationsforthecustomer,andexcitesthemonlytodisappointed
whentheyfindoutitsmoreofathreestarstandard.

CUSTOMER RELATIONSHIP MANAGEMENT IN

HOSPITALITY SECTOR
Customer loyalty
Rememberhappycustomersareloyalcustomers,gotheextramileifneedsbe,provide
additionalitemswherepossible,thisalwaystendstoimpress.Justremember,customers
arethemostimportantpartofthebusinesswithoutthemwhatwouldyouhavefocuson
thematalltimesandtheywillbehappy.
Feedback is important
Ifacustomerisunfortunateenoughtohaveabadexperience,foranyreason,youneedto
makesureitsmadeeasyandclearforthemtotellyouaboutit.Atthesametimebe
understandingandallowthemtogetitofftheirchesttoyou,sotheyrenotinclinedtotell
someoneelse.Tryhardtofixtheproblemcommunicationiskeyandrememberkeep
calmandtrytoresolvethesituationsothecustomerultimatelygoesawayhappy.

Classification of Hotels
1. According to Size:

a. Small Scale (under 150 rooms)

b. Medium Scale (150 to 299 rooms)
c. Large Scale (300 and above)

2. According to Target Market:

a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.

Commercial Hotels
Airport Hotels
Suite Hotels
Residential Hotels
Resort Hotels
Bed and Breakfast Hotels
Time-Share and Condominium
Casino Hotels
Conference Centers
Convention Hotels
Alternative Lodging Properties

3. According to Levels of Service

a. World-Class Service
b. Medium-Range Service
c. Economy / Limited Service

4. According to Type of Ownership and

Affiliation
a. Independent
b. Chain Hotels
- Management Contract
- Franchise

5. Reasons for Traveling

a. Business Travel
b. Pleasure Travel
c. Group Travel
d. Buying Influences

6. According to Quality Ranking

a.

Deluxe

b.

First Class

c.

Standard

d.

Economy

7. According to Location
a. Center City
b. Suburban
c. Resort
d. Airport
e. Highway

D. Hotel Organization
Mission Statement
Defines the unique purpose that sets one hotel or hotel company apart from
others. It expresses the underlying philosophy that gives meaning and direction to
hotel policies. A hotels mission statement should address the interests of three
diverse groups: guests, management, and employees.

Objectives
Are those ends an organization must achieve to effectively carry out its
mission. An objective is more specific than a mission; it calls for levels of
achievement which can be observed and measured.

Goals
Define the purpose of a department or division; they direct the actions of
managers and employees and the functions of the department or division towards fulfilling
the hotels mission.

Strategies
Are the methods a department or division plans to use to achieve its goals.

Organizational Chart
A schematic representation of the relationships between positions within the
organization. It shows where each position fits in the overall organization as well as where
divisions of responsibility and lines of authority lie. Solid lines on the chart indicate directline accountability. Dotted lines indicate relationships that involve a high degree of
cooperation and communication, but not direct reporting relationship.

E. Classification of Functional Areas:

Revenue vs. Support Centers
Revenue Centers - those that sells goods or services to guests,
thereby generating revenue for the hotel (front office, food and
beverage outlets, room service and retail stores).
Support Centers - these do not generate direct revenue, but provide
important backing for the hotels revenue centers (housekeeping,
accounting, engineering and maintenance, and human resources
division).

Front-of-the-house vs. Back-of-the-house

Front-of-the-house - areas that involves guest and employee
interaction (front office, restaurants, and lounges).
Back-of-the-house - areas where interaction between guests
and employees is less common (housekeeping, engineering
and maintenance, accounting, and human resources).

F. Hotel Divisions:
1.
2.
3.
4.
5.
6.
7.

8.

Food and Beverage Division

Sales and Marketing Division
Accounting Division
Engineering and Maintenance
Security Division
Human Resource Division
Rooms Division
-Housekeeping
-Front Office
Other Divisions:
-Retail Outlets
- Recreation
- Casino