Post on 19-Nov-2014
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SERVICE INDUSTRY -Hospitality sector
MEMBER NAMES ROLL NO.
Jayraj Panchal 09065
Kiran Patel 09076
Manish Bajari 09084
Manisha Desai 09087
Nidhi Shah 09097
Pranali Chandarana 09118
CREDITS
Service marketing is based on relationship and value.
Provides services to business and final consumers.
Accounts for more than half of India’s GDP
It is the backbone of Indian economy
Contributes for more than half of the gdp growth.
The service sector is not confined only to India but it is also expanding globally.
INTRODUCTION OF SERVICE INDUSTRY
SECTORWISE DISTRIBUTON OF INDIA’S GDP
Services or tertiary sector of economy covers various sectors like trade, hotels And restaurants, banking and insurance, telecommunication, personal services, Community services
SERVICE SECTOR CLASSIFICATION
IT Industry• Contributes 5.8% to the service
sector
Telecom Industry• Contributes 1% to the service
sector
Tourism Industry• Contributes 5.9% to the service
sector
(source : www.ibef.com)
Contribution of different industries of service sector to the GDP
Aviation Industry• Contributes more than 8% to the
service sector
Hospitality Industry• Contributes 6.1% to the service
sector
Insurance Industry• Contributes 4.1% to the service
sector
(source : www.ibef.com)
Contribution of different industries of service sector to the GDP
Growth was fastest in communication, hotels and restaurants, banking And trade and business services.
Liberalization - one of the reason for sudden growth gave rise to innovation and higher Export from service sector.
However the growth in GDP was accompanied by proportionate increase in sector’s Share of national employment.
GROWTH IN SERVICE INDUSTRY
Competitiveness of nations and service sector :
Developing economies are in rapid transit
Towards becoming service economies.
Share of service is getting higher in total GDP.
Growth rate of India’s service exports is higher than the world average.
CHALLENGES IN SERVICE INDUSTRY
Campaigns like Incredible India has got various large scale regional and global events like IPL, Commonwealth Games and Asian Games to the nation.
Policies and incentives will be provided over the next decade which will act as a catalyst for the growth of the industry.
FUTURE PROSPECTS OF INDIAN SERVICE INDUSTRY
It refers to the activity of hotels, restaurants, catering, inn, resorts or clubs who make a vocation of treating tourists.
The hospitality industry is a 3.5 trillion dollar service sector within the global economy.
It is expected to grow at the rate of 8% between 2007 and 2016.
This year the number of tourists visiting India is estimated to have touched the figure of 4.4 million.
It estimated that the tourism sector will account for nearly 5.3 per cent of GDP and 5.4 per cent of total employment.
HOSPITALITY INDUSTRY – AN OVERVIEW
India is an ideal destination for tourists
The industry is more dependent on metropolitan cities as they account for 75% to 80% of the revenues, with Delhi and Mumbai being on top.
The average room rate (ARR) and occupancy rate (OC) are the two most critical factors that determine profitability.
Estimated requirement of hotel rooms is 240,000, the current availability is just 90,000 rooms - leaving a shortfall of 150,000 rooms to be provided
INDIAN HOTEL INDUSTRY
Category Typical Location Target Customers
5 star Deluxe Restricted to the 4th largest metro areas and other major cities
Foreign business and leisure travelers, senior biz executives and senior govt. officials
3 star & 4 star Located in major cities as well as tourist destinations
Middle level biz executive and leisure travelers
One star & 2 star Located in major cities as well as tourist destinations
Domestic tourists
Heritage It comprises of odd places, forts ,residences converted in to hotels,Eg.Jaipur,Mysore
Primarily foreign leisure travelers
CLASSIFICATION OF INDIAN HOTEL INDUSTRY
Over the last two years,
the hotel industry has
seen higher growth rates
due to greater number of
tourist arrivals, higher
occupancy rate (being
around 75% in FY'06) and
significant increase in
average room rate (ARR).
KEY PLAYERS IN HOTEL INDUSTRY
As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall
It is ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources, with many World Heritage sites, both natural and cultural, rich fauna, and strong creative industries in the country.
India also bagged 37th rank for its air transport network. The India travel and tourism industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019.
TOURISM AND HOSPITALITY
The hotel industry in India is at $17 billion (Rs 87,601 crore) currently.
Thirty per cent of the sector is organised.
About $12 billion (Rs 61,836 crore) is the expected investment in this sector by 2011.
In the present scenario the tourism industry's contribution to GDP has dropped from 6.8% in 2007-08 to 6.1% in 2008-09.
FEE in US$ terms during the month of November 2009 were US$ 1.2 billion
Foreign institutional investors (FIIs) have pumped in Rs 20,117 crore (US$ 4.3 billion) into the Indian equity markets in the month of May 2009 — the highest in 19 months.
CONTRIBUTION TO THE ECONOMY
New Tourism Policy was released in May 2002
Hotels located in locations other than the four major metro cities are entitled to 30% deduction from profit, for a ten-year period.
The expenditure tax has been waived in respect of hotels located in the hills, rural areas, and places of pilgrimage or specified place of tourist importance
SCOPE IN RURAL AREAS
Campaign ‘Visit India Year 2009’
Campaigns ‘Incredible India’ and ‘Ahithi Devo Bhava’
No approval is required for foreign equity of up to 51 per cent in tourism projects
50% of profits derived are exempted from income tax.
Concession rates on customs duty is 25%
GOVERNMENT INITIATIVE
PRODUCTRoomsLaundryBaby-sittingChild CareBoutiquesCurrency-exchangeFloristsSalons
PRICE Off-season discountsDifferential Pricing
PROMOTIONTravel AgentsHoardingsSponsoring of EventsAdvertisements in Travel GuidesWord of MouthViral Marketing
PLACEEasily accessible w.r.t stations, airportsSafe and convenient locationsCloser to places of strategic importance
MARKETING MIX
STRENGTHS
Natural and cultural diversity:Demand-supply gapGovernment supportIncrease in the market share
WEAKNESS
Poor support infrastructureSlow implementation Susceptible to political events
OPPORTUNITIES
Rising IncomeOpen sky benefits
THREATS
Increase in competitionFluctuations in International Travel
SWOT ANALYSIS
POLITICAL
Government SupportPolitical issues like in Kashmir and North-EastHistorical places
ECONOMIC
Increase in the spending power of peopleNo. of tourists travelling by air has gone upIncrease in demand for better hotels
SOCIAL
Culture-centric societyHistorical ImportanceFamous among international touristsDiversification of societyExotic locations
TECHNOLOGY
Better communication facilitiesCommunication at cheaper costsBetter transportation facilitiesAvailability of frequent flights
PEST ANALYSIS
Shortage of skilled employeesRetaining quality workforceShortage of rooms Intense competition and image of IndiaCustomer expectationsManual back-endHuman resource development
CHALLENGES FOR HOSPITALITY INDUSTRY
THREAT FROM NEW ENTRANTS
100% FDI is permissible Increasing no. of new players due to cooling of land prices 5-star hotel companies line up 1lk-cr investment near Delhi airport Scarcity of quality hotel rooms
BARGAINING POWER OF BUYER Higher in metro cities due to increasing room supply. Switching of cost of buyer over to another brand of hotel is very high
to be borne by the company. Consumer preference most be in the highest interest of the companies. Competition amongst players gives the customer a better bargaining
more at all times.
PORTER’S FIVE FORCE MODEL
BARGAINING POWER OF THE SUPPLIERS
Huge difference between demand and supply Many key supplies, such as food and beverages, have intense
competitor rivalry which keeps the prices of those supplies low. The conventioneers are a captive set of buyers and thus have
virtually no bargaining power. Good quality service providers can to a certain extend demand a
considerable share for their services.
THREAT FROM SUBSTITUTES
Wide range of choice due to increase in no. of hotels Additional service of spas, health treatments, recreation and much
more
PORTER’S FIVE FORCE MODEL
RIVALRY FROM EXISTING PLAYERS
Rivalry is enhanced when industry growth is low, because growth-minded companies must steal customers from other firms to meet growth objectives.
Customers can easily switch among providers.
Many hospitality firms try to neutralize buyers' power by creating loyalty programs that reward customers for repeat purchases.
PORTER’S FIVE FORCE MODEL
Company Introduction
Incorporated by the founder of the Tata Group, Mr. Jamsetji N. Tata
Subsidiaries are collectively known as Taj Hotels Resorts and Palaces
Taj Hotels Resort and Palaces comprises more than 60 hotels in 45 locations across India with an additional 15 international hotels
Taj hotel offers the luxury of service, the apogee of Indian hospitality, vantage locations, modern amenities and business facilities.
THE INDIAN HOTES COMPANY LTD. (IHCL)
StarsTaj Hotels
Question marksGinger Taj Air
Cash cowsThe Gateway hotelsTaj exotica
Dogs Taj SATS – Air catering group Taj Safaris
BCG MATRIX
Tie ups with
institutes
Continues training
Sponsoring
Research
More low cost Hotels
2 Tier and 3 tier Cities
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