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HOSPITALITY PROJECT REPORT
Market Feasibility & Financial Viability
Opening a Four Star Hotel in Faridabad
SUBMITTED BY:
Nikita Pandey
UNDER THE GUIDANCE OF:
Mr. Divoy Chabra
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ACKNOWLEDGEMENT
I find it difficult to pen down my deepest sense of indebt towards my parents and family
members who soulfully provided me their constant support and the right input to undertake the
challenge of this proportion like all other spheres of life, for what I cannot measure but treasure.
They believed in me before I believed in myself. To whom I owe my wonderful today and dream
filled future.
I also owe my sincere thanks to Ms. Anjali Khanna, Head Of Department, Department of
Tourism & Hospitality, Lovely Professional University, Phagwara; a special thanks to Mr.
Divoy Chabra, Faculty Member, Department of Tourism & Hospitality, Lovely Professional
University, Phagwara for providing me the necessary infrastructure and platform to work on this
Research Study.
And last but not the least a special word of thanks to all my friends and colleagues for their
intermittent and timely doses of morale boosting, utmost care during my leaps and bounds and
for giving me constant support.
Nikita Pandey
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CERTIFICATE
This is to certify that Nikita Pandey bearing Registration no. 10905939 has completed her
capstone project titled, “Market Feasibility and Financial Viability for Opening a Four Star
Hotel in Faridabad.” under my guidance and supervision. To the best of my knowledge, the
present work is the result of her original investigation and study. No part of the dissertation has
ever been submitted for any other degree at any University.
The dissertation is fit for submission and the partial fulfillment of the conditions for the award of
.........................
Signature and Name of the Research Supervisor
Designation
Lovely School of Tourism & Hospitality
Lovely Professional University
Phagwara, Punjab.
Date :
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DECLARATION
I, Nikita Pandey, student of BHMCT under Department of Lovely School Of Tourism &
Hospitality of Lovely Professional University, Punjab, hereby declare that all the information
furnished in this dissertation / capstone project report is based on my own intensive research and
is genuine.
This dissertation / report does not, to the best of my knowledge, contain part of my work which
has been submitted for the award of my degree either of this university or any other university
without proper citation.
Date:
Signature and Name of the student:
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Table of Content
Chapter 01
1.1 Introduction to Tourism
1.2 Introduction to Hotel Industry
1.3 Review of Existing project in the same category.
Chapter 02
2.1 Objective
2.2 Need and
2.3 Scope of project.
Chapter 03
3.1 Project design
3.2 Detail about the project.
Market feasibility:
Target market.
Introduction to Marketing and marketing mix.
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Demand analysis and quantification.
Technical aspects & Manpower planning of the proposed Hotel.
Project Profile.
Financial Viability:
Tariff Structure.
Cost of the Project.
Sales Revenue.
Estimation of Expanses.
Working capital.
Financing the Project.
Estimation of Income
Profitability statement.
Cash Flow Statement.
Cost Benefit Analysis.
Break even analysis.
Debt service coverage ratio.
Sensitivity analysis.
Conclusion:
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Chapter 1
INTRODUCTION
1.1 INTRODUCTION TO TOURISM:
Tourism is defined as a composite of activities, services, and industries that delivers a travel
experience to individuals and groups traveling fifty miles or from their homes for purposes of
pleasure.
The business sectors comprising the tourism industry include: transportation, accommodations,
eating and drinking establishments, shops, entertainment venues, activity facilities, and a variety
of hospitality service providers who cater to individuals or groups traveling away from home.
Tourism product is not produced by a single business, nonprofit organization, or governmental
agency; rather, it is defined as “a satisfying visitor experience.” This definition encompasses
every activity and experience that a tourist encounters during his or her entire trip away from
home
The importance of tourism in the global economy
Prior to September 11th 2001, travel and tourism was the world’s largest, $3.6 trillion, industry,
generating 11% of global GDP, employing 200 million people, accounting for one in every 12
jobs and transporting nearly 700 million international travellers per year. This last figure is
expected to double by 2020.
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International tourism arrivals in developing countries have grown by an average of 9.5% per year
since 1990, compared to 4.6% worldwide1. The industry makes important contributions to
developing country economies, representing the second largest source of foreign exchange after
oil, although these countries currently have only a minority share of the international tourism
market (approximately 30%). The aftershocks of the events of September 11th in the industry are
impacting through a decline of tourists across the globe. In particular, destinations dependent on
the American market e.g. some Caribbean islands, and where destinations are predominantly
Muslim populations e.g. Indonesia.
Where tourism generates than 40% of GDP – small, low and middle income island nations in
the Caribbean and Pacific – the impact of September 11th has confirmed some developing
countries’ exposure to their dependency on tourism. Strategies to diversify and integrate their
economies to protect livelihoods from the adverse shocks caused to tourism by political and
natural disasters were already called for prior to September 11th and are even imperative now.
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Structure of the International Tourism Industry
It is important to understand the highly complex nature of measuring the impact of tourism. The
tourism product is made up of number of elements – travel to a destination, accommodation and
food, and services the tourist uses at the destination. It involves a diverse set of organisations and
TravelAgencies
TourOperators
Airlines, cruiselines, other means ofaccess
TOURISM DESTINATION
Tourist BoardsGround handlersAccommodationRestaurantsTransport operatorsAttractions
ORIGINATINGMARKET
SUPPORTSERVICES
InfrastructureUtilitiesHealthEducation &TrainingBanks/finance
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institutions – travel agents, tour operators, airline companies, hotels, guest houses, rented
accommodation, national and local tourist boards, national and local government
(developmental, regulatory), local entrepreneurs, local services (banks, hospitals etc), community
based organisations (CBOs) and Non-Governmental Organisations (NGOs).
In addition, tourism revenue is not calculated as a separate category in national accounts making
it difficult to assess its overall economic impact.
The role of institutional capacity must be underlined. Section 2 will analyse the multi stakeholder
approach required to understand and assess tourism enterprise development interventions. Here,
we note the importance of national and local institutional development capacity in tourism
support services, if tourism enterprise interventions are to maximise their potential positive
impacts while minimising their negative impacts. Examples include unclear land tenure
legislation and procedures, no effective land registry, and inadequate planning regulations and
their enforcement.
Tourism Typologies
‘Mass Tourism’ :
‘Mass tourism’ (70% of market share today) grew rapidly in the 60s and 70s mainly as a function
of increased disposable incomes. It was centred in North American and Western European
destinations, and some island destinations like the Caribbean. This tourism was, and is,
dominated by tour operators offering package tours to the sun, sea and sand, and often sex too.
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The product was about quantity, not quality. This product has been characterised by local
income revenues being concentrated in densely packed tourist destinations that employ migrant
labour from the hinterland and abroad. Local skills capacity remains low, with skilled,
management jobs often being carried out by ex patriots.
The big UK based tour operators (e.g.Thomsons, First Choice, Airtours) that dominate the
market are vertically integrated and own whole travel and accommodation product chains
creating economies of scale that out compete small entrepreneurs on price. With the trend away
from packaged four ‘S’s and demand for ‘authentic’, individual and varied experiences,
alternative producers now abound and compete on specialised product demand and quality.
With increasing disposable income in the 80s and 90s, and long haul travel becoming affordable
to Europeans and North Americans, new destinations in the ‘South’ were made accessible. The
mass tourism, package tour model was replicated in many of these destinations despite warnings
of the ‘boom/bust’ syndrome that was affecting destinations that competed on price alone.
(Butler, 1980)
‘Ecotourism’ to ‘Sustainable Tourism’:
The growing awareness of environmental and conservation damage caused by tourism, in
conjunction with the Rio Summit establishing the triple bottom line of environmental, economic
and social sustainability, saw development of new forms of tourism evolved in response to this
sensitive international climate. Green tourism, adventure tourism, nature tourism, community-
based tourism, heritage tourism are all labels that are generally encapsulated in the term
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‘ecotourism’ that this paper uses to describe as alternative forms of tourism to mass tourism.
These products’ market share is estimated at approximately 30%. While these products do bring
development to remote regions, and hence poorer areas, it is not proven that they generate less
damage and provide benefits than mass tourism.
‘Sustainable tourism development’ has been defined as tourism that “maximises the potential of
tourism for eradicating poverty by developing appropriate strategies in co-operation with all
major groups, indigenous and local communities”, (UN Commission on Sustainable
Development, 1999). This definition builds on, and goes beyond the WCED, 1987 definition of
sustainable development: “development that meets the needs of the present without
compromising the ability of future generations to meet their own needs” (WCED, Our Common
Future, 1987).
Ecotourism does not necessarily mean sustainable tourism. Rather, it is a term that is often used
by operators as a marketing tool to promote a product that is perhaps based in a pristine, rural
setting, or an authentic cultural environment. It does not mean that the product is sustainable in
terms of its impact on local community livelihoods and resources. At the centre of the PPT
approach is putting poor people and poverty at the centre of the sustainability debate.
However, it is the earlier, environmental definitions of sustainable development that have now
been embraced by the global travel and tourism industry. Their responsibilities to this definition
are largely targeted at environmental initiatives – e.g. waste and rubbish disposal and water
conservation. Addressing the socio-economic issues of tourism development has only been found
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in the domain of NGO backed community tourism projects. This, however, is now being
addressed in set of new initiatives.
Responsible tourism
A final recent distinction needs to be made between ‘responsible’ and ‘sustainable’ tourism. The
current debate on ‘sustainable tourism’ would, some argue (e.g. WWF UK), make “sustainable
tourism an unachievable ideal, not least because of the significant contribution that air travel
makes to climate changes.” The statement continues, “it is therefore useful to think about
‘responsible tourism’ within the context of a wider sustainable development strategy.”
For these applications guidance notes we are discussing IA in tourism enterprise intervention in
terms of all of the above definitions set out in Section 1.4, although now, most tourism enterprise
level intervention does come under the label of ‘sustainable development’ whether rural or
urban, macro or micro.
1.2 INTRODUCTION TO HOTEL INDUSTRY
One of the fastest growing sectors of the economy of our time is the hotel industry. The
hotel industry alone is a multi-billion dollar and growing enterprise. It is exciting, never boring
and offer unlimited opportunities. The hotel industry is diverse enough for people to work in
different areas of interest and still be employed within the hotel industry. This trend is not just in
India, but also globally.
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Modern hotels provide refined services to their guests. The customers or guests are
always right. This principle necessitated application of management principles in the hotel
industry and the hotel professionals realized the instrumentality of marketing principles in
managing the hotel industry.
The concept of total quality management is found getting an important place in the
marketing management of hotels. The emerging positive trend in the tourism industry indicates
that hotel industry is like a reservoir from where the foreign exchange flows. This naturally
draws our attention on HOTEL MANAGEMENT. Like other industries, the hotel industry also
needs to explore avenues for innovation, so that a fair blending of core and peripheral services is
made possible. It is not to be forgotten that the leading hotel companies of the world have been
intensifying research to enrich their peripheral services with the motto of adding additional
attractions to their service mix. It is against this background that we find the service mix
flexible in nature.
The recruitment and training programmes are required to be developed in the face of
technological sophistication. The leading hotel companies have been found promoting an
ongoing training programme so that the personnel come to know about the use of sophisticated
communication technologies.
Hotel – The Concept
At the outset, we go through the concept of hotel. The common law says that hotel is a place
where all who conduct, themselves properly and who being able and ready to pay for their
entertainment, accommodation and other services including the boarding like a temporary home.
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It is home away from home where all the modern amenities and facilities are available on a
payment basis.
It is also considered to be a place where tourist stops, cease to be travellers and become
customers. The definition presented by hotel operators to authorities of the National Recovery
Administration in Washington is found to be a comprehensive definition, presented by Stuart
Mc Namara. The definition states that, “ Primarily and fundamentally, a hotel is an establishment
which supplies boarding and lodging not engaged in inter – state commerce or in any intra – state
commerce, competitive with or affecting inter – state commerce (or so related that the regulation
of one involves the control of other).”
The hotel may furnish quarters and facilities for assemblage of people for social business or
entertainment purposes and may engage in retaining portion of its premises for shops and
businesses whose continuity (i.e., proximity) is deemed appropriate to a hotel. The assemblage of
people for social business and entertainment purposes makes it essential that hotels are also
furnished with a big conference hall where the maximum possible accommodation is available.
We also call it the function room.
Motel – The Concept
Initially the term motel was meant for local motorists and foreign tourists travelling by
road. They serve the needs and requirements of these travellers and meeting their demand for
transit and accommodation. Some of the important services offered by the motels are parking,
garage facilities, accommodation, and restaurant facilities.
Motels are found located outside the city, preferably by the side of high ways and
important road junctions. The accommodation in this is in the category of a ‘chalet facility’. In
USA, the motel accommodation is ranked at par with hotel accommodation.
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Origin of the word “Hotel”
Before 1760 people used to go to inns for having their lunch, dinner etc .It was the place
where families used to host their guest inns owner used to provide lodging and boarding facility
service to their guest.
To world “hostel” was used then it was called “hostelier” which means head of unit or the
place. The Norman people invented the word “hotel”. The word “hotel” was originally in
England, officially from 1760. The real growth of modern hotel was originated in “U.S.A” with
opening of “City Hotel” in New York in the year 1974. This was the first building erected for
the hotel purpose. This period also saw the beginning of chain operation under the guidance of
E.M.STATLER. It involves big investment, big profits and trained professional to manage
business.
Origin of Hotel Industry
The origin and the development of the hospitality industry is a direct outcome of travel
and tourism. There are many reasons for which a person may travel: business, pleasure, further
studies, medical treatment, pilgrimage or any other reasons. When a person travels for few or
more days, he may carry his clothes with him, but it is not possible for him to carry his food and
home. Thus two of thee basic needs –food and shelter- are not taken care of when he is
travelling. This is where the hospitality industry steps in.
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Before the wheel was invented, people undertook journeys on animals such as horses, camels
and elephants. In those days they used to travel in groups called “Caravans” for safety. However,
there was a limit to the distance they could cover in a day. At nightfall they avoided travel due to
the fear of wild animals and bandits, and also because of animal fatigue. Thus for the night halt,
they looked for a place that could provide them with water fuel to cook food and above all
security from wild animals and bandits.
The primitive lodging houses or inns originated essentially to cater to these needs of the
travelers. Throughout the world they were known by different names, such as dharamshala and
sarai in India, ryokans in Japan, paradors in Spain, pousadas in Portugal, coffee houses in
America, taverns and inns in Europe, cabarets and hostelries in France, mansionis and hospitia in
Switzerland, phatnal in Greece and relay houses in China.
The repreciation in 1930 had a disaster effect in a hotel industry after the World War II and
brought a tremendous up surge to hotel industry with continuous prosperity of hotel industry.
Mass travel is a modern phenomenon that emerged after World War II. Mass tourism continues
to grow as political freedom, economic wherewithal and social equality spread across the globe.
With the economic engine of development running at full steam, there was a growth in
international travel and thereby growth in hotel industry.
Estimates abound as to the importance and size of house keeping. Certainly, its economic
contribution is critical to the global economy whether as a service to the business community.
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Background of Hotel Industry
Prior to the 1980’s, the Indian hotel industry was a nascent and slow growing industry primarily
consisting of relatively static, single hotel companies. However, Asian games in 1982 and the
subsequent partial liberalization of the Indian economy generated tourism interest in India with
significant benefits accruing to the hotel and tourism sector in terms of improved demand
patterns. Fortunes of the hotel industry are tied to the fortunes of tourism and the general
business climate in the country, which is why the economic liberalization initiatives
implemented since 1991, led to a soaring demand and supply gap in the hotel industry.
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1.3Review of Existing Project
Park Plaza, Faridabad
Hotel Amenities:
General
Park Plaza Faridabad features an outdoor pool and a fitness facility. Dining is available at one
of the hotel's 4 restaurants. A bar/lounge is on site where guests can unwind with a drink.
Public areas are equipped with complimentary high-speed wireless Internet access.
This 4-star property offers access to a business center and audiovisual equipment. Event
facilities include a conference center, conference/meeting rooms, and banquet facilities. This
business-friendly hotel also offers a rooftop terrace, spa services, and tour/ticket assistance.
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For a surcharge, a roundtrip airport shuttle (available on request) is offered to guests.
Complimentary valet parking is available on site.
Air-conditioned public areas
Free parking
Spa services on site
24-hour front desk
Airport transportation (surcharge)
Elevator/lift
Valet parking
Free valet parking
Total number of rooms - 78
Audiovisual equipment
Banquet facilities
Bar/lounge
Business center
Multiple large conference rooms
Dry cleaning/laundry service
Event catering
Fitness facilities
Tours/ticket assistance
Free Wi-Fi
Rooftop terrace
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Room service (24 hours)
Number of meeting/conference rooms - 3
Conference center
Number of restaurants - 4
Swimming pool - outdoor
Internet
Available in all rooms: Free Wi-Fi
Available in some public areas: Free Wi-Fi
Parking
Free parking, Valet parking, free valet parking
Room Amenities
Minibar
Coffee/tea maker
Private bathroom
Shower only
Rainfall showerhead
In-room safe
Desk
Satellite TV service
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Free Wi-Fi
LCD TV
Dining
Veranda - This restaurant serves breakfast, lunch, and dinner.
Guests can enjoy alfresco dining (weather permitting).
24-hour room service is available.
Recreation
Recreational amenities at the hotel include an outdoor pool and a fitness facility.
Policies & Fees:
Check-in
Check-in time starts at noon
Check-out
Check-out time is noon
Payment Types
Accepted at this hotel: American Express, Carte Blanche, Diners Club, Discover, JCB
International, MasterCard, Visa
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Policies
Extra-person charges may apply and vary depending on hotel policy.
Government-issued photo identification and a credit card or cash deposit are required at
check-in for incidental charges.
Special requests are subject to availability upon check-in and may incur additional charges.
Special requests cannot be guaranteed.
Fees
The following fees and deposits are charged by the property at time of service, check-in, or
check-out.
Airport shuttle fee: INR 1700 per vehicle (one way)
Rollaway bed fee: INR 1000 per night
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CHAPTER-2
OBJECTIVE, NEED and SCOPE
2.1 OBJECTIVES:
1. To ascertain the market feasibility.
2. To study the existing hotels and facilities provided by them.
3. Planning of staffing and manpower.
4. To study various places of tourist destinations.
5. To obtain various cost based study analysis in order to determine the financial
viability of the project.
6. To study the financial viability of the project by using various concepts of accounting
like break- even analysis , cash flow statement, profitability statements.
7. To outline in brief the various facilities to be provided in the proposed hotel project.
2.2 NEED OF THE PROJECT:
Faridabad, the south-eastern district in the state of Haryana, with the object of protecting
the Grand Trunk Road (now National Highway 2) which passed through the town. Thus
there is a scope for the en-route guests to have a stay in Faridabad.
Faridabad is the largest city and one of the major industrial hubs of Haryana. It generates
60% of the revenue of the state. 50% of the income tax collected in Haryana is from
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Faridabad and Gurgaon. As most of the visitors in Faridabad are business travelers and
there is a shortage to star properties, thus there is a great need for star category property.
Faridabad is famous for henna production from the agricultural sector while tractors,
motorcycles, switch gears, refrigerators, shoes and tyres are the famous industrial
products of the city. Thus it is quite obvious that in Faridabad every type of industry is
present. So there is a need of such projects to cater the need of the travelers.
2.3 SCOPE FOR THE PROJECT:
Faridabad is the major industrial city of Haryana. Thus there are a major crowd of
business travellers are coming. To cater those business travellers.
To know the type of cliental
To decide the type of facility
To design the tariff structure
To estimate the occupancy
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CAHPTER 3
3.1Project Design
Name of the hotel: Hotel Ciel
Type of property: a 4 Star Property
Number of Rooms: 62
Location: Hotel Ciel, Sec 12, Faridabad, HR
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3.2 About the Project
LOCATION
FARIDABAD
Faridabad is the largest city of Haryana state in northern India, in Faridabad district. It lies at
28°25′16″N Latitude and 77°18′28″E Longitude. The district shares its boundaries with the
National Capital and Union Territory of Delhi to its north, Gurgaon district to the west and Uttar
Pradesh to its east and south. Faridabad enjoys a prime location both geographically and
politically. The river Yamuna separates the District Boundary on the eastern side with Uttar
Pradesh. Delhi-Agra National Highway No.2 (Shershah Suri Marg) passes through the centre of
the district. The city has many railway stations on the Delhi-Mathura double track broad-gauge
line of the North Central Railway. The railway stations of Old Faridabad and New Industrial
Township (NIT) are the major ones.
Faridabad is the largest city and one of the major industrial hubs of Haryana. It generates 60% of
the revenue of the state. 50% of the income tax collected in Haryana is from Faridabad and
Gurgaon. Faridabad is famous for henna production from the agricultural sector while tractors,
motorcycles, switch gears, refrigerators, shoes and tyres are the famous industrial products of the
city.
For the ease of Civil Administration, Faridabad district is divided into two sub divisions viz.
Faridabad and Ballabgarh each headed by a Sub Divisional Magistrate. The Municipal
Corporation of Faridabad (MCF) provides the urban civic amenities to the citizens of
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Faridabad City. Palwal, Hodal and Hathin Sub Divisions are now part of newly created Palwal
District.
Geography
City is located on the plains of the Yamuna river. It is bordered by the Yamuna to the east and
Aravali Hills towards the west and southwest. Today, virtually all of the land has been
developing with residential housing as the population of the city swelled during the mid 1990s.
Much like the rest of India, the people of Faridabad rely on the ground water for their basic
needs which is the gift of good monsoon season.
Climate
The climate of Faridabad district can be classified as tropical steppe, semiarid and hot which is
mainly characterized by the extreme dryness of the air except during monsoon months. During
three months of south west monsoon from last week of June to September, the moist air of
oceanic penetrate into the district and causes high humidity, cloudiness and monsoon rainfall.
The period from October to December constitutes post monsoon season. The cold weather
season prevails from January to the beginning of March and followed by the hot weather or
summer season which prevails up to the last week of June.
The normal annual rainfall in Faridabad district is about 542 mm spread over 27 days. The south
west monsoon sets in the last week of June and withdraws towards the end of September and
contributes about 85% of the annual rainfall. July and August are the wettest months 15% of the
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annual rainfall occurs during the non monsoon months in the wake of thunder storms and
western disturbances.
Culture of Faridabad
The culture and tradition of Faridabad is similar to rest of country. It is the home of many culture
and traditions. Every festival is celebrated here with lot of enthusiasm.
People: Jats and Gujars are the main castes that resides in this city. They depict a picture of
happy and hardworking people. All the castes and communities represent communal harmony.
Languages: Hindi is widely spoken language in Faridabad while others are Haryanvi, English
and Punjabi are other languages.
Famous Restaurants: The famous restaurants of Faridabad are: Silk , Zosse – Crown Plaza,
Moksha, and Pind Baluchi.
Fairs and Festivals
People celebrate here every fair and festival with enthusiasm.
Gangore Festival: It is celebrated in Spring which falls in March to April. It is celebrated to
worship Gauri which is the deity of abundance. The procession is taken out with the water
immersion of Gangore and Ishar images.
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Surajkund Crafts Mela: Surajkund is an exhibition fair where handlooms and handicrafts are
displayed. It is held in every February. Its main aim was to aware tourists about the techniques of
crafting. Food Festival, dancing and singing of the participants are other major attraction of
Surajkund Crafts Mela.
Basant Panchami or Vasant Panchami: This festival is dedicated to Goddess Saraswati, the
deity of education and wisdom. People involved themselves in kites flying. Yellow is the
auspicious color of this occasion which is shown in their dresses to foods.
Transportation
Rail
DelhiMetroPurpleLine
Faridabad is on the broad gauge of New Delhi- Mumbai Line. New Delhi and Hazrat
Nizammudin Railway Station is about 25 km away from Faridabad Station. The trains for big
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cities like Mumbai, Chennai, Hyderabad are easily accessible from here. Local Trains runs
between New Delhi to Faridabad.
There are three railway stations in the city viz. Faridabad (FDB), New Town Faridabad (FDN)
and Ballabgarh (BVH). Earlier it was the last station of central railway, but now it has been
included in Northern railway. It is a very high revenue generating source for railways as
thousands of people move daily in local trains to and from Delhi for education/professions.
The Delhi Metro Rail Corporation is extending the metro rail service to the city as well.
Currently the services terminate at Badarpur at the Delhi-Faridabad border. It will cover the town
under Phase - III expansion of the Delhi Metro The fully elevated corridor, the longest Metro
line in the NCR, will be constructed at an estimated cost of Rs 2,533 crore by 2016 when the
Delhi Metro's Phase-III is expected to be completed.
Road
The National Highway-2 (Delhi-Mathura Road) passes through the city, and thus it is well
connected to nearby states. Roadways services of Haryana (Haryana Roadways) and
neighbouring states like Delhi Transport Corporation, Uttar Pardesh Transport Department, and
Madhya Pradesh Transport Department are easily accessible.
Air
Faridabad is served by Indira Gandhi International Airport, New Delhi.
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Tourism
Badkhal Lake
Dried Badkhal lake
Badkhal Lake was located in Badkhal village, 8 km from Delhi Border. The lake fringed by
Aravalli hills was a man-made embankment. Owing to unchecked mining in the neighbouring
Aravallis, the lake has totally dried up. There are functional Haryana Tourism restaurants in the
vicinity. A flower show is held every spring here. Its name is most probably derived from the
Persian word bedakhal, which means free from interference. Close to Badhkal Lake, is the
Peacock Lake, which is another picturesque spot.
The lake is dried up as of now and no lake exists apart from a dry ground.
Suraj Kund Tourist Complex and the crafts fair
Suraj Kund
Situated at a distance of around 8 km from South Delhi, it is an ideal picnic spot. The Suraj Kund
Lake here is surrounded by rock cut steps. Built by Surajpal Tomar, Suraj Kund represents the
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rising sun. Ruins of a Sun temple lie around the lake. The complex includes a beautifully done-
up Rajhans, a pool of fresh water – Siddha Kund; its waters said to have healing properties and a
garden.A delightful handloom and handicrafts fair is held here annually in February. Skilled
artisans from all over the country display the rich crafts tradition of India in the typical setting of
a rural Indian marketplace. Cultural programmes like folk dances, magic, acrobats and rural
cuisines are also a part of this colourful fair. One can also see traditional crafts being made and
buy them direct from the craftsmen. Food is served in Banana leaves and claypots.
Raja Nahar Singh Palace
Nahar Singh Mahal is also commonly known as Ballabgarh Fort-Palace was built by Balram the
predecessor of Raja Nahar Singh. As a matter of respect and remembrance this palace was given
the name of Raja Nahar Singh who died in a war of independence. This palace is known for its
architecture. This is located at main road entering in Ballabgarh market which is at a distance of
about 30 km from Delhi. The palace was recently worked with antiques and relics of a bygone
past.
Other visitor attractions
Shirdi Sai Baba Temple Society Popularly Known as Sai Dham Tigaon Road Faridabad
Shirdi Sai Baba Temple
Shiva Temple
St. Mary’s Orthodox Church
Dhauj Lake
Aravali Golf Course
Nahar Singh Cricket Stadium
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Town Park
Jharna Mandir village Mohabbtabad
Farid Khan's Tomb
mata vaishno devi mandir sansthan
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MARKET FEASIBILITY
TARGET MARKET
Faridabad is the industrial hub in Haryana. Faridabad is the largest city and one of the major
industrial hubs of Haryana. It generates 60% of the revenue of the state. 50% of the income tax
collected in Haryana is from Faridabad and Gurgaon. Faridabad is famous for henna production
from the agricultural sector while tractors, motorcycles, switch gears, refrigerators, shoes and
tyres are the famous industrial products of the city.
Thus the Target Market for me the business visitors visiting to Faridabad, Because my
project is a Business Hotel.
INTRODUCTION TO MARKETING AND MARKETING MIX
DEFINITION OF MARKETING
The word market is derived from the Latin work ‘Marcatus’ meaning goods or trade or a place
where business is conducted. The term marketing is defined as a ‘business activity planned at
satisfying to a reasonable extent, consumer or customer needs and wants, generally through on
exchange process’.
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The human needs are less and are important for his survival. The wants of people are many and
varied and change with time, place and society. The wants keep changing with life styles,
earning capacity of consumers, social values, education etc. Human intentions and decision to
acquire may not be the same due to existing conditions. A man like or intend to stay in a five star
hotel. He may decide (or acquire) a room in a three star hotel due to his tight financial position.
Kotler defines marketing as “a social and managerial process by which individuals and groups
obtain what they need and want through creating, offering and exchanging products of value
with others.
As per the definition by the American Marketing Association (AMA), marketing is “the process
of planning and executing the conception, pricing promotion and distribution of ideas, goods and
services to create exchanges that satisfy individual and organizational goals.”
‘Market’ traditionally is a place where buyers and sellers gather to exchange their goods.
With this concept of markets, it is seen that Marketing means working with markets to actualize
potential exchanges for the purpose of satisfying human needs and wants.
To meet the exchange process in the market, considerable skill and work is put by one party to
the transaction. To bring in the desired response from the other party in a market, the marketer
has to analyze, plan, implement and control activities.
Definition of Marketing Management, according to Kotler, is the process of planning and
executing the conception, the pricing, promotion and distribution ideas, goods and services to
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create exchanges that satisfy individual and organizational goals. He has thus approved the
definition of the AMA.
Marketing Management is engaged in influencing the level, timing the composition of demand in
a manner that will help an organization to achieve its objectives. Marketing Management is
basically demand management.
COMPONENTS AND CLASSIFICATION OF MARKET
Market is a social and economic institution which performs activities and provides infrastructure
for exchange of commodities between buyers and sellers. A market is not confined to a particular
geographical location, it exists wherever the fundamental forces of demand and supply exist.
Market Components
The following components are necessary for a market to exist:
Two parties are necessary – one buyer/s and secondly seller/s
Goods or commodity for transaction. Physical existence of goods is not necessary.
Business relation and communication between buyer and seller and
Demarcation-area or place there, uniform price or competition is not a condition.
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Classification of Markets
Based on nature and dimensions, markets are classified as under:
1. Area of Coverage
Local Market: Where buying and selling activities are taking place, where buyers and
sellers belong to same or nearby villages. These are for perishable items like vegetables.
Tehsil Level Markets: Market catering to buyers and sellers of taluka area. Buyers and
seller meet for their stock of food grains and other daily use items.
Regional Level Markets: Usually at district headquarters to cater to a larger area.
National Level: Buyers and sellers world over meet in this market. These are large scale
markets and business value and volumes are large. The items transacted include, silver,
gold, non-ferrous metals, petro goods and machinery. In the recent past, agricultural
commodities have also entered the area.
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2. Location
Village Market: The transactions between buyer and seller takes place in a small
village center called a village market or a Haat. This meet is periodical, usually once or
twice a week
Primary Market: The villagers take their agricultural produce to the nearby town or
Tehsil on bullock carts, buses or tractors-transaction in the town market takes place
between farmers and products.
Wholesale Markets: These markets are located at important commercial centers or
district headquarters. The arrivals from villagers and other markets are large in
quantities. The transactions take place among villagers, village traders and wholesalers.
There are specialized marketing functions that take place in this market. They are
commission agents, brokers, packers, weighment etc. These are also called Secondary
markets.
Terminal Market: This market caters to the final consumer or processor. These are
organized and modern markets. These markets are in cities or state capitals and deal in
many commodities.
3. Volumes of Trade
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Retail Markets: Where goods are brought and sold to consumers based on actual
requirements. The retailers purchases goods from the wholesale market and sell in small
lots to the nearby consumers.
Wholesale Markets: The wholesale markets are in big cities or commercial centers in a
district. The commodities are brought in bit lots bulk and sold in bulk. These markets
balance supply and demand fluctuations and also determine the prices of the
commodities being transacted. As such wholesale markets are an important part in the
market scheme.
4. Time Span
Short Period Market: These markets are for few hours or a day in a week. Generally
perishable goods like vegetables, fruits, milk, fish, mutton are traded. The prices are fixed
on the basis of demand pattern.
Long Period Market: Where perishable items for a long period are traded. The items are
food grains, oilseeds and oil. The prices are governed by supply as well as demand forces
in the market.
Permanent Market: Markets where commodities can be kept for any length of time like
machinery, steel furniture, manufactured goods.
5. Number of Commodities
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General Market: These markets deal in a large number of commodities and of different
quality and packages. The items are as groceries, foodgrains, oils, oilseeds, sugar etc.
Specialized Markets: Markets where only one or wo commodities are transacted are
called specialized markets. Examples are food grain markets, electrical markets, cotton
markets and vegetable markets.
6. Type of Transactions
Spot or Cash Markets: Where goods are exchanged immediately on payment of cash
Forward Markets: In this market, the timing of exchange of commodity and purchase
and sale of that commodity are not same. The goods are delivered at a later date.
Sometimes the goods are not delivered at all, only difference being in sales and purchase
price which are paid as per agreements.
7. Degree of Competition
Market are seen from perfect competition to pure monopoly. The markets may exist different
intermediate points. The markets are classified on the basis on basis of competition as under:
Perfect Markets: The perfect market in true sense does not exist. This presupposes that
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There are large numbers of buyers and sellers.
The buyers and sellers in the market have indepth knowledge of prices, demand and
supply.
Price are uniform in a geographical area-
Plus or minus cost of transportation from surplus to deficit market.
Plus or minus cost of storage over a period of time.
Plus or minus cost of converting the product from one to another.
Imperfect Markets: In this market, the conditions of perfect market are lacking. These are:
Monopoly market where there is only one seller of a commodity. He has sole control.
The prices are generally higher. When there is only one buyer, the market is termed
as monophony market.
Duopoly market is a market there are two sellers of a commodity in the market.
Where there are only two buyers in the market, it is called duopsony market.
Monopolistic competition: Where a large number of sellers are selling heterogeneous
and differentiated forms of a commodity, the situation is termed monopolistic
competition. Example – farmer has to choose between various makes or brands of
pesticides, pumpsets and fertilizers.
8. Nature of Commodities
Commodity Markets: Pertains to the types of goods like grains, cotton, sugar,
fertilizers etc.
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Capital Markets: Markets where shares, debentures and bonds are purchased and
sold as in share markets.
9. Government Intervention
Regulated Markets: Where markets are controlled by government or statutory rules and
regulations, pricing and distribution are as per laid down rules.
Unregulated Markets: The seller or trader makes his own rules for conduct of business.
These are not government rules for trading. The traders may exploit the situations.
10 Accrual of Marketing Margins
This is done on the basis of whom the marketing goes. These are usually cooperative market.
These are prevalent in milk, fertilizer and sugar industries. The margins are distributed to the
cooperative members.
11 Type of Population Served
Urban Market: Markets to serve the urban population.
Rural Market: Markets to meet demands originating from the rural population.
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MARKETING MIX
MARKETING SYSTEM
Marketing activity presently dealt with focused on the commercial transaction between a seller
and a buyer. The seller offers his commodities to the buyer to satisfy his needs and wants. The
buyer purchases the commodity or services as per his needs and demand.
Marketing Activity and Environment
The framework or environment in which marketing activity takes place is within and outside the
buyer and seller organizations – some are controllable and some are uncontrollable variables.
Some variables can be controlled by the seller that is one can plan, organize and perform –
whereas there are variables which are beyond and control.
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6 P’s of Hospitality:
1. Product:
The tourism product differs from other products due to the wide range it covers, including such
areas as accommodations, transportation, food, recreation and attractions. Often the product
includes intangibles such as history, culture and natural beauty. Many times the hospitality or
tourism product is viewed as more of “service” in the customer’s eyes. The closer we can
determine how to satisfy the customer’s needs, the more successful the destination will be.
2. Price
This refers to the amount customers pay for the product or service provided. A quality tourism
experience at a fair price is what the customer is looking for in most cases. Pricing should be
based upon clear-cut goals and objectives: survival, profit maximization, market share,
competition or positioning.
3. Place
The place where the customer buys the tourism product can vary greatly. Travel agents, tour
operators and tour wholesalers are a few examples of the distribution points for tourism products.
Look for new distribution points in which you can sell your services. Like Hotels, Resort etc.
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4. Promotion
A range of activities can be used to convince customers to buy the product, including
information kits, web sites, advertising, personal selling, sales promotion, travel shows, and
public relations.
Utilize tourist information centers, such as welcome centers. Participation with your state,
regional and local tourism offices and associations.
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 among with leaflets and folders.
ii. Data Base : this is sending personalized 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
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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
5. People
The people who sell and service your product are an extremely important part of tourism
marketing. Friendly personal service and trained employees can make or break
a tourism business.
Because much of the tourism industry is based upon word- of-mouth advertising- particularly
about the service received- what your customers say after they depart can thrust your business
forward or send it into a downward spiral.
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6. Planning
An important part of a viable business plan is to develop a strategic marketing plan in an
effort to identify customer expectations. Research and planning also helps design and devise
means by which you can meet these expectations. Provides a road map. Is a working document.
To be effective the plan must be maintained, reviewed and revised.
Should have an annual marketing plan, with a component that mentions long-term goals as well.
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DEMAND QUANTIFICATION
Meaning of demand:
The amount of a particular economic good or service that a consumer or group of consumers will
want to purchase at a given price. The demand curve is usually downward sloping, since
consumers will want to buy as price decreases. Demand for a good or service is determined by
many different factors other than price, such as the price of substitute goods and complementary
goods. In extreme cases, demand may be completely unrelated to price, or nearly infinite at a
given price. Along with supply, demand is one of the two key determinants of the market price.
Types of demand
The different types of demands have been explained below as follows:
Individual demand:
It is the quantity of a commodity demanded by an individual consumer at a particular price
during a given period of time.
Market demand:
It is the total quantity of a commodity demanded by all the consumers in the market during a
given period of time.
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Joint demand:
When two or commodities are jointly needed to satisfy a single want, then the demand for such
goods are said to be joint demand.
Composite demand:
When a commodity is demanded for a number of uses, then the demand for that commodity is
said to composite in nature.
Competitive demand:
When two goods are close substitutes of one another, then the demand for such goods is said to
be competitive in nature.
Derived demand:
When demand for a commodity gives rise to demand for another commodity, then it is said to be
as a derived demand.
Variation in demand:
It refers to extension or contraction in demand which is exclusively due to change in the price of
a product.
Changes in demand:
Change in demand refers to increase or decrease in demand which is due to change factors other
than price of the commodity.
It refers to some inferior goods which are demanded in smaller quantities when their price falls.
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Direct demand:
Goods which yield direct satisfaction to a customer can be termed as the direct demand
Demand for 4 star hotel
Hotel industry is one of the biggest and smokeless industries. It’s the form of the hospitality
industry. Hotels widely depend upon the nature of the guests. The proposed “Hotel Ciel” could
be classified under 4 star categories, keeping in mind about the demand of rooms, tastes and
preferences of guests and the tourist inflow and outflow of the place.
Demand will be based on the average of the existing projects in Faridabad.
The no. of rooms and other things will be decided on the average rooms of those projects.
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Name of Hotel No. of Rooms Tourist Others Business Occupancy%
Park Plaza 70 34 11 66 64
Sarovar Portico 62 15 10 60 66
Rajmandir 54 27 25 59 70
Mahalaxmi 62 30 15 50 60
Average No. of Rooms = 70 + 62 + 54 + 62
4
= 62
Average Tourist clients = 34 + 15 + 27 + 30
4
= 26.5
Average Other Clients = 11 + 10 + 25 + 15
4
= 15.25
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Average Business Clients = 66 + 60 + 59 + 50
4
= 58.78
Average Occupancy% = 64 + 66 + 70 + 60
4
= 65%
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TECHNICAL ASPECTS and MAN POWER PLANNING
TECHNICAL ASPECTS
It is clear from the demand analysis that a hotel with 62 rooms
Hotel Ciel 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 40
SUITE 22
TOTAL 62
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
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HOTEL BUILDING
Basement
Basement Layout Square Feet
Accounts Department 340
Personal Department 300
Time Office 200
Receiving Area 300
House keeping 100
Fire escape 200
Passage and corridors 500
Laundry 500
Staff cafeteria 800
Locker(male) 400
Locker(female) 400
Stores 400
Purchase department 200
Uniform exchange room 200
Linen exchange room 700
General manager office 200
Engineering and maintenance department 230
Centralized A/C 700
Service lift 100
Security office 200
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T.V. channel music 170
Total 7140 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
Florists 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
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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 9240
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
House keeping pantry 150
Double room (25) 11000
Speciality restaurant 1200
Room service 140
TOTAL AREA 13460 sq. Ft
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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
House keeping pantry 200
Double room(15) 6600
Suites(05) 3200
Room service pantry 190
TOTAL AREA 12360sq. Ft
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Third floor
THIRD FLOOR SQUARE FEET
Service lift 100
Fire escape 80
Guest stairs 60
Service stairs 60
Guest lifts 70
Set back areas corridors 1500
House keeping pantry 200
Suites(8) 5120
Room service pantry 170
TOTAL AREA 7360
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Fourth floor
FOURTH FLOOR SQUARE FEET
Service lift 100
Fire escape 80
Guest stairs 60
Service stairs 60
Guest lifts 70
Set back areas corridors 1910
House keeping pantry 200
Suites(9) 5760
Room service pantry 170
TOTAL AREA 8410sq. Ft
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LEGAL REQUIRMENTS
Hotel License:
Hotel license is the certificate or document which deals with service where the public are
admitted for repose or consumption of any food or drink or any place where food is sold or
prepared to sale.
Generally following license are required in hotels
1.Labour License -- Labor Office
2.Bar License -- state excise
3.PF Reg. - PF authorities
4.ESI reg - ESI authorities
5.Licence to contractor -- Labor Office
These are licenses has to be take care by HR
01.PF
02.ESI
03.LABOUR LICENSE
04.CONTRACT LICENSE
05.FOOD LICENSE
06.M.C.H LICNESE
07.WIGHTS AND MEASUREMENT LICENSE
08.POLICE LICENSE
09.24HRS COFEE SHOP LICENSE
10.LPG AND DESIGL LICENSE
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11.31ST NIGHT LICENSE
12.ENTERTINEMENT LICENSE
13.AP POLLUSTION CONTROL BOARD LICENSE
1-Service Tax Registration
2-N.O.C from fire department
3-VAT/TIN /C.S.T Registration Certificate
4-C.M.O certificate for food license
5-Training Record of employees shift wise from Fire Department
6-Excise License
7-Luxury Tax registration
8-Paste Control Certificate
9- IATA Approval for tour handling, ticket booking/or agreement with travel & tour company
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
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Afternoon shift: 3pm to 12am
Night shift: 11pm to 8am
The manpower of the hotel will be disturbed as below
Sr. no. Description No. of Staff
1. General Manger 01
2. Assistant manager 01
3. PA to GM 01
4. FO Manager 01
5. Lobby Manager 01
6. Bell Captain 01
7. Bell Boys 04
8. Telephone Operator 02
9. Telephone Supervisor 01
10. Front office assistants 02
11. Executive Chef 01
12. Sous Chef 02
13. Chef de Partie 05
14. Commies 20
15. F&B Manager 01
16. Restaurant Manager 02
17. Banquet Manager 02
18. Captain 04
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19. Steward 16
20. Barmen 03
21. Room service Manager 01
22. Order Taker 03
23. Steward room service 06
24. Executive Housekeeper 01
25. Assistant Housekeeper 01
26. Floor Supervisor 04
27. Linen room supervisor 04
28. Uniform room supervisor 02
29. HK Store Supervisor 01
30. Housemen 15
31. Gardner 02
32. Kitchen Stewarding Supervisor 01
33. Asst KSt Supervisor 01
34. Pot Washer 04
35. Chief Engineer 01
36. Technicians 05
37. Security Manager 01
38. Security Personnel 04
39. Doorman 02
40. S & M Manager 01
41. S & M Executives 02
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42. Assistants 02
43. Personnel Manager 01
44. Asst. Personnel Manager 01
45. Assistants 02
46. Accounts Manager 01
47. Cashier 02
48. Clerk 02
49. Purchase Manager 01
50. Purchase Assistants 02
Total - 147
PROJECT PROFILE
Name of the industry : 4 Star Business Hotel
Location : Faridabad
Name of Hotel project : Hotel Ciel
Room statement : Total no. Of rooms - 62
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1st floor: Double Rooms - 20
2nd floor: Double Rooms - 25
: Suites - 02
3rd floor: Double Rooms - 3
: Suites - 4
4th floor: Double Rooms - 5
: Suites - 3
Therefore
Land area required is =25,000sq. Ft.
Total build up area =45,390sq. Ft.
Covered land =7,800sq. Ft.
Open area(garden and parking) =5,200sq. Ft.
1. By place I 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 finalized.
Hospitality Products Offered
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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 cuisines like continental, Chinese ,Awadhi
d. Shopping arcade: This is attached to reception counter. It consist of
>Travel desk
>Handicraft soft
>Chemist
>Banking facilities
>Beauty parlour
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.
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e. Lockers: This is to help the guest who are carrying valuable like jewelry, currency or
very doc. Etc., to safe guard and prevent theft
f. Car Park: This is provided at the side of the hotel about 35-45 cars and 15 wheelers can
be asked here .
FOOD AND BEVERAGES OUTLETS OF THE HOTEL
ZAYKA 24 HOURS COFFEE SHOP
DAWAT E SHAN Awadhi cuisine specialty restaurant
11 am – 3 pm
7 pm – 11.30 pm
CHINA STREET CHINESE SPECIALITY
RESTAURANT
11 am – 3 pm
7 pm – 11.30 pm
ROOM SERVICE 24 HOURS
KESARIYA BANQUET HALL(UP TO 90 PAX)
MEHFIL BANQUET HALL(UP TO 300 PAX)
ACCELARATE – BAR 11 am- 11.30 pm
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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 hotel sells, is has to follow a method of fixing
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
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Double rooms 40
Suite rooms 22
A complimentary fruit basket and cookies can be provided for the 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.
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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
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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.
MARKETING GOALS
Marketing is an important and integral part of any enterprise. It follows of the organization, that
is marketing desires goals from an organization. gives goals of an organization and its marketing
arm.
Organization Marketing
Growth Product
Sales growth
Market development
Diversification
Profitability Maximum sales revenue
Maximum contribution
Market Penetration Market leadership
Innovation
Consumer satisfaction
Image Company image
Brand image
Social image
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Goals of Organization and Marketing
SELLING AND MARKETING CONCEPTS
Selling concept holds that, if left alone, a customer will ordinarily not buy enough products of
the organization. the organization must, therefore, go for aggressive selling and invest in
promotional campaigns. This is a common man’s approach. The aim is to sell what an
organization makes rather than make what the market wants.
On the hand, marketing is a business philosophy that is opposed to the selling concept. The
marketing concept holds that the key to achieve goals of an organization consists of being
effective than its competitors in evolving and executing marketing activities towards determining
and satisfying the needs and wants of target markets. The concept is put is few words – “find
wants and fill them” or “meeting needs profitably”. The difference between selling and
marketing are detailed in below.
Concepts Starting
Points
Focus Means End
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The Selling
Concept
Factory Products Selling and
Promoting
Profits through
sales through
The Marketing Target Customer Integrated Profit through
Concepts Market Needs Marketing Customer
Satisfaction
MARKETING PRACTICES
The marketing philosophies have to be put in place by actions for success. These are broadly
categorized as:
Organization structure and
Marketing strategies and leadership.
Organization Structure
Each company has its own structure to meet the organizational goals and its target market
segment. The approaches are by:
Territory – like north, south, east etc. or by states
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Function – Subdividing marketing based on functions like advertising, market planning
and market research
Product – as per product say air conditioners, coolers, washing machine
Customer – example, kids wear, means wear
Markets – domestic, export markets
Project – example, pipeline project, civil construction project and
Matrix – A multi- product company uses combination of the above to get best results.
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
4 star hotel will be feasible in Faridabad.
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 70 room hotel is feasible. Hence a hotel
with 62rooms has been proposed. This proposed hotel will be having the best facilities, which
are up to the best standards provided in the industry.
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FINANCIAL VIABILITY
TARIFF STRUCTURE
TYPE OF ROOM SINGLE OCCUPANCY DOUBLE OCCUPANCY
DOUBLE 2500 2750
SUITES 3600 3650
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 Floor
86 | P a g e
FACILITIES PROVIDED
Restaurant – DAWAT E SHAN (Awadhi Cuisine) and MINGS GARDEN (Chinese Specialty)
Coffee Shop – ZAYKA
Bar - ACCELARATE
Banquet Hall - KESARIYA, MEHFIL
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
87 | P a g e
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:
Long term finance
Short term finance
Long term finances include 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
88 | P a g e
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 4 star hotel in
Faridabad called Park Plaza Faridabad. 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, and capital, etc.
Financial management
Is mainly 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
objective of financial management is to maximize the value of the company 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
89 | P a g e
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 which 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
90 | P a g e
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 fangs and the purpose for which they are applied.
Ratios
A ratio is a numerical value which exposed in 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
91 | P a g e
COST OF PROJECT
ANALYSIS AND INTERPRETATION
The current chapter deals with the analysis and interpretation. Financial tools such as ratio
analysis, the funds flow statement, the breaker even analysis such similar 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 aspects 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
92 | P a g e
PARTICULARS RS. In Lakhs
Cost of land 570.75
Building and civil work 288.36
Plant and machinery 140.85
Furniture and fixtures 57.25
Miscellaneous fixed assts 13.16
Margin for contingency 107.037
Preliminary and pre-operation
expenses
33.1
TOTAL COST OF THE
PROJECT
1210.50
93 | P a g e
SALARY and WAGES
ADMINISTRATIVE Salary(Rs. Per person )
General manger 1 50000
Assistant manager 1 32000
PA to General manager 1 19000
Total 3 101000
Front Office:
FRONT OFFICE Salary(Rs.)
Front office manager 1 28000
Lobby manager 1 20000
Bell captain 1 10000
Bell boys 4 7000
Telephone operators 2 8000
Telephone supervisor 1 7500
Front office assistant 2 19000
Total 12 99500
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Food and Beverage Production:
FOOD AND BEVERAGE (PRODUCTION) Salary (in Rs.)
Executive chef 1 40000
Sous chef 2 30000
Chef de Partie 5 60000
Commis 20 160000
Total 28 290000
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Food and Beverage Services:
FOOD AND BEVERAGE (SERVICE) Salary(Rs.)
F&B manager 1 30000
Restaurant Manager 2 40000
Banquet manger 2 36000
Captains 4 34000
Stewards 16 120000
Barmen 3 18000
Total 25 278000
96 | P a g e
Room Service:
ROOM SERVICE Salary(Rs.)
Room service manager 1 10000
Rom service order taker 3 19500
Steward 6 36000
Total 10 65500
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Housekeeping:
HOUSE KEEPING Salary(Rs.)
Executive housekeeper 1 22000
Assistant house keeper 1 18000
Floor supervisor 4 40000
Linen room supervisor 2 20000
Uniform room supervisor 2 18000
Housekeeping stores 1 8000
House men 15 105000
Gardeners 2 8000
Total 28 239000
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Kitchen Stewarding:
KITCHEN STEWARDING Salary (Rs.)
Kitchen stewarding supervisor 1 8500
Assistant kitchen stewarding supervisor 1 7000
Dish and pot washers 4 16000
Total 6 31500
Engineering and Maintainance:
ENGINEERING AND MAINTENANCE Salary(Rs.)
Chief engineer 1 7500
Technicians 5 20000
Total 6 27500
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Security:
SECURITY Salary(Rs. )
Chief security manager 1 6500
Security personnel 4 22000
Door man 2 10000
Total 7 38500
Sales and Marketing:
SALES AND MARKETING Salary(Rs.)
Sales and marketing manager 1 14000
Executive 2 20000
Assistant 2 16000
Total 5 50000
100 | P a g e
Personnel Department:
PERSONNEL DEPARTMENT Salary (Rs.)
Personnel Manager 1 16000
Assistant personnel manager 1 12500
Assistant 2 15000
Total 4 43500
Accounts Department:
ACCOUNTS DEPARTMENT Salary(Rs. Per person)
Accounts manager 1 14000
Cashier 2 20000
Clerks 2 17400
Total 5 51400
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Purchase Department:
PURCHASE DEPARTMENT Salary(Rs. Per person)
Manager 1 16000
Assistant 2 18000
Total 3 34000
TOTAL NO. OF EMPLOYEES = 147
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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 give 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 approx. 65% comes from the standard
rooms and 35% from the suite rooms
SALES REVENUE (IN LAKHS)
Year 1 2 3 4 5 6
Occupancy % 65 70 75 80 85 85
Double room 486 522 567 603 648 729
Suite room 79 86 93 99 106 119
Total (a) 1099 1182 1283 1365 1466 1649
103 | P a g e
Coffee shop 146.89 150.32 152.50 159.54 164.93 170
Specialty
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
104 | P a g e
OPERATIONAL EXPENSES
ESTIMATED OPERTAING EXPENDITURE FOR SIX YEARS
The table illustrates 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
YEAR 1 2 3 4 5 6
Occupancy 60% 65% 70% 80% 85% 90%
ITEM In lakhs
Fuel(1.6 % 0f Total sales) 25.29 26.68 29.55 34 38.85 44.45
Water(0.75 % of total sales) 11.38 12.59 13.85 15.94 18.21 20.83
F&B cost(13% of F&B sales) 45.53 51.37 59.41 83.91 109.51 130.59
Telephone(0.8% of total
sales)
12.64 13.34 14.77 17 19.42 22.22
Electricity(0.91% of total
sales)
13.91 15.17 16.80 19.34 22.09 25.27
105 | P a g e
Maintenance(1.16% of total
sales)
17.70 19.34 21.43 24.65 28.16 32.22
Wages( increased by 5%
every year)
164 172.2 180.4 188.6 196.8 205
Admn/marketing(1.75% of
total sales)
26.59 29.19 32.32 37.19 42.49 48.61
Replacement(2.3% of total
sales)
35.41 38.36 42.48 48.87 55.84 63.89
Repairs (1.03% of total sales) 15.71 17.18 19.02 21.88 25 28.61
Corporation/Tax(1.23% of
total sales)
18.71 20.15 22.71 26.14 29.86 34.17
Misc expenses(0.41% of total
sales)
6.32 6.83 7.57 8.71 9.95 11.38
Total 393.19 421.4 460.3 526.23 595.69 667.24
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.
106 | P a g e
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 month’s capital requirement for raw material is estimated to be 15% and F&B cost
at the corresponding year
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.
As per recent notification of RBI, the working capital for a unit should be 20 % of total annual
sales. Using this norm the working capital required for the first four years of operation is
furnished below:
107 | P a g e
( in lakhs)
Year Sales Working capital
(WC)
20% 0f sales
Margin money
for WC
(MM)
20% of WC
Banks finance
Wc-mm
1st 1518 303.6 60.72 242.88
2nd 1668 333.6 66.72 266.88
3rd 1847 369.4 73.88 295.52
4th 2125 425 85 340
5th 2428 485.6 97 388.6
6th 2778 555.6 111.12 444.48
108 | P a g e
FINANCING THE PROJECT
MEANS OF FINANCE
HDFC@ 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 HDFC)
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%
109 | P a g e
ESTIMATION OF INCOME
Items 1st year 2nd year 3rd year 4th year 5th year
Operating
levels
65.00% 70.00% 75.00% 80.00% 85.00%
Room Sales 1099 1182 1283 1365 1466
F & B Sales 323.93 394.28 469.02 550.08 634.91
General
Stationery
2.40 2.40 2.50 2.70 2.76
In-house
service
38.32 43.21 49.64 56.65 63.80
Health Club 29.20 35.51 43.80 53.33 60.22
Total In Lakhs 1492.8 1657.2 1848 2027.76 2227.6
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PROFITABILITY STATEMENT
STATEMENT OF PROFIT PROFITABILITY AND CASH FLOW
Items 1st year 2nd year 3rd year 4th year 5th year 6th year
Operating
profit
1265.04 1268.22 1288.63 1477.42 1733.34 2034.6
Interest on
long term
loan
230.18 191.68 153.38 115.02 76.67 38.2
Depreiciation
chap- XII
77.66 58 45.65 36.14 29.68 25.04
Preoperative
&
preliminary
expenses
written off
41.38 41.38 41.38 41.38 41.38 41.38
Interest on
Unsecured
Loan
44.26 35.4 28.32 22.56 18.14 14.5
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Profit before
tax
868.94 938.7 958.48 1280.74 1562.68 1910.41
Tax 40% 347.58 375.48 383.29 512.29 625.07 764.16
Surcharge
(8%)
27.8 30.03 30.67 40.98 50 61.13
Profitable tax 549.16 593.25 605.86 809.43 987.61 1207.38
Depriciation 77.66 58 45.65 36.14 29.68 25.04
Preoperative
&
preliminary
expenses
41.38 41.38 41.38 41.38 41.38 41.38
Available
surplus
668.2 692.63 693.1 886.95 1058.67 1273.8
Long term
loan
instalment
230.18 191.68 153.37 115.02 76.67 38.2
Unsecured
loan
44.26 35.4 28.32 22.56 18.14 14.5
112 | P a g e
Net cash
flow
393.76 465.55 511.41 749.37 963.86 1221.1
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 these
results in a higher level of net cash flowing in the first year.
113 | P a g e
CASH FLOW STATEMENT
Source of find Constructio
n (3 year
period)
1st year 2nd year 3rd year 4th year 5th year
Promoters contribution 331.95
Long term loan 1438.45
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 &
preliminary exp.
41.38 41.38 41.38 41.38 41.38
Total in Lakhs 2213 512.8 564.93 598.44 826.89 1034.92
114 | P a g e
COST BENEFIT ANALYSIS
Cost benefit analysis
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
Total 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
115 | P a g e
BREAKEVEN 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 behavior.
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.
116 | P a g e
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%
1. Estimated revenue: 1848 (Rs. In Lakhs)
2. Fixed costs ( fixed overheads):
a) Power 40% : 17.71
b) Salaries and wages : 45.28
c) Interest on long term loan: 153.38
d) Insurance and legal exp. : 1.77
e) Depreciation : 45.65
f) Advertisement and publicity: 88.54
g) Administration & general expenses: 17.71
Total 370.04
3. Variable Cost:
a) Raw material : 187.60
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b) Electricity and power 60% 28.40
c) Repairs and maintenance 10.00
d) Interest on working capital 3.54
e) Misc expenditure 50.00
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)
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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
tax
549.16 593.25 605.86 809.43 987.61 1207.38
Depreciation 77.66 58 45.65 36.14 29.68 25.04
Interest on
long term
loan
230.18 191.68 153.38 115.02 76.67 38.2
Preliminary
and
preoperative
expenses
41.38 41.38 41.38 41.38 41.38 41.38
Total 898.38 884.31 846.27 1001.97 1135.34 1312
119 | P a g e
Coverage -
B
1st year 2nd year 3rd year 4th year 5th year 6th year
Interest on
long term
loan
230.18 191.68 153.38 115.02 76.67 38.2
Installment
on long
term
239.7 239.7 239.7 239.7 239.7 239.7
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.
120 | P a g e
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
121 | P a g e
CONCLUSION
The total cost of the project is estimated at Rs. 1210. 50 lakhs. There are 62 rooms out of which
40are double rooms and 22 are suite rooms. The hotel also provides facilities like coffee shop,
conference hall, specialty restaurant, bar, travel desk, 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.
122 | P a g e
BIBLIOGRAPHY
Books
1. Khurana R. & Ravichandran A.N. Strategic Marketing Management: Concepts and Class
(1995), Global Business Press, New Delhi.
2. Reich A.Z., Marketing Management for the Hospitality Industry: A Strategic Approach
(1997), John Wiley & Sons Inc., New York.
3. Porter, M.E. Competitive Strategy. Techniques for and analyzing industries and competitors
(1980), New York, Free Press, pp. 89, 149.
4. Abbott P. and Lewry S. (1991), Front Office: Procedures. social skills and management.
Butterworth Heinemann.
5. Coltman, M. (1991), Financial Control for your Hotel. John Willey & Sons, Inc.
6. Kasavana M. and Brooks R. (1995), Managing Front Office Operations. Fourth Edition,
Educational Institute.
123 | P a g e
Websites
www.fhrai.com
www.hotelinteractive.com
www.thomsonlearning.co.uk
www.hcima.com
www.ehotelier.com
www.hotelier&caterer.com
www.fooddude.com
www.biz.yahoo.com
www.restaurant.org
www.hotel-online.com
www.cio.com
www.entrepreneur.com
www.mckinseyquarterly.com
124 | P a g e
ANNEXURE
ANNEXURE
Cost of Land = Land Required in Sq ft X Rate per Sq ft
= 25,000Sq.ft X 2,000Sq.ft
= Rs.500 lakhs
10% for Conveyance =Rs.50 lakhs
4.15% for Site Development = Rs.20.75 lakhs
Total =Rs.5, 70, 75,000
=Rs.570.75 lakhs
125 | P a g e
COST OF BUILDING
DESCRIPTION AMOUNT
Total Built up Area (Sqft) 57970 sq. ft.
Rate/Sq ft 400/ sq. ft.
Cost 231,88,000
15% of Electrical Work
34,78,200
4.36% on Plumbing & Drainage 101,09,97
5% on Consultant 11,59,400
Total 28836597 (Rs.)
Therefore the cost of building is Rs 288.36 lakhs.
126 | P a g e
PLANT & MACHINERY
Items Cash in lakhs
Central Air Conditioner 17.725
Elevators 12.475
‘Generator 16.7375
Transformer 16.475
Bore Well 8.00
Boiler 14.475
EPABX 5.75
Instruments 6.7375
Exhaust & Ventilation 11.00
Close Circuit Television 7.00
128 | P a g e
FURNITRE and FIXTURE:
GUEST ROOMS & SUITES
Items Price(Rs/ piece) Nos. Total (in Lakhs)
Twin Bed 5,000 11 0.55
Double Bed 11049 51 5.6349999
Side Table 1841 135 2.4856
Chairs 1860 100 1.86
Coffee Table 3180 84 2.672
Cupboard 3333 84 2.8
Luggage Rack 4004 62 2.4823
Magazine Rack 3358 62 2.082
129 | P a g e
T.V. Stand 2984 84 2.50623
Carpet 4839 62 3.00
Mirror 1038 124 1.287
Washbasin
Bathtub
Water Closet
13515 62 8.379203
Upholstery 3000 124 3.3306666
Dressing Table 3965 84 2.95
Fixtures - - 3.00
Total 45.02
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FOOD & BEVERAGES OUTLET
RESTAURANT
Items Price Nos. Total
Tables 2461 13 0.32
Chairs 646 52 0.336
Side Station
7500 4 0.30
Décor & Upholstery
35600 All Inclusive 0.356
Fixtures 32800 All Inclusive 0.328
Music system 25,000
1
0.25
Bar counter 40600
1
0.406
Total - 2.30 lakhs
131 | P a g e
ROOM SERVICE
Item Price (RS) No’s Total (Lakhs)
Breakfast Trays 266 20 0.0532
Tea Trays 160 30 0.048
12” Salvers 266 15 0.040
9” salvers 208 10 0.0208
Trolleys 1530 4 0.0612
Racks 2680 3 0.0804
Order-Taker Cabin, Desk 7120 1 0.0712
Misc 3000 1 0.030
TOTAL 0.405
132 | P a g e
BANQUET / CONVENTION HALLS
Item Price (RS) No’s Total (Lakhs)
Tables 3000 100 3.0
Chairs 100 300 3.0
Carpet 3000 4 0.12
Podium 2000 2 0.04
P A system 7000 1 0.070
12” salvers 666 12 0.08
Fixtures and Upholstery 0.406
TOTAL 6.716
133 | P a g e
STORES, PURCHASE AND HOUSE KEEPING
Item Price No. Total (Lakhs)
Cupboard 3000 6 0.18
Racks 2500 5 0.125
Shelves 2500 8 0.20
Bins 1000 6 0.06
Fixtures --- 0.18
TOTAL 0.823
ADMINISTRATION
Item Price No. Total (Lakhs)
Tables 3000 5 0.15
Chairs 1000 15 0.15
Fixtures --- --- 0.08
TOTAL 0.38
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RECEPTION AND LOBBY
Item Price No. Total (Lakhs)
Counter 3500 6 0.21
Sofa Set 9000 3 0.27
Luggage Carrier 6000 1 0.060
Stationary --- --- 0.13
Safe Deposit 2000 1 0.02
Cup Board 10000 1 0.10
Fixtures --- --- 0.18
Miscellaneous --- --- 0.10
TOTAL 1.07
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STAFF CAFETERIA
Item Price No. Total (Lakhs)
Tables and chairs (attached
benches)
3000 15 0.45
Fixtures --- --- 0.09
TOTAL 0.54
Grand Total = 57.254
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MISCELLANEOUS FIXED ASSETS
F&B Outlets
RESTURANT/BAR
Item Price (RS) No.
(Inc Par Stock)
Total (Lakhs)
Table Cloth 250 39 0.078
Napkins 60 156 0.022
TOTAL 0.10
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BANQUETS/ CONFERENCE
Item Price (Rs) No’s
(Inc Par Stock)
Total (Lakhs)
Table Cloth 300 150 0.5
Napkins 60 600 0.132
Frills 400 150 0.316
TOTAL 0.95
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GUEST ROOM / SUITE ROOM LINEN
Item Price (Rs) No.
(Inc Par Stock)
Total (Lakhs)
Double Bed Sheet 2250 35 0.48
Single Bed Sheet 1371 20 0.45
Blankets 1160 62 0.58
Blanket Cover 556 72 0.40
Mattress 1,112 72 0.80
Mattress Protector 605 72 0.435
Bed Covers
(single, double)
604 72 0.435
Pillow Cover 195 200 0.39
Hand Towel 375 80 0.30
Bath Towel 543 80 0.435
Bath Mat 543 80 0.435
Feather pillows 218 200 0.435
TOTAL 6.01
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KITCHEN STEWARDING
Item Price per set (Rs) No (sets) Total (Lakhs)
Glasses 80 250 0.20
Chinaware 140 200 0.28
Cutlery 72 250 0.18
Flat Ware 120 200 0.24
Miscellaneous --- 0.03
TOTAL 1.2
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BANQUETS
Item Price per set (Rs.) No. (sets) Total (Lakhs)
Glassware 224 250 0.56
Chinaware 253 300 0.76
Cutlery 133 300 0.40
Flat Ware 150 400 0.60
Miscellaneous --- --- 0.58
TOTAL 2.904
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STAFF CAFETERIA
Item Price (RS) No.( per set) Total ( Lakhs)
Plates 350 120 0.42
Spoons 127 150 0.19
Forks 126 150 0.19
TOTAL 0.8
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MISCELLANEOUS HOUSEKEEPING ASSESTS
Item Price (Rs) No’s Total (Lakhs)
Vacuum Cleaner 3000 3 0.30
Cleaner Mug 2000 4 0.10
Mops 150 10 0.20
Brooms 70 10 0.18
Squeezer 80 10 0.12
Duster 10 100 0.075
Waiters Cloths 10 100 0.15
Miscellaneous --- --- 0.075
TOTAL 1.2
Grand Total: 13.16
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MARGIN OF CONTINGENCY
1. Cost of Land = 570.75
2. Cost of Building = 288.36
3. Plant and Machinery = 140.85
4. Furniture and Fixture = 57.25
5. Miscellaneous Fixed Assets = 13.16
Margin of Contingency = 10% on 1-5 = 107.03
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PRELIMINARY AND PRE-OPERATIVE EXPENSES
Item Amt (lakhs)
Salary and Wages 13.70
Loan Procurement and Application 2.25
Project Fee 5.00
Registration and Establishment Fees -
Insurance 4.25
Advertisement and Publicity 3.00
Deposits
1. Electricity
2. Telephone
3. Water supply
1.00
1.50
1.00
Miscellaneous Expenses and Contracts 1.40
TOTAL 33.1
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MANPOWER REQUIREMENT AND COST
SALARY &WAGES (YEARLY)
Sr. no. Description No. of Staff Amount Total
In lakhs
51. General
Manger
01 50,000 6
52. Assistant
manager
01 32,000 3.84
53. PA to GM 01 19,000 2.28
54. FO Manager 01 28,000 3.36
55. Lobby Manager 01 20,000 2.4
56. Bell Captain 01 10,000 1.2
57. Bell Boys 04 28,000 3.36
58. Telephone
Operator
02 8,000 0.96
59. Telephone
Supervisor
01 7,500 0.90
60. Front office 02 19,000 2.28
146 | P a g e
assistants
61. Executive Chef 01 40,000 4.8
62. Sous Chef 02 30,000 3.6
63. Chef de Partie 05 60000 7.20
64. Commies 20 1,60,000 19.2
65. F&B Manager 01 30,000 3.6
66. Restaurant
Manager
02 40,000 4.8
67. Banquet
Manager
02 36,000 4.32
68. Captain 04 34,000 4.08
69. Steward 16 1,20,000 14.4
70. Barmen 03 18,000 2.16
71. Room service
Manager
01 10,000 1.20
72. Order Taker 03 19,500 2.34
73. Steward room
service
06 36,000 4.32
74. Executive
Housekeeper
01 22,000 2.64
75. Assistant
Housekeeper
01 18,000 2.16
76. Floor 04 40,000 4.8
147 | P a g e
Supervisor
77. Linen room
supervisor
04 20,000 2.4
78. Uniform room
supervisor
02 18,000 2.16
79. HK Store
Supervisor
01 8,000 0.96
80. Housemen 15 1,05,000 12.6
81. Gardner 02 8,000 0.96
82. Kitchen
Stewarding
Supervisor
01 8,500 1.02
83. Asst KSt
Supervisor
01 7,000 0.84
84. Pot Washer 04 16,000 1.92
85. Chief Engineer 01 7,500 0.90
86. Technicians 05 20,000 2.4
87. Security
Manager
01 6,500 0.78
88. Security
Personnel
04 22,000 2.64
89. Doorman 02 10,000 1.2
90. S & M 01 14,000 1.68
148 | P a g e
Manager
91. S & M
Executives
02 20,000 2.4
92. Assistants 02 16,000 1.92
93. Personnel
Manager
01 16,000 1.92
94. Asst. Personnel
Manager
01 12,500 1.5
95. Assistants 02 15,000 1.8
96. Accounts
Manager
01 14,000 1.68
97. Cashier 02 20,000 2.4
98. Clerk 02 17,400 2.088
99. Purchase
Manager
01 16,000 1.92
100. Purchase
Assistants
02 18,000 2.16
Total - 147 164.448
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INCOME FROM TARIFF
DOUBLE ROOM
Year Room Tariff Occupancy Days/Year Total (Lakhs)
I 2500 65% 365 367.73
II 2500 70% 365 396.02
III 2500 75% 365 424.31
IV 2500 80% 365 452.6
V 2500 85% 365 480.88
VI 2500 85% 365 480.88
150 | P a g e
SUITE ROOM
Year Room Tariff Occupancy Days/Year Total (Lakhs)
I 3600 65% 365 529.54
II 3600 70% 365 570.27
III 3600 75% 365 611.01
IV 3600 80% 365 651.74
V 3600 85% 365 692.47
VI 3600 85% 365 692.47
Room Sales
I YEAR = Rs.897.27
IIYEAR = Rs.966.29
IIIYEAR = Rs.1035.32
IV YEAR = Rs.1104.34
V YEAR = Rs.1173.35
VI YEAR = Rs.1173.35
151 | P a g e
REVENUE FROM F & B OUTLETS
RESTAURANT/ BAR
Year Total
Covers
Occupancy
Average
realization
per cover
No of days
per year Total
(Lakhs)
I 150 65% 400 365 142.35
II 150 70% 400 365 153.3
III 150 75% 400 365 164.25
IV 150 80% 500 365 219
V 150 85% 500 365 232.68
VI 150 85% 500 365 232.68
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COFFEE SHOP
Year Total
Covers
Occupancy
Average
realization
per cover
No of days
per year Total
(Lakhs)
I 180 65% 700 365 298.93
II 180 70% 700 365 321.93
III 180 75% 700 365 344.92
IV 180 80% 750 365 394.2
V 180 85% 800 365 446.76
VI 180 85% 800 365 446.76
153 | P a g e
BANQUET
Year Total
Covers
Occupancy
Average
realization
per cover
No of days
per year Total
(Lakhs)
I 300 65% 900 365 640.57
II 300 70% 900 365 689.85
III 300 75% 900 365 739.12
IV 300 80% 950 365 832.2
V 300 85% 1000 365 930.75
VI 300 85% 1000 365 930.75