Introduction to Hotel Industry and Tourism

Over the last decade business opportunities in India had intensified and elevated room rates occupancy levels in India. Even budget hotels are charging USD 250 per day. 'Hotel Industry in India' success story is only second to China in Asia Pacific. The World Travel and Tourism Council, says that India ranks 18th in business travel and will be among the top 5 very soon. India's big success stories includes the new model for development and growth; a model that is uniquely made. Indian Hotel Industry's room rates are most likely to rise 25% annually and occupancy to rise by 80%, over the next two years. 'Hotel Industry in India is gaining its competitiveness as a cost effective destination. The 'Hotel Industry' is likely to add about 60,000 quality rooms, currently in different stages of planning and development which would be ready by 2012. MNC Hotel Industry giants are initiating for Joint Ventures to earn their share of pie in the race. The Indian Government has approved 300 hotel projects, where half are for the luxury range. Analysts says that the manpower required by the hotel industry has increased from 7 million in 2002 to 15 million in 2010. More and more IT Professionals are moving into the Metro cities as the USD 23 billion software services sector pushing into the Indian economy. Indian Hotel Industry is set up to grow by 15% a year. In 2010 as the Delhi capital city of India hosted the Commonwealth Games there were more than 50 international budget hotel chains moving into India. One of the major reasons for the increase in demand for hotel rooms in the country is due to the boom of information technology, telecom, retail and real estate. India's increasing stock market and new business opportunities are always been attractive foreign investors and corporate travelers to look for business opportunities in the country. From 167 countries, today India has finally made its mark on the world travel map. 'Hotels in India' have supply of 110,000 rooms. According to the tourism ministry, 4.4 million tourists visited India last year and at current trend, demand will soar to 10 million in 2010 - to accommodate 350 million domestic travelers. 'Hotels in India' has a shortage of 150,000 rooms fueling hotel room rates across India. With tremendous pull of opportunity, India is a destination for hotel chains looking for growth. The World Travel and Tourism Council, India, data says, India ranks 18th in business travel and will be among the top 5 in this decade. Sources estimate, demand is going to exceed supply by at least 100% over the next 2 years. Five-star hotels in metro cities allot same room, more than once a day to different guests, receiving almost 24-hour rates from both guests against 6-8 hours usage. Link: http://business.mapsofindia.com/india-industry/hotel-industry-in-india.html : http://www.indianmirror.com/indian-izndustries/hotel.html

Hospitality Market

Hospitality has a very vast market. All those who have stayed in hotels or have plans to stay in hotels or any other lodging establishment can be put under hospitality market. Hence all travelers including tourists, visitors, businessmen, leisure travelers, pilgrims and company executives etccan be the hospitality market. Depending upon the purpose of travel people can be classified under either commercial hospitality market or leisure hospitality market. Classifying Lodging Properties Because of constant changes, staying current just with who is offering what and where can be difficult for the guest. The necessity for classifying hotels came about when hotels began to differ from one another enough to appeal to different group of people. Long gone are the days when the guest had two choices luxury hotels or budget hotels. Hotel entrepreneurs such as Kemmons Wilson created a third option when they built facilities intended to serve middle-class families. These property classes had clear-cut boundaries in the beginning. Potential guests knew they could expect more services at a luxury hotel than a budget motel, and something in between at a midpriced hotel. As the economy in general boomed and room supply increased, hoteliers focused on setting themselves apart from the crowd by offering specialized accommodations. No longer just a place to sleep, hotels were appealing to conventioneers, business groups, and special-interest groups. Descriptive hotel classifications helped potential guests locate suitable lodgings, and as such, became a valuable marketing tool. As this diversity flourished, so did competition for customers and brand loyalty. As properties continually upgraded their services, boundaries between the descriptive labels blended into one another. Old systems of classification were not as clear. For instance, the Marriott brand, once recognizable as a midpriced hotel, began to include hotels classified as economy (Fairfeilds Inns), business (Courtyard), extended-stay (Residence Inns), all suite (Marriott Suites), and upscale (Marriott Hotels and Resorts). Other chains also began to cater to a myriad of guests from business to pleasure travelers and from individuals to groups. Consequently, lodging classification became more complex. Facilities were then grouped according to size, amenities offered, price, type of guest (business or pleasure), or type of hotel (luxury, full-service, or economy, extended stay to name a few). Many facilities fit two or more categories, and did so in order to attract different types of guests. Motels and hotels are the most widely recognized forms of lodging. They can be found almost anywhere from the center of a huge metropolis to the streets of a small town. For the most part, hotels and motels attract transient guests who need a place to stay for a night or two while traveling for business or pleasure. Hotels that specialize in residence or extended-stay accommodations serve guests looking for more permanent lodging. Hotels. From the age of grand hotels to the troubled 1990s, the hotels has been the most fabled type of lodging. Varying greatly in style and service, most hotels share a similar structure. They generally have more than two stories with guest rooms located along common hallways. Guests rooms usually have a bed, bath, telephone, and television. In addition to housekeeping, services may include luggage assistance, access to a business center for use of a photocopier or fax machine, and availability of recreation facilities, restaurants, or bars. Hotels are most often located in or near business districts, travel destinations, and airports.

Motels. Motels offered fewer amenities and were less expensive to build and operate than downtown hotels. The lower rates, basic accommodations, roadway locations, and lack of a central lobby were well-suited for the new overnight automobile traveler. Motels are generally less formal than hotels. Guests usually carry their own luggage, and free parking is available, often adjacent to the guests room. Many motels provide swimming pools and restaurant service. Guests who prefer to save money may opt for a budget motel that has smaller rooms, no pool, and fewer amenities. All-Suite Hotels. Unlike regular hotels, all-suite hotels rent only suites, often combing living space with kitchen facilities, or a bedroom section with an attached parlor. To keep rates competitive with other hotels, many all-suite hotels have small lobbies and no public meeting rooms. Some do not offer restaurant or bar facilities. As the market has expanded, through, some all-suite hotel hotels have reintroduced public areas and limited foodservice. Amenities such as free breakfast, cocktail hour, and access to an on-premise health club keep Summerfield Suites Hotel in San Jose, California, at a 98 percent average occupancy rate. Convention Hotels. Convention hotels provide meeting and banquet facilities for large groups (usually five hundred or more) booked in their guest rooms. Because they target groups, these hotels need large lobbies to accommodate group arrivals. They also have a high percentage of double-occupancy rooms and emphasize food and beverage services. Convention hotels may also offer concierge floors to cater to individual guests needs. Levels Of Service At one time, hotels differed distinctly by the services they offered. Recognizing that all guests do not expect the same services nor have the same amount to spend on lodging, the hotel industry offered a variety of services at different prices aimed at particular markets (groups whose members have similar expectations and budgets). Familiarity with these labels is helpful in understanding guest perception as the transition is made from one system to another. Also, classifications short history shows how dynamic the industry is and how important service is at all levels. Classifying hotels by service contains four broad categories: luxury, full-service, limited-service, and economy Luxury Hotels And Resorts. Traditionally, independent hotels offer the finest accommodations money can buy. Luxury properties are descendants of the grand hotels, featuring expensive, lavishly decorated public areas and the high levels of customer service. They offer the finest cuisine and the full range of amenities from shampoos and hair dryers to private Jacuzzis and fireplaces. Whether parking your car, carrying your luggage, or delivering room service, staff members including concierges, bell persons, front desk attendants, and wait staff are well-trained and efficient. Luxury resorts offer the finest entertainment and recreational facilities available. A part of Introduction to Hospitality Industry ICHM Page 29

luxury properties attraction is their ability to perpetuate an exclusive image by charging high rates. Hotels in the category include Four Seasons and Ritz-Carlton properties, the WaldorfAstoria, and the Trump Plaza in New York. Royal Sonesta, a deluxe hotel in New Orleans, Louisiana, spends an estimated $1.5 million annually on guest service. Their guests must find such service pleasing with an average occupancy of 75 percent in 1992, the hotel grossed $25 million in sales. Full-Service Properties. Featuring properties operated by Hilton, Hyatt, Westin, and Marriott, this category of hotels attempts to offer a wide range of services at lower rates than luxury hotels. Full-service hotels generally offer clean, well-decorated hotels with meeting and restaurant facilities, a limited room-service menu, and a variety of recreational activities. Although not as extravagant as the luxury properties, full-service hotels generally have large, attractive public areas. The ratio of service of the concierge or other staff may be limited to designated VIP floors. Some all-suite and extended-stay hotels with good-sized public areas also fit into the full service category, with amenities like in-room coffeemakers, microwave ovens, and refrigerators. Limited-Service Properties. Lodging establishments like Days Inn, Hampton Inn, and Quality Suites & Inns were once considered limited-service facilities. Usual offerings included simple, clean rooms with a telephone, free cable television, swimming but some offered a few extra amenities such as complimentary shampoo and lotion to distinguish themselves from the economy properties. The remaining all-suite hotels fit into this category because of their limited services and amenities, and small public areas. The Days Inn in Fort Pierce, Florida, has a guest mix of 50 percent business and 50 percent leisure. As the second most successful highway facility in 1992, its management renovated its public spaces including two meeting rooms. Economy Properties. Introduction to Hospitality Industry ICHM Page 30 Once offering only the basic bed and bath facilities, economy properties focus on more values for the dollar with clean and low-priced lodging. Economy properties generally did not offer meeting and recreational facilities or food and beverage services, with the possible expectation of a vending area featuring prepackaged snacks and video games. Staff was limited to only those required to provide basic front office services, security, and housekeeping services. Generally, the smaller guest rooms of the economy hotels offered one or two double beds and a separate bathroom equipped with no more than towel and soap. Properties in this category include Econo Lodge, Motel 6, and Daystop. Economy Lodging Systems management company has positioned Knights Link : http://ichm.edu.np/files/download/Introduction%20to%20Hospitality%20Industry.pdf

The hotel industry in India is going through an interesting phase. One of the major reasons for the increase in demand for hotel rooms in the country is the boom in the overall economy and high growth in sectors like information technology, telecom, retail and real estate. Rising stock

market and new business opportunities are also attracting hordes of foreign investors and international corporate travellers to look for business opportunities in the country. Hotel industry is also inextricably linked to the tourism industry and its growth has added fillip to the hotel industry. And with Conde Nast Traveller ranking India as the fourth most preferred travel destination and Lonely Planet selecting the country among the top five destinations from 167 countries, India has finally made its mark on the world travel map. The arrival of low cost airlines and the associated price wars have given domestic tourists a host of options. The opening up of the aviation industry in India has led the way for exciting opportunities for the hotel industry as it relies on airlines to transport 80% of international arrivals. Moreover, the governments decision to substantially upgrade 28 regional airports in smaller towns and privatisation and expansion of Delhi and Mumbai airport will improve the business prospects of hotel industry in India. Substantial investment in tourism infrastructure is essential for Indian hotel industry to achieve its potential. The upgrading of national highway connecting various parts of India has opened new avenues for the development of budget hotels here. Link: http://www.financialexpress.com/news/hotel-industry-is-poised-for-a-new-growthphase/286542 The Indian hospitality industry has emerged as one of the key industries driving growth of the services sector in India. The fortunes of the hospitality industry have always been linked to the prospects of the tourism industry and tourism is the foremost demand driver of the industry. The Indian hospitality industry has recorded healthy growth fuelled by robust inflow of foreign tourists as well as increased tourist movement within the country and it has become one of the leading players in the global industry. Trends in the Industry: 1. Budget Hotels as the next trigger 2. Medical Tourism 3. New avenues of growth 4. Shifting focus to Tier II and Tier III cities 5. Marketing Strategies 6. Emergence of Mixed Land Usage 7. Huge spurt of international brands 8. Innovative operating models The Indian hotel industry is highly fragmented with a large number of small and unorganized

players accounting for a lion's share. The major players in the organized segment include Indian Hotels Company Ltd, Hotel Leela Venture Ltd, EIH Ltd, ITC Hotels and ITDC. Link: http://www.researchandmarkets.com/reports/1948962/hotel_industry_in_india_20112015 The Growing Indian Hospitality Industry India has the potential to become the number one tourist destination in the world with the demand growing at 10.1 per cent per annum, the World Travel and Tourism Council (WTTC) has predicted. The WTO (World Travel Organisation) predicts that India will receive 25 million tourists by year 2015. Major attractions in India are the world's highest mountains, miles of coastline with excellent beaches, tropical forests and wildlife, desert safari, lagoon backwaters, ancient monuments, forts and palaces, adventure tourism and, of course, the Taj Mahal. India currently has over 200,000 hotel rooms spread across hotel categories and guest-houses and is still facing a shortfall of over 100,000 rooms (source: FHRAI). The country is witnessing an unprecedented growth in hotel constructions and will be adding almost 114,000 hotel guest rooms to its inventory over the next five years. (source: HVS) The earlier setbacks in global tourism have strengthened the Department of Tourism's resolve to promote India's tourism through aggressive marketing strategies through its campaign 'Incredible India'. The 'marketing mantra' for the Department of Tourism is to position India as a global brand to take advantage of the burgeoning global travel and trade and the vast untapped potential of India as a destination. The Indian Hospitality Industry An Overview The current scenario Existing hotel rooms in India: 202,963, source FHRAI Revenue of the Indian hotel industry FY 2009-10: US$ 137.36 (INR 47,889.03 crore) 30% of this revenue i.e. US$ 41.2 million (INR 14,366.7 crore) went back into the market in FY 2008-09 as operating expenses

Number of hotels and restaurants in India: Hotel category 5 star deluxe/5 star No. of Hotels 165 No. of Rooms 43, 965

4 Star 3 Star 2 Star 1 Star Heritage Uncategorised Total Restaurants What the future holds:

134 505 495 260 70 7,078 8,707 12,750

20, 770 30,100 22,950 10,900 4,200 1,32,885

Despite the global recession, inflation, terrorism and other factors, the overall outlook for the Indian hospitality market is optimistic and will remain so says HVS India remains the second fastest growing economy in the world and the economic growth of the country is at 7.1% of the GDP as declared by Mr. Pranab Mukherjee, Finance Minister, India. The Tourism Ministry, Government of India, has set a target of 10 million tourists to India by 2010 The WTO (World Travel Organisation) predicts that India will receive 25 million tourists by year 2015

Projected investments years 2009-015

Rooms being built across hotel categories: 114,000, source HVS Investment in rupees: INR 40,463.10

Link: http://www.hostsindia.in/index.php?option=com_content&task=view&id=18&Itemid=32 The Indian Hospitality Sector is witnessing one of its rare sustained growth trends. Hotel industry is inextricable linked to the tourism industry and the growth in the Indian tourism industry has fuelled the growth of Indian Hotel Industry. A major reason for the demand for hotel rooms is the underlying boom in the economy, particularly the growth in the information technology enabled services and information technology industries. Rising stock indices and new business opportunities are also attracting foreign institutional investors, funds, equity and venture capitalist. The financial year 2008 09 was an unforgettable one for the Indian tourism industry with the Mumbai terror attacks and the global economic downturn affecting the industrys performance. The Hotel Industry, too, observed an overall decline in occupancy and revenue in most cities in India. Foreign Direct Investment in India: The purpose of the Foreign Direct Investment Policy in India is to invite and encourage foreign Investment in India. Since 1991, liberalized economic policies have transformed India, the worlds, largest democracy, into a shine of global Investment

For the purpose of FDI in an Indian economy, the following categories assume relevance: Sector in which FDI is prohibited Sectors in which FDI is permitted Investment under Automatic Route; and Investment under Prior Approval Route i.e. with prior approval of the government through the Foreign Investment Promotion Board (FIPB). In the Hotel Industry Sector, Foreign Direct Investment (FDI) has been permitted up to 100% under the automatic route. For foreign technology agreements, automatic approval is granted if: 1. Up to 3 % of the capital cost of the project is proposed to be paid for technical consultancy services. 2. Up to 3 % of the net turnover is payable for franchising and marketing/publicity fees. 3. Up to 10 % of gross operating profit is payable for management fees, including incentives fees. Regulatory Regime: Classification of Hotels: 1. Star Category Hotels: 5 Star Deluxe, 4 Star, 3 Star, 2 Star, 1 Star. 2. Heritage Category Hotels: Heritage Grand, Heritage Classic & Heritage Basic Approval of Hotel at the Project Stage: 1. The Ministry of Tourism will approve hotels at project stage based on documentation. Project approval is given to a 1, 2, 3, 4, 5 Star Hotels and Heritage Basic Category. After becoming operational the project may seek classification under 5 Star Deluxe/ Heritage Classic/ Heritage Grand category if they fulfill the prescribed norms.

2. Project approval will be valid for 5 years. The project approval would cease 3 months before the date of expiry of project approval or from the date the hotel becomes operational, even if all its rooms are not ready. The Hotels have to apply for classification within 3 months of commencing operation. Taxation: Tax Holiday in respect of Hotels: A deduction of an amount equal to 100 % of the profit and gain for the first 5 consecutive years to an undertaking deriving profits from the business of a hotel or from the business of building, owning and operating a convention centre, in specified areas, if such hotel /
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convention centre is constructed and has started or start functioning before 31 July, 2010.

 A deduction of an amount equal to 100 % of the profit and gain for the first 5 consecutive years to an undertaking derived profit from the business of a hotel located in the specified district having a World Heritage Site. If such hotel is constructed and has started
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functioning before 31 March, 2013. Recent changes in Fringe Benefit Tax:

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Finance Bill, 2009 has proposed to abolish Fringe Benefit Tax with effect from 1 April 2009. Fringe Benefit Tax is a tax payable by the employer on benefits (provided or deemed) that employees received as a consideration of their employment. Fringe benefit tax was applicable on several benefits such as travel and tour, entertainment, provision of hospitality, conference, sales promotion including publicity, use of hotel, boarding or lodge, aircraft, festival celebration, use of health club, scholarship, free or concessional ticket for private journey, etc. The abolition of the FBT has become major advantage to the Hospitality industry. Opportunity & Challenges: Opportunity: In the Financial Year 2008-2009, Indias GDP recorded a growth rate of 6.7 % according to the Central Statistical Organization. The GDP growth in the 2008-2009 can be attributed to a strong service sector, steady foreign direct investment, as well as the government policies that helped to sustained growth rate. The market size of Hotel industry has more than doubled from about USD 1 billion in 2004 to USD 2.3 billion in 2008. It is estimated that India is likely to have around 40 international hotels brands by 2011. The growth of the Hotel Industry is largely due to the rising business opportunities, strong economic performance and cross border investments. India has currently base of 110,000 hotels rooms and still face the shortage of 150,000 rooms. There is a mismatch between demand and supply, leading to higher occupancies and average room rates. Occupancy rates across India have improved from 52 percent in 1999 to 67 percent in 20072008. Average Room Rates across cities have improved from USD 51.6 to USD 76.4 in the same period. Despite the global economic recession, foreign tourist arrival increased to 5.37 million in 2008 from 4.98 million in 2007. Sports events like IPL and the Commonwealth games have a potential to create demand for both Tourism and Hospitality industry in India. Challenges: Statistical Data Indian Hotel Industry Size of the Hotel Industry USD 3.8 Billion Share of premium segment in the overall hotel market USD 2.3 Billion (2008)

Expected growth rate from 2008 to 2009 Key Players

12 percent Indian Hotels, Leela Ventures, ITC Hotels, Oberoi Hotels, Bharat Hotels, ITDC, Kamat Hotels. About 110,000 hotels rooms About 150,000 hotels rooms

Rooms Current Supply Current Demand

Link: http://www.newdevtprojects.com/ilo/iloPdf/indianhotelindustry.pdf Market Size The amount of foreign direct investments (FDI) inflow into the hotel and tourism sector during April 2000 to January 2013 was worth US$ 6,561.78 million, as per data provided by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce. Link: http://www.ibef.org/industry/tourism-hospitality-india.aspx Major Developments & Investments

Egypt has initiated talks with the Tata Group to set up a hotel chain in the African country InterContinental Hotels Group (IHG) has signed 13 new hotels in India in 2012, boosting its existing pipeline of hotels in the country to 47 Marriott International plans to open 52 more properties in India over a period of four years

Link: http://www.ibef.org/industry/tourism-hospitality-india.aspx

ICRA expects the Indian Hotels industry to finish 2011-12 on a weaker note with subdued pricing power eroding margins. Although some revival in operational metrics was witnessed during late 2010-11, the industry continued to lack the pricing power to drive out of its current stagnancy. Globally weak macroeconomic scenario, the European sovereign debt crisis, geo-political turmoil in the Arab countries, high interest rates, inflation and a muted domestic corporate performance during the current fiscal (year to March 31, 2012) have sapped the industrys ability to sustain inflation adjusted Average Room Realizations (ARRs). Muted ARRs and high costs have led to one of the weakest nine month (9M) periods (AprilDecember-11) in over five years.

With uncertainty continuing to cloud the near term, wavering business/consumer confidence and a sluggish economy, there is no significant trigger for the industry during the next two-three quarters. While the start of the next season (in Q3, 2012-13) may bring some relief to the industry in some specific markets, we expect real traction to return to the industry only by 201314; overall, we expect this to be a slow and long slog to recovery. We expect ARR growth during the current fiscal to be limited to around 5%, followed by around 5-8% during 2012-13. In the current inflationary environment, RevPAR growth of around 6-7% is required to maintain profitability levels. All the same, we remain optimistic on the long term growth story for the Indian hospitality industry. The improving demographics, rising affluence and the current under penetration throw up significant growth opportunities for the hospitality sector. This is further reinforced by the India-centric growth strategy several global hotel majors are following. An uneasy calm prevails in the global markets; consumer confidence low Over the past few quarters, the global economy has been affected by various natural, social and economic headwinds; the earthquake in Japan during March-2011, the floods in Thailand during October-2011 or the civil unrest in the Arab countries and most importantly the ongoing economic crisis in the EU. Despite these upheavals, foreign tourist arrivals (FTA) to India grew by 8.8% to 62.9 lakh tourists while international tourist arrivals grew by 4.4% to 980 million travellers during CY2011 (Calendar year - Period ending December-11). The pace was however significantly slower than the 11.8% (FTA) and 7.0% (international travellers) of the previous year. Growth in arrivals to Africa and the Middle East was weak while arrivals to Europe, Asia, the Pacific and Americas led the international traveller growth during CY2011. With strengthening regional business ties, South and South-East of Asia witnessed strong intraregional demand during the period. As is the case with industries that depend on discretionary spending, the performance of the hotels industry is intrinsically knit with the economic growth. However, we have in the past witnessed periods of decoupling between the hotels industry and GDP growth; particularly during periods of recession and the early phases of recovery. During the economic down cycle, the faster pace of deceleration in the hotels industry, as witnessed during 2009, can take the industry to deep troughs. While the climb during the initial phases of recovery is faster than the economic revival, a strong underlying economy is a pre-requisite for a sustained recovery. Domestic demand continues to be relatively healthier; Visa on Arrival (VoA) eases travel to India As witnessed during the previous fiscal, domestic travel continued to support demand across the Indian sub-continent during the current fiscal also. With a weaker rupee undermining pricing power in the Indian subcontinents, cost of outbound travel has increased by over 12% during the past twelve months alone. This would have supported intra-regional travel to an extent. Additionally, this is expected to have driven higher inbound traffic into the country. Despite incremental room inventory in several markets, occupancies sustained at previous year levels during YTD December-11 for some markets, while certain heavily supplied markets like the National capital Region (NCR) witnessed a 5-10% decline in occupancy.

Certain measures like the VoA scheme by the GoI has a long term positive impact on drawing travellers. At present , India has extended the VoA facility to nationals of 13 countries including Finland, Japan, Luxembourg, new Zealand and Asian countries of Singapore, Cambodia, Indonesia, Vietnam, the Philippines, Laos and Myanmar. Contemplation on adding over 14 new countries including Malaysia, Thailand, Brunei, Spain, France, Germany, Sweden, Russia, Ukraine, Kazakhstan, Brazil and South Africa to this scheme is also underway. Since this facility was introduced in January 2010 (and the list expanded in January 2011), over 6,500 VoAs have been issued in 2010 and over 12,000 VoAs in 2011. This has facilitated easy travel and planning at short notices for tourists. Link: http://icra.in/Files/ticker/Indian%20Hotels%20Industry%2030032012.pdf At present hotel industry in India has entered the global arena, supported by its potential economy and the growth of India tourism. From builders, contractors, real estate companies, real estate developers have most branded hotels in India are at the top end of the market, the hotel industry is top heavy. A number of companies are addressing the requirements of the increasing domestic market for more economical hotels, hotel projects, 5 star hotel construction, 5 five star hotel India, hotel accommodations and luxurious hotels. The Domestic Factor for Hotel Development Among the excellent features of the Indian hotel industry is the overwhelming volume of the domestic market. As a rule hotels receive double the number of domestic clients than international clients. India is likely to witness a steady and continued trend of boom in expenditure, fuelled by higher disposable incomes. This is excellent news for the hotel industry as higher disposable incomes enhance the concept of traveling. A healthy domestic demand and sustained foreign tourist inflow shall facilitate popular leisure destinations in absorbing potential hotel developments, 5 star hotel construction, 5 five star hotel India as a hotels projects thus continuing the current trend of value appreciation. Several hotel projects in the Indian Hospitality sector have been steadily coming up with respect to the viability of hotel business in India. Nevertheless, the real estate and hotel industry of India have also been aligning their roadmap in quite a rhythmic way. Opportunities in Tier-II and Tier-III cities too are looking great. Analysts estimated that there are about 16 cities like Jaipur, Agra, Goa, Pune, Ludhiana, Chandigarh, Ahmedabad and Cochin that have potential for a strong hotel industry. India is a very famous holiday destination in the world and provides plenty amenities as far as lodging is concerned. It has state of the art hotels to cater to its ever booming travel and tourism industry. Hotel Development India have popped up in India over the last few years to cater the

accommodation needs of everybody. India is dotted with hotels that fit in every budget. There are hotels ranging from luxury hotels to economy hotels. Metro cities markets have witnessed strong demand from the extended stay and domestic business travel segments. The surfacing of relatively new feeder markets and steady demand for quality lodging across most business destinations from niche markets, like the extended stay segment, ensures that hotels now have a base demand that guarantees certain minimum level of occupancy. This type of demand is advantageous to hotels because it provides a base level of hotel reservation, hotel accommodations and luxurious hotels over an extended period that usually includes weekends and slow seasons. The International Factor in Hotel Era Even though the international market is considerably smaller than India's domestic market, it also shows potential for growth. Tourism in India including hotel accommodations also benefits from the stronger economy of India's major source markets - the United Kingdom and the United States. Presently business travel dominates the international arena. The global financial crisis may cause a temporary depression in demand for hotel rooms in India, but foreign hotel chains betting on the countrys enduring growth say their expansion plans remain on track. People the world over are nervous because of the financial crisis, and investments are the last thing on their mind, said Ray Stone, senior vice-president of sales and marketing at Accor Asia Pacific. IN INDIA THAT IS DESTINED TO EXPAND, IT WOULD BE UNWISE NOT TO INVEST.

Hotel Services Hotel services, their number and the amount of people engaged in them depends on the size of the hotel as well as on its status. Typically, the basic hotel services include reception guests, room service, food service, including restaurants in the hotel, and security. Sometimes in the small hotels the duties of security, a cook and a cleaner are performed by the owner himself. Other services offered to guests of the hotel, can be considered as bonuses. These are the laundry service, massage room, fitness gyms, conference rooms, lock boxes for valuable assets and many other things. These services can be included in the price of the room or paid separately. Recently, the hotel industry trends towards separating the services sector between hotels. Many hotels nowadays offer recreation for a particular group of tourists. Popular family hotels, hotels for the newlyweds and hotels for people with disabilities each of them has its unique set of services. For example in the family hotel clients are offered services of child care and game

rooms. In the hotel for the newlyweds there is a special service for weddings. In the hotel for disabled persons there is medical support service. Among the services that are indirectly related to the customers, that means that they are not involved in direct care of guests, are marketing service and bookkeeping of the hotel. Reservation, once considered one of the main hotel services, today has become an anachronism. Nowadays, in order to book a hotel clients use services of the major tour operators. Online booking through the numerous tourist online services is getting increasingly popular. Often the responsibilities of some hotel services are assigned to the other companies. In the United States and Western Europe the network of special hotel firms, which offer their services to the hotels, is widely developed. Typically, if the hotel uses the services of such companies, the price of the rooms will be slightly lower than in a hotel that provides a full range of hotel services on its own. Link: http://www.city-of-hotels.com/165/hotel-services-business.html Luxury Hotel Concierge Services

Local results for Extended Stay in your city HyperLocal search for Extended Stay HelloLocal.com Concierge services are normally found in higher end hotels. Using hotel concierge services is like having a personal assistant. The goal of the concierge is to anticipate problems that hotel guests may encounter and find solutions. For business and leisure travelers who are in a rush, a hotel concierge can save them both time and energy in an unfamiliar city. Basic Concierge Services Basic hotel concierge services involve giving hotel guests information, such as restaurant recommendations, city maps and directions. Concierges can also tell hotel guests what is going on in town. If the downtown area will be closed for a holiday parade, the concierge should know and tell the guests, as well as suggest alternative ways to avoid traffic. Concierges may also offer additional services. For example, business travelers often need to look polished during an important meeting, and concierge services can help in emergency situations. Some hotel concierge services keep a stash of extra socks, buttons, pantyhose, ties, cuff links, stain remover and other last minutes fixes for any wardrobe malfunctions. The hospitality service

Link: http://www.superpages.com/supertips/concierge-services.html Various images showing hotel services:

Link: https://www.google.co.in/search?q=hotel+services&tbm=isch&tbo=u&source=univ&sa=X&ei=e 4i8UYfhBsvNrQeDzIDoAg&ved=0CFYQsAQ&biw=1024&bih=625

Statement of Problems in Hotel Industry

Link: http://classof1.com/homework_answers/hospitality_management/issues_and_problems_concerni ng_hospitality_industry/ Three big Technology issues in Hotel Industry Technology enables service. Thats the idea, anyway. In the hotel industry, thousands of companies worldwide provide hundreds of software applications to help hotels and hotel companies manage operations to provide better guest service. But which technology or use of technology really provides strategic value for a hotel or hotel company?

The answer depends on many factors, but a group of hospitality associations has identified three key technology issues that are having, and will continue to have, a direct strategic impact on the hospitality industry:

PCI (payment card industry) compliance Unique identification numbers for hotels Support for guests with disabilities

The HTSIC (Hospitality Technology Strategic Initiatives Council) is an informal affiliation of associations and other entities whose combined memberships represents every aspect of the hospitality industry not only hospitality professionals, and hotels and hotel companies, but also most companies that provide technology and technology services to the global hospitality industry. Because of this, the organizations on the council have a full and broad view into the technology issues facing the industry. 1. PCI Compliance One of a hotel CIOs biggest nightmares is getting a phone call that one of their systems has been hacked by credit-card thieves. The fragmented nature and location of hotel systems means a guests credit card number could exist in multiple systems in formats of varying security in locations of varying security. PCI compliance across all levels of a hospitality company has become critically important for the financial stability and market credibility of the hospitality industry. Members of the HTSIC have addressed this issue in a coordinated approach:

HTNG has set up a workgroup that will a framework that will enable hotels to concentrate the storage of sensitive card data in a single system, managed securely by a vendor or the hotel company. The objective is to get every other hotel system out of the scope of PCI by shielding it from real credit card numbers. The initial goal of this workgroup, which is limited to hoteliers for the initial phase, is to document the framework so that all hotels can present it to their preferred vendors and partners as their vision of the path forward. HFTP has set up a taskforce aimed at educating hoteliers about the implications of PCI compliance on property-based operations and systems, including building a knowledge base, an ongoing series of articles, and a series of educational boot camps and conference sessions. Other council member organization initiatives include a white paper authored by AH&LA, a payment technologies committee established by HEDNA, and the support by OpenTravel of needed XML specification changes as required by the industry.

2. Unique Global Identification Numbers The idea of a single global unique identifier for a hotel has been around for a long time, one of those holy grail items like single-image inventory or the mythical super-PNR. Originally, it was seen as a benefit for distribution channels that aggregate information and inventory from hundreds or thousands of properties, and for payment processors to more efficiently collect commissions from hotels. The prevailing argument for the initiatives slow progress has been the lack of a compelling commercial reason for a hotel to care about this kind of identifier. HTSIC believes the changing nature of the travel business has provided those compelling reasons. Search is one (I wrote about this more in depth recently); it has become critical for hotels to appear correctly and accurately in search results, as search engine sites have essentially become the gateway to travel research and inspiration. Search engine optimization is a great thing, but not when the propertys address is incorrect in Google, or the property is still listed under its previous flag in Bing. Interestingly enough, PCI compliance is emerging as another driver for the global identifier initiative, as hotels work with their trading partners through the lifecycle of the transaction to ensure compliance. Heres a likely scenario as an example when a distributor creates a guaranteed reservation for a hotel, they will need to contact the hotels designated token issuer for a token to replace the credit card. This requires being able to unambiguously identify the hotel so the hotel is able to charge the card and receive funds. HEDNA, HTNG, HFTP, HSMAI and OpenTravel are all directly supporting this initiative and holding conversations with interested companies, with the objective to identify possible partners and governance structure and organization.

3. Support for guests with disabilities In both Europe and the US, regulations are being released and revised to provide support to guests with disabilities. These are requiring hotels and hotel companies to review most aspects of their operations, from distribution to construction, to ensure compliance. With the increase in electronic distribution of hotel information and transactions, hotels are working to provide better information and service to guests with disabilities. Initiatives specific to distribution include the creation of standard room definitions and descriptions, guaranteeing accessible guest rooms and removing the accessible guest room from inventory when booked. HEDNA has worked on creating this vocabulary, and OpenTravel has revised its hotel schema, annotations and code list to reflect these changes. Link: http://www.tnooz.com/2011/10/07/news/what-are-the-three-big-technology-issues-for-thehotel-industry/

Top 10 Global Issues & Challenges in Hospitality

by Gerald Oliver At the recent International Society of Hospitality Consultants (ISHC) Annual Conference held in London, members identified their top 10 global issues and challenges for the hospitality industry for 2005. Their focus is of particular importance for those involved in hotel distribution: customer issues and distribution channel management all feature strongly, with a strongly worded warning on technology - "the industry must learn to better utilize technology in marketing to guests, training employees, yield management, and meeting customer requirements". While there were dozens of issues discussed, in the final voting the membership identified eleven (there was a tie for number ten) issues as the ones that can be expected to potentially have the greatest impact on the industry in 2005. As published by the ISHC, the details are as follows: 1. Global Uncertainty While the global hospitality industry continues to recover following the effects of the terrorist attacks of September 11, 2001, SARS, the war on terrorism in Afghanistan, and the war in Iraq, global uncertainty remains a major concern. Terror attacks are the most direct example of global uncertainty, however, there are other areas of concern such as geopolitical relations, governmental travel restrictions and currency exchange rates. The industry needs to take a proactive approach in addressing these issues and their potential impact. 2. Human Resources Human resources is an area that is growing in importance. As the industry continues to recover, it needs to focus on its employees and their roles as service providers. Increasing demand requires increased staffing levels at a time when the labour pool is shrinking. To address this issue, the industry must attempt to work with the unions as allies, devote more time and money to recruitment and training and educate politicians as to the impact of governmental economic and immigration policy on the industry. 3. Branding Issues The society notes the following brand issues facing the industry in 2005: A proliferation of brands and branded hotels worldwide that is leading to the commoditization of the hotel product. Increased competition between the brands is leading to amenity creep, and diverging interests between owners and brands. Instilling authenticity of local culture into brand standards remains a challenge. 4. Financial Viability There is a significant amount of capital currently flowing into the hospitality industry. Not only are investors betting on a strong recovery, but also in some cases they are not performing realistic projections and investment analyses. Should expectations not materialize, then subpar returns could damage the overall financial credibility of the lodging industry. 5. Technology The hospitality industry must do a better job of managing technology and addressing the challenges posed by new and changing technology. Specifically, the industry must align technology investment with business objectives, address aging and inadequate infrastructure (at both the corporate and the property levels); and learn to better utilise technology in marketing to guests, training employees, yield management, and meeting customer requirements.

6. Customer Issues Customer issues present a challenge to the industry in several ways: Increasing loss of control over the customer - use of the Internet, homogenisation of the hotel product and increased corporate oversight has reduced the amount of control that operators have over the customer. Changes in the customer - hotel customers are changing due to demographics (the aging of the baby boomer generation) and due to lower transportation costs that promote travel. Changes in customer expectations - these are changing as consumers become more sophisticated and better educated. 7. Operating Cost Creep While the industry has experienced strong growth this past year, with revenues expected to approach 2000 levels, bottom line performance has eroded dramatically (i.e. over 30%) since 2000, due to escalating expenses.In recent years "non-controllable" costs such as utilities, insurance and government regulation have increased significantly. These costs along with interest rates are expected to increase in 2005. In addition, there is the potential for increases in controllable costs such as payroll, staffing, brand requirements, and amenity creep. The industry must be cognizant of these increases, and take steps to address them. 8. Supply There are three supply related issues facing the industry: Increasing alternative forms of supply such as time-share, fractional ownership, second homes,camping, cruising and waterparks. "Under demolished" (functionally obsolete) supply is, and will remain, a challenge for owners and operators, particularly in Europe where new construction is expensive and difficult. In the United States, the use of public funds to develop hotels and resorts presents a challenge for existing private owners and operators. 9. Safety and Security The threat of terrorist attack remains a major concern for the industry. Hotel operators must make every effort to protect their guests while encouraging tourism. 10. Distribution Channel Management In 2005, Distribution Channel Management as an issue must be viewed in a much broader context than in the past. Whereas most hospitality organizations have devoted extraordinary efforts to managing electronic channels, a broad-based distribution management strategy now must consider the following challenges. In 2005 it is expected that price sensitivity will continue to drive consumer buying behaviour in virtually every segment.Pricing structures will need to demonstrate price integrity across all distribution channels-not just electronic ones. The potential challenges are formidable: lead times to booking continue to shrink; the move toward real time inventory becomes paramount, impacting technology, product categories, segments and channels; and the desire to track and manage every revenue stream in every channel means that distribution channel management transitions to a focus on the most profitable customer. Airlines in the 21st Century It is important to closely monitor the fundamental changes occurring in the airline industry and their potential impact on the hotel industry for the viability of the hotel industry depends

greatly on airline lift capacity, service and convenience in travel as well as the cost of airline travel. Travelling by air today is a major inconvenience for many travellers and security remains a huge challenge and very costly undertaking for the industry.Customers have become much more "value" focused and most major airlines have experienced a substantial decline in revenues per passenger mile primarily due to the erosion in high end/priced business travel. In addition to the escalating cost of fuel, many airlines are also struggling to address labour issues. With several carriers worldwide in bankruptcy and/or severe financial distress it is an enormously challenging time for the airline industry. In light of these financial challenges we can anticipate that carriers of necessity will need to reevaluate route structures, lift capacity in certain markets and well as rethink pricing on certain routes changes that can be expected to represent potential challenges for some hotels/markets and opportunities for others. ISHC is a professional society of 175 members in 16 countries who are leading consultants in the hospitality industry. ISHC members have expertise in over 30 different specialty areas in the hospitality industry and collectively have experience with many leading independent hotels and over 100 brands worldwide. Link: http://www.hedna.org/pdf/EMEA_Newsletter_Dec_2004--Top_10_Global.pdf 10 major hurdles faced in Indias Hotel Sector 1. 1111111

Link: http://www.hotelnewsnow.com/articles.aspx/9735/10-major-hurdles-facing-Indias-hotelsector Assessment of the various risks and challenges lying ahead for the hospitality industry in achieving optimal performance from their hotel assets: 1. If the market conditions were to further deteriorate, and indications are that they will, there will be a significant impact on demand growth, revenue performance and profitability of hotel companies. Performance pressures will continue to push industry players to explore more efficient business models and forge new partnerships. The industry will embark upon a journey of consolidation and we could witness

conversions, mergers and acquisitions, more out of compulsions than out of choice. 2. A new set of competitive pressures through correction in the demand-supply imbalance will lead to improved choices and lead to fragmentation of demand. Further, the overall slowdown in economic activity will have a direct impact on demand across segments and feeder markets. Businesses are likely to adopt stringent austerity measures and discretionary spends on travel will be a sure victim. These measures are likely to erode demand, bring about substantial rate correction, rationalize spends on

MICE events and lead to sub-optimum revenue performances across hotels. 3. The executive management at hotels will have to constantly innovate and adopt dynamic business practices to bring about inherent flexibility in operating cost structures. While hotels have already rationalized key fixed input costs like payroll and raw materials, continued improvements will be difficult to come by and hence guest satisfaction levels and employee morale will be negatively impacted. The commodity price cycle has already bottomed out and a weak rainfall is likely to further fuel inflation leading to increase in average service cost for each occupied room. Innovations in supply chain management and outsourcing will become crucial and would have to be focused upon. Customization, re-alignment and re-engineering of processes will play a pivotal role in determining the extent to which a company is geared operationally to deliver consistent profitability. 4. The rapidly changing macroeconomic environment and rationalization in asset values will provide attractive opportunities for acquisitions of hotel assets. However, to leverage opportunities for growth and expansion, it will be necessary to focus on immediate improvements in the health of the organizations balance sheet. A key challenge would be the implementation of debt restructuring strategy and plan for longterm capital availability. 5. There is likely to be a prolonged period of relative inactivity in the real estate sector and this will have a direct impact on hotels as a preferred asset class for investments. Further, non-availability of quality sites for hotel development will force international brands keen to establish themselves in emerging markets market to become more flexible in terms of their product specifications. The development activity for new hotels will rapidly shift to Tier II and Tier III locations. The average inventory count for new-builds will be significantly lower and in our assessment the biggest development opportunities will be in the mid-market segment with efficient hotels that provide attractive value-for-money proposition to their respective end-users. Link: http://prognosisglobal.wordpress.com/2012/08/16/the-hospitality-industrys-challenges5-trends-to-watch-out-for/ Problems faced and Changes to be made in the Indian Rating System

No system comes without its set of problems. The Indian hotel rating system, even though well executed and forward-thinking, does have a few issues. One major factor affecting hotels that have been classified is the ongoing struggle of being taxed on printed tariffs.Yes, we

understand this problem only too well and were in talks to see how we can resolve this, says Chaturvedi. When a hotel is classified, it has to print its tariff and is taxed on this rate irrespective of the current market rate. Non-classified hotels dodge this. However, classified hotels also get certain tax incentives that non-classified hotels dont get. This becomes a bit of a catch-22 situation. When hotels are classified, they have to publish their tariff rates and the luxury tax is charged on this rate card, Chaturvedi explains. Were taking this up with the government and hopefully we should see a change coming in soon. Many state governments have already begun to link classification with tax incentives, in order to promote classification. The ones that are not classified miss out on these incentives. Apart from tax benefits, Godet says that getting your hotel classified also helps to easily attain various licenses. If you dont classify your hotel, it has an impact on your license and permits. In fact, all your licenses are at risk and open to scrutiny if youre not classified. Another thorn in the side of the hospitality industry is the unorganized sector. The unorganised sector has been creating problems since day one, says Kumar.These are the guys who create a problem. Some people say we dont want to be classified and theyre happy providing inferior services. The main culprits her are the one-, two- and three-star hotels along with the various guest houses. They should be monitored. At the moment there is no control over these hotels. Only when you have something bad reported on by the media in one of these hotels do people wake up and by that time country earns a bad reputation for encouraging these sorts of places. Were trying to bring this sector up for the Common Wealth Games. They should be regulated and governed by the country. And you cant just tag yourself a budget or mid-market or boutique hotel either these are official classifications that are given out. Also you cannot extend your facilities beyond what your classification is and the tariff should be regulated. They have to adhere to standards or close shop. For example, you know what to expect from a Ginger or a Lemon Tree. By 2012 or 2013 those who dont toe the line will definitely be put of business, he adds. In an industry where a government body is heavily involved, changes could take a while to come through. Research is vital and a good place to start would be assessing how many hotels in the country are classified. As far as luxury hotels are concerned, 99% of them are classified, says Chaturvedi. But for others like budget hotels for example its difficult to say, because many of them are happy with a few customers and continue to provide inferior service.

According to Chaturvedi, the new guidelines will also focus heavily on environment friendly practices. In the current classification guidelines, the minimum requirement across all stars is for hotels to change bed and bath linen on a daily basis. This is in stark contrast to current practices in hotels today where guests are encouraged to reuse their towels and bed linen to save on water and energy that goes into the cleaning process. Only a few days ago we had a work shop focusing on sustainable tourism, says Chaturvedi. Apart from saving energy, we looked at ways to cut down on water usage and the bed and towel issue was brought up. Were moving forward very quickly. In fact for things like this, we can make the change immediately. We dont have to wait for the next two years. Kumar who has been on several inspection mission across the country says hotels now-a-days are professional and environment conscious enough to encourage guests to reuse linen. During our inspection and interaction with professional hotels, weve noticed that they never fail to demonstrate how theyve improved on energy-efficiency and eco-friendliness. Today if Im going to a hotel and Im staying for lets say three or four nights, it is absolutely wrong to change my bed linen daily. I think they can make it alternative. Link: http://www.hotelierindia.com/article-9328-whats_in_the_stars/1/print/

Classification of Hotels
The hotel industry is so vast and therefore Classification is based on many criteria like location, size of property,level of service, type of clientele, based on target market,type of plan, length of stay,based on theme. Link: http://www.hotelmanagementhub.com/tag/classification-of-hotels-in-india/ Classifying a hotel in India is no easy feat, especially in todays world where the difference between four and five star hotels is a little opaque. A quick example of this opacity can be tested with a basic bath tub - most hotels, four stars upwards, have one, despite it being only a desirable requirement and not a necessary one. Hotel chains are constantly pushing the envelope and looking to upgrade their facilities in order to attract, retain and sometimes even steal guests to increase their own businesses.HotelierIndia.com talks to industry veterans to gain an insight into important issues including why you should classify your hotel, how to do it and why six and seven star hotels are only as real as Peter Pan. When one thinks of how hotels are classified, more often than not, ideas of a fashionably posh

gentleman come to mind. A gentleman who is wined and dined and outrageously fussed over by innumerable hotel staff; exotic foods are served, champagne becomes the order of the day and waiters dive to grab the napkin that has fallen from his lap. He is a member of the hotel star-rating committee. He is king. But any hotel classification committee member will quell this notion for you in a matter of seconds. In truth, it couldnt be more different. The Indian classification system is considered by many in the hotel industry to be among the best in the world. The Indian Ministry of Tourism, a government body, is in charge of classifying hotels across the country. Everyone swears by it including several hotel general managers, hotel chain board members and hotel association members. Link: http://www.hotelierindia.com/article-9328-whats_in_the_stars/1/print/ Classification of hotels as per the instructions of Ministry of Tourism 1. Hotels are an important component of the tourism product. They contribute in the overall tourism experience through the standards of facilities and services offered by them. With the aim of providing contemporary standards of facilities and services available in the hotels, the Ministry of Tourism has formulated a voluntary scheme for classification of operational hotels which will be applicable to the following categories: Star Category Hotels: 5 Star Deluxe, 5 Star, 4 Star, 3 Star, 2 Star & 1 Star Heritage Category Hotels: Heritage Grand, Heritage Classic & Heritage Basic

2. The Hotel & Restaurant Approval & Classification Committee (HRACC) inspects and assesses the hotels based on the facilities and services offered. Hotel Projects are approved at implementation stage Operational Hotels are classified under var ious categories 3. Details of the criteria for Project Approval / Classification along with the documents required for this purpose are given in this document. Applications for project approvals under the category of Heritage, 4 star and 5 star as well as applications for Classification of operational hotels in the category of 4 star, 5 Star and 5 star Deluxe as well as Heritage (Basic, Classic & Grand) categories along with the requisite fee (paid vide Demand Draft) may be sent to Member Secretary (HRACC)/ Hotel and Restaurants Division Ministry of Tourism C-1 Hutments, Dalhousie Road New Delhi 110011 Telefax: 011 23012810 / 23792504 Revised June 2012 1

4. For project approval /classification in 3, 2 and 1 Star categories, application along with the requisite fee (paid vide Demand Draft) maybe forwarded to the Regional Director, Indiatourism Office in whose region the hotel / project is located. The offices of the Regional Directors are as under: Regional Director, Indiatourism (Western & Central Region), 123 Maharshi Karve Road, Mumbai - 400 020 Regional Director, Indiatourism (Northern Region), 88 Janpath, New Delhi - 110 001 Regional Director, Indiatourism (Southern Region), 154 Anna Salai, Chennai600002 Regional Director, Indiatourism (Eastern Region), Embassy, 4 Shakespeare Sarani, Kolkata 700 071Regional Director, Indiatourism (North Eastern Region), Assam Paryatan Bhawan, 3rd Floor, Near Nepali Mandir, A.K. Azad Road, Paltan Bazar, Guwahati - 781 008 5. The detailed Guidelines for Project Approval are at Annexure I and that for Classification / Re- Classification at Annexure II 6. The Ministry of Tourism reserves the right to modify the Guidelines / Terms and Conditions from time to time. Link: http://tourism.gov.in/writereaddata/Uploaded/Guideline/070420120223855.pdf Classification of Hotel Industry

Classification of Hotels The hotel industry is so vast and therefore Classification is based on many criteria. Hotels may be categorized upon different factors:

1. 2. 3. 4. 5. 6. 7. 8.

Location Size of property Type of Plan Level of service Length of stay Type of clientele Target market Based on theme

Location wise:

Downtown hotel or City centre hotels: It is located in the heart of city. Tariffs are high due to their location advantage as these hotels are near corporate offices, shopping arcade, business centre, public buildings etc and also to the fact that rate of ROI calculated on the capital intensive property is considerably high. Normally business clientele are preferred and it has high occupancy on week days. Best example to fit in this category is Hyatt regency New Delhi. Motels or Motor hotels: Earlier it was termed as motor hotels now it is known as motels they are located on highways, they only provide lodging to highway travellers that means no food and beverage is served in this type of hotel they guest generally have an overnight stay and these provide more than enough parking spaces for their vehicles. Example: KTDC motel in kerala. Suburban hotels: It has very quite surrounding as they are located in suburban areas; the occupancy is generally having high traffic on weekend. Tariffs of these hotel rates are reasonably low and therefore it is perfect for budget travellers. Airport hotels: As name says it is situated near by the airport. They have transit guest who stay over between flights for few hours. The guests generally prefer these types as hotel as they have to cut down the travelling hours and have very minimum time just for their work. Tariffs are reasonable here. Example: Centaur hotel in New delhi and Mumbai. Floating hotels: These are the type of hotel are generally which floats. These hotels are established on luxury liners or ship generally located on lakes, rivers and sea. These are cruise in this rooms are generally small and all furniture is fixed down. It has long stay guest and have all the facilities which a normal hotel has for example food and beverage services, laundry, bar etc. Travelling is not the main purpose of this ship. Boatels are also a kind of floating hotels they are generally a house boats. They also offer luxurious stay to their guest. Example for floating hotel is Royal caribbean cruise ships and shikaras of Kashmir for boatels. Inns: They are located inside or outside the city. They are smaller in size and just have lodging facility. It has reasonably very low tariff and its generally for budgeted

clientele. The length of stay is from one to two days.

Rotels: These are hotel on wheel. These are in form of buses as well as trains. They providing a luxurious hotel atmosphere to the travellers they are like hotel room and have facility of food and beverage. They are normally used by small group of travellers. Examples are palace on wheels and Deccan Odessey. Resorts: These leisure hotels are located at the beaches or in the hills. They are also termed as health resort or beach hill resort and so depending on their position and location. They are for vacationers it generally cater a person who wants to relax, enjoy with their families. They include adventurous trip. Most resort has high occupancy rates during peak season. Sales and revenue fluctuate from season to season. Examples are: Raj vilas jaipur, vanya vilas ranthambore etc.

Level of service: This is the most important criteria for classifying hotels. Hotels can be classified into economy, mid market or semi economic hotel and luxury hotels. This is done on the basis of the level of service they offer.

Economy Hotels: these are also known as Budget hotels in this hotels guest is provided by a clean and comfortable room with the minimum required amenities. Mid market hotels: It offers small living room with appropriate furniture and small bed room with king sized bed they facilities provided in this hotel are swimming pool, health club etc. These hotels are called as suite hotels. Luxury hotels: These types of hotels provide world class service to the guest. The room has entire facility with antique furniture and special artwork. These hotels have variety of restaurant and lounges; it even has concierge service and business centre, shopping arcade, sports facility etc. The prime market for these hotels are mainly celebrities, business man, corporate head and high ranking political figures. Example: Hyatt Regency, Mumbai.

Length of Stay: The classification of hotel is also classified by the length of stay of a guest. It is categorized into transient, residential and semi residential hotels.

Transient Hotel: Airport hotels can be termed as transient hotels. In this type of hotel the guest stays for a day or even less. The occupancy rate is usually very high. Residential hotels: In this type of hotel guest stay for a minimum period of one month and up to a year. The lease is signed with a guest and rent can be paid on monthly or quarterly basis. They room is provided bed room and kitchenette. The tariff is

reasonably low in these types of hotels.

Semi residential hotels: The hotel which include features of both transient and residential hotel.

Type of clientele: Hotels are categorized into group hotels, commercial hotels and family hotels. This categorization is mainly based on the type of stakeholders.

Group hotels: these types of hotel generally cater to groups and therefore use American plans. Vacationers are their biggest clientele. Commercial hotels: these types of hotel cater mostly to business man and therefore use European plan in their hotels. Family hotel: these types of hotels are situated in resort cities and they cater families therefore they use American plan.

Target Market:

Commercial hotel: they target clientele are businesses men who visit these types of hotels for business purpose. These hotels are located in busy commercial areas especially in the heart of city therefore it gets high business. Convention hotels: these hotels are used for conventional purpose. Seminars, conferences, events, education and job fairs, exhibitions, events take place here. They have large convention complex and cater to group of people who are there to attend these events. Hotel with largest convention centre in India is Le meridian, Cochin. Suite hotels: These hotel offer compact kitchenette along with rooms. They cater guest who has to stay away from home due to their business they keep on relocating from one place to another. These types of clientele are lawyers and executives. Casino hotels: This type of hotel has gambling facilities with guest room, food and beverage. These hotels operate 24 hours a day and 365 days a year. They cater leisure and vacation travellers. Las Vegas in United State is Famous for Casino hotels.

Based on Theme:

Ecotels: These hotels are eco friendly and amenities provided in these hotels are environmental friendly. Orchid Mumbai is Asia first and most popular five star ecotel. Boutique hotels: This hotel offer themed rooms to the guests. They provide stylish accommodation and antique furniture. These hotels cater to corporate travellers. The

Park Bangalore is a boutique hotel in India.

Spas: This is a luxury hotel resort which offer therapeutic bath, massage and therapies along with other hotels offerings. Ananda spa in Himalaya is the most popular Spa. Heritage hotel: these are hotels which are converted from heritage properties. These hotels give glimpse of the earlier tradition of a particular region. In this hotel rooms are offered with their history. Traditional cuisine is served to the guest and entertainment is done by folk artist. Jai Mahal palace in Jaipur.

Link: http://www.hotelmanagementhub.com/2011/07/25/classification-of-hotels/ Hotel Rating Hotel ratings are often used to classify hotels according to their quality. The development of the concept of hotel rating and its associated definitions display strong parallels. From the initial purpose of informing travellers on basic facilities that can be expected, the objectives of hotel rating has expanded into a focus on the hotel experience as a whole.[1] Today the terms 'grading', 'rating', and 'classification' are used to generally refer to the same concept, that is to categorize hotels, mostly using stars as a symbol There are a wide variety of rating schemes used by different organizations around the world. Many have a system involving stars, with a greater number of stars indicating greater luxury. Forbes Travel Guide, formerly Mobil Travel Guide, launched its star rating system in 1958. The AAA and their affiliated bodies use diamonds instead of stars to express hotel and restaurant ratings levels. Food services, entertainment, view, room variations such as size and additional amenities, spas and fitness centers, ease of access and location may be considered in establishing a standard. Hotels are independently assessed in traditional systems and rest heavily on the facilities provided. Some consider this disadvantageous to smaller hotels whose quality of accommodation could fall into one class but the lack of an item such as an elevator would prevent it from reaching a higher categorization.[2] In recent years hotel rating systems have also been criticised by some who argue that the rating criteria for such systems are overly complex and difficult for laypersons to understand. It has been suggested that the lack of a unified global system for rating hotels may also undermine the usability of such schemes. Standards of hotel classification The more common classification systems include "star" rating, letter grading, from "A" to "F", diamond or simply a "satisfactory" or "unsatisfactory" footnote to accommodation such as hostels and motels. Systems using terms such as Deluxe/Luxury, First Class/Superior, Tourist Class/Standard, and Budget Class/Economy are more widely accepted as hotel types, rather

than hotel standards. Some countries have rating by a single public standard Belgium, Denmark, Greece, Italy, Malta, Netherlands, Portugal, Spain and Hungary have laws defining the hotel rating. In Germany, Austria and Switzerland, the rating is defined by the respective hotel industry association using a five-star system the German classifications are Tourist (*), Standard (**), Comfort (***), First Class (****) and Luxury (*****), with the mark "Superior" to flag extras beyond the minimum defined in the standard. The Swiss hotel rating was the first nongovernment formal hotel classification beginning in 1979[3] It did influence the hotel classification in Austria and Germany.[3] The formal hotel classification of the DEHOGA (German Hotel and Restaurant Association) started on August 1, 1996 and proved very successful with 80% of guests citing the hotel stars as the main criteria in hotel selection.[4] This implementation influenced the creation of a common European Hotelstars rating system that started in 2010 (see below). In France, the rating is defined by the public tourist board of the department using a four-star system (plus "L" for Luxus) which has changed to a five-star system from 2009 on. In South Africa and Namibia, the Tourist Grading Council of South Africa has strict rules for a hotel types granting up to 5 stars. Link: https://en.wikipedia.org/wiki/Hotel_rating

The Indian Rating System The hotel rating system in India is considered by many hoteliers those who have worked in the country and abroad to be one of the better rating systems in existence. Speaking to Hotelier India, the Ministry of Tourisms additional director general Devesh Chaturvedi who is also the gentleman in charge of the classification guidelines feels that the Indian system is very functional. He says: It works well and is efficient because it is an evolving system. We move with the times and the necessities of the moment. We revise it every two years so that were not a redundant system. Apart from the law-makers, even those who are on the receiving end feel the system is a good one. The JW Marriott Mumbai general manager Guy Godet, a French national who has worked in several places around the world including South Korea and Kuala Lumpur is a keen supporter of the Indian classification system. I think it is very well done, says Godet. It is also taken very seriously. The committee that comes in to asses us is very knowledgeable and experienced. Youre informed well in advance of their arrival and its not as stressful as one would imagine something like this to be. When compared to international rating systems Godet feels that India still holds on to its place

among the top ratings. Comparing it to other Asian countries like Indonesia and Thailand, which he says are good systems in their own right, the Indian one is very thorough. The rating process In India hotels are rated by The Hotel & Restaurant Approval & Classification Committee (HRACC), which falls under the umbrella of the Ministry of Tourism. The committee is further divided into two wings, one that assesses one to three star hotels and another that assess three to five star hotels. The committee is made up of eight members from various sub-sectors in the hospitality industry including one nominee each from the department of tourism in the Central government, the state tourism department, tour operators, travel agents, a hotel management institute, a nominee from the hotel industry who is considered a specialist in the hospitality industry and an FHRAI member. The committee contacts a hotel that has applied for classification and books a time to visit. The assessment takes around three hours where the committee usually has a meal in one of the restaurants and inspects the hotel grounds. They assess the hotel based on 17 broad categories, which have a further 108 sub-categories. On a very general level, some points that are considered in establishing a standard are food services, entertainment, view, room variations such as size and additional amenities, spas and fitness facilities, hygiene, ease of access and location. In the earlier days, inspectors would actually check into a hotel for a night or two in order to assess the hotel, says current FHRAI president Rajindera Kumar, who is also an old hand at classifying hotels including chains like the Hyatt, The Oberoi Group, The Taj Group and the Marriott. But now that process has changed a little due to the needs of the day. We dont follow the check-list exactly otherwise everyone would be able to achieve the star they want. We put in a little more. The process now doesnt take more than three hours. We go in, meet the staff, have a quick bite at either the coffee shop or at the restaurant, watch the service, check hygiene levels and various other points and then we leave. Its quick, its thorough and its convenient for everyone, he adds. But is that enough and does the committee hire guests who double up as secret agents who lurk around in the shadows spying on hotel operations? One already knows the character of a hotel, so we pretty much know what to expect and what the standards are, explains Kumar denying any such practice. Also we mostly take guest feedback on hotels. We dont make use of spies to get us information. With social media being as advanced as it is now, we get all the feedback we

need. Link: http://www.hotelierindia.com/article-9328-whats_in_the_stars/1/print/ Hotel classifications in Britain In Great Britain, hotels are rated from one-star to five stars, as in many other countries. The RAC pulled out of accommodation grading in 2008 so the only grading schemes in operation are those operated by the AA (Automobile Association) and the national tourist boards; Visit England, Visit Wales, the Scottish Tourist Board and the Northern Ireland Tourist Board. The schemes were all 'harmonised' to ensure consistency between the schemes. This applies to all accommodation types apart from Self Catering that the AA have recently (2009) started offering. The AA criteria is available on its website.[5] In addition to the usual black stars (ranging from one (the lowest) to five (the highest), the AA awards red stars to the highestrated, which are deemed 'Inspectors' Choice'. Each of the national tourist boards have grading explanations on their web sites. European Hotelstars Union The HOTREC (Hotels, Restaurants & Cafs in Europe) is an umbrella organization for 39 associations from 24 European countries. At a conference in Bergen in 2004, the partners drafted a hotel classification system in order to harmonize their national standards. In 2007 HOTREC launched the European Hospitality Quality scheme (EHQ) which has since accredited the existing national inspection bodies for hotel rating. Under the patronage of HOTREC, the hotel associations of Austria, Czech Republic, Germany, Hungary, Netherlands, Sweden and Switzerland created the Hotelstars Union.[6] On 14 September 2009, the Hotelstars Union classification system was established at a conference in Prague. This system became effective in these countries in January 2010, with the exception of Hungary, Switzerland and the Netherlands, who have chosen later dates for the change. The European Hotelstars Union system is based on the earlier German hotelstars system that had widely influenced the hotel classifications in central Europe, with five stars and a Superior mark to flag extras. Instead of a strict minimum in room size and required shower facilities (e.g. a bath tub in a four-star hotel) there is a catalogue of criteria with 21 qualifications encompassing 270 elements, where some are mandatory for a star and others optional. The main criteria are in quality management, wellness and sleeping accommodation.[7] In the catalogue of criteria each entry is associated with a number of points - each Hotelstars level requires a minimal sum of points besides some criteria being obligatory for the level.[8] The minimum requirement for the Superior flag requires the same sum of points as for the next Hotelstars level which however was not awarded due to at least one obligatory requirement being left out.[8] For hotels with three to five stars, the Hotelstars Union will use "mystery guests" to check the service quality regularly.

Hotelstar

Excerpt of the catalogue of criteria 100% of the rooms with shower/WC or bath tub/WC Daily room cleaning 100% of the rooms with colour-TV together with remote control Table and chair Soap or body wash Reception service Facsimile at the reception Publicly available telephone for guests Extended breakfast Beverage offer in the hotel Deposit possibility

Tourist

The Superior flag is provided when the additional service and accommodation provisions are not sufficient for the next Superior Hotelstar. The bathroom facilities are usually at the same level as Tourist for two stars hotels but built from cheaper materials. The cost for regular inspection by independent associations is waived as well. In addition to the single star (*) hotels:

Standard

Breakfast buffet Reading light next to the bed Bath essence or shower gel Bath towels Linen shelves Offer of sanitary products (e.g. toothbrush, toothpaste, shaving kit) Credit Cards

The Superior flag is provided when the additional service and accommodation provisions are not sufficient for the next Hotelstar. The Standard-Superior does usually offer the same Superior service level as three-star hotels but the interiors of the hotel are Standard smaller and cheaper so that the three stars were not to be awarded by the inspection body. A two-star superior does not require mystery guesting. In addition to the standard star (**) hotels: Comfort

Reception opened 14 hours, accessible by phone 24 hours from inside and outside, bilingual staff (e.g.

German/English) Three piece suite at the reception, luggage service Beverage offer in the room Telephone in the room Internet access in the room or in the public area Heating facility in the bathroom, hair-dryer, cleansing tissue Dressing mirror, place to put the luggage/suitcase Sewing kit, shoe polish utensils, laundry and ironing service Additional pillow and additional blanket on demand Systematic complaint management system

The Superior flag is provided when the additional service and accommodation provisions are not sufficient for the next Superior Hotelstar. The accommodation facilities for a superior hotel need Comfort to be on a modern level and fully renovated which is checked regularly. In addition to the comfort star (***) hotels:

First Class

Reception opened 18 hours, accessible by phone 24 hours from inside and outside Lobby with seats and beverage service Breakfast buffet or breakfast menu card via room service Minibar or 24 hours beverages via room service Upholstered chair/couch with side table Bath robe and slippers on demand Cosmetic products (e.g. shower cap, nail file, cotton swabs), vanity mirror, tray of a large scale in the bathroom) Internet access and internet terminal " la carte"-restaurant

The Superior flag is provided when the first class hotel has a First proven high quality not only in the rooms. The superior hotels Class provide for additional facilities in the hotel like a sauna or a Superior workout room. The quality is checked regularly by mystery guesting of an external inspection service. In addition to the first class (****) hotels: Luxury

Reception opened 24 hours, multilingual staff Doorman-service or valet parking

Concierge, page boy Spacious reception hall with several seats and beverage service Personalized greeting for each guest with fresh flowers or a present in the room Minibar and food and beverage offer via room service during 24 hours Personal care products in flacons Internet-PC in the room Safe in the room Ironing service (return within 1 hour), shoe polish service Turndown service in the evening Mystery guesting

The Luxury star hotels need to attain high expectations of an Superior international guest service. The Superior Luxury star is only Luxury awarded with a system of intensive guest care.

World hotel rating There is so far no international classification which has been adopted. There have been attempts at unifying the classification system so that it becomes an internationally recognized and reliable standard, but they have all failed. It has been considered that, as it has been the case in other areas (e.g. international accounting standards), hotel classification standards should result from a private and independent initiative. This may be the case of the World Hotel Rating (WHR) project, which notably aims to set international classification standards and rating criteria along the lines of a world starrating system. It will also establish an information platform on the hotel industry which will be multilingual and multicultural. WHR intends to play a key role in the development of quality hotel services, as well as equitable and sustainable tourism, and the protection of the world's cultural and natural heritage. In addition, WHR will develop labels to promote hotels distinguished by specific features, such as a family and child-friendly disposition. A test period was scheduled for 2010. Six- and seven-star hotels Some members of the hospitality industry have claimed a six or seven-star rating for their operation. As no traditional organization or formal body awards or recognizes any rating over five-star deluxe,[9] such claims are meaningless and predominantly used for advertising purposes. The Burj Al Arab hotel in Dubai is widely described as a "seven-star" property, but

the hotel says the label originates from an unnamed British journalist on a press trip and that they neither encourage its use nor do they use it in their advertising. The Seven Stars Galleria is a hotel located in Milan, Italy. It describes itself for marketing purposes as the world's first seven-star hotel, citing the private inspection company Socit Gnrale de Surveillance, although official star classification in Italy includes no rating. Link: https://en.wikipedia.org/wiki/Hotel_rating Tourism ministrys new star-rating norms for hotel industry The hotel industry across western India has voiced concern against the new guidelines prescribed by the Tourism Ministry for classification of hotels. The sector has primarily expressed reservations against some of the criteria based on which hotels will be star-rated such as designated parking facilities, sewage treatment plants, X-Ray checking machines and high percentage of skilled staff. "It will not be practical for the operative hotels to have designated parking facilities and sewage treatment plant due to space constraints. This should be applicable only to upcoming projects. Furthermore, it will be impossible to adhere to the guidelines within one year," said Suresh Talera the newly elected president of Hotel and Restaurant Association (Western India). The Tourism Ministry has also emphasised on the mandatory installation of X-Ray checking machines in all A and B Grade hotels. The association said that though they are not against security measures, small hotels will find it difficult to incorporate the changes at such a short notice. "These machines need to be imported and require trained manpower to operate them. The costs of installing these X-ray machines is fromRs 50 lakh-60 lakh, which is not viable for one star or two star hotels. Hoteliers believe the existing use of metal detectors for physical checking of guests and manual checking of luggages is sufficient. "The rule that restricts old hotels from being classified in the star category if it doesn't have X-Ray machine is not justifiable," said Talera. Hoteliers are also unhappy with the percentage of qualified and skilled manpower required for each category. According to the new policy, one and two-star should now have 20 per cent, three and four-star should have 30 per cent and five-star and above should have 60 per cent of the skilled staff. Whereas earlier it was 10 per cent in one-star, 15 per cent for two-star, 20 per cent for three-star, 25 per cent for four-star and 30 per cent for five-star. Link: http://www.indianexpress.com/news/tourism-ministry-s-new-starrating--norms-worry-

hotel-industry/538937/

Unique hotels[edit]
Treehouse hotels[edit]
Some hotels are built with living trees as structural elements, for example the Treehotel near Pite, Sweden, the Costa Rica Tree House in the Gandoca-Manzanillo Wildlife Refuge, Costa Rica; the Treetops Hotel in Aberdare National Park, Kenya; the Ariau Towers near Manaus, Brazil, on the Rio Negro in theAmazon; and Bayram's Tree Houses in Olympos, Turkey.

Straw bale hotels[edit]

The Maya Guesthouse in Nax Mont-Noble in the Swiss Alps, is the first hotel in Europe built entirely with straw bales. Due to the insulation values of the walls it needs no conventional heating or air conditioning [3] system, although the Maya Guesthouse is built at an altitude of 1,300 meters in the Alps.

Bunker hotels[edit]
The Null Stern Hotel in Teufen, Appenzellerland, Switzerland and the Concrete Mushrooms [4] in Albania are former nuclear bunkers transformed into hotels.

Cave hotels[edit]
The Cuevas Pedro Antonio de Alarcn (named after the author) in Guadix, Spain, as well as several hotels in Cappadocia, Turkey, are notable for being built into natural cave formations, some with rooms underground. The Desert Cave Hotel in Coober Pedy, South Australia is built into the remains of anopal mine.

Cliff hotels[edit]

On top of the cliff, the Riosol Hotel in Mogn

Located on the coast but high above sea level, these hotels offer unobstructed panoramic views and a great sense of privacy without the feeling of total isolation. Some examples from around the globe are the Riosol Hotel in Gran Canaria, Caruso Belvedere Hotel in Amalfi Coast (Italy), Aman Resorts Amankila in Bali, Birkenhead House in Hermanus (South Africa), The Caves in Jamaica and Caesar Augustus in [5] Capri.

Capsule hotels[edit]

Interior of a capsule hotel in Osaka, Japan

Capsule hotels are a type of economical hotel that are found in Japan, where people sleep in stacks of rectangular containers.

Ice, snow and igloo hotels[edit]

Main article: Ice hotel Igloo Village in Kakslauttanen,the Ice Hotel in Jukkasjrvi, Sweden, and the Hotel de Glace in Duschenay, Canada, melt every spring and are rebuilt each winter; the Mammut Snow Hotel in Finland is located within the walls of the Kemi snow castle; and the Lainio Snow Hotel is part of a snow village near Ylls, Finland.

Garden hotels[edit]
Garden hotels, famous for their gardens before they became hotels, include Gravetye Manor, the home of garden designer William Robinson, andCliveden, designed by Charles Barry with a rose garden by Geoffrey Jellicoe.

Underwater hotels[edit]
Some hotels have accommodation underwater, such as Utter Inn in Lake Mlaren, Sweden. Hydropolis, project cancelled 2004 in Dubai, would have had suites on the bottom of the Persian Gulf, and Jules' Undersea Lodge in Key Largo, Florida requires scuba diving to access its rooms.

Railway hotels[edit]
Further information: Category:Railway hotels Frequently, expanding railway companies built grand hotels at their termini, such as the Midland Hotel, Manchester next to the former Manchester Central Station, and in London the ones above St Pancras railway station and Charing Cross railway station. London also has the Chiltern Court Hotelabove Baker Street tube station; there are also Canada's grand railway hotels. They are or were mostly, but not exclusively, used by those travelling by rail.