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An Assignment on Application of Marketing Mix in Hospitality Services

Submitted by: DIPANKAR SAIKIA (M.Com, Roll No.-12)

Hospitality is the relationship between a guest and a host, or the act or practice of being hospitable. that is, the reception and entertainment of guests, visitors, or strangers, resorts, membership clubs, conventions, attractions, special events, and other services for travelers and tourists. "Hospitality" can also mean generously providing care and kindness to whoever is in need.

In true sense, it is reception and entertainment of guests, visitors or strangers with liberality and goodwill

Derived from HOSPICE the term for a medieval house of rest for travelers and pilgrims. Hospitality industry includes three broad categories i.e., Hotel, Tourism and Travel. Thus it can be said that those institutions which offer services like accommodation, entertainment, reception, personal care, etc when people are away from their home falls under the hospitality service.

It is one of the oldest profession practiced by the humans and they involve making guest, client, member and resident Today, the hospitality industry is the worlds fastest-growing, job-creating profession, employing one in ten people worldwide. It is estimated that the industry will require 30,000-35,000 trained people at management and supervisory level year on year until 2010.


To analyses the role and need of Hospitality Services. To know how Hospitality Services can be beneficial in growth of Indian economy.

To know about the emergence of Hospitality industry in International market.

To understand the nature of services rendered and various facilities provided by Hospitality Industry. To know about the recent trends of Hospitality services in India. To understand the future prospects and challenges faced by Hospitality Industry activity.


Economic liberalization has given a new impetus to the hospitality industry. It costs an average of US$50-80 million to set up five-star hotels with 300 rentable rooms in India. The gestation period is usually between three and four years. Movements in real estate prices have to be watched, though they have stabilized in the past three years or so.

Non-five-star hotels are obviously cheaper and have had smaller gestation periods, but international chains are expected to go into the five-star category.

The Indian hospitality industry is growing at a rate of 15 percent annually. The current gap between supply (61,000 rooms) and demand (90,000 rooms) is expected to widen further as the economy opens and grows.

The government forecasts an additional requirement of 200,000 rooms by the turn of the century. A rapidly growing middle class, the advent of corporate incentive travel and the multinational companies into India has boosted prospects for tourism. India's easy visa rules, public freedoms and its many attractions as an ancient civilization makes tourism development easier than in many other countries.

Many foreign companies have already tied up with prominent Indian companies for setting up new hotels, motels and holiday resorts. The entry of McDonalds, PepsiCos Kentucky Fried Chicken, Dominos and Pizza Hut has given an international glitz to the hospitality sector. Several international chains including Sheraton, Holiday Inn, Intercontinental, Hyatt, Radisson, Best Western, Days Inn, Hilton, Quality Inn, Ramada Inn, Meridian, Kempenski, Four Seasons Regent, Accor, and Marriott International are entering or expanding their hotel network in India.

Trends that are shaping the Future of Hospitality Sector are:

1. Low cost carriers: Travelers in general are more price sensitive to airfare than they are to hotel room rates. Often a low airfare will stimulate demand for travel even if hotel prices are increasing. LCCs are a good option for business travelers, as they have advantages like low cost, more options and connectivity.

2. Budget hotels: More than 50 per cent of occupancy of a majority of hotels comes from the business travel segment. The average room rate (ARR) realized from business travelers is normally higher than from leisure travelers. Heightened demand and the healthy occupancy rates have resulted in an increase in the number of budget hotels. Some of the new players entering into this category of hotels include Kamfotel, Country yard by Marriott, Country Inns & Suites, Ibis and Fairfield Inn.

3. Service apartments: The concept of service apartments, though a recent phenomenon in India, is an established global concept. Villas in Spain, flats in the UK and apartment complexes in the US have all created a viable market for those who want more than just a room in a hotel. Service apartments are the latest trend in accommodation, offering the comfort and convenience of a home without the hassles of having to maintain or look after it. Ideally suited for medium-to-long staying guests, service apartments are a natural choice for corporate

4. Technology: Travel and technology have become inseparable. Technology is making its own advances with high-tech video conferencing facilities, web cameras and virtual reality mode of conferencing. On-line bookings, eticketing, Wi-Fi Internet connectivity, easy access to information, etc. are just a few areas where technology has completely changed the way we travel.

5. Loyalty travel: Today, airline-credit card company tie-ups have brought a whole range of benefits to the travelers. These include insurance cover, upgrades, free tickets, access to executive lounges, and a host of other goodies.


Since the economy opened up in 1991, several foreign chains have entered the Indian market, including Hyatt, Four Seasons, Hilton, Regent, Radisson and Holiday Inn. The result is that the quality of service has improved. The overseas players have brought in efficient systems and service standards from Europe and the US. Competition has forced Indian hotel groups to improve their standards. The customer has benefited in many ways. The influx of foreign players has led to major price wars in the industry. In an attempt to woo customers, Indian hotels have reduced their tariffs significantly. According to one hotelier, "India has become a normal market - like others in the West or in Southeast Asia with demand and supply determining the price".


THE PRODUCT: The core product of the hospitality industry which satisfies the basic needs of the customer are accommodation facilities and the services along with it, the food of a restaurant and drinks in pubs/bars etc are also the key products. Apart from this there are other tangible elements that are added like room service, laundry etc the other services that can be added are childcare, barber, babysitting, boutiques, currency exchange, in room telephone service, express check in, express check out, florist, front desk 24 etc in case of a hotel.

The product in case of tourism will be packages they offer to the customer. Some other examples of product in hospitality services are reception, restaurant, swimming pools, light and heavy vehicles, etc.


There can be competition based pricing or demand based pricing. Off season discounts can be clubbed with higher rates during season also. Differential pricing can also be adopted based on the type of client the industry caters to. Some other examples of price of service marketing mix are taxes, distance traveled, entry fees, guide, air- conditioning, etc.

Promotion schemes should be carried on regularly. It . is because of its peculiar characteristics i.e., inseparability, variability, perishability, intangibility, ownership, etc. While promoting the services, the advertising should be done through attractive pictures, travel agents, hoardings, pamphlets etc. advertisements can also be given on travel guides which are published by the govt agencies. Some other examples are publicity, personal selling, word-of-mouth, etc.

The place in case of hospitality industry must provide easy accessibility, safe and convenient in terms of proximity to railway stations, airports, bus stand, tourist spots, shopping areas, stations, etc. As we also know that the closer the places to such important places, the greater are the chances of business.

The people in case of hospitality industry are the employees like the Chefs, Hostesses, Waiters, Bartenders and Receptionists government, travel agent, tourist, waiters, drivers, etc., who are involved in real time production of service. Service firms must find ways in which they can effectively manage the contact employees to ensure that their attitudes and behaviors are conducive to the delivery of service quality. This is especially important in services because employees tend to be variable in their performance, which can lead to variable quality i.e. heterogeneity in the performance of services.

Process is referred to the procedures, mechanisms and flow of activities by which the service is delivered i.e. the service delivery and operating systems. Creating and managing effective service processes are essential tasks for hospitality industry. Managing the process factor is essential due to the perishability of services which means that services cannot be inventoried, stored for reuse or returned. Hotel rooms not occupied cannot be reclaimed so it is a challenge for service businesses to manage situations of over or under demand. Some other examples are training, guiding, explaining, room service, maintenance, booking, marketing, etc.

Physical evidence refers to the environment in which the service is assembled and in which the seller and customer interact, combined with tangible commodities that facilitate performance or communication of the service. In the hotel industry, the design, furnishing, lighting, layout and decoration of the hotel as well as the appearance and attitudes of its employees will influence customer perceptions of the service quality and experiences. Because of the simultaneous production and consumption of most services, the physical facility i.e. its service scope can play an important role in the service experience. Some other examples are vehicles, monuments, historical places, swimming pools, gardens, booking offices, etc.


STRENGHTS Indias Rich Culture Heritage: With a historical backdrop of 5,000 years, India is one big package of culture and legend that ever fails to captivate the imagination of the visitor.

Demandsupply gap: Indian hotel industry is currently facing a mismatch between the demand and supply of rooms and occupancy levels. Though new capacities are expected to come in the next five years demand will outpace supply in the short to medium term. Government support: Till a few years ago, the Indian government had a total negligence towards promotion of tourism. Now the government seems to have realized the importance of tourism and is willing to spend towards the development of the industry. The Incredible India campaign is a product of this realization.

WEAKNESSES: Poor support infrastructure: India is currently spending a little amount compared with its needs, on infrastructure. China is spending seven times as much as India. However, over the past 2-3 years, the Government has realized the importance of infrastructure and has focused on improving it.


Open sky benefits: The opening up of the aviation industry in India brings exciting opportunities for the hotel industry. Increased competition among airline companies will further lead to the development of new and improved services. Also the open skies policy has benefited both international and domestic travel.


Increasing competition: Global hospitality majors like the Four Seasons, Shangri-La and Amman Resorts are all making their entry into the Indian market. The Hilton Group is deciding on a comeback and has tied up with the Oberoi Group. Two other groups - the Carlson Group and the Marriott chain are furiously hunting for new hotels in India's top cities.

Regulations The projects have to be approved by Department of Tourism, New Delhi. They have to fulfill the required conditions prescribed by Tourism ministry.


In the conclusion it can be said that , hospitality industry is probably the worlds fastest-growing, job-creating profession, employing one in ten people worldwide. Therefore, there is an enormous scope for those who want to pursue a career in the industry, plus a huge range of employment opportunities across the varied sub sectors.