Indian Hotel Industry Survey 2007-2008

THE HALLMARK OF ENVIRONMENTALLY SENSITIVE HOTELS

Table of Contents

Foreword from the President, FHRAI........................................................................1

FHRAI Address by President....................................................................................................2
HVS Hospitality Services...........................................................................................5
ECOTEL ...................................................................................................................7
Synopsis & Key Highlights of the Survey....................................................................8
Country Trend.............................................................................................................10
In The Focus..................................................................................................................11
City Trends................................................................................................................... ...15
HVS Views....................................................................................................................21

1. Indian Hotel Industry by Star Category................................................................ 23

2. Indian Hotel Industry by Hotel Size & Chain Affiliated v/s Independent......... 32
3. Indian Hotel Industry Seven Major Cities................................................................40
4. Indian Hotel Industry Twelve Other Cities................................................................ 51
Hotel Analysis Worksheet ....................................................................................................62

Foreword
The Federation of Hotel & Restaurant Associations of India (FHRAI) is pleased to present the
eleventh annual edition of the Indian Hotel Industry Survey in cooperation with HVS
Hospitality Services. This survey, covering the performance of hotels across different cities
and different quality standards, provides an in-depth understanding of the Indian hospitality
industry; becoming a benchmark reference standard. We would like to thank the participating
hotels for all the detailed information they have provided and helped improve the quality of
this research.
The Indian Hotel Industry Survey analyses the performance of the Indian hospitality industry
across varying parameters such as facilities, manpower, operational performance and
marketing trends. The information is based on data received from FHRAI hotel members
using a standard format of Hotel Fact Sheet (HFS). The authenticity of this data helps us in
providing a clear picture of the operating statistics of Indias hospitality sector. Data collated
from our member hotels, our extensive historic database and the credibility of our research
have helped make this report a preferred tool for hotel professionals, consultants, investors,
bankers, researchers, government officials in the tourism department, media persons and all
those interested in studying the Indian hotel industry.
The current edition includes an analysis of seven major cities for which we have received
detailed information and twelve other cities where information was available with us for
some hotels, though not in sufficient numbers for all the star categories. It is our endeavour to
include data on a larger number of Indian cities, covering the entire spectrum of facilities
offered across the country and for this we earnestly request all our members to be more
forthcoming with sharing the required information. Therefore, while we have basic data for
1,204 members (a healthy increase over 1,186 members the previous year), the financial data
is not available for all of them.
We encourage feedback on the presentation and content of this report to enable us to better
it each year. We are thankful to HVS Hospitality Services for their continued support for this.

M P Purushothaman

President, FHRAI

Address by the FHRAI President

The economic downturn and the terror attacks in Mumbai in November 2008 have adversely
impacted tourism in India. This has caused massive cancellation of hotel bookings throughout
the country and large layoffs loom on the horizon. The tourism industry has suffered huge
revenue losses which have also been reported by the media. The best way to fight terrorism
is to support Indias beleaguered tourism industry. FHRAI has been at the forefront of this
endeavour and has been using multiple channels to communicate with the government the
needs of the hour. Below we have highlighted some of these for our members so that we can
all speak in one voice.
As per the Ministry of Tourism Government of India (GOI), 5.5 million tourists are expected
to visit India in 2008/09 and help the country earn Rs50,000 crores in foreign exchange. It is
expected that foreign tourist arrivals will increase significantly in the next few years and
although the governments figure of 10 million foreign tourist arrivals by 2010 may appear a
bit too optimistic at this stage, there is no doubt that we need to plan for these high number
of arrivals.
It is estimated that demand is going to exceed supply by 100% in the next two to three years.
With this disparity, the hotel room rates in India are most likely to rise again annually and
occupancy is also likely to rise over the next two-three years. This rise in rates would negatively
affect the competitiveness of India as a low-cost destination when compared with other
south Asian countries thriving on large foreign tourist inflows.
India currently has 110,000 rooms operating across various categories and there is a shortage
of approximately 150,000 rooms (as estimated by the government); impeding the growth
prospects of the tourism industry, a very labour intensive industry. This imbalance is most
acute in the lower category hotels falling under the classification of two, three and four-star
categories. India therefore, needs to create an additional 150,000 rooms for which an
investment of over Rs40,000 crores is required in the next three to four years to meet the
estimated demand of foreign tourist arrivals of 10 million.
We are all aware that tourism is a major driver of Indias economic growth with a contribution
of 6% of the total GDP and its large multiplier effect should be harnessed for employment
generation, economic development and providing impetus to infrastructure development.
The additional inventory of 150,000 guestrooms would lead to a huge generation of
employment opportunities. As per the Planning Commission an investment of Rs10 lakhs
creates 78 jobs in the tourism sector while the same generates just 18 jobs in the manufacturing
and 45 in the agriculture sector. Currently tourism, being employment intensive, provides
employment to 53 million people throughout the country with the largest multiplier effect
and is the highest employment generator in the country. The government needs to look at
helping our sector and help spread the benefits of prosperity to a larger section of society.
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In order to compete with the leading tourist destinations in Asia like Malaysia, Indonesia,
Thailand, Macau etc, who have a very pro-active tourism policy with low levels of taxation,
hotels in India need a rational licensing, procurement and tax structure (especially with
regard to taxes imposed by state governments like Luxury Tax, Value Added Tax,
Entertainment Tax, State Excise Duty etc.). The complicated licensing regime and the high
taxes are stifling growth in our industry.
To provide growth, there is a need to take the following steps:

Providing tax incentives as given to service exporters, providing the necessary fillip for
increasing hotel capacity and tourism infrastructure.

Rationalisation of taxes such as service tax charged by the GOI. Hotels should be exempted
from service tax if the guests staying with them pay their invoices in convertible foreign
exchange.

Rationalisation of taxes such as Luxury Tax, Value Added Tax (Sales Tax) etc levied by
the State Governments.

Capacity building of service providers, taxi drivers, guides and immigration staff.

Constant innovation of the Incredible India campaign and penetration into newer markets.

Convergence of tourism with other sectors of the Indian economy.

Continued opening of the skies and improvement of rail-road, seaports, internal

waterways and airport infrastructures.

As India expands its base in travel and tourism, it will generate many more jobs and the
tourism sector will become a major engine for Indias economic growth. In order to be more
effective and competitive, we suggest the following specific changes be made
DIRECT TAXES: Under the Income Tax Act, 1961, the following changes may be considered
favourably:

Inclusion of Hotels in Infrastructure: On hotels being included in the infrastructure list

just like airports, seaports, railways etc. all new hotel projects will be able to avail the
benefit of deductions of 100% in respect to profits and gains for a period of ten years.

Hotels should be given the benefits available through the Section 80-HHD which were
available till 2004/05. These benefits allow hotels to get a tax exemption on amounts
earned through foreign exchange earnings.

Special category states like Sikkim, Assam, Tripura, Meghalaya, Mizoram, Nagaland,
Manipur, Arunachal Pradesh, Uttaranchal and Himachal Pradesh are allowed 100%
deductions from profits and gains for five years for computing the total income for
promoting Eco Tourism in the country in terms of Income Tax Act 1961, Schedule XIV
Part-C, Serial No 15. However, Income Tax authorities have disallowed deductions to
hoteliers on the grounds that an activity of a hotel does not constitute an operation as
specified in Schedule XIV of the act. This is a set back not only for hoteliers who are in the
process of building hotels with eco tourism being the mainstay but also discourages the
development of eco friendly hotels, something that this country and the world are in
urgent need of.

While computing the total income of an individual, deduction of LTC paid to an employee
(government/private) be admissible as is the case for provident funds, mutual funds,
insurance etc.

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In the Income Tax Act 2007/08, Section 80 ID was introduced to encourage development
of one, two, three and four-star hotels and Convention Centres of a minimum seating
capacity of 3,000 persons built in Delhi, Faridabad, Gurgaon etc. A tax holiday of five
years was granted to these hotels. We request that this section not only be extended to
hotels in other categories such as five and five-star deluxe hotels but also all hotels being
built across the country. We also think that this tax holiday be increased from five to ten
years.

As per the latest accounting norms, hotel buildings should be depreciated at a rate of
10% per year. However, hotels need to maintain their facilities in prime condition and
this adds a lot of pressure on existing structures, demanding a higher level of maintainance
and resulting in higher wear and tear. We suggest that a rate of depreciation of 20% be
allowed.

INDIRECT TAXES

Exemption from Para 63, Service Tax Act 1994: Hotels and other tourism related service
providers who earn foreign exchange have been included as the 13th Sector in the Service
Export Promotion Council (SEPC) set up by the Ministry of Commerce GOI. We think
that they should be granted exemption to the extent of foreign exchange for services such
as commission paid to foreign travel agents, cab rentals, dry cleaning services, health
club, beauty parlour services.

Hotels should be allowed a concessional rate of customs duty for hotels and restaurants
in tune with international level of duty.

Preparations such as bread, biscuits, chocolates etc, which are consumed regularly by
guests, should be exempted from levy of central excise duty.

SALES TAX/VAT/LUXURY TAX AND OTHERS

Luxury Tax should be rationalised on the actual amount received by the hotel and not
the published tariffs.

A common policy should be established for luxury tax as well as uniform VAT/Sales Tax
on Food and Beverage and excise duty on liquor.

ECONOMIC ISSUES PENDING WITH MINISTRY OF FINANCE

A 2% interest subvention should be extended to hotels for being an employment extensive

industry similar to textiles, leather, marine and handicrafts which currently enjoy these
benefits.

Deletion of hotels from being equated with real estate by the Reserve Bank of India, a
condition which implies very high risk levels (3-4% higher than the prime lending rate).

Tourism to be declared as an industry under the Industries (Development and Regulation)

Act 1951, which will allow hotels benefits such as getting land banks, exemption of duty
on stamp paper, exemption and concessions on VAT, water and electricity charges as
per industrial rates, road tax, single window clearance for projects etc.

We have reiterated to the government authorities that as the voice of over 2,160 Indian
hotels, we feel it is important that hotel owners be given these advantages so that the huge
shortage of rooms in the country can be addressed.

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About HVS
HVS Hospitality Services, a global hospitality consulting and services organization, is
acknowledged as a specialist in its field. Founded in 1980 in the United States, by Stephen
Rushmore, the company has 32 offices across the globe and more than 18,000 assignments
to its credit. Rushmores first book, The Valuation of Hotels and Motels, quickly became the
definitive work on the subject and the HVS method of providing an economic study and
appraisal for hotels and motels immediately became and continues to be the industry standard.
HVS New Delhi was established in 1997 and has risen to be the only dedicated hospitalityconsulting firm in this region. It currently offers its consulting and valuation services to
clients with interests in the South Asian Region covering India, Pakistan, Sri Lanka,
Bangladesh and Nepal. The different verticals based on the services offered by the New
Delhi Office are as follows:

Consulting and Valuation

Asset Management & Strategic Operational Advisory Services
Executive Search
Marketing and Communications
Web Strategies

CONSULTING AND VALUATION

The team comprises experienced and qualified hotel professionals undertaking feasibility
studies, development strategies, valuations, market area analyses, market entry strategies,
investment services, operator search and management contract negotiations. The team has
an impeccable reputation with the highest level of credibility and as a result, a hotel project
accompanied by an HVS consulting report attracts immediate attention. Our database of
hotel information, combined with broad insight and extensive experience, enables HVS to
produce well-documented studies that contain fully supported value conclusions.
Each report is customized to meet client requirements based on mutually agreed upon
parameters. The HVS approach on hotel and real estate appraisal is widely used by hotel
management companies, financial institutions, equity investors and developers of hotels in
making investment decisions in the South Asian hospitality industry.
EXECUTIVE SEARCH

Executive Search, another vertical to the base of services offered, entered the Indian market
in 2001 and manages diverse portfolios across varied sectors. HVS Executive Search has
offices in New Delhi and Mumbai and is among South Asias first retained Executive Search
practices catering to the services sector. While hospitality continues to be an important area

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of focus, this division has carried out senior level searches in the real estate, financial
services, retail and healthcare sectors.
MARKETING AND COMMUNICATIONS

Marketing Communications Services provides a specialized platform for its clients creating
executable marketing and communication road maps for improved business performance.
Our services include Pre-Opening, Opening and Tactical Marketing Campaign,
Conceptualization, Strategic Advertising, Development and Implementation of Brand
Architecture and Strategies, Creation and Management of CRM Strategies, F&B Marketing
and Corporate Communications.
WEB STRATEGIES

HVS Web Strategies provides affordable, accessible, and streamlined Internet and Web services to hotel and resort owners, operators, developers and investors who recognize the key
role technology can play in improving their operational and financial performance. It
specializes in conceptualizing, developing and deploying the next generation of online/web
solutions, such as, Website designing and development, Online Marketing and Branding
(including SEO), Graphics and Multimedia services to name a few.
ASSET MANAGEMENT & STRATEGIC ADVISORY SERVICES

The HVS Asset Management & Strategic Advisory Services aims to provide a unique value
proposition for its clients through services aimed to assist hotel owners and investors to achieve
optimal performance from their hospitality investments. Through expert, independent
market assessments and unbiased reviews of various processes affecting the operational
efficiency of hotel assets, our analysis and recommendations will be custom-designed to meet
the specific needs of each individual client and asset that we manage.
The HVS Asset Management & Strategic Advisory vertical offers services like Strategic
Advisory Services and Owner Representation, Pre-Opening Capital Plan and Budgeting,
Revenue-Cost Optimization and Profitability Analysis, Sales, Marketing and Revenue
Management, Operational Advisory and Audit Services.
HOTEL INVESTMENT CONFERENCE SOUTH ASIA 2009

A confluence of hotel industry stakeholders, visions

and ideas, industry news and networking, HICSA has
successfully created an interactive platform in the
South Asian region. For enquiries regarding the fifth
annual conference, HICSA 2009 please visit
www.hicsaconference.com or email to hicsa@hvs.com
The Indian Hotel Industry Survey 2007-2008 brings together the industrys key statistics and
serves as an easy reference volume. We are grateful to all those who have contributed towards the same and look forward to increased participation in the years to come.

Manav Thadani
Managing Director

Shamsher Singh Mann

Senior Associate

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Avantika Vijay Singh

Editor

Sally DSouza
Research Analyst

ECOTEL
The ECOTEL certification program is not just for hotels that want increased cost-saving
benefits for themselves, but also for those that want to give something worthwhile back to
the environment by providing a benevolent helping hand to the community on the whole.
The certification is given to hotels, which show a heightened level of environmental
responsibility and is based on five criteria termed as globes. A hotel must achieve at least two
of the five globes to qualify as an ECOTEL Hotel.

Each of these globes is unique in the sense that, in isolation it covers one responsible aspect of
the environment, and in totality encompasses the environmental ethos of our earth. The
ECOTEL certification once granted lasts for two years during which the hotel must permit
regular inspections to ensure steadfast belief in their environmental curriculum.
The ECOTEL hotels in India are:

The Orchid, Mumbai

Rodas, Mumbai
Ceebros Raintree, Chennai
Hotel Gautam, Mahabaleshwar*
Hotel Laguna, Lonavla*
The White Orchid, Jammu*

* Under Construction

For further details on the ECOTEL certification program contact:

Ms. Harinakshi Nair
Senior Associate
HVS Eco Services
+91 9820203036 (Mobile), Email: hnair@hvs.com

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Synopsis and Key Highlights of the Survey

Introduction
The Indian hospitality industry has emerged as one of the key industries driving the growth
of the services sector and, thereby, the Indian economy. The FHRAI Indian Hotel Survey
2008 Report aims to provide the most comprehensive guide to performance trends for this
industry. Results of the Survey will empower industry stakeholders such as owners, investors, operators, business analysts and researchers with information on the inner workings of
our industry. It will help operators benchmark their performance and identify investment
opportunities.
Data Collection
The data for the FHRAI Indian Hotel Survey 2008 Report has been contributed by the member hotels of FHRAI. The FHRAI sends out a questionnaire to each of its members (currently
numbering 2,160 member hotels) which is then analysed and presented in this report. The
data presented in the current edition is culled from 1,204 responses.
Methodology
Data from participating hotels is sorted and filtered into a comprehensible structure explaining
the performance of the Indian hospitality sector across crucial parameters. These parameters,
like guest segmentation, hotel finances, marketing, seasonality and sources of reservations
among others, are then presented under the following categories:

Star: Five-Star Deluxe, Five, Four, Three, Two and One-Star hotels alongwith Other hotels,
which do not come under any star ratings.
Inventory: Number of rooms in hotels categorised under - Less than 50 Rooms, 50-150
Rooms and More Than 150 Rooms
Affiliation: Affiliated to chain or independent
Primary Markets: Seven major cities
Bangalore
Chennai
Goa Kolkata
Mumbai
New Delhi NCR
Pune
Secondary Markets: Twelve secondary cities
Agra
Ahmedabad
Hyderabad
Indore
Jaipur
Kochi
Lucknow
Ootacamund Shimla
Thiruvananthapuram
Udaipur Visakhapatnam
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Qualifying Conditions

While it is our endeavour to represent all the cities of India, we are limited by the data
received from the participating hotels. In order to make the study relevant, we present
data for only those categories for which we have a minimum of four participating hotels.
Hotels across different categories showing similar characteristics have been combined
under the same category.
To facilitate better evaluation of data across comparable groups, the financial statements
are presented upto Net Income, before any deduction of depreciation and interest, which
are hotel/owner specific.

Limiting Condition

In some cases, there are large fluctuations in the data and this noise in the data may be
attributed to the changing participation in the survey and not an accurate representation
of market performance.

Presentation of Financial Data

Percentage of Revenue: is an assessment of costs as a percentage of revenue. Departmental

expenses are portions of individual revenue heads while Operating and Fixed Expenses
are deducted from Gross Hotel Revenue.

Amount per Available Room (PAR): is the financial performance of a single room. It is
the product of average occupied rooms per hotel and the average rate, divided by the
average room inventory per hotel.

Amount per Occupied Room (POR): is the performance of a single occupied room.

All amounts presented in this report have been rounded to the nearest whole number and
are in Indian rupees (Rs) for the fiscal year 2007/08 (April-March). In the financial statements,
rupee amounts are shown as amounts per available room (PAR) and per occupied room
(POR) in order to eliminate differences in the size of hotels surveyed.

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Key Trends
In the section, Country Trends, broad industry characteristics are highlighted first along
with historic marketwide trends. In the Focus discusses some key trends and characteristics
followed by some emerging trends from hotels across the country presented under City
Trends, analysing hotels in 19 cities. The City Trends reflect HVS market perception for
each city, as well as our expectations with regard to its performance in the current year
(2008/09). HVS Views discuss our opinion on some concerns we would like to bring to the
attention of our readers.

Country Trends

Overall Performance: The financial year 2007/08 was clearly one of the best for the
Indian hospitality industry in terms of the overall average rates and occupancies. Average
occupancies increased by 2.5% while average rates increased by over 23%. The
performance of branded hotels with an inventory in excess of 150 rooms has been much
better than that of standalone properties with a lower room inventory. Most hotels saw
an improvement in their bottomlines, though a surge in operating expenses especially in
administration, general and energy costs has been observed.

Performance Analysis per Star Category: The upper echelon of hotels, including fivestar deluxe, five-star and four-star hotels outperformed the lower ones in almost every
category. Minor operating departments such as telephones, car rentals and so forth are
predominantly in the red for three, two and one-star hotels, a trend which has been
continuing for many years now. This difference in costs, when comparing the higherend hotels to the lower ones, is largely due to inefficient management of assets and is an
area hotel owners should focus on in order to be more competitive. Rising energy costs
have affected most hotels across categories.

Manpower and Training: An increased number of hotels, especially in the four and
three-star categories, have invested in training. Trained manpower has become
increasingly scarce especially with attrition to related sectors like aviation, telecom, and
information technology (IT)/IT enabled services (ITeS). In an increasingly competitive
scenario and with discerning customers, hotels need to ensure the availability of a skilled
workforce. The countrys demographics - especially a young and substantial Englishspeaking population can be turned into one of the greatest assets to fuel the growth of
this sector. In order to have a workforce with industry-specific skills, more basic vocational
institutes need to be started across the country. The survey also indicates a high employee
to room ratio, highlighting the excessive use of manpower across hotels. While hotels at
the upper end of the spectrum can afford to have a high ratio, mid market, budget and
economy hotels should try and be more efficient in using manpower. The newer hotels
entering these segments, managed by competent hotel companies, have a far leaner
structure supported operationally by technology and service standardisation. Though
they incur a higher initial investment, their operational costs are reduced over the years.

Market Segmentation and Guest Analysis: The domestic traveller (74.3%) continues to
be the largest segment in the country; within this, the domestic business traveller holds
the highest weight at 37.7% of the overall demand. The domestic traveller is the main
demand generator for mid market, budget and economy hotels. With the global financial
recession setting in, we expect the domestic segment to gain more importance. It is,
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therefore, important that hotels try and understand the demographics of the Indian
customer and customise their products to suit the requirements of this segment rather
than blindly applying international norms. Judging by the high percentage of repeat
clientele in the mid market, budget and economy hotels, we also find that the domestic
Indian consumer has high brand loyalty, a fact that is reiterated by the consumer spending
patterns in other product markets like fast moving consumer goods (FMCG).

Country of Origin: The United Kingdom (UK) and the United States of America (USA)
remain the biggest international feeder markets for the Indian hospitality sector,
contributing nearly 28% of the overall demand. Most of these travellers visit India for
business related work and being large trade partners, UK and USA tend to have a higher
weight. Though we expect this trend to continue, Indian hotels should look at increasing
their attractiveness to other countries, like China and those of the ASEAN (Association
of Southeast Asian Nations), which are large sources of international travellers. Easier
and more comfortable travel needs to be facilitated in order to attract these markets and
the way is through improved visa norms, quality of rail travel, air connectivity and hotel
room accommodation.

Seasonality: The pattern of seasonality in India has been constant with the months of
October through March being the busiest. Holidays in December, financial closings in
March and the extreme weather from May to August tend to bring down the overall
occupancy of hotels. With a shortage of rooms across the country, this seasonality has
become less pronounced and hotels tend to tide over the leaner periods with an increased
use of yield management. Weekly occupancies show guests checking in on Monday
evening and checking out on Friday morning in business destinations. The sharp increase
in average rates in cities such as Bangalore has made this even more pronounced. An
expected decline in next years occupancies might reverse this trend.

Marketing Media: It is interesting to see the increased usage of Internet as a marketing

media by hotels across the value chain and especially the three, two and one-star categories.
A countrywide increase of 5.5% in hotels having their own websites and 8.3% increase in
hotels advertising themselves on other Internet sites has been seen. Internet bookings are
increasingly becoming the preferred mode for customers to choose and book hotels, a
trend which is now confirmed by the rising adoption of this media as a marketing tool.
As can be seen, while hotels have started to invest in their own websites, they are also
featuring themselves on aggregator sites like makemytrip, travelmasti, expedia etc. These
aggregators play a powerful role by providing the smaller unbranded hotels with a global
sales platform similar to the central reservation system used by larger chains.

Technology and Environment Management Practices: Over the past few years, hotels
have invested in technology, though selectively. When compared with the levels of
investments in 2002-03, we find that there are substantial increases in the period. Hotels
have moved towards having their own intranet (21.5% increase) and Local Area Network
or LAN (25%) systems, optimising sales through investing in property management
systems (18%) and point of sales systems for food and beverage (22%). Similar investments
have also been made in having their own websites (18.3%) and reducing telephone costs
by having call accounting systems (18.9%).

In the Focus
The performance of hotels across India has seen a sharp improvement over the past few
years, making hotels a financially attractive sector. The Net Income lines for hotels have
become buoyant and even though costs have risen, the incremental value addition from
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higher room rates and occupancies has helped tide over these increased costs. There are,
however, a few important trends that have also surfaced and need to be highlighted.

Hotels associated with chains have shown a much better performance than the
independently run ones. Many a times, hotel owners wish not to associate their products
with chains in order to save themselves added costs like marketing, licensing etc. These
costs are high and in many cases the brands tend to place very tough conditions on hotel
owners while tying up their brands. However, they bring a lot of positives alongwith
them. Their reservation systems have a very wide reach and have a very high traffic flow
as well, translating into higher visibility and therefore reservations. Another advantage
of branding hotels is that customers get to associate with the product and therefore get a
feel of what product they are looking at, something which individual hotels cannot
provide. Going into the future, as a higher volume of reservations come in through the
Internet and branded budget and economy hotels mushroom across the country, owners
of standalone properties might witness a large erosion of their market share, a concern

Exhibit 1: Rev PAR Comparison : Chain and Independent Hotels

they should look into urgently. Exhibit 1 highlights the performance of RevPAR over five
years for hotels that are part of a chain versus those that are independent.

Performance of hotels, as can be seen in Exhibit 2, shows a similar trend when comparing
hotels with a room inventory less than 50 as against those with more than 50, on the
basis of increase in bottomlines. Hotels with a higher room inventory tend to do better
than hotels with a smaller base. This is because the marginal costs associated with a
higher room inventory are much lower than the revenue generated by rooms. The division
of fixed costs over a larger room base helps in improving the profits. This condition does
not imply that hotels with huge inventories be developed because there might not be
enough demand in the city to support so much supply. Hotels should have an average
inventory of around 125 rooms to maximise efficiencies. This brings us to another issue
faced by mid market, budget and economy hotels. Most of the existing hotels in this
category lie in the heart of the city. The low FSI (Floor Space Index or the amount that

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Exhibit 2: Net Income Comparison : Hotel Room Inventory

can be constructed on a given parcel of land) is so low that larger inventories cannot be
made. The only alternative left for hotel owners is to buy additional land which is very
difficult especially with the prohibitively high land prices across most Indian cities.
All India performance of hotels over the past five years shows a robust increase in topline

In Rupees

Exhibit 3: Performance Indicators

Table 1 highlights the performance of hotels across India over the past five years. The robust
increase in the profitability of hotels is clearly visible from the data.

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Page 14

Table 1: Trends in Key Operating Statistics

City Trends
The current year has seen one of the most buoyant performances by hotels across various
cities and categories. The rapid increases in average rates have even made some Indian cities
the most expensive markets in the world. However, as elaborated ahead in HVS Views,
most Indian cities face a shortage of quality rooms. The onset of the global financial recession
and the negative travel advisory issued for India, in the wake of the Mumbai terror attacks,
are expected to correct the performance of hotels across India in 2009/10 as well. Nonetheless,
we expect this to be a short term effect and overall most Indian cities face a shortage of
quality rooms, especially in the mid market, budget and economy hotels catering to the fast
growing domestic consumption.
It should be noted that the country average is not representative of the trends seen in certain
key hotel markets in India as it includes the results of lower star category hotels across several
cities, which comparatively, have a more restrained operating environment. Table 2 illustrates
average occupancy and rate for 30 cities/regions on an all India basis over the last five years,
which is followed by HVS viewpoint on the demand-supply scenario and performance of
the 19 identified hotel markets based on in-house research.

Table 2: Average Occupancy and Average Rate: 30 Cities/Regions in India

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Bangalore
Bangalore has been amongst the top performing markets in India for the past four to five
years. Developers were initially slow in gauging the market and new hotel developments
entered the market relatively late, leading to an acute shortage of rooms. Five-star deluxe
and five-star hotels witnessed a drop in occupancy while maintaining their average room
rates (ARR) while the lower category hotels saw a sharp increase in their occupancies at the
same ARR. The shortage of rooms in this market has resulted in the mushrooming of unbranded serviced apartments and guesthouses providing quality accommodation at competitive rates. Once a demand-supply equilibrium is attained in three-to-four-years time, we
anticipate rate consolidation to take place with the branded hotel segment reacquiring some
of the unaccommodated demand. Furthermore, geographic pockets are likely to be formed
with each feeder market having adequate number of hotels capturing the demand generated. Going forward, we believe, Bangalore will witness a sharp rate correction in the medium term accompanied by the subsequent stabilisation of occupancies and average rates.
Chennai
Chennai has historically been a stable market. This year, the five-star deluxe and four-star
segments have seen a sharp drop in occupancies, which can be attributed to a near 50%
jump in the ARR. In the three and two-star category hotels, performance has remained
constant with an inflation adjusted increase in the average rates. Operating costs, on the
other hand, have increased due to very high energy costs and an increase in administration
and general costs. The strength of the Chennai market can be attributed to the diversification
of its demand generators which range across sectors such as automobile manufacturing,
textiles, leather, IT/ITeS, finance and FMCG companies. It is, in our opinion, a very attractive
hotel market especially because of the low supply entering it. While there were numerous
projects announced in areas close to the newer IT developments, many may not be completed
as the IT sector faces a turbulent global market. This might get compensated by the
development of Sriperumbudur as a leading manufacturing area. Nearly 5,000 acres of land
is being developed by the government and private companies for automobiles, auto ancillary,
glass and electronics manufacturing. Chennai is also expected to benefit from the development
of the East Coast Road as a tourist hub with scenic beaches and easy connectivity. The
progressive governance of Tamil Nadu further helps bolster the image of Chennai and
improves its prospects.
Goa
After rising steadily for the past few years, hotels in Goa have seen a stabilisation in both
occupancies and ARRs. However, Net Income of hotels across categories has dropped due to
a sharp increase in operating expenses. We expect the Goa hotel market to witness a sharp
correction in average rates in the coming months and the next year, which can be attributed
to the astronomically high room rates moving the charter business from countries like the
UK and Russia out of Goa. Unfortunate incidents such as the increasing crime-related ones
in Goa and the Mumbai terror attacks will further dampen Goas performance by keeping
foreign tourists temporarily away. Nonetheless, with very low active supply in the market,
Goa remains one of the most attractive markets of India.
Kolkata
Over the last year, we observed a slight drop in occupancy for the three and two-star hotels
and an increase in their ARR. The mid market segment has performed very well in Kolkata
as it improved its Net Income by nearly 7% owing to increased contribution from the sales of

Page 16

rooms to overall revenue. Future performance of the Kolkata market has been negatively
affected by the governments inability to muster adequate support for the Tatas small car
project and, thus, dampened investor confidence in the market. Due to the comparatively
low cost of land in the city, the barriers for entry into Kolkatas hotel market are low and
there are concerns of oversupply in the city.
Mumbai
After a very good performance in 2006/07, Mumbai continued to improve in both occupancy
and ARR in 2007/08, making it one of the best performing markets of India. Five-star deluxe
and five-star hotels maintained their occupancies while showing an impressive 32% increase
in average rates. The performance of four-star and three-star hotels has been even better
with a 7% increase in their bottom lines. The scarcity of real estate and the high capital
values increase the entry cost into the market and give the incumbents a very strong advantage.
Unfortunately, the recent terror attacks and the global financial recession have adversely
affected the short term performance of Mumbais hotel market. Though we expect a 20%
correction in both average rates and occupancies in the market over the next year, we expect
the city to continue showing a strong operating performance. Most companies are looking at
entering the Mumbai market across all category of hotels. The division of the Mumbai hotel
market into different micro markets such as Bandra Kurla Complex, Worli, Andheri, South
Mumbai, Navi Mumbai and others has created an opportunity for hotel owners to have
multiple assets in the same market. Mumbai promises to be one of the most promising markets
in Asia.
New Delhi-National Capital Region (NCR)
New DelhiNCR was the best performing market in India for the year 2007/08. The political
centre of the country, Delhi has greatly benefited from many factors that have enabled it to
become an important commercial hub of the country. Good governance along with the
development of Gurgaon as a services hub and quality infrastructure in Delhi has enabled
the city to attract many companies. While hotels across all categories have maintained their
occupancies, ARRs in the city increased by over 26% in the five-star deluxe and five-star
categories and 36% in the four and three-star hotels. This is further evident from the bottomlines
of hotels in New Dehi NCR, which are the best in the country. An interesting fact to note in
the performance of the four and three-star hotels in Delhi is the low revenue contribution
from banquets and conferences to the overall revenue. Delhi has a very flamboyant social
events segment which is extensively catered to by the high-end hotels as well as numerous
standalone facilities. Newer hotel developments should consider this business model seriously.
Delhi also has very diversified feeder markets, helping it tide over the gloomy market scenarios.
With elections favouring the incumbent government, hotel development in the city might get
an additional boost.
Pune
Performance of three and two-star hotels remained constant in 2007/08 but increased
operational costs have reduced the profitability of the market. This year, there is an adequate
representation from the five-star deluxe, five and four-star hotels. We notice the growth in
Punes hotel market in the robust performance of incumbent hotels in Pune. Low supply in
the city helped existing hotels increase their ARRs and overall performance. However, Pune
has low land costs and ample available land. This along with the attention grabbing rise in
average rates, has attracted many an investor into this comparatively nascent hotel market.
With many projects under construction across the city and across various segments, we
expect to see a sharp and sustained correction in this market.
Page 17

Twelve Other Cities

Agra
Agra is a famous tourist destination and has good road and train connectivity with the other
vertices of the Golden Triangle - Delhi and Jaipur. The Taj Mahal continues to attract record
tourist visitations and the city is filled with architectural and historical wonders.
Unfortunately, it has not been able to package itself well and capitalise on its rich heritage
like Jaipur and Udaipur have. As is evident from the comparison of average stay per guest
across cities, tourists now prefer going to Agra for a day visit and not spend time in the city.
Bad governance, poor maintenance of civil infrastructure and lack of cleanliness have
negatively affected the image of this destination. Despite having some of the most beautiful
historical structures, Agra continues performing badly and it is our opinion that the state
government should look at improving the conditions in this city so that the citys citizens and
its tourism can benefit.
Ahmedabad
Hotels in Ahmedabad improved their overall performance by showing an 11.2% increase in
the occupancy while maintaining their ARRs. However, these hotels have shown a surprise
rise in their rooms costs. At 27.9% of rooms revenue, these costs stand to be amongst the
highest in the country along with other cities like Thiruvanathapuram and Indore. As the
capital of Gujarat, one of the most economically progressive states of India, Ahmedabad
benefits from a fast growing economy and good governance. Investors have been eager to
enter the hospitality market in Ahmedabad, and 2,000 to 2,500 rooms are expected in the
market over the next five years. This is a dramatic increase over the current base of supply in
the city; however, the hotel market in Ahmedabad is expected to sustain itself in the medium
to long term.
Hyderabad
The five-star deluxe, five and four-star categories show a sharp decline of nearly 22% over
last year in the occupancies of hotels; however, this is not entirely representative of the markets
performance. The primary reason for the decline is that the data set is skewed by the
performance of hotels located in close proximity to Begumpet, which has been adversely
affected by the shifting of the airport to the southern end of the city in Shamshabad. Part of
the occupancy correction can also be attributed to the healthy increase in room supply of
36.7% over last years existing supply. Hyderabad, along with Pune, is expected to witness a
strong growth in future hotel supply. A heavy dependence on IT/ITeS (a sector facing a lot
of turbulence and cost cutting during these times of a global financial recession), low cost of
land for developing hotels, and a robust future supply are expected to have a negative bearing
on the performance of this market.
Indore
Indore saw an occupancy rise of 6.4% and an ARR decline of 23% in 2007/08. Indore, the
economic and commercial capital of Madhya Pradesh, is also an important industrial hub
for textiles, automobile spares, and pharmaceuticals amongst other industries operating
around the city. The market has shown a stable increase in demand and the average rates for
hotels has been low. However, with a large existing base and some new hotel developments
underway, we expect this price sensitive market to face further rate and occupancy pressures.

Page 18

Jaipur
Jaipur has done well as both a tourist and business destination, though occupancies have
dipped significantly for the year 2007/08, owing largely to the new supply entering the
market. The 2008/09 performance of this market shall be further affected by the Gujjar
agitation in the state. However, there are some very positive signals from this market as the
state and the city get featured prominently in the advertising campaign of Indias tourism
ministry. As part of the Golden Triangle, the city gets a lot of foreign tourist arrivals and the
average stay of these guests is also very high, improving the overall performance of the hotels.
A substantial number of mid market and budget category hotels are expected to commence
operations in Jaipur in the near future. This bodes very well for the market as it would be
able to tap into the great potential offered by domestic tourists. While the performance of
hotels might be negatively affected in the immediate short term due to reduced foreign tourist
inflow, Jaipur remains a strong hotel market overall.
Kochi
While three and two-star hotels in Kochi have maintained their performance in terms of
ARR and occupancy, the hotels have shown a marked increase in the contribution from
rooms to total revenue. Bottomlines have increased by nearly 4%, commensurate with a
6.9% increase in room contribution. Kochi is the cultural and economic capital of Kerala and
has profited from both commercial and tourist travel. The development of Kumarakom as
one of the most preferred tourist destinations has further helped increase traffic to Kochi
which is the port of entry for Kumarakom.
Lucknow
The average occupancy in Lucknow increased by 6.1% over the previous year to 76.9% in
2007/08 at an ARR of Rs1,709. As the capital of Uttar Pradesh, the most populated state of
India, Lucknow is a base for industries as well as services sector companies. Demand for
hotel rooms is primarily from the Commercial segment with literally no participation from
the Leisure one. The absence of a strong tourist circle follows the lack of initiative from the
state government to promote it. Lucknow has also suffered from investor participation owing
to the rampant corruption in the state. However, the scale of demand originating from the
middle management of companies has been positively affecting the performance of hotels in
the city and we expect them to continue improving. A limited hotel supply is planned to
enter the Lucknow market and it remains an attractive investment option for the budget and
economy products.
Ootacamund
Ootacamund, or Ooty, is a popular hill station in the Nilgiris. As is seen in the performance
of its hotels, the market is weak with an occupancy of 56.6% and an ARR of Rs1,353. Seasonality is marked in this market with hotels witnessing a surge in May as schools in India
take a break for summer vacations. The market also witnesses weekly seasonality with occupancies breaching the 80% mark during the weekends when domestic tourists from
neighbouring Bangalore, Mysore, Coimbatore and Kerala visit. Though Ootacamund has
quality mid market hotels, it has not been able to penetrate the domestic tourist circuit well.
This is because most of the hotels here provide little more than accommodation while tourists, especially those with young children, prefer destinations which have some entertainment activity or a unique selling proposition (USP).

Page 19

Shimla
Shimla - a popular hill station in the Himalayas - is located in close proximity to Chandigarh
and is well connected by road and rail to Delhi. As is evident, the performance of three and
two-star hotels is weak and the market shows a marked yearly and weekly seasonality.
Similar to hotels in Ootacamund, hotels in Shimla, too, lack a USP and tend to offer the
regular fare to visitors. In the coming years, domestic tourist demand shall be the major
target segment. In order to build a repeat clientele and to move up the value chain, hotels in
Shimla will have to invest in creating infrastructure and facilities like nature camps, sports
and other entertainment activities that appeal to this segment.
Thiruvananthapuram
Thiruvananthapuram, the capital of Kerala, maintained its occupancy and ARRs. Demand
for hotel accommodation has increased due to growth in technology, and medical sectors.
The city accounts for a substantial portion of software exports for the state. Tourism, too,
contributes heavily towards the citys economy owing to it being a well-established hub used
by travellers to visit other destinations within Kerala. Going forward, the outlook for the city
appears positive with hotels benefiting from the above-mentioned developments.
Udaipur
Our data set for Udaipur comprises of the three and two-star hotels segment. These hotels
have maintained their overall performance in terms of occupancy and ARR. Other research
on Udaipur highlights its popularity as a tourist destination and the manifold improvement
in hotel performance, especially in the higher category hotels. Yearly seasonality is marked
in Udaipur as it receives a bulk of its tourist arrivals during the winter season. The three and
two-star hotels of Udaipur are mainly used by domestic tourists.
Visakhapatnam
Over the past two years, Visakhapatnam has emerged as an attractive hotel market with
hotels witnessing an increase of nearly 88% in average rates. The market has witnessed a
rush of investments in special economic zones (SEZs), IT and retail. These developments
along with the existing shipping, oil and refining businesses have helped increase demand in
the city. Net Income of hotels in Visakhapatnam has nearly doubled from 22.4% in 2005/06
to 42.6% in 2007/08. Future supply into the market is low and we expect the city to continue
to be an attractive hotel destination.

Page 20

HVS Views
The Times They Are A-Changin

Come gather round people, wherever you roam

And admit that the waters around you have grown
And accept it that soon youll be drenched to the bone.
If your time to you is worth savin
Then you better start swimmin or youll sink like a stone
For the times they are a-changin.
(Bob Dylan)
It is amusing to note that in times such as these, a poet sums up the situation better than the
experts. The global economy is in a state of shock. There arent many, if any, who can
comprehend the extent of the damage this economic meltdown has left in its wake. The year
2008 started with five investment banks; todays score leaves one wiped out, two sold and
the remaining two retired. The economy of Iceland collapsed completely while those of the
US, Japan, Brazil, Russia, Germany and others have been sinking fast. Capitalism, the cornerstone of economics, is crumbling like the Colossus, leaving behind another lengthy round
of over analysed debates, blame games and some case studies for future management students.
What can one make of the arguments of markets decoupling and dependence of developing
economies on the western world. Bottoming out of the US economy will have powerful
repercussions across the world and it shall take a lot of time before we get back on our feet.
But then, not all parts of the world are reacting in the same manner. Factors of demand,
supply, economy, political stability, security and growth are different for every country. We
need to look closely at the risks associated with our investment options across this checkered
board and try to make sense of it. What do the tea leaves say about the future? This time, we
have no real answers except:

Markets, on their own, tend to behave in an irrational manner. The ability of markets to
overshoot fundamental values and remain at those levels is much stronger than to find
equilibrium and stabilise at an appropriate level. Adam Smiths invisible hand has decided to do a disappearing act when confronted by a more dangerous animal called
Greed.

The silver lining is that such times, when one gets an opportunity to invest, come just
once in a while.

India has treaded cautiously in opening up its financial sector to globalisation, a strategy
which has helped keep its banks sound and its foreign debt manageable. In the meanwhile,
it has recorded an annual average growth of 8.8% for the past five years. At similar rates, its
US$1 trillion economy would double in size in about nine years. Its economy, though heavily
affected by the global financial recession, continues to be one of the few economies expected
to grow over the next few years. There are opportunities across sectors and regions in India.
The moot argument of this article is that there lies a strong investment opportunity in the
Indian hotel sector and the time for it is now.
Consider the data shown in Exhibit 4 detailing the hotel room inventory and hotel properties
under the various categories. Nearly 67% of the entire countrys 100,506 strong hotel room
inventory (considering those classified by FHRAI. HVS considers this number to be closer to
120,000 rooms) falls under the category of three, two, one-star and unrated hotels (the greyPage 21

shaded oval in Exhibit 4). These hotels are mostly independently operated, unbranded with
low service and product standards and, as can be seen, cater to the majority of domestic
demand. We see a lot of scope for the aggregation of these hotels.
Exhibit 4

Not only does the Indian hospitality market have a large unbranded market at the lower end
of the spectrum, which needs to be consolidated but it also requires a large number of rooms
across every single category. To understand the dearth of hotel rooms faced by India, we
analyse some major cities across the world and compare their population to their respective
hotel room inventory (Exhibit 5). Even if we discount the Indian cities for the low income per
average citizen, the disparaging imbalance between population and actual room supply in
Indian cities cannot be ignored. The total hotel room inventory of India, a country with the
second-largest population in the world, has lesser rooms than in many individual cities across
the world.
Exhibit 5

pressure in the coming few months. This is the time when a prudent investor should consider evaluating opportunities from what appears to be a fantastic buffet of options. Hotels
are stable, long term assets that are capital intensive and have historically shown stable
though slow returns. They require owners who have foresight, passion and perseverance
armed with sound market intelligence. This is not an opportunity someone with a real interest in hotels would like to disregard.
Page 22

1. Indian Hotel Industry by Star Category

Introduction
In this section, we have analysed hotel performance by star classification. An overall total of
1,204 hotels participated in our survey for 2007-08. The hotels have been classified into the
eight categories applicable in India (see Tables 1-1 to 1-10), and their responses analysed
accordingly. Unapproved hotels too have been put under the appropriate star category
based on their product and operational efficiencies. The balance is represented under Others.
To provide further comparisons, we have included a column for All India Totals across all
star categories. Each section includes the total number of respondents for each component of
the survey, allowing the reader to judge the validity of the data received.
The layout has been standardised in each section to enable consistency throughout the entire
document. All figures pertain to 2007-08 (April-March), and monetary figures are in Indian
rupees.
Trends

Three Two and One-star hotels have a much lower bottomline than the higher rated
hotels. Apart from operational inefficiencies, a low room inventory could also be responsible
for this. Hotels with a larger room inventory tend to benefit from it as they can reduce the
overall costs associated with operations.

The contribution of F&B to the overall revenue is higher in three, two and one-star hotels
than in the four, five and five-star deluxe hotels. This, however, does not imply that the
former are more aggressive in F&B sales. Instead, the poor performance of the rooms
department as seen by the low ARRs, could be more responsible for this trend. This
argument is further strengthened by the high F&B costs which point towards F&B being
a very low margin revenue generator.

While the five and five-star deluxe hotels tend to have an equal proportion of domestic
and foreign travellers this proportion tilts strongly in the favour of domestic travellers in
the three, two and one-star hotels.

Page 23

TABLE 1-1: Indian Hotel Industry by Star Category Facilities Analysis and Staffing
Typical Room Profile of an Average Hotel

Average Number of Food & Beverage Outlets Per Hotel

Average Number of Total Employees Per Hotel (Permanent / Contract / Full Time / Part Time)

Average Percentage of Trained Employees Per Hotel

Page 24

Page 25

TABLE 1-2: Indian Hotel Industry by Star Category : Financial Report Percentage of Revenue (2007-2008)

Page 26

TABLE 1-3: Indian Hotel Industry by Star Category : Financial Report Amount Per Available Room (2007-2008)

Page 27

TABLE 1-4: Indian Hotel Industry by Star Category : Financial Report Amount Per Occupied Room (2007-2008)

TABLE 1-5: Indian Hotel Industry by Star Category Market Data

Market Segmentation

Guest Analysis

Country of Origin of Guests

Page 28

TABLE 1-6: Indian Hotel Industry by Star Category Monthly & Daily Occupancy
Average Monthly Occupancy

Average Daily Occupancy

TABLE 1-7: Indian Hotel Industry by Star Category Sources of Reservations

Source of Advance Reservations

Page 29

TABLE 1-8: Indian Hotel Industry by Star Category Marketing Media

Marketing Media - Percentage of Hotels Using Each Media

TABLE 1-9: Indian Hotel Industry by Star Category Payment Methods

Payment Methods Used

Credit Cards Used

Average Credit Card Commission

Page 30

TABLE 1-10: Indian Hotel Industry by Star Category Technology & Environment
Management Practices
Technology in Hotels - Percentage of Hotels Using Each Technology

Environment Management Practices - Percentage of Hotels Monitoring Quantitative Performance

Page 31

2. Indian Hotel Industry-Hotel Size & Chain

Affiliated vs. Independent

Introduction
In this section, we present key operating and other data for the survey participants according
to the number of rooms. The participating hotels have been classified into three categories:
less than 50 rooms, between 50 and 150 rooms, and more than 150 rooms. We have also
drawn a comparison between chain affiliated and independent hotels.

On comparing the percentage of suites as part of overall hotel room configuration we

find that hotels with less than 50 rooms have a higher percentage of suites to total rooms
(11.8%) than others in the 50 to 150 rooms (9.8%) and those with more than 150 rooms
(10%).
There is substantial similarity between the characteristics of hotels with more than 150
rooms and chain affiliated hotels. While average number of rooms are much lower in the
latter, their composition of rooms (10.3% and 9.9% respectively), ratio of management to
overall staffing (13.0% and 13.6% respectively), net incomes (47.7% and 47.9%
respectively) and other categories like market segmentation are very comparable.
As is evident and been highlighted through the survey, Indian hotels operating with
lower room inventories and with no branding are facing ever increasing costs. While this
could have varying explanations, one fact which does stand out is that the contribution
of rooms to the overall revenue is very low. Rooms are relatively the most profitable
section of a hotel and many budget and economy hotels should try and maximise their
revenues from this section.
Cash sales continue to be the preferred mode of payment for hotels with inventories less
than 50 rooms and for unbranded hotels.
Hotels with less than 50 rooms, 50 to 150 rooms and independent hotels tend to have
very limited contribution from the GDS, showing that they are not affiliated with larger
reservation systems. It is obvious that independent hotels do not belong to any chain but
there are numerous instances of independent hotels becoming a part of a larger reservation
system. These three categories of hotels also tend to have a very low contribution from
online reservation systems.

Page 32

TABLE 2-1: Indian Hotel Industry Hotel Size & Chain Affiliation : Facilities Analysis and Staffing
Typical Room Profile of an Average Hotel

Average Number of Food & Beverage Outlets Per Hotel

Average Number of Total Employees Per Hotel (Permanent / Contract / Full Time / Part Time)

Average Percentage of Trained Employees Per Hotel

Page 33

Page 34

TABLE 2-2: Indian Hotel Industry Chain Affiliated vs. Independent : Financial Report (2007-2008)

Page 35

TABLE 2-3: Indian Hotel Industry Hotel Size : Financial Report (2007-2008)

TABLE 2-4: Indian Hotel Industry Hotel Size & Chain Affiliation : Market Data
Market Segmentation

Guest Analysis

Country of Origin of Guests

Page 36

TABLE 2-5: Indian Hotel Industry Hotel Size & Chain Affiliation : Monthly & Daily Occupancy
Average Monthly Occupancy

Average Daily Occupancy

TABLE 2-6: Indian Hotel Industry Hotel Size & Chain Affiliation : Sources of Reservation
Source of Advance Reservations

Page 37

TABLE 2-7: Indian Hotel Industry Hotel Size & Chain Affiliation : Marketing Media
Marketing Media - Percentage of Hotels Using Each Media

TABLE 2-8: Indian Hotel Industry Hotel Size & Chain Affiliation : Payment Methods
Payment Methods Used

Credit Cards Used

Average Credit Card Commission

Page 38

TABLE 2-9: Indian Hotel Industry Hotel Size & Chain Affiliation: Technology &
Environment Management Practices
Technology in Hotels - Percentage of Hotels Using Each Technology

Environment Management Practices - Percentage of Hotels Monitoring Quantitative Performance

Page 39

3. Indian Hotel Industry-Seven Major Cities

Introduction
In this section, we present the operating profiles and financial data for different categories of
hotels in seven major cities: Bangalore, Chennai, Goa, Kolkata, Mumbai, New Delhi-NCR
and Pune. This section will give the reader an understanding of hotel performance in these
cities.
Qualifying Condition
In certain cities and for certain star categories, we were unable to fulfil the minimum data
requirement of a minimum of four hotels in each representation and have reflected this as
ID (insufficient data). Data has been combined for star category hotels exhibiting similar
trends in order to get a larger data set.
Key Trends
The key trends noted in the 2007-08 survey across the seven major participating cities are
presented below.

Foreign guests ratio is very high in five-star deluxe and five-star hotels in markets like
Bangalore and New Delhi-NCR as compared to Goa, Mumbai, Kolkata and Chennai.
This helps us in understanding the price elasticity of these markets as New Delhi-NCR
and Bangalore have been able to raise their average rates while Kolkata and Chennai
find a ceiling which they cannot cross.

Daily occupancy trends are more pronounced in markets where hotels have over extended
their prices e.g. Bangalore. Hotel occupancies fall drastically over the weekend and rise
only on Mondays when guests check in. This is a clear deviation from historical trends
when guests preferred checking in on Sunday evenings rather than flying into markets
on Monday morning.

Average length of stay

y for foreigners is one week in Goa while domestic guests tend to
come over the weekend. This also explains the drop in daily occupancy in Goa at the
beginning of the week. Five-star deluxe and five-star hotels in Bangalore have seen a
sharp drop in the average duration of guest stays, especially for foreign guests. This drop
of nearly one day is commensurate with the increase of one day for the four, three and
two-star categories.

Repeat guests ratio is the lowest in five-star deluxe and five-star hotels amongst all the
hotel categories.

Page 40

Page 41

Single
Double
Suites

Non-Air-Conditioned

0.0
0.0
0.0
192.7

16.3
160.7
15.7

2.5
10.7
0.0
70.9

0.5
51.7
5.5
0.0
0.0
0.0
162.4

2.0
0.8
1.3
4.2

3.3
2.5
3.1
1.7
41.2

90.3%
9.7
100.0

Total Business
Total Leisure
Total

Avg. Stay of Foreign Guests (Days)

Avg. Stay of Domestic Guests (Days)
Avg. Stay of Business Guests (Days)
Avg. Stay of Leisure Guests (Days)
Percentage of Repeat Guests

30.2%
69.8
100.0

4.0
3.2
2.9
1.5
42.7

68.7%
31.3
100.0

71.9%
28.1
100.0

Bangalore
FourStar,
ThreeFive-Star
Star &
Deluxe &
Five-Star Two-Star
8
15

2.9
1.3
0.6
4.8

Domestic Guests
Foreign Guests
Total

COMPOSITION
Number of Responses

Guest Analysis

Restaurant
Bars
Others
Total

COMPOSITION
Number of Responses

Bangalore
FourStar,
Five-Star
ThreeStar &
Deluxe &
Five-Star Two-Star
8
19

6.2
2.8
2.2
2.8
35.0

75.0%
25.0
100.0

53.2%
46.8
100.0

2.8
3.0
3.1
2.6
47.6

71.3%
28.3
100.0

73.6%
26.4
100.0

8.7
3.0
2.4
5.5
30.0

26.7%
73.4
100.0

52.9%
47.2
100.0

6.2
3.3
2.6
4.4
34.6

38.1%
61.9
100.0

60.9%
39.1
100.0

Five-Star Four-Star
Deluxe & & ThreeFive-Star
Star
10
17

2.1
1.6
0.7
4.5

Five-Star
ThreeDeluxe &
Star &
Four-Star Two-Star
6
24

4.3
2.3
0.7
7.3

Goa

1.7
0.9
1.5
4.1

Chennai

2.4
1.4
0.3
4.1

Five-Star Four-Star
Deluxe & & ThreeFive-Star
Star
9
19

Five-Star
ThreeDeluxe &
Star &
Four-Star Two-Star
6
26

0.1
1.6
0.0
80.2

3.2
65.8
9.5

Goa

0.0
0.0
0.0
168.8

0.0
134.0
34.8

Chennai

2.0
4.0
0.1
77.0

5.4
58.2
7.3

Five-Star Four-Star
Deluxe & & ThreeFive-Star
Star
11
19

Five-Star
ThreeDeluxe &
Star &
Four-Star Two-Star
6
27
0.0
147.7
14.7

Goa

Chennai

Average Number of Food & Beverage Outlets Per Hotel

Total Average Rooms

Single
Double
Suites

Air-Conditioned

COMPOSITION
Number of Responses

Bangalore
FourStar,
Five-Star
ThreeStar &
Deluxe &
Five-Star Two-Star
9
24

Typical Room Profile of an Average Hotel

1.7
2.7
0.4
33.8

2.4
23.3
3.2
0.2
1.6
0.0
32.2

3.2
25.1
2.1

1.0
0.7
0.3
2.1

2.2
1.7
1.6
2.4
36.8

83.5%
16.5
100.0

73.5%
26.5
100.0

2.9
2.6
3.0
2.5
36.8

63.5%
36.6
100.0

83.4%
16.6
100.0

2.1
1.7
1.9
2.3
56.6

83.2%
16.8
100.0

52.0%
48.0
100.0

2.5
3.9
3.2
2.8
48.9

72.9%
27.1
100.0

64.7%
35.3
100.0

2.9
2.7
2.3
2.7
39.6

69.8%
30.2
100.0

76.0%
24.0
100.0

Five-Star Four-Star Two-Star

Deluxe & & Three& OneFive-Star
Star
Star
14
35
56

1.3
0.8
0.7
2.8

Mumbai

3.4
1.2
0.6
5.2

Kolkata

1.4
0.8
1.1
3.3

Mumbai

0.0
0.0
0.0
57.9

5.3
48.0
4.6

Five-Star Four-Star Two-Star

Deluxe & & Three& OneFive-Star
Star
Star
14
44
39

0.0
0.0
0.0
236.0

83.4
127.6
25.0

Five-Star Four-Star Two-Star

Deluxe & & Three& OneFive-Star
Star
Star
16
45
67

Mumbai

Five-Star
Deluxe & Two-Star
Three & ThreeStar
Star
7
15

2.4
1.3
1.3
5.1

Five-Star Two-Star
Deluxe & & ThreeFour-Star
Star
7
17

Kolkata

0.0
0.0
0.0
158.1

0.0
144.4
13.7

Five-Star Two-Star
Deluxe & & ThreeFour-Star
Star
7
22

Kolkata

TABLE 3-1: Indian Hotel Industry Seven Major Cities : Facilities and Guest Analysis

0.2
0.3
0.0
105.7

11.8
80.5
12.9

3.4
3.2
0.3
28.5

4.0
16.1
1.4

1.7
1.1
0.8
3.6

0.9
0.2
0.2
1.3

3.0
2.3
2.3
1.8
28.1

75.5%
24.5
100.0

26.7%
73.3
100.0

3.5
2.5
3.8
2.7
54.6

60.0%
40.0
100.0

47.1%
52.9
100.0

3.3
1.8
1.9
1.6
48.8

81.9%
18.1
100.0

72.7%
27.3
100.0

Five-Star Four-Star Two-Star

Deluxe & & Three& OneFive-Star
Star
Star
7
11
14

New Delhi-NCR

3.3
1.1
1.0
5.4

Five-Star Four-Star Two-Star

Deluxe & & Three& OneFive-Star
Star
Star
7
14
13

New Delhi-NCR

0.0
0.0
0.0
168.1

20.4
126.7
21.0

Five-Star Four-Star Two-Star

Deluxe & & Three& OneFive-Star
Star
Star
7
15
18

New Delhi-NCR

1.7
7.9
1.3
39.2

2.8
23.1
2.4

1.1
0.5
0.9
2.5

5.4
2.9
3.5
1.7
50.0

93.7%
6.3
100.0

43.7%
56.3
100.0

4.8
2.8
2.1
1.9
44.9

82.1%
18.0
100.0

80.6%
19.4
100.0

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
7
25

2.7
1.1
0.4
4.3

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
7
24

0.0
0.0
0.0
99.3

0.0
85.1
14.1

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
7
22

Page 42

Male
Female
Male
Female
Male
Female

1.9

35.8
14.4
67.9
12.1
220.6
17.0
367.8
1.9

9.1
1.5
10.4
1.5
80.2
5.1
107.8

96.5

91.0

94.5
5.5

87.5

Supervisors

Staff

Total Avg. Trained Employees*

Total Avg. Un-Trained Employees

Hotels with Training Dept.

1.8

9.3
1.1
14.6
1.5
91.7
7.0
125.2

31.8

79.4
20.7

68.1

80.9

89.1%

100.0

88.6
11.5

76.6

94.4

94.6%

41.7

81.7
18.3

68.0

84.4

92.6%

81.8

51.6
48.4

41.1

55.6

58.0%

Five-Star
Deluxe &
Five-Star
6

1.4

8.8
2.4
10.2
3.7
80.6
8.6
114.3
2.1

40.6
12.4
33.6
17.0
193.9
33.3
330.7
1.5

2.6
0.6
3.6
0.8
36.3
1.4
45.3

Kolkata
Five-Star
Deluxe ,
Five-Star Two-Star
& Four- & ThreeStar
Star
7
18

New Delhi-NCR

2.1

55.2
13.9
59.1
13.8
248.7
27.1
417.9
2.1

7.6
1.6
8.3
2.2
86.8
5.5
112.1
1.1

1.9
0.3
2.8
0.7
24.9
1.4
32.0
2.6

45.3
17.5
48.7
8.7
270.3
41.8
423.3

1.6

11.6
1.8
12.1
1.3
94.0
9.3
130.0

0.8

2.1
0.4
1.7
0.5
16.4
0.3
21.3

Five-Star Four-Star Two-Star Five-Star Four-Star Two-Star

Deluxe & & Three- & One- Deluxe & & Three- & OneStar
Star
Star Five-Star
Star
Five-Star
15
40
61
6
14
16

Mumbai

29.4

62.4
37.6

58.7

51.4

77.2%

100.0

83.8
16.2

66.7

93.6

91.2%

5.6

80.1
19.9

73.7

76.7

90.0%

64.3

78.5
21.5

65.5

85.1

84.9%

37.5

74.7
25.3

55.2

82.4

86.4%

6.3

70.6
29.4

53.2

69.8

88.9%

100.0

88.7
11.3

84.2

91.2

90.7%

1.0

3.3
0.8
4.4
1.1
26.1
2.4
38.1

82.9
17.2
83.3

45.5

82.9

80.5

85.1%

17.9

74.6
25.4

65.2

72.2

86.3%

Pune
Five-Star
Deluxe,
ThreeFive-Star
& Four- Star &
Star Two-Star
7
15

2.6

21.4
4.3
32.3
4.6
143.0
12.4
218.0

Pune
Five-Star
Deluxe,
Five-Star
ThreeStar &
& FourStar Two-Star
7
28

84.5
15.5

78.3

81.0

94.3%

Kolkata
Mumbai
New Delhi-NCR
Five-Star
Deluxe ,
Four-Star Five-Star Two-Star Five-Star Four-Star Two-Star Five-Star Four-Star Two-Star
& Three- & Four- & Three- Deluxe & & Three- & One- Deluxe & & Three- & OneStar
Star
Star Five-Star
Star
Star
Star Five-Star
Star
12
5
5
10
25
21
6
5
ID

Goa

2.2

40.0
9.2
38.5
7.5
232.2
38.1
365.4

Five-Star Four-Star
Deluxe & & ThreeStar
Five-Star
11
18

Goa

*? Trained Employees includes those with a minimum one-year certificate course from a hotel management or equivalent institution; however, some hotels may have included those with short term (in-house) training

96.0%

Managers

COMPOSITION
Number of Responses

Five-Star
Deluxe &
Five-Star
7

2.1

29.9
2.4
45.7
6.3
216.3
25.6
326.1

Chennai
FourStar,
Three- Five-Star
ThreeStar & Deluxe &
Star &
Two-Star Four-Star Two-Star
9
6
13

Bangalore

Average Percentage of Trained Employees Per Hotel

Average Number of Employees per Room

Total

Staff

Supervisors

Managers

COMPOSITION
Number of Responses

Bangalore
Chennai
FourStar,
ThreeFive-Star
Three- Five-Star
Star &
Deluxe &
Star & Deluxe &
Five-Star Two-Star Four-Star Two-Star
8
21
7
26

Average Number of Total Employees Per Hotel (Permanent / Contract / Full Time / Part Time)

TABLE 3-2: Indian Hotel Industry Seven Major Cities : Staffing

Page 43

REVENUE
Rooms
Food & Beverage
Banquets & Conferences
Telephone & Other
Minor Operated*
Rental & Other Income
Total
DEPARTMENTAL EXPENSES
Rooms
Food & Beverage
Telephone & Other
Minor Operated*
Rental & Other Income
Total
DEPARTMENTAL INCOME
OPERATING EXPENSES
Administrative & General
Management Fee
Marketing
Franchise Fees
Property Operations & Maintenance
Energy
Total
HOUSE PROFIT
FIXED EXPENSES
Property Taxes
Insurance
Other Fixed Charges
Rent
Total
NET INCOME**
5.8
39.0
98.2
42.3
1.8
19.8
80.2
7.0
0.7
3.1
0.3
3.1
5.5
19.7
60.5

0.8
0.6
0.4
4.8
6.6
53.9%

10.3
46.7
108.6
33.7
2.6
22.7
77.3

6.0
2.2
2.5
0.2
3.3
4.8
19.0
58.3

1.0
0.3
1.0
4.1
6.3
52.0%

0.7
0.2
1.5
0.6
3.0
35.3%

10.7
1.4
0.8
0.2
3.7
10.9
27.7
38.3

16.6
50.0
232.2
160.9
3.2
34.0
66.0

51.9%
33.4
11.2
0.5
1.1
1.9
100.0

72
20,932
78.2%
Rs1,852

0.1
0.4
0.1
0.9
1.4
35.1%

8.4
2.2
4.3
1.7
7.9
7.3
31.8
36.6

18.8
61.2
170.0
48.1
1.8
31.7
68.3

64.0%
26.5
1.8
0.1
4.2
3.3
100.0

172
45,054
78.1%
Rs5,797

Five-Star
Deluxe &
Five-Star
10

Goa

0.3
0.3
0.2
0.1
0.8
29.3%

13.2
1.3
1.6
0.3
7.8
8.8
32.9
30.1

20.8
73.7
155.1
26.6
14.7
37.0
63.0

63.3%
29.1
0.7
0.3
3.6
3.1
100.0

94
22,116
68.0%
Rs2,087

Four-Star
& ThreeStar
12

0.2
0.1
2.5
1.6
4.3
40.5%

7.7
3.6
4.7
0.0
4.5
6.1
26.6
44.8

16.0
45.4
48.7
30.2
0.0
28.6
71.5

53.0%
28.9
11.9
0.7
4.0
1.5
100.0

159
45,710
78.1%
Rs6,189

0.7
0.3
2.5
2.4
5.9
26.4%

8.5
4.5
3.7
0.3
6.3
7.7
31.0
32.3

16.6
75.1
563.7
428.0
40.6
36.7
63.3

71.0%
22.3
3.4
0.4
0.6
2.4
100.0

49
12,128
72.3%
Rs2,257

1.0
0.2
0.9
0.5
2.6
48.6%

6.0
3.5
3.3
0.3
2.6
6.3
22.0
51.2

20.5
43.3
52.3
40.8
0.0
26.9
73.2

69.6%
17.2
8.8
0.6
2.4
1.4
100.0

227
64,436
80.4%
Rs10,136

0.6
0.4
0.7
0.7
2.3
44.0%

7.6
1.9
2.0
0.6
5.3
9.8
27.2
46.3

10.7
58.9
162.6
154.2
17.4
26.5
73.5

70.3%
18.5
7.9
0.4
1.6
1.3
100.0

61
17,395
81.0%
Rs4,506

Four-Star
& ThreeStar
26

Five-Star
Deluxe,
Five- Star Three-Star
& Two& Four Star
Star
5
5
Five-Star
Deluxe &
Five-Star
11

Mumbai

Kolkata

? Minor operated departments include: laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth
** Net Income is before depreciation, interest payments and taxes
ID: Insufficient Data

57.0%
34.0
5.5
0.5
1.4
0.9
100.0

66.4%
20.2
8.6
1.4
2.7
0.8
100.0

72
16,329
73.4%
Rs4,685

Five-Star Three-Star
& TwoDeluxe &
Four-Star
Star
ID
12

Four-Star,
Five-Star Three-Star
& TwoDeluxe &
Star
Five-Star
5
8

Average Total Rooms Per Hotel:

214
Average Occupied Rooms Per Hotel: 52,988
Average Occupancy Per Hotel:
69.4%
Average Rate Per Hotel:
Rs12,820

COMPOSITION
Number of Responses

Chennai

Bangalore

0.7
0.3
0.8
0.4
2.2
30.7%

14.5
0.8
3.5
0.2
8.4
10.8
38.1
32.9

17.7
70.2
316.4
279.9
45.1
28.9
71.0

80.5%
15.8
1.3
0.4
0.3
1.8
100.0

0.4
0.2
0.1
0.1
0.7
57.0%

5.9
0.7
3.5
0.2
4.3
4.3
18.9
57.7

11.3
41.8
48.6
44.2
5.4
23.4
76.6

58.6%
25.1
8.2
1.1
5.2
1.9
100.0

1.6
0.2
0.1
0.6
2.3
53.1%

5.3
0.3
3.5
0.0
5.4
6.5
21.0
55.3

8.5
65.8
124.8
154.5
61.2
23.7
76.3

75.7%
18.2
0.4
0.7
1.1
4.0
100.0

34
168
57
9,430
43,356 16,366
79.3%
77.9%
80.7%
Rs1,898 Rs12,483 Rs5,173

Two-Star Five-Star Four-Star Two-Star

& One- Deluxe & & Three- & OneStar
Star
Star Five-Star
30
7
7
ID

New Delhi-NCR

TABLE 3-3: Indian Hotel Industry Seven Major Cities : Financial Report Percentage of Revenue (2007-2008)

0.5
0.2
1.8
0.2
2.7
47.1%

11.3
4.5
2.2
0.1
4.9
5.0
28.0
49.8

10.9
45.1
75.0
44.7
74.6
22.2
77.8

68.2%
18.4
9.9
0.7
1.8
1.1
100.0

86
23,507
76.5%
Rs8,139

0.5
0.4
1.1
1.7
3.7
28.9%

6.8
1.2
1.6
0.0
7.8
7.2
24.6
32.6

25.2
94.4
79.2
173.6
12.7
42.8
57.2

71.5%
21.3
3.4
0.8
0.3
2.7
100.0

38
11,011
80.9%
Rs2,449

Five-Star
Deluxe,
Five- Star Three-Star
& Two& Four Star
Star
6
12

Pune

Page 44

TABLE 3-4: Indian Hotel Industry Seven Major Cities : Financial Report Amount Per Available Room (2007-2008)

Page 45

TABLE 3-5: Indian Hotel Industry Seven Major Cities : Financial ReportAmount Per Occupied Room (2007-2008)

Page 46

5.9%
4.0
5.1
0.7
2.2
4.7
3.9
4.6
0.9
11.1
0.6
1.3
0.8
16.2
28.2
9.8
100.0

Goa

4.2%
2.5
3.0
0.6
2.5
8.1
9.9
7.2
3.6
8.4
2.4
6.3
3.3
7.2
12.3
18.8
100.0

13.3%
2.0
3.5
0.7
1.7
6.0
7.7
8.2
3.3
6.7
1.8
4.7
1.5
8.8
15.0
15.2
100.0

18.0%
3.5
4.0
0.4
2.1
4.0
4.8
5.0
3.7
6.9
1.7
9.8
4.6
8.7
11.1
11.9
100.0

Goa

1.9%
5.2
2.3
1.7
18.8
27.8
6.1
11.4
9.0
10.8
5.0
100.0

Kolkata

1.0%
0.8
2.0
0.1
0.4
2.2
7.3
1.0
1.2
4.6
22.7
6.2
0.8
38.4
3.4
7.9
100.0

2.3%
1.3
3.1
0.2
2.1
2.1
5.3
3.6
3.5
9.7
18.2
1.7
1.2
36.1
4.8
5.0
100.0

13.1%
53.1
12.0
0.7
3.7
4.5
3.0
4.1
1.6
3.3
80.0
100.0

Mumbai

5.0%
3.0
2.4
0.0
5.4
2.8
7.2
4.4
0.8
16.6
0.5
7.2
1.6
10.8
13.0
19.3
100.0

4.5%
3.2
2.6
1.4
5.3
3.6
6.7
4.8
1.0
5.1
2.8
26.7
0.7
12.4
9.0
10.3
100.0

2.5%
45.5
14.3
1.1
7.3
7.9
2.7
7.3
3.2
5.3
2.9
100.0

Mumbai

4.6%
31.0
25.5
2.0
5.2
3.4
1.9
18.9
2.2
3.1
2.3
100.0

1.2%
45.5
13.4
0.9
15.5
10.3
1.4
5.0
3.6
1.7
1.5
100.0

4.8%
2.2
1.3
0.2
1.2
1.9
3.0
0.8
3.1
4.5
0.3
11.6
4.1
19.0
11.3
30.7
100.0

8.9%
3.9
4.7
0.7
4.5
5.0
4.2
3.6
5.9
5.1
7.2
7.3
4.8
15.6
12.2
6.6
100.0

5.8%
2.9
3.7
0.4
2.5
2.8
3.7
1.6
12.0
8.7
2.3
9.2
5.0
18.1
8.6
12.8
100.0

Five-Star Four-Star Two-Star

Deluxe & & Three& OneFive-Star
Star
Star
8
31
41

1.3%
45.9
9.1
2.0
11.0
7.4
4.0
7.1
6.3
2.3
3.8
100.0

Kolkata
Five-Star
Deluxe
FiveThreeStar&
Star &
Four-Star Two-Star
5
10

2.6%
25.8
6.1
1.8
23.4
12.8
5.1
1.6
9.8
10.0
1.0
100.0

Five-Star Four-Star
Deluxe & & ThreeFive-Star
Star
9
12

1.3%
48.6
14.7
1.7
10.2
4.2
2.2
4.2
6.7
4.2
2.2
100.0

Chennai
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
6
18

85.0%
37.6
18.0
1.2
9.0
5.0
7.4
11.4
4.7
3.9
1.0
100.0

Bangalore
FourStar,
Five-Star
ThreeDeluxe &
Star &
Five-Star Two-Star
7
11

6.7%
18.9
59.6
1.1
2.0
3.9
1.4
4.0
0.9
1.0
0.5
100.0

Five-Star
Deluxe &
Five-Star
7

Chennai

Five-Star
FourDeluxe
Star,
Five- Three- Five-Star Four-Star Two-Star
Three- Five-Star Three- Five-Star Four-Star
Star& Star & Deluxe & & Three- & OneStar & Deluxe & Star & Deluxe & & ThreeStar
Star
Star Four-Star Two-Star Five-Star
Two-Star Four-Star Two-Star Five-Star
13
ID
20
10
16
7
12
9
32
46

Bangalore

* ASEAN: Association of South East Asian Nations

** SAARC: South Asian Association for Regional Co-operation - India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives

ASEAN*
Australia
Canada
Caribbean
China
France
Germany
Japan
Middle East
Other European
Russia
SAARC **
South Africa
UK
USA
Other
Total

COMPOSITION
Number of Responses

Country of Origin of Guests

Airline Crew
Business Traveller - Domestic
Business Traveller - Foreign
Complimentary Rooms
Domestic - Tourists / Leisure FIT
Foreign - Tourists / Leisure FIT
Meeting Participants (Less than 100 Attendees)
Meeting Participants (Over 100 Attendees)
Tour Groups - Domestic
Tour Groups - Foreign
Other
Total

COMPOSITION
Number of Responses

Market Segmentation

TABLE 3-6: Indian Hotel Industry Seven Major Cities : Market Data

75.0%
32.6
20.9
0.8
8.0
8.8
2.4
4.1
4.0
16.5
1.3
100.0

55.0%
62.0
13.2
0.3
5.6
4.8
2.0
2.3
2.9
2.8
3.6
100.0

4.2%
4.6
2.4
1.1
1.6
3.8
4.0
7.2
5.8
5.0
2.9
6.5
4.2
14.6
17.4
14.8
100.0

3.6%
3.1
2.2
0.4
3.2
7.7
6.7
12.1
2.4
8.4
6.4
3.8
1.9
12.4
9.7
16.3
100.0

2.8%
2.6
3.6
0.3
2.3
5.9
3.5
6.2
3.8
11.3
2.7
22.8
1.6
9.6
5.4
15.7
100.0

New Delhi-NCR
FiveStar
FourStar & Two-Star
Deluxe
Three& Five& OneStar
Star
Star
5
10
9

1.5%
19.1
44.1
1.1
5.2
10.8
2.3
7.2
1.1
4.5
3.1
100.0

FourStar & Two-Star

Three- & OneStar
Star
8
11

New Delhi-NCR
FiveStar
Deluxe
& FiveStar
6

Pune

0.0%
52.3
9.0
0.8
13.7
1.8
2.7
16.4
1.1
1.0
1.1
100.0

1.2%
5.0
1.7
0.5
4.1
2.0
12.1
3.7
0.5
9.4
0.6
0.6
1.2
24.4
17.2
15.8
100.0

6.1%
3.8
4.4
0.3
3.6
4.0
9.8
3.7
4.5
8.4
2.0
5.2
1.6
9.8
16.0
16.8
100.0

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
6
12

45.0%
34.6
56.1
0.6
4.2
0.7
0.3
1.6
0.6
0.3
0.7
100.0

Five-Star
Deluxe,
Five-Star Three& Four- Star &
Star Two-Star
7
23

Page 47

73.8%
84.1
72.9
66.7
71.7
72.4
68.4
69.3
73.2
78.6
78.1
62.0

68.1%
68.8
58.5
60.7
70.3
68.5
67.3
64.0
64.6
67.0
68.4
64.9

85.5%
86.1
75.9
77.4
69.9
71.4
74.8
72.9
76.8
77.1
81.2
75.9

77.8%
81.1
75.2
73.9
72.4
74.5
77.8
77.2
75.1
75.1
75.5
77.4

92.0%
94.2
87.6
86.4
65.7
64.2
58.8
69.1
68.5
62.6
83.9
80.6

89.6%
87.3
77.6
69.8
61.0
51.1
43.9
49.1
57.3
62.6
76.0
83.4

84.1%
86.1
75.7
73.6
72.1
70.9
75.6
71.1
73.0
71.9
79.4
80.0

79.4%
76.6
68.0
69.1
65.0
63.2
67.5
67.5
71.5
69.6
76.1
79.3

Kolkata
Five-Star
Deluxe,
Five-Star Four-Star Five- Star Two-Star
Deluxe & & Three- & Four - & ThreeFive-Star
Star
Star
Star
10
14
7
12

Goa

88.0%
88.1
81.1
81.6
76.2
77.2
78.0
77.4
76.9
82.2
83.1
86.3

81.9%
79.9
74.1
71.2
69.4
69.7
70.9
72.2
71.6
73.8
79.0
83.1

Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday

85.6%
89.6
89.8
78.4
60.9
54.9
67.8

67.1%
69.2
71.4
71.9
67.4
60.4
51.6

70.9%
77.4
79.7
75.4
72.7
69.9
58.4

77.4%
77.4
77.2
77.7
74.4
66.6
69.7

70.4%
66.4
66.9
68.9
76.9
80.1
79.7

63.6%
62.8
64.1
64.5
69.6
66.0
60.0

75.6%
81.9
83.4
83.9
73.6
64.3
63.7

66.2%
66.6
64.1
65.4
59.9
55.0
51.4

78.6%
81.2
79.1
77.7
72.1
68.2
67.0

83.8%
86.2
86.9
85.7
79.5
67.3
64.9

75.0%
76.0
77.6
75.9
75.5
68.0
59.4

84.6%
90.3
85.6
76.9
67.6
64.1
71.6
70.4
77.5
83.6
83.3
72.4

74.3%
80.0
73.5
67.8
61.6
55.2
60.6
65.5
69.6
74.5
75.8
73.3

81.8%
85.8
85.8
78.6
65.8
65.8
67.4

80.0%
82.8
85.0
81.8
72.6
64.3
60.4

66.4%
73.2
72.6
72.1
64.8
52.4
50.5

Five-Star Four-Star
Deluxe & & Three- Two-Star
Five-Star
Star & One-Star
5
10
11

New Delhi-NCR

81.9%
95.0
85.9
82.6
76.6
70.6
71.6
75.7
79.8
87.1
87.2
72.9

Five-Star Four-Star
Deluxe & & Three- Two-Star
Five-Star
Star & One-Star
6
11
9

Five-Star Four-Star Two-Star

Deluxe & & Three- & OneStar
Star
Five-Star
13
36
52
81.2%
85.6
77.3
78.0
68.7
68.7
68.0
70.7
75.7
79.6
82.6
78.0

New Delhi-NCR

Mumbai

Bangalore
Chennai
Goa
Kolkata
Mumbai
FourFive-Star
Star,
Deluxe,
Five-Star Three- Five-Star Three- Five-Star Four-Star Five- Star Two-Star Five-Star Four-Star Two-Star
Deluxe & Star & Deluxe & Star & Deluxe & & Three- & Four - & Three- Deluxe & & Three- & OneCOMPOSITION
Five-Star Two-Star Four-Star Two-Star Five-Star
Star
Star
Star Five-Star
Star
Star
Number of Responses
8
16
7
20
7
12
7
10
11
35
48

Average Daily Occupancy

January
February
March
April
May
June
July
August
September
October
November
December

Bangalore
Chennai
FourStar,
ThreeFive-Star
Three- Five-Star
Star &
Deluxe &
Star & Deluxe &
COMPOSITION
Five-Star Two-Star Four-Star Two-Star
Number of Responses
8
17
7
22

Average Monthly Occupancy

TABLE 3-7: Indian Hotel Industry Seven Major Cities : Monthly & Daily Occupancy

78.7%
78.4
69.0
66.3
69.3
75.0
72.4
75.4
73.3
72.8
77.0
78.9

83.1%
90.6
88.0
81.1
66.6
58.0
60.7

71.3%
73.7
74.7
73.4
71.9
62.4
54.8

Pune
Five-Star
Deluxe,
Five-Star Three& Four- Star &
Star Two-Star
7
15

76.7%
85.4
79.9
79.4
78.6
80.0
76.0
76.9
77.6
82.3
79.3
65.7

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
7
20

Page 48

2.6%
37.3
21.5
4.4
7.5
17.0
6.0
3.7
100.0

2.4%
57.0
4.7
11.7
10.7
1.4
8.1
3.9
100.0

3.4%
53.6
7.1
11.4
13.1
4.0
3.0
4.3
100.0

3.6%
55.6
0.6
5.6
15.8
2.6
3.7
12.6
100.0

4.3%
23.2
1.9
2.0
58.8
4.6
2.5
2.9
100.0

4.3%
36.4
1.3
5.4
39.4
0.9
4.9
7.2
100.0

13.0%
50.6
4.3
3.4
11.2
11.4
4.4
1.7
100.0

Direct Mail
Hotel Web site
Loyalty Card Program
Merchandising
Other Internet Site
Outdoor Advertising
Print Advertising
Promotions
Radio Advertising
Telemarketing
TV Advertising

COMPOSITION
Number of Responses

100.0%
100.0
85.7
71.4
85.7
85.7
100.0
100.0
85.7
57.1
28.6

91.7%
83.3
50.0
0.0
33.3
33.3
75.0
75.0
8.3
66.7
0.0

100.0%
85.7
57.1
14.3
57.1
85.7
100.0
100.0
0.0
71.4
0.0

89.5%
84.2
21.1
26.3
57.9
73.7
79.0
63.2
10.5
57.9
15.8

Bangalore
Chennai
FourStar,
Three- Five-Star
ThreeFive-Star
Star & Deluxe &
Star &
Deluxe &
Five-Star Two-Star Four-Star Two-Star
7
12
7
19

Marketing Media - Percentage of Hotels Using Each Media

88.9%
100.0
88.9
22.2
100.0
88.9
100.0
100.0
33.3
77.8
55.6

100.0%
100.0
25.0
31.3
81.3
87.5
100.0
87.5
25.0
56.3
25.0

100.0%
100.0
71.4
57.1
85.7
57.1
85.7
85.7
42.9
100.0
14.3

87.5%
87.5
37.5
25.0
75.0
62.5
87.5
75.0
37.5
50.0
50.0

Kolkata
Five-Star
Deluxe,
ThreeFive-Star Four-Star Five- Star
Star &
Deluxe & & Three- & Four Star Two-Star
Star
Five-Star
8
16
7
8

Goa

1.3%
50.8
1.1
8.8
19.7
2.7
9.5
6.2
100.0

Mumbai

78.0%
53.8
1.0
8.1
16.9
2.3
5.4
11.8
100.0

28.0%
62.6
1.0
5.4
16.2
0.9
4.3
9.3
100.0

1.1%
42.0
3.4
4.3
26.2
2.3
4.4
16.5
100.0

New Delhi-NCR

7.0%
46.0
9.5
4.5
25.4
5.6
1.0
1.0
100.0

8.1%
46.7
2.2
4.2
10.0
4.0
5.8
19.1
100.0

100.0%
100.0
90.9
45.5
63.6
54.6
90.9
90.9
45.5
63.6
18.2

86.4%
81.8
45.5
18.2
68.2
40.9
86.4
54.6
13.6
68.2
13.6

75.9%
75.9
10.3
3.5
69.0
34.5
72.4
55.2
6.9
44.8
6.9

80.0%
80.0
100.0
40.0
40.0
80.0
80.0
80.0
40.0
80.0
60.0

100.0%
71.4
14.3
28.6
57.1
57.1
100.0
85.7
0.0
57.1
0.0

100.0%
100.0
0.0
0.0
75.0
50.0
75.0
50.0
0.0
25.0
0.0

Five-Star Four-Star Two-Star Five-Star Four-Star Two-Star

Deluxe & & Three- & One- Deluxe & & Three- & OneStar
Star
Star Five-Star
Star
Five-Star
11
22
29
5
7
4

4.9%
50.4
7.4
5.1
6.9
9.5
2.5
13.2
100.0

Bangalore
Chennai
Goa
Kolkata
Mumbai
New Delhi-NCR
FourFive-Star
Star,
Deluxe,
Five-Star
Three- Five-Star
Three- Five-Star Four-Star Five- Star
Three- Five-Star Four-Star Two-Star Five-Star Four-Star Two-Star
Deluxe &
Star & Deluxe &
Star & Deluxe & & Three- & Four Star & Deluxe & & Three- & One- Deluxe & & Three- & OneFive-Star Two-Star Four-Star Two-Star Five-Star
Star
Star Two-Star Five-Star
Star
Star
Star Five-Star
Star
7
14
7
22
10
18
7
12
10
32
54
4
11
13

TABLE 3-9: Indian Hotel Industry Seven Major Cities : Marketing Media

Chain CRS (Central Reservation System)

Direct Enquiry / Hotel Representative
Global Distribution System (GDS)
Hotel / Chain Website
Travel Agent & Tour Operator
Other Online Reservation Systems
Other Websites
Other
Total

COMPOSITION
Number of Responses

Source of Advance Reservations

TABLE 3-8: Indian Hotel Industry Seven Major Cities : Sources of Reservation

61.0%
82.5
1.9
2.2
6.1
0.3
0.6
5.8
100.0

83.3%
100.0
66.7
33.3
33.3
100.0
100.0
100.0
16.7
50.0
0.0

84.6%
84.6
23.1
23.1
76.9
69.2
100.0
76.9
15.4
53.9
15.4

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
6
13

4.0%
46.6
16.2
5.1
3.9
9.8
0.4
14.0
100.0

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
5
18

Page 49

ID: Insufficient Data

American Express
Diners club
Mastercard/Eurocard
Visa
Other

COMPOSITION
Number of Responses

25.4%
49.3
23.4
1.9
100.0

13.8%
40.3
43.2
2.7
100.0

45.8%
40.0
12.3
1.9
100.0

44.7%
3.1
18.1
33.9
0.3
100.0

3.3
1.9
0.9
1.1
0.4

3.6
0.9
1.2
1.5
0.0

Bangalore
FourStar,
ThreeFive-Star
Deluxe &
Star &
Five-Star Two-Star
6
8

20.1%
3.1
29.2
37.4
10.3
100.0

10.6%
4.8
36.6
38.4
9.7
100.0

3.5
2.0
1.2
1.2
0.3

2.2
0.8
1.7
1.7
0.6

ThreeFive-Star
Star &
Deluxe &
Four-Star Two-Star
4
9

Chennai

17.8%
9.2
31.1
38.6
3.3
100.0

Bangalore
Chennai
FourStar,
ThreeThree- Five-Star
Five-Star
Star &
Star & Deluxe &
Deluxe &
Five-Star Two-Star Four-Star Two-Star
5
12
6
19

7.5%
70.9
20.3
1.3
100.0

Bangalore
Chennai
FourStar,
Three- Five-Star
ThreeFive-Star
Star & Deluxe &
Star &
Deluxe &
Five-Star Two-Star Four-Star Two-Star
7
14
6
22

Average Credit Card Commission

American Express
Diners club
Mastercard/Eurocard
Visa
Other
Total

COMPOSITION
Number of Responses

Credit Cards Used

Cash Sales
Credit Card Sales
Credit Sales (Other Than Cards)
Electronic Fund Transfer
Total

COMPOSITION
Number of Responses

Payment Methods Used

31.7%
32.8
29.5
6.1
100.0

23.2%
43.4
32.2
1.2
100.0

47.2%
38.8
14.1
100.0

3.6
1.7
1.4
1.4
0.0

Five-Star
Deluxe &
Five-Star
6

6.9%
2.0
35.9
47.4
7.7
100.0

22.6%
5.1
28.8
42.2
1.3
100.0

4.1%
4.9
35.9
54.0
1.1
100.0

3.1
0.6
1.6
1.6
0.1

3.4
2.0
1.2
1.2
0.9

1.9
1.4
1.6
1.6
0.4

Kolkata
Five-Star
Deluxe,
ThreeFour-Star Five- Star
Star &
& Four & ThreeStar Two-Star
Star
12
6
6

Goa

18.3%
0.6
34.8
45.3
1.0
100.0

Kolkata
Five-Star
Deluxe,
ThreeFive-Star Four-Star Five- Star
Star &
Deluxe & & Three- & Four Star Two-Star
Star
Five-Star
8
15
7
7

Goa

24.4%
29.5
34.2
11.9
100.0

Kolkata
Five-Star
Deluxe,
ThreeFive-Star Four-Star Five- Star
Star &
Deluxe & & Three- & Four Star Two-Star
Five-Star
Star
8
17
7
11

Goa

TABLE 3-10: Indian Hotel Industry Seven Major Cities : Payment Methods

Mumbai

31.2%
33.2
32.0
3.7
100.0

53.5%
31.1
14.1
1.3
100.0

Mumbai

15.7%
4.6
36.1
41.8
1.8
100.0

6.5%
4.2
39.0
45.3
5.0
100.0

3.3
1.8
1.2
1.2
0.5

3.4
0.9
1.4
1.3
0.3

2.9
1.0
1.8
1.6
0.3

Five-Star Four-Star Two-Star

& OneDeluxe & & ThreeStar
Star
Five-Star
7
28
33

26.8%
4.1
26.1
38.7
4.3
100.0

Five-Star Four-Star Two-Star

& OneDeluxe & & ThreeStar
Star
Five-Star
8
31
39

13.5%
47.7
34.3
4.5
100.0

Five-Star Four-Star Two-Star

Deluxe & & Three& OneFive-Star
Star
Star
9
35
50

Mumbai

28.9%
40.2
29.1
1.7
100.0

21.8%
2.1
26.7
37.3
12.1
100.0

3.2
2.3
1.2
1.1
0.0

Five-Star
Deluxe &
Five-Star
5

3.5
1.4
1.4
1.4
0.5

Four-Star
& Three- Two-Star &
Star
One-Star
4
ID

2.0%
1.7
37.5
52.2
6.7
100.0

Four-Star
& Three- Two-Star &
Star One-Star
8
6

New Delhi-NCR

36.6%
5.0
30.0
28.4
100.0

Five-Star
Deluxe &
Five-Star
5

46.1%
30.1
22.0
1.8
100.0

Four-Star
& Three- Two-Star &
Star One-Star
9
10

New Delhi-NCR

9.6%
64.6
22.6
3.2
100.0

Five-Star
Deluxe &
Five-Star
5

New Delhi-NCR

35.5%
43.9
20.2
0.5
100.0

7.2%
3.0
49.2
38.8
1.9
100.0

3.5
2.0
1.2
1.2
0.3

3.4
1.4
1.6
1.5
0.3

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
4
11

23.8%
2.4
17.9
43.1
12.9
100.0

Pune
Five-Star
Deluxe,
ThreeFive-Star
Star &
& FourStar Two-Star
7
13

30.3%
53.0
15.9
0.9
100.0

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
7
20

Page 50

85.7%
71.4
57.1
100.0
42.9
100.0
100.0
57.1
100.0
85.7
85.7
100.0
42.9
28.6

92.3%
61.5
30.8
76.9
15.4
92.3
84.6
53.9
76.9
84.6
84.6
61.5
30.8
0.0

80.0%
100.0
0.0
20.0
0.0
100.0
80.0
60.0
100.0
100.0
80.0
80.0
40.0
40.0

100.0%
84.2
21.1
68.4
26.3
94.7
89.5
36.8
84.2
63.2
84.2
63.2
15.8
15.8

ThreeFive-Star
Star &
Deluxe &
Four-Star Two-Star
5
19

Chennai

100.0%
90.0
30.0
90.0
20.0
100.0
100.0
50.0
90.0
70.0
90.0
70.0
30.0
30.0

100.0%
60.0
20.0
33.3
26.7
93.3
93.3
33.3
80.0
80.0
93.3
66.7
33.3
0.0

100.0%
100.0
66.7
83.3
33.3
100.0
100.0
100.0
100.0
100.0
100.0
83.3
83.3
16.7

ID: Insufficient Data

Air (External Emissions)

Air (Indoor Air Quality)
Community Interaction
Energy Consumption (Electricity)
Energy Consumption (Gas)
Energy Consumption (Oil)
Fresh Water Quality
Noise (External)
Noise (In House)
Solid Waste Disposal
Solid Waste Production (Quality)
Solid Waste Production (Segregation)
Solid Waste Production (Volume)
Staff Training in Environmental Issues
Use of Chemicals (Housekeeping)
Use of Chemicals (Maintenance)
Use of Pesticides and Herbicides (Dry Rations)
Use of Pesticides and Herbicides (Green Groceries)
Use of Pesticides and Herbicides (Hor ticulture)
Use of Pesticides and Herbicides (inside Building)
Use of Pesticides and Herbicides (Pest Control)
Use of Pesticides and Herbicides (Public Area)
Waste Water Quality
Waste Water Volume
Water Consumption

COMPOSITION
Number of Responses

100.0%
100.0
87.5
100.0
100.0
100.0
100.0
100.0
100.0
87.5
87.5
87.5
75.0
100.0
100.0
100.0
62.5
62.5
100.0
100.0
87.5
100.0
100.0
100.0
100.0

53.9%
53.9
15.4
92.3
69.2
61.5
76.9
46.2
46.2
46.2
30.8
38.5
38.5
53.9
100.0
100.0
46.2
38.5
84.6
69.3
92.3
69.2
46.2
61.5
84.6

Bangalore
FourStar,
ThreeFive-Star
Star &
Deluxe &
Five-Star Two-Star
8
13
0.0%
40.0
40.0
100.0
100.0
80.0
100.0
60.0
60.0
20.0
60.0
20.0
0.0
80.0
100.0
100.0
0.0
0.0
100.0
80.0
100.0
80.0
80.0
80.0
100.0

Five-Star
Deluxe &
Four-Star
5
66.7%
66.7
33.3
100.0
94.4
83.3
88.9
50.0
50.0
38.9
33.3
50.0
44.4
55.6
83.3
83.3
38.9
44.4
72.2
77.8
83.3
72.2
66.7
72.2
100.0

ThreeStar &
Two-Star
18

Chennai

80.0%
70.0
50.0
100.0
100.0
100.0
100.0
90.0
90.0
30.0
40.0
50.0
50.0
50.0
90.0
90.0
40.0
40.0
90.0
70.0
90.0
70.0
100.0
100.0
100.0

53.3%
53.3
40.0
100.0
73.3
73.3
86.7
60.0
53.3
40.0
33.3
60.0
46.7
53.3
73.3
93.3
13.3
26.7
60.0
73.3
80.0
66.7
60.0
66.7
86.7

Five-Star Four-Star
Deluxe & & ThreeFive-Star
Star
10
15

Goa

100.0%
100.0
66.7
100.0
100.0
100.0
100.0
66.7
100.0
66.7
66.7
83.3
66.7
83.3
100.0
83.3
33.3
33.3
66.7
66.7
83.3
66.7
100.0
66.7
66.7

42.9%
57.1
57.1
100.0
85.7
57.1
85.7
42.9
57.1
57.1
42.9
42.9
71.4
57.1
71.4
71.4
57.1
57.1
71.4
85.7
100.0
71.4
71.4
71.4
85.7

Kolkata
Five-Star
Deluxe,
Five- Star Two-Star
& Four - & ThreeStar
Star
6
7

85.7%
57.1
42.9
28.6
14.3
100.0
85.7
71.4
71.4
71.4
57.1
57.1
42.9
14.3

Kolkata
Five-Star
Deluxe,
Five-Star Four-Star Five- Star Two-Star
& Four - & ThreeDeluxe & & ThreeStar
Star
Star
Five-Star
10
15
6
7

Goa

Environment Management Practices - Percentage of Hotels Monitoring Quantitative Performance

Accounting System
Call Accounting System
Central Reservation System (CRS)
Electronic Keycard
Energy Management System
Internet / E-Mail
Internet / Website
Intranet System
Local Area Network (LAN)
Management Information System
Point of Sale System for Food and Beverage
Property Management System
Yield Management System
Other

COMPOSITION
Number of Responses

Bangalore
FourStar,
ThreeFive-Star
Star &
Deluxe &
Five-Star Two-Star
7
13

Technology in Hotels - Percentage of Hotels Using Each Technology

92.9%
85.7
42.9
100.0
100.0
92.9
100.0
78.6
78.6
42.9
64.3
92.9
85.7
64.3
78.6
85.7
28.6
28.6
64.3
50.0
64.3
50.0
100.0
92.9
100.0

41.4%
44.8
24.1
96.6
89.7
79.3
72.4
37.9
41.4
27.6
31.0
51.7
37.9
48.3
72.4
55.2
34.5
27.6
41.4
72.4
79.3
65.5
31.0
34.5
89.7

Five-Star Four-Star
Deluxe & & ThreeFive-Star
Star
14
29

Mumbai

100.0%
75.9
24.1
44.8
20.7
100.0
86.2
41.4
82.8
72.4
89.7
48.3
27.6
10.3

32.1%
35.7
21.4
100.0
82.1
71.4
64.3
21.4
32.1
32.1
42.9
50.0
32.1
17.9
78.6
78.6
32.1
35.7
50.0
57.1
85.7
60.7
28.6
35.7
71.4

Two-Star
& OneStar
28

95.8%
70.8
4.2
20.8
20.8
91.7
79.2
20.8
58.3
41.7
45.8
20.8
8.3
8.3

New Delhi-NCR

100.0%
100.0
0.0
37.5
25.0
100.0
75.0
75.0
100.0
100.0
100.0
50.0
25.0
12.5

80.0%
100.0
60.0
0.0
20.0
100.0
80.0
40.0
60.0
40.0
40.0
20.0
0.0
0.0

83.3%
66.7
66.7
100.0
100.0
100.0
83.3
83.3
66.7
33.3
50.0
66.7
66.7
83.3
83.3
66.7
33.3
33.3
66.7
66.7
66.7
66.7
83.3
83.3
83.3

42.9%
28.6
28.6
100.0
100.0
100.0
85.7
57.1
71.4
42.9
57.1
57.1
71.4
71.4
85.7
85.7
57.1
57.1
57.1
71.4
85.7
71.4
85.7
71.4
100.0

16.7%
50.0
33.3
83.3
83.3
33.3
50.0
33.3
66.7
0.0
0.0
16.7
0.0
33.3
66.7
66.7
16.7
33.3
50.0
50.0
83.3
50.0
33.3
33.3
66.7

Five-Star
Deluxe & Four-Star & Two-Star &
Five-Star Three-Star
One-Star
6
7
6

100.0%
85.7
100.0
100.0
57.1
100.0
85.7
71.4
100.0
85.7
100.0
100.0
42.9
14.3

Five-Star
Deluxe & Four-Star & Two-Star &
Five-Star Three-Star One-Star
7
8
5

Five-Star Four-Star Two-Star

& OneDeluxe & & ThreeStar
Star
Five-Star
12
29
24
100.0%
100.0
66.7
83.3
41.7
100.0
83.3
66.7
91.7
75.0
100.0
100.0
41.7
33.3

New Delhi-NCR

Mumbai

TABLE 3-11: Indian Hotel Industry Seven Major Cities : Technology & Environment Management Practices

93.3%
80.0
20.0
53.3
13.3
80.0
80.0
60.0
66.7
53.3
66.7
46.7
26.7
6.7

42.9%
57.1
71.4
100.0
100.0
100.0
100.0
28.6
42.9
42.9
57.1
85.7
85.7
100.0
85.7
100.0
14.3
28.6
71.4
71.4
100.0
71.4
71.4
85.7
100.0

46.7%
46.7
26.7
100.0
93.3
86.7
66.7
46.7
46.7
40.0
26.7
53.3
26.7
53.3
86.7
80.0
33.3
26.7
40.0
46.7
80.0
40.0
33.3
26.7
80.0

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
7
15

100.0%
85.7
28.6
100.0
57.1
85.7
85.7
57.1
85.7
85.7
100.0
100.0
28.6
28.6

Pune
Five-Star
Deluxe,
Five-Star
Three& FourStar &
Star Two-Star
7
15

4. Indian Hotel Industry-Twelve Other Cities

Introduction
This section presents the operating profiles and financial data for different categories of hotels
in 12 other cities. These cities are Agra, Ahmedabad, Kochi, Hyderabad, Jaipur, Indore,
Lucknow, Ootacamund, Shimla, Thiruvananthapuram, Udaipur and Visakhapatnam. This
section will give the reader an understanding of the markets in these cities.
Qualifying Condition
In certain cities and for certain star categories, we were unable to fulfil the minimum data
requirement of a minimum of four hotels in each representation and have reflected this as
ID (insufficient data).
Key Trends
Highlighted below are some trends noted in the 2007-08 survey across these 12 participating
cities.

Repeat guests percentage is very high in the cities of Indore and Viasakhapatnam at
78.3% and 83.5%, respectively. This is typical of mature industrial markets; however,
Visakhapatnam also exhibits a very high percentage of foreign guests.

Average number of employees per room is low in most cities as compared to the national
average. The ratio, though, is high for Indore, primarily because the existing supply in
the market has a large amount of banqueting which employs a large manpower base.

Good performance with robust bottomlines is seen in the cities of Lucknow,

Visakhapatnam, Hyderabad, and Agra. These performances, a direct function of their
high average rates and occupancies, help identify cities with high growth prospects.

Food and Beverage (F&B) costs are normally very high for hotels that are primarily
dependent on tourism, such as Udaipur, Ootacamund and Shimla. However, this trend
has also been noticed in hotels in other cities such as Indore and Lucknow, a cause of
concern as hotels in cities are heavily dependent on food and beverage sales.

Page 51

Page 52

Guest Analysis

Average Number of Food & Beverage Outlets Per Hotel

Typical Room Profile of an Average Hotel

TABLE 4-1: Indian Hotel Industry Twelve Other Cities : Facilities and Guest Analysis

Page 53

Average Percentage of Trained Employees Per Hotel

Average Number of Total Employees Per Hotel (Permanent / Contract / Full Time / Part Time)

TABLE 4-2: Indian Hotel Industry Twelve Other Cities : Staffing

Page 54

TABLE 4-3: Indian Hotel Industry Twelve Other Cities : Financial Report Percentage of Revenue (2007-2008)

Page 55

TABLE 4-4: Indian Hotel Industry Twelve Other Cities : Financial Report Per Available Room (2007-2008)

Page 56

TABLE 4-5: Indian Hotel Industry Twelve Other Cities : Financial Report Per Occupied Room (2007-2008)

Page 57

Country of Origin of Guests

Market Segmentation

TABLE 4-6: Indian Hotel Industry Twelve Other Cities : Market Data

Page 58

Average Daily Occupancy

Average Monthly Occupancy

TABLE 4-7: Indian Hotel Industry Twelve Other Cities : Monthly & Daily Occupancy

Page 59

Marketing Media - Percentage of Hotels Using Each Media

TABLE 4-9: Indian Hotel Industry Twelve Other Cities : Marketing Media

Source of Advance Reservations

TABLE 4-8: Indian Hotel Industry Twelve Other Cities : Sources of Reservation

Page 60

Average Credit Card Commission

Credit Cards Used

Payment Methods Used

TABLE 4-10: Indian Hotel Industry Twelve Other Cities : Payment Methods

Page 61

Environment Management Practices - Percentage of Hotels Monitoring Quantitative Performance

Technology in Hotels - Percentage of Hotels Using Each Technology

TABLE 4-11: Indian Hotel Industry Twelve Other Cities : Technology & Environment Management Practices

Hotel Analysis Worksheet

Hoteliers can analyse their financial data, compare it with their competitors and accordingly
prepare their future strategies and budget with the help of the following table:
COMPOSITION

Your Hotel

Comparison 1

Comparison 2

Average Total Rooms Per Hotel:

Average Occupied Rooms Per Hotel:
Average Occupancy Per Hotel:
Average Rate Per Hotel:
REVENUE
Rooms
Food & Beverage
Banquet & Conferences
Telephone & Other
Minor Operated*
Rental & Other Income
Total
DEPARTMENTAL EXPENSES
Rooms
Food & Beverage
Telephone & Other
Minor Operated*
Rental & Other Income
Total
DEPARTMENTAL INCOME
OPERATING EXPENSES
Administrative & General
Management Fee
Marketing
Franchise Fees
Property Operations & Maintenance
Energy
Total
HOUSE PROFIT
FIXED EXPENSES
Property Taxes
Insurance
Other Fixed Expenses
Rent
Total
NET INCOME**
* Minor operated departments include: laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth
** Net Income is before depreciation, interest payments and taxes

Page 62

Comparison 3

Moscow

London

New York

Consulting and
Valuation
Investment Banking
Asset Management
and Advisory
Hotel Management
Hotel Parking
Consulting
Executive Search
Conventions, Sports
and Entertainment
Facilities Consulting
Food & Beverage
Services
Gaming Services
Interior Design
Sales & Marketing
Services
Shared Ownership
Services
Golf Services

New Delhi

Mumbai

Singapore

Hong Kong Shanghai

Madrid

SERVICES

Dubai

Sao Paulo

Buenos
Aires

Boulder

Beijing

Athens

OFFICES

Denver

Dallas

Chicago

Atlanta

Miami

Toronto

San Francisco

Boston

Washington
D.C.

Vancouver

Consulting and Valuation

Asset Management and
Strategic Advisory
Executive Search
Marketing and
Communications
Web Strategies
Hotel Investment Conference
South Asia
Ecotel

Mexico City Newport, RI

INDIA

HVS AT A GLANCE

THE HALLMARK OF ENVIRONMENTALLY SENSITIVE HOTELS