Setting up a

Skill development and

Hospitality training centre
at Siddhpur
Tourism
Government of Gujarat
Contents

Project Concept 3
Market Potential 4
Growth Drivers 6
Gujarat – Competitive Advantage 7
Project Information 9
- Location/ Size
- Infrastructure Availability/ Connectivity
- Raw Material/ Manpower
- Key Players/ Machinery Suppliers
- Key Considerations
-Potential Collaboration Opportunities
Project Financials 13
Approvals & Incentives 15
Key Department Contacts 17

Page 2
Project Concept

Hospitality Industry

 The Hospitality industry is a broad category of fields within the service industry that includes
lodging, event planning, theme parks, transportation, cruise line, and additional fields within the
tourism industry. The hospitality industry is a multibillion-dollar industry that depends on the
availability of leisure time and disposable income.

Hotel Management
 Hotel management refers to managing the operations of a hotel, motel, resort, or other lodging-
related establishment. Management of a hotel operation includes, but is not limited to
management of hotel staff, business management, upkeep and sanitary standards of hotel
facilities, guest satisfaction and customer service, marketing management, sales management,
revenue management, financial accounting, purchasing, and other functions.

Similar projects in India

 State Institute of Hotel Management and Catering Technology, Thuvakudi, Tamil Nadu
 State Institute of Hotel Management, Indore, Madhya Pradesh
 State Institute of Hospitality Management, Kozhikode, Kerala
 State Institute of Hotel Management & Catering Technology, Pune, Maharashtra

Source
https://en.wikipedia.org/wiki/Hotel_manager
https://en.wikipedia.org/wiki/Hospitality_management_studies
https://en.wikipedia.org/wiki/Hospitality_industry

Page 3
Market Potential

Tourism is not only a growth engine but also generates employment

for diverse sections in the society
World - Total contribution of Travel & Tourism to GDP World - Total Domestic Expenditure (USD billion)
(USD billion)
CAGR: CAGR:
3.0% 3.0% 4,792
10,254 4,269
9,035 3,746
7,816 3,342
6,846

2011 2015 E 2020E 2025E 2011 2015 E 2020E 2025E

 The total contribution of Travel & Tourism to GDP is forecasted to reach USD10,254 billion in
2025 and the domestic expenditure is expected to reach USD4,792 billion in 2025

India - Domestic Tourists (in million) India - International Tourists (in million)

CAGR: 2,775
CAGR: 13
8.0% 2,099 5.0% 10
1,422 8
6
865

2011 2015 2020E 2025E 2011 2015 2020E 2025E

 The number of domestic and international tourists is going to increase in the coming years and
reach up till 2,775 million and 13 million in 2025.

Foreign Exchange Earnings from Tourism in India

 The Foreign Exchange Earnings (FEEs)
(in million)
from tourism in the country is expected to
CAGR: grow and reach a CAGR of 5%.
5.0% 32,901
27,039  Government's e-visa facility, has led to a
21,177
16,564 huge growth in tourist arrivals to the
country. The 'e-Tourist Visa' (eTV) scheme
was launched for nationals of 43
countries. The government extended the
2011 2015 2020E 2025E scheme to 31 more countries.

Source
http://incredibleindia.org/index.php/trade-nav/latest-news/1534-tourism-an-export-growth-engine-and-employment-generator-says-
economic-survey-2011-12-15-march-2012

Page 4
Market Potential

Hospitality Management: Skill and Supply Gap Scenario (Gujarat)

Major Additional manpower
Segments Skill Gaps
Functions required In 2022-23
Adequate communication skills
House Understanding guest's needs and Requirements and
7,888
Keeping servicing accordingly at Housekeeping
Behavioural Skills including proper Guest Handling
Adequate communication skills
F&B Ability to manage customer complaints
4,057
Service Ability to interact with guests
Star Ability to manage F&B Inventory
Category
F&B Knowledge on food costing
Hotels 6,311
Kitchen Awareness on food calorific and nutritional values.
Awareness about the local areas/site
seeing/shopping areas and suggesting the same to
guest based on their interest at Travel Desk
Front Desk 1,803
Knowledge on various hotel offerings, procedures,
etc.
Proactively review occupancy and promote sales.
Other 2,479
Cleanliness at Hotel premises and room
House Daily Room Cleaning
33,807
Keeping Proper Personal Hygiene of Housekeeping Staff
and waiters
Ability to maintain a polite and cheerful appearance
Ability to manage customer complaints
F&B Ability to interact with guests
11,494
Service Ability to manage F&B Inventory
Knowledge of all Cuisines
Un-
Ability to manage team of stewards / waiters
classified
Innovation in food
Hotels
F&B Ability to prepare different kinds of cuisine
5,409
Kitchen Maintain a clean kitchen environment
Cleaning and handling vessels
Ability to market the rooms/restaurant / Banquet /
Conference rooms, including with institutions /
Front Desk corporate etc. 11,494
Familiarity with the local region to guide
guests/tourists
Other 5409
Source
GITCO Analysis

Page 5
Market Potential

Hospitality Management: Skill and Supply Gap Scenario (Gujarat)

Maintain a clean kitchen environment etc.

F&B
Interacting with the guest and explaining the 1,25,164
Service
speciality of cuisines
Knowledge of nutritional value and cost specific details
Eating of food prepared by Chefs
F&B
Outlets Discipline at Work Place 88,078
Kitchen
Ability to plan menu
Ability to prepare different kinds of cuisine
Front Ability to market the restaurant / Banquet / Conference
18,543
Desk rooms, including with institutions / corporate
Total: 321,937

Source
GITCO Analysis

Page 6
Growth Drivers

Rising affordability and increased affinity for leisure travel are driving
1 Rise in Income domestic tourism in India. Domestic expenditure on tourism is
and Changing expected to rise due to the growing income of households. A number
Demographics of niche offerings such as medical tourism and eco tourism are
expected to create more demand.

2 Increasing Domestic expenditure on tourism has grown significantly; the market

Spending on has reached USD96.7 billion in 2015 and shall be USD 332.4 billion
Tourism in 2025, representing a CAGR of 6.3 per cent during 2008–15.

Campaigns such as Khushboo Gujarat Ki, Incredible India, Athithi

3 Devo Bhava were launched to harness the tourism industry’s
potential. 100% FDI is allowed under the automatic route in tourism
Policy Support
and hospitality, subject to applicable regulations and laws. Tourism
and hospitality had a cumulative FDI inflows of USD8.45 billion in
FY15

The GoI has made concerted efforts to improve and upgrade

4 infrastructure facilities at important tourist destinations, thereby,
Focus on improving accessibility to these hubs. The FY16 Union Budget
improved allocated INR14.8 billion toward infrastructure development for
infrastructure destination and circuits, domestic promotion and publicity including
hospitality, overseas promotion and publicity including market
development assistance, computerization and information technology
and creation of land bank for hotels, etc.

Emerging Tourism and Hospitality Trends

The below trends will require personnel trained in a multi-faceted approach, in order to cater to
tourists of all kinds. The SIHM at Siddhpur intends to prepare the local manpower for these
emerging trends:
• Camping Sites: Camping is a major source for both additional economic opportunities in
remote areas as well as an instrument of conservation
• Eco Tourism: Vast variety of flora and fauna in various states is a major factor behind their
growing popularity as tourist destinations.
• Luxury Tourism: The luxury travel market is projected to reach USD14.7 billion in 2015 and it
was pegged to grow at 25 per cent on a year – on – year basis between 2013 and 2015
• Rural tourism: The aim is to develop interest in heritage and culture; and promote visits to
village settings to experience and live a relaxed and healthy lifestyle.

Source
https://www.tourmyindia.com/blog/tourism-holds-special-place-make-india-campaign
http://www.makeinindia.com/sector/tourism-and-hospitality

Page 7
Gujarat - Competitive
Advantage
The Gross Tourist Flow has been increasing for Gujarat

Gujarat Gross Tourist Flow (Number in millions)

38.3
CAGR: 32.7
13.6% 28.8
25.4
22.4
19.8
15.8 17
12.3 14.1
10.7

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Source: Tourist Flow Information System- Annual Report 2015-16

 Gujarat has many tourist destinations and sacred Gujarat Gross Foreign Tourist Flow
pilgrimages, which attracts both Indian and Foreign (Number in thousands)
travelers. CAGR:
16.2% 309
 The total flow of tourist is expected to record an increase
over the years. This is attributed to the growing 228 245
prominence of the state as a major business hub. Vibrant
Gujarat is a biennial investors' summit held by the
government of Gujarat in Gandhinagar, Gujarat, India. in
The event is aimed at bringing together business leaders,
investors, corporations, thought leaders, policy and
opinion makers. The Gujarat Vibrant Summit 2015
attracted 25,000 delegates from 110 countries. 2013-14 2014-15 2015-16

Total contribution to GDP Total Investment (USD Billion) Employment (in million)
CAGR:
5.76% 5.0% CAGR:
4.00 CAGR: 3.00
11.0%
2.7% 15.63%

0.81 0.95

2014 2025P 2014 2025P 2014 2025P

Source: Tourism Policy for state of Gujarat (2015-20)

 Tourism in India accounts for 7.5 per cent of the GDP and is the third largest foreign exchange
earner for the country. Gujarat is expected to contribute 5% to the total GDP by 2025. The
business is expanding both in terms of turnover and boundaries and therefore contributions
total investments by Gujarat are expected to increase. Today worldwide, one in eleven jobs may
be ascribed to the tourism industry. Gujarat is expected to generate 3 million jobs by 2025.

Page 8
Gujarat - Competitive
Advantage
Initiatives – Gujarat Tourism Policy 2015-2020

Grant of Industry status to First state to have accorded INDUSTRY STATUS to Tourism
Tourism Sector Sector

Planning to develop wayside amenities at an interval of about

Development of Wayside
75 km on selected major arterial roads to be progressively
amenities
extended to other major trunk roads
The implementation of PPP projects in coordination with GIDB
and as per the GR dated 2nd March 2015 for tourism projects,
PPP in tourism
which would be applicable to both Greenfield and Brownfield
projects.
Special incentives for adopting ICT and emphasis on
Promotion of ‘Make in India’ promoting ICT-enabled technologies through mobile
and ‘Digital India applications, social networking, big data analytics, blogs,
virtual tourism
Emphasis on active participation in GoI schemes like
Participation in GoI Schemes Swadesh Darshan, PRASAD, HRIDAY, AMRUT, LRGP and
other schemes

Tourism development needs multi-departmental coordination.

Active Collaboration with the The State Government would actively collaborate with MoT,
Central Government MoUD, MoC, MoEF, ASI and other GoI Ministries /
Organizations

Annual Tourism Awards would be instituted for recognition of

Excellence Awards excellence in tourism products and services as also for
contribution to the growth of tourism in the State.

Institution of Tourist Police to suitably assist, facilitate and

Tourist Police
guide the Tourists as also to safeguard their interests.

List of AICTE approved Hotel Management institutions in Gujarat

 State institute of Hotel Management, Siddhpur

 Asia Pacific Institute of Hotel Management, Ahmedabad
 Vivekanand Institute of Hotel & Tourism Management, Rajkot

Source
http://www.gujarattourism.com/downloads/Tourism%20Policy%202015.pdf
http://www.aicte-india.org/downloads/List_of_Approved_Institutes_2015-2016.pdf

Page 9
Project Information

Project Location
 The State Institute of Hotel Management (SIHM) is located in Siddhpur, Patan district.
 Latitude: 23° 55 0.12 N
 Longitude: 72° 22 59.88 E
 Project area: 5 acres
 Siddhpur was identified as a strategic location to develop the SIHM since it has numerous
historical sites. It can be developed as a tourism hub of Gujarat.
 The SIHM building has being established with about 8395 Square Meters. Tourism Corporation
of Gujarat Limited (TCGL) has spent about INR 230 Million against campus construction. The
Campus includes the Institute building, Boys Hostel (occupancy: 120 student) and Girls Hostel
(occupancy: 60 student).
 SIHM has the State of the art Infrastructure facilities and is ready to commence academic
session in academic year 2016-17.
 The institute has received AICTE Approval and affiliation with GTU to conduct 4 Year Degree
program – Bachelor of Hotel Management & Catering Technology (BHMCT).

Site images

Source
http://sihm.org.in

Page 10
Project Information

Utility

Water Power

 Water supply for industrial purposes in
the district can be obtained from three
main sources: Gujarat Water Supply
and Sewerage Board (GWSSB),
Irrigation Canals and Sardar Sarovar
Project (5 branch canals)
 Patan district enjoys uninterrupted 24-hour
power supply due to the presence of many
Power Sub Stations
 The 220 KV power stations at Radhanpur,
Janghral and Sankhari supply power
throughout the district
 Patan and Sidhpur talukas have 132 KV
substations

Connectivity

Rail Road

 Siddhpur Railway Station (Western  State Highway (S-41) connects

Railways) Siddhpur to National Highway (NH - 27),
which is ~30 kms away

Air Port

 ~115 kms from airport (domestic &  ~300 kms from major port at Kandla
international) at Ahmedabad  ~280 kms from minor port at Bhavnagar

Existing Infrastructure/Facilities
 Institute Building (8395 Square meters)
 Boys Hostel (occupancy: 120) and Girls Hostel (occupancy: 60)
 Approach road
 Furniture & fixtures
 Electricity connection
 Back-up power (450 kVA)
 Land to develop Sports Infrastructure (in the future)
Source
http://www.globalgujarat.com/images/patan-district-profile.pdf
http://dcmsme.gov.in/dips/DIP%20PATAN.pdf

Page 11
Project Information

Project Components
Average
Course Type Examples Duration of
Course

Bachelors in Hospitality Management & Catering technology

Bachelor’s Courses 3 - 4 years
Bachelor in Hotel Management and Catering Technology (BHMCT)

Hotel Financial Management

Certification Courses
Diploma Courses
Post Graduate Courses
Foodservice Management
Hospitality Marketing
Hotel Real Estate Investments and Asset Management
3 – 6 months
Front office management
Housekeeping & Laundry
Craft Certificate in Bakery & Confectionary
Certificate in Carving (Fruit & Ice)
Diploma in Hospitality Management & Catering technology 1 year
Masters in Hospitality Management & Catering Technology
Masters in Sustainable Tourism 2 years
MBA in Hospitality & Tourist Management

Estimated Manpower Requirement

Category Number of People required
Faculty 20
Administrative Staff (Governing board, Admissions, Placements et al.) 15
Maintenance 30
Security 5

Key Players
 ITC Hospitality Management Institute
 Institute of Hotel Management, Aurangabad
 Indus Hospitality Careers & Training
 The Oberoi Centre of Learning and Development

Key considerations
 AICTE Approvals are already in place.
 There are many small restaurants in the vicinity which have readily available manpower.
 Construction has been completed, and the institute is already operational.
 The Institute is quite popular in the state.

Page 12
Project Information

Potential Collaboration Opportunities

 Taj Group
1  Oberoi Group
Leading hoteliers,
corporate houses, public  Welcome Group
sectors & private sectors  Hyatt Group
undertakings - Provide  Radisson Hotels
internship and career  InterContinental Hotels Group
opportunities for the SIHM
 Toran Hotels (Gujarat Tourism)
Siddhpur students
 IRCTC

 Institute of Hotel Management Ahmedabad (IHM)

2  Asia Pacific Institute, Ahmedabad (Asia Pacific)
Hotel/ Hospitality  DIMS Institute of Hotel Management, Ahmedabad (DIMS)
Management institutes -  Gujarat Institute of Hotel Management, Vadodara (GIHM)
Organize student exchange  Jindal School of Hotel Management, Vadodara (JSHM)
programs and faculty  Anand Institute of Management Science, Anand (AIMS)
training programs
 CZ Patel College of Business Management, Anand (CZP)
 Lords Institute of Management, Surat (LIM)
 Vivekananda Institute of Hotel and Tourism, Rajkot (VIHM)

Current Status of Project

 The institute has received AICTE Approval and affiliation with GTU to conduct 4 Year Degree
program – Bachelor of Hotel Management & Catering Technology (BHMCT).
 Course of Study:
Year 1 Year 2 Year 3 Year 4
• Foundation courses in • Advance Food • Food & Beverage • Industrial Training
Food production, F&B Production, F&B Management & Report
Service Service Control
• Indian Heritage &
• Application of • Food Safety • Principles of Culture
Computers Management Systems Management &
Organizations • Business Law &
• Foundation course in • Accommodation & Behaviour Corporate
Accommodation & Front Office Governance
Front Office Operations • Financial Management
Operations Management II • Environmental
Sustainability
• Business • Research Project
Communication Design & Methodology • Entrepreneurship
Development
• Food Science & • Travel & Tourism
Nutrition • Professional Elective
• Facility Planning
• Open Elective
• Hospitality Marketing
Source
http://sihm.org.in

Page 13
Project Financials

Estimated Project Cost and Means of Finance

 Project cost: The estimated cost is INR 900 Million
 Project structure and Implementation: PPP Structure - Land procurement and basic campus
construction by SIHM; Operation of institute by Private players
 Means of Finance: Majority of funds will be raised through debt finance from banks and financial
institutions, a part of it will be financed through promoters’ equity.
 Initial Capital Cost:
Cost parameters Total Cost (INR Million)
Kitchens (5) 40.0
Larder 2.0
Bakery & Confectionary 9.0
Restaurant (Capacity: 100) 10.0
House Keeping Equipment 5.0
Guest Rooms (25 – Standard, Executive, Suites) 100.0
Industrial Laundry Equipment 10.0
Front Office Laboratory 1.0
Resource Center (Computer Lab & Library) 3.0
Classrooms (25) 2.5
Total Cost 182.5
 Revenue Sources
Estimated
Yearly/ Number of Number of Total
Capacity
course fee Batches Years/ Revenue
of each
per student per year Courses (INR Million)
course
Course fees – Bachelors Courses 80,000 50 1 3 years 12.00
Course fees – Post Graduate
1,00,000 40 1 2 years 8.00
Courses
Course fees – Certificate Courses 30,000 50 4 8 courses 48.00
Course fees – Diploma Courses 60,000 50 1 3 courses 9.00
Hostel fees 40,000 180 - - 7.20
Conveyance fee (Day Scholars) 7,000 420 - - 2.94
Annual Revenue 87.14
 Expenses:
Total Expense (INR Million)
Salaries 4
Operation & Maintenance 7
Marketing 1
Annual Expenses 12
Source
http://www.ihmbbs.org/upload/FEES%20STRUCTURE%20FOR%20THE%20ACADEMIC%20YEAR%202016-17(3).pdf
http://mumbaicollege.com/fees.html

Page 14
Project Financials

 For the proposed project, debt equity ratio of 3:1 is considered. On this basis, the means of
finance proposed is as given below:

S. No Means of Finance Cost (INR million)

1 Promoters contribution 45.625
2 Term loan 136.875
Total means of finance 182.500

 On the basis of profitability estimates, the breakeven point for the project is as follows:

Breakeven 3 – 4 years
Interest rate assumption 18%

 Project Structure
Following is a schematic diagram showing possible development model of destination
development through a Revenue sharing (PPP) model

Tourism Corporation of
Project consultant
Gujarat Limited

Government selects the The consultant undertakes

private player through identifies the revenue
competitive bidding sharing model between
process and enters into TGCL and Operator
an agreement to form a SPV assists with bid process
Special Purpose Vehicle management and partner
(SPV) selection process;

Private investor
(O&M Operator) Activities of the operator

The O&M Operator will Invest in purchase of equipment like

decide the courses and cutlery, computers, etc for training the
run the institute students
Class room equipment, AV equipment etc
Run the courses and train the students

Page 15
Approvals / Incentives

Approvals Required
Some of the approvals already received are:
1. Allotment of land - Government order
2. Approval from Gram Panchayat for Building development and use
3. Certificate for Land Encumbrances from Sub-divisional Magistrate
4. Food Safety International (FSI) Certificate from Taluka Panchayat, Siddhpur
5. Approval and connection from Electricity Board i.e. UGVCL

Approvals/clearance required Department to be approached and consulted

Incorporation of company
Registration/Industrial license
Registration under state sales tax act
and Central and State excise act
Hazardous waste import and export
approval
Exiting business
Approval from Government
Organization
Approval for New Higher Education
Programme
Approval from other authorities
Registrar of companies
Secretariat if industrial assistance (SIA) for large and
medium scale industries
 Sales tax department
 Central and state excise department
Ministry of environment, forest and climate change
Ministry of corporate affairs
Eg: NSDC / DET / NCVT / GCVT / NCHMCT for
Certification and Trade Diploma Courses
Eg: AICTE / NCHMCT
Eg: ACPC, FRC, DTE and GTU, Govt. of Gujarat

Incentives from Government of Gujarat

Government of Gujarat has granted Industry status to Tourism sector thereby providing a great
boost to the industry. The incentives under Tourism Policy for the State of Gujarat (2015-2020)
shall be applicable to the eligible tourism units as mentioned in the next sections.

Capital Subsidy to the Eligible Tourism Units

Eligible Capital Investment (excluding land cost) Admissible Maximum Limit
Subsidy (INR crores)
Investment upto INR.50 crore 15% 7.5
Investment above INR. 50 crore 15% 10

Additional Capital Subsidy of 5% for New Tourism Units

• Owned and managed by women entrepreneurs (with minimum equity participation of 51% in the
entity)
• SC/ST categories to an additional 5% subsidy over and above the ‘Admissible Subsidy’.

Page 16
Approvals / Incentives

Incentives from Government of Gujarat

Support for Sustainable Tourism -

• Assistance to eligible tourism units up to 75% of the cost of carrying out Energy Audit by a
recognized institution/consultant, Water Harvesting / Conservation and Environment-friendly
practices like Green Buildings, Solar and other Renewable Energy measures

Other Relevant Exemptions

• Electricity Duty - 5 years from the date of commencement of commercial operation for New
Tourism Units only.

Special Package for Mega Tourism Units

The State Government shall duly promote and facilitate Mega Tourism Projects that have a large
multiplier effect on the economy, leading to employment generation and inclusive growth in the
State. Any type of Tourism Units qualifying criteria of Mega Tourism Units will be eligible.
Following incentives would be offered to eligible Mega Tourism Units:
 100% reimbursement of stamp duty and registration fee on sale/lease/transfer of land for the
first transaction only. Reimbursement of stamp duty and registration fee would be done after
the commencement of commercial operations.
 Capital subsidy of 15% of eligible capital investment (excluding the cost of the land) subject to
a ceiling of INR200 million.
 Exemption from luxury and entertainment tax for a period of seven years from the date of
commencement of commercial operations.
 Exemption in electricity duty would be for a period of five years from the date of
commencement of commercial operations.
 Mega tourism units shall not be entitled to any interest subsidy.

Skill Development
 Reimbursement of 100% of Course Fees, up to a maximum of INR 10,000 per person for
course duration of a fortnight or more
 Training to be imparted to Tourist Guides hailing from the local area with a monthly stipend of
INR 5,000 to all the guides registered with CoT.

Page 17
 Tourism Corporation of Gujarat Limited
http://www.gujarattourism.com/

Department of Tourism, Gujarat

http://www.gujarattourism.com/

Industries and Mines Department, Gujarat

www.imd-gujarat.gov.in/

iNDEXTb - Industrial Extension Bureau

www.indextb.com

This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope.
It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.

Tourism Corporation of Gujarat Ltd,

H. K. House, Opp: Bata Showroom,
Ashram Road, Ahmedabad,
Tel: +79 26578044/46/26589172
Fax: +79 26582183
E-mail: tibahd@gujarattourism.com