HOSPITALITY INDUSTRY

With a consistently growing middle class and increasing disposable income, the tourism and
hospitality sector is witnessing a healthy growth and accounts for 7.5 per cent of the country's
GDP. According to a report by KPMG, the hospitality sector in India is expected to grow at 16.1
per cent CAGR to reach Rs 2,796.9 thousand crore in 2022.The hospitality sector encompasses
a wide variety of activities within the services sector and is a major job provider both direct and
indirectly. The sector attracts the most FDI (Foreign Direct Investment) inflow and is the most
important net foreign exchange earners for the country. It also contributes significantly to
indirect tax revenue at the state and central level which includes revenues from VAT, Service
Tax, and Luxury Tax etc. 

The growth in the hospitality sector and its contributions to the GDP will continue to be
substantially higher than other sectors of the economy on the back of huge tourism potential in
the country. However, the hospitality sector is one of the most heavily taxed industries and is
saddled with multiple layers of tax such as VAT, service tax, luxury tax, etc. ranging from 20 per
cent - 30 per cent. This multiple taxations adds to operational costs and reduces profitability.
While the operationalization of the much awaited GST regime is expected to rationalise the
taxation structure, bring a positive outcome with streamlined taxes, enhance ease of doing
business and lower cost for the consumers, there is an urgent need for lowering the tax levied,
to incentivize and attract more investments to the sector.

Infrastructure development is the backbone and key to the growth of the hospitality sector.
Taxes on real estate development for the hospitality sector must be lowered to boost
investments as there is an acute shortage of good quality accommodation in the country.
Secondly, the industry has been clamouring for industry status for over two decades. Providing
industry status to the hospitality sector will go a long way in attracting investment and
development of the sector. With India projected to be the fastest-growing nation in the wellness
tourism sector in the next five years, at over 20 per cent gains annually through 2017 (SRI
International), infrastructure development becomes critical in order to support this growth.

The government must also look at incentivizing investment in the development of luxury and
ultra-luxury projects which will provide impetus to the hospitality and travel sector in India. The
government should also provide service tax exemption for new developments and a longer tax
holiday for new hotels and resorts that will help in attracting investments into the industry. Also,
the tax rate for the sector needs to be lowered from the proposed 18% tax slab under
consideration for the new GST regime.

The hospitality industry relies on a host of enabling the ecosystem to function and has a
reciprocal relationship with several other sectors like transportation, entertainment, aviation etc.
Strengthening these related sectors will lead to the growth and development of the hospitality
sector. Therefore, single window clearance for real estate and hospitality projects and providing
infrastructure status to the hospitality industry are much-needed steps for the growth of the
industry.

The hospitality sector has the potential to be the main driving force behind the growth of the
economy. It, however, will be possible only with the right amount of support and incentives from
the government in all categories of hotels and not only limited to the luxury and ultra-luxury
segment. I believe that the government must provide its full support in incentivizing the sector
and the overall taxation on the hospitality sector should be reduced to stimulate its growth and
make India competitive against other internationally renowned hospitality chains

India is a large market for travel and tourism. It offers a diverse portfolio of niche tourism
products - cruises, adventure, medical, wellness, sports, MICE, eco-tourism, film, rural and
religious tourism. India has been recognised as a destination for spiritual tourism for domestic
and international tourists.
Total contribution by travel and tourism sector to India’s GDP is expected to increase from US$
136.3 billion in 2015 to US$ 275.2 billion in 2025. India ranked third among 184 countries in
terms of travel & tourism’s total contribution to GDP in 2016. Travel and tourism is the third
largest foreign exchange earner for India. A sum of US$ 27.693 billion was earned under foreign
exchange through tourism during calendar year 2017. The employment in the sector is expected
to rise to 46.42 million by 2026. During calendar year 2017, 10.177 million foreign tourists have
arrived in India. The Government of India has set a target of 20 million foreign tourist arrivals
(FTAs) by 2020 and double the foreign exchange earnings as well.
The launch of several branding and marketing initiatives by the Government of India such as
‘Incredible India!’ and ‘Athiti Devo Bhava’ has provided a focused impetus to growth. The Indian
government has also released a fresh category of visa - the medical visa or M visa, to
encourage medical tourism in the country. Incredible India 2.0 campaign was launched in
September 2017.
The Government has also been making serious efforts to boost investments in tourism sector. In
the hotel and tourism sector, 100 per cent FDI is allowed through the automatic route. A five-
year tax holiday has been offered for 2, 3 and 4 star category hotels located around UNESCO
World Heritage sites (except Delhi and Mumbai). Total FDI received by Indian hotel & tourism
sector was US$ 10.6 billion between April 2000 and September 2017.
Growth Of Hospitality Industry In India
The hotel industry in India is going through an interesting phase. One of the major reasons for the
increase in demand for hotel rooms in the country is the boom in the overall economy and high
growth in sectors like information technology, telecom, retail and real estate. Rising stock market
and new business opportunities are also attracting hordes of foreign investors and international
corporate travellers to look for business opportunities in the country.
The hotel industry in India is going through an interesting phase. The industry has a capacity of
110,000 rooms. According to the tourism ministry, 4.4 million tourists visited India last year and at
the current rate, the demand will soar to 10 million by 2010 to accommodate 350 million domestic
travellers. The hotels of India have a shortage of 150,000 rooms fuelling hotel room rates across
India. With tremendous pull of opportunity, India has become a destination for hotel chains looking
for growth.
Due to such a huge potential available in this segment, several global hotel chains like the Hilton,
Accor, Marriott International, Berggruen Hotels, Cabana Hotels, Premier Travel Inn (PTI),
InterContinental Hotels group and Hampshire among others have all announced major investment
plans for the country. The Government's move to declare hotel and tourism industry as a high priority
sector with a provision for 100 per cent foreign direct investment (FDI) has also provided a further
impetus in attracting investments in to this industry.
It is estimated that the hospitality sector is likely to see US$ 11.41 billion rise in the next two years,
with around 40 international hotel brands making their presence known in the country by 2011.
Simultaneously, international hotel asset management companies are also likely to enter India.
Already, US-based HVS International has firmed up plans to enter India, and industry players
believe others like Ashford Hospitality Trust and IFA Hotels & Resorts among others are likely to
follow suit
 ONLINE FOOD PORTALS

In my report i would be talking about some of the well known food portals you would be
knowing:-

1. Foodpanda

The foodpanda group is a global mobile food delivery marketplace headquartered in

Berlin, Germany, and operating in 24 countries and territories, including India, Pakistan,
Russia, Bangladesh, Hong Kong and Singapore. The service allows users to select from
local restaurants and place orders via the mobile application as well as the website. The
company has partnered with over 40,000 restaurants They believe food is a pleasure and
food ordering should be fast and definitely a fun experience.
2. Zomato

Zomato is a restaurant search and discovery service founded in 2008 by Deepinder Goyal
and Pankaj Bhardwaj. It currently operates in 23 countries, including India, Australia and
the United States. It features restaurant information such as scanned menus and photos
sourced by local street teams, as well as user reviews and ratings. The company also
provides cashless payment, online ordering, white-label apps, table reservation, and
point-of-sale systems.
3. Swiggy

Swiggy is a Food ordering and Delivery Company based out of Bengaluru, India. Swiggy
was inspired by the thought of providing a complete food ordering and delivery solution
from the best neighbourhood restaurants to the urban foodie. A single window for
ordering from a wide range of restaurants, they have their own exclusive fleet of delivery
personnel to pick up orders from restaurants and deliver it to customers. Having their
own fleet gives them the flexibility to offer customers a no minimum order policy on any
restaurant and accept online payments for all partner restaurants that we work with.
4. TastyKhana

TastyKhana was founded by Shachin Bharadwaj and Sheldon D’souza in 2007. Available
on Android and iOS platforms, it enables users to get instant access to its database of
over 7,000 restaurants across India. It provides a few options to let users create profiles,
save restaurant locations and their previous orders. You can choose to pay through net
banking, cash on delivery or credit/debit card. Foodpanda acquired this food delivery
service in 2014.
5. JustEat

JustEat is another similar kind of service which lets you browse nearby restaurants and
then order food online. You also get discounts for online payment or via various coupon
codes. It operates in most of the big cities in India.
6. Domino’s

Domino’s pizza delivery app is mostly popular with pizza lovers across India. It works on
Android, Windows Smartphones and iOS. The app provides users with the easiest way to
order food without making a call. The unique feature of Domino’s Pizza delivery app is
that it allows users to apply coupons to their orders and also choose the mode of
payment as per their convenience.
7. Faaso’s

Kallol Banerjee and Jaydeep Barman are the founders of this food delivery app that hit
the market in 2011. Faaso’s food delivery app is compatible with Windows Phones,
Android and iPhones. It is mostly used in Mumbai, Ahmedabad, Bangalore and Pune. The
app is fairly simple to use and allows users to customize their orders in multiple ways.
8. FoodMingo

Founded by Pushpinder Singh in 2012, FoodMingo is currently operating across

Hyderabad, Pune, Bengaluru and Aurangabad. Available for free download on Android,
iOS and Windows phones, FoodMingo app enables users to order food online from and
book tables at restaurants of their choice. It also offers coupons and deals from its
partner restaurants in those cities. Users of FoodMingo app can track their orders in real
time.

9. Pizza Hut

Pizza hut app discovers Pizza hut restaurant near you. It offer all your favorite deals,
pastas, pizzas, drinks and dessert. Pizza hut app offers fast access and local deals. An
amazing feature is that you can place order 7 days in advanced.
10. Holachef

Holachef is a food delivery platform which serves food made by renowned chefs to your
doorstep. Holachef has a changing menu every day with delicious food made fresh by
chefs working in the hospitality industry for years.
 THE RESTAURANT INDUSTRY

What is the restaurant industry called?

Restaurant Industry. ALSO CALLED: Cafes, Food Service Industry, Fast FoodRestaurants,

Eateries, Full-service Restaurants. DEFINITION: Companies that own, operate, and/or
franchise dining establishments.

The latter includes chefs, cooks, managers, and dishwashers. Fast food restaurantslimit their
staff to food preparation people, managers, and cashiers. ... Equipment suppliers are an
example of a segment of the food service industry that does not deal directly with food.

Rise of the Restaurant Industry in India

Executive Summary
While India has always been a food-loving country with each region having its
own special cuisine, Indians have never been very big on eating out. But all
that is changing now. The restaurant industry in India has been growing at a
rapid pace over the last decade or so and the growth story is set to continue
for the next foreseeable future.
There were nearly 22 lakh hotel and restaurant establishments in India in
2002. The food service or restaurant industry was worth a whopping Rs.
43,000 crores in 2010 and growing at a healthy rate of 15-20 percent
annually.
The growth of the restaurant industry coincided with the growth of the great
Indian middle class, which was the byproduct of liberalization. Rapid
urbanization, growing awareness of Western lifestyles, more women joining
the workforce, and higher disposable income were some of the factors that
contributed to the growth of the restaurant industry.
But the real game changer was the entry of American fast food chain
McDonalds into India in the year 1996. Indians, who had limited exposure to
American food until then, lapped it up and gave rise to a huge upsurge in the
quick service restaurant (QSR) industry. The following years saw the
establishment of many international fast food chains such as Dominos, Pizza
Hut, KFC, etc.
But the real game changer was the entry of American fast food
chain McDonalds into India in the year 1996. Indians, who had limited
exposure to American food until then, lapped it up and gave rise to a huge
upsurge in the quick service restaurant (QSR) industry. The following years
saw the establishment of many international fast food chains such
as Dominos, Pizza Hut, KFC, etc.
And while the QSR industry was thriving, Indians discovered fine dining, too.
The joy of experiential eating was new to the Indian consumer, who was
hitherto reluctant to spend copious amounts of money on dining out. But
greater awareness of global cuisines & gourmet food as well as the search
for a heightened dining experience led them to high-end restaurants. Today,
the chain fine dine market in India has around 50 players with 150-200
outlets spread across various cities and is worth Rs. 500 crores.
Another interesting development for the restaurant industry was the rise of
niche restaurants serving specific cuisines and specialties. Niche
restaurants like Oh! Calcutta, Pind Baluchi, and Zambar  made inroads into
the Indian market.
As India went through another invasion – that of the mall culture – Indians
were treated to a whole new concept of eating. Food courts made their foray
into India and thanks to their quick service, value for money pricing, and
casual atmosphere, had soon captured the imagination of the Indian
consumer.
The restaurant industry went through a technological revolution of sorts in
the last few years with the emergence of the online food ordering service.
The trend gave rise to many entrepreneurs who began food ordering startups
like TastyKhana, TinyOwl, and Food Panda. Ordering good food was now
possible with the press of a button and the Indian consumer couldn’t be
happier.
While the restaurant industry in India faces many challenges like high taxes
and food cost inflation, it remains a major engine of growth for the country’s
economy contributing significantly to its GDP, paying crores of rupees in
taxes, and providing employment to millions of people. The future looks
promising for the Indian food service industry.
1. History of restaurant business in India
Food is a big part of the Indian culture. Whether it’s an everyday meal
prepared lovingly for the family or special celebratory culinary treats made
during festivals – food has always been something that Indians have bonded
over. If there’s one thing to know about the food culture of India, it’s the fact
that it is an elaborate, expansive fare. Even a regular meal at home consists
of various staples like rice, chapati, daal, and curry along with
accompaniments such as pickles, chutneys,papadams, salad, and raita in a
large number of households. Not only does a typical Indian meal take long to
prepare, but it is also savored over an extended period of time.
Indians have traditionally prided themselves for eating home-cooked meals
prepared by maharajsor cooks in affluent families and women in middle and
lower-class ones, so the restaurant culture took a while to find a place in the
country.
While modern restaurants are believed to be a byproduct of the French
revolution, food services per se date back to ancient times.
Public eateries and street vendors were not an uncommon sight in ancient
Rome, whereas travelers during medieval times often ate at monasteries,
taverns, inns, and hostelries. But it was the French revolution that gave birth
to restaurants as we know them today by abolishing the monopolistic cooks'
guilds. The enterprising French chefs took advantage of the opportunity to
serve a primarily middle class customer base dishes that were prepared to
order.
In India, the earliest reference of restaurants dates back to early 250 BC
when taverns or inns provided food to hungry travelers. Street vendors and
small stall owners also sold food in local markets and most Indian towns and
villages.
But the modern day restaurants probably started mushrooming with the
spread of colonialism, especially with the growth of the Indian Railways and
Civil Services. As people started to travel far and wide across the country,
there was a spurt in eateries that could serve them freshly cooked food.
However, eating out for leisure remained a fairly rare phenomenon for
majority of the Indian families until the rise of the great Indian middle class
post liberalization. As Western influences percolated down, lifestyles and
food habits of Indians began to change.
More and more young folk began to leave home to work in other cities and
towns and for them takeaways and dining out became necessary. This was
accompanied by an increase in disposable income and a general willingness
to spend on the experience of dining out.
The resulting growth of the restaurant industry was spectacular to say the
least. The industry was worth a whopping Rs. 43,000 crores in 2010 and has
been registering a healthy 15-20 percent growth annually, according to the
National Restaurant Association of India (NRAI).
A study conducted by the Federation of Hotels & Restaurant Association of
India (FH&RA) estimated that there were approximately 2.2 million or 22 lakh
hotel and restaurant establishments in India in 2002 and the hungry Indian
wants more.
2. Food varieties & state wise specialties
One of the most interesting things about Indian food is that it is as varied as
the country’s culture, geography, and demography. The cooking style varies
a great deal as you travel from the North to South or the East to West.
While most restaurants box Indian cuisine into region-specific categories like
Gujarati, South Indian, Punjabi, Bengali, etc., it’s worth noting that each
Indian state has its own local specialty.
Here’s a list of some of state-wise specialties:
Bihar: Known for sattu (baked chickpea flour), Bihar’s cuisine is simple yet
wholesome. LittiChokha (wheat flour cake filled with sattu) and
meat saalan(mutton or goat curry with cubed potatoes) are two of its local
specialties along with sweetmeats like balushahi and thekua.
Delhi: The capital of India is also the birthplace of the hugely popular Mughlai
cuisine. This is the style of cooking prevalent during the Mughal era and is
defined by the use of whole and ground spices. Some of the signature
Mughlai dishes include kebabs, koftas, pilafs, and biryani. Delhi is also
famous of its street food which includes parathas, chaats, and kulfi.
Andhra Pradesh: Spicy and tangy are two words that describe the cuisine of
this Southern Indian state. The use of tamarind and red chillies in both
vegetarian and non-vegetarian preparations is widespread. Rice is the staple
food of Andhra eaten with lentil preparations like daalor sambhar as well as
curries. Pickles and chutneys are also essential part of Andhra cuisine.
Seafood is pretty common in the coastal part of the state.
Goa: The food in Goa is deeply influenced by its Hindu culture. But centuries
of Portuguese rule and the burgeoning international tourism also influence
the state’s cuisine. Because it’s coastal, seafood forms the mainstay of Goan
food, but other meats like pork are also hugely popular in the state. The use
of coconut milk and strong, pungent spices is common to Goan cooking.
Gujarat: This is one of the few primarily vegetarian states in India. The
cuisine of this state has been made popular by the famous
Gujarati thali that consists of dishes like daal, kadhi, subzi, papad,
and chaas (buttermilk) served with rice and roti. What differentiates
Gujarati dishes from others is the simultaneous use of sweet, salty, and
spicy flavors.
Jammu & Kashmir: Jammu & Kashmir has a cuisine that is distinct from the
rest of the country. It draws its influence from the ancient Hindu culture of
Kashmir as well as Central Asia, Persia, and North Indian plains. Mutton is
the mainstay of Kashmiri cooking and there’s a lot of use of yogurt and
spices like cumin, fennel, red chilli powder, and ginger.
In addition to the state-specific specialties, India is also home to a number of
fusion cuisines that have taken birth as a result of globalization. As more
Indians travel abroad and foreigners travel to India, a cooking style that is a
blend of both Indian and foreign cuisines has emerged.
Thanks to the growth of restaurants, now people don’t have to wait to visit a
particular state to taste its local cuisine. Most tier 1 and 2 cities in India
have specialty restaurants serving up authentic local dishes of different
Indian states to people who are missing home food or those keen to taste
cuisines from different parts of the country.
3. International players enter India and the rise of the quick service
restaurants
If there was one year that changed the restaurant landscape of India it was
1996 when the American fast food chain McDonalds entered the country.
With its colorful mascot, cheap burgers, and consistent looking and tasting
French fries, McDonalds soon had the middle class Indian eating out of its
hand.
Until then, the fast moving foods in India were mostly restricted
to udupi style dosa-idli-wada fare or local chains like Delhi-
based Nirula’s serving fast foods such as pizzas and burgers.
But McDonalds changed all that and set the stage for the entry of many
other fast food chains like Dominos, Pizza Hut, and KFC.
In fact, the last two years have seen the entry of various niche fast food
chains like Burger King, Dunkin Donuts, Taco Bell, and Krispy Kreme. Even
cafes like Starbucks and Costa Coffee have set up shop in several Indian
cities.
The restaurant industry in India is mainly driven by the youth aged between
15-44 years. With a population of 1.2 billion and the largest number of youth
on the planet, opportunities for the quick service restaurant industry is huge
in India and it’s this potential that foreign fast food chains have taken
advantage of.
According to the NRAI, the Indian fast food market is worth $13 billion, less
than one-fifth that of China – the second largest fast food consuming market
after the U.S. But while China is witnessing a decline in fast food sales, the
Indian market is expected to grow.
In fact, the fast food industry in India is growing at 19 percent annually, 4
percent faster than the Chinese fast food market, which is growing at 15
percent annually.
It’s not just that these QSR chains have set up shop in India, but they are
also tweaking their menus and making them more suitable for the Indian
palate. So, you have a McDonalds on one hand opening up 100 percent
vegetarian outlets in some parts of the country and a Pizza Hut on the other
adding Indian flavors and ingredients to their pizzas.
What has worked for the quick service restaurants and international fast
food chains in India is the shift in the eating out patterns. Because of the
increase in disposable income, dining out is no longer reserved for
celebrating special occasions. People go out to eat more and try
international fast food joints as against the older generations that were less
experimental in their tastes and not very trusting of the food quality and
hygiene level maintained in restaurants.
Also, with an increasing number of young adults embracing the American
style fast food meals, India’s QSR story is still being written.
4. Fine Dining comes of age in India
The changing lifestyle, rise of the nuclear family, more women stepping out
of their traditional roles to go out and work, rapid urbanization are some of
the factors responsible for the growth of the restaurant industry in India.
Added to that is the increased exposure to international lifestyles and
cuisines. More and more Indians are demonstrating a growing appetite for a
variety of cuisines ranging from Chinese and Italian to Mexican and Middle
Eastern.
Greater awareness of global cuisines combined with a larger disposable
income is leading many Indian consumers to seek experiential eating or fine
dining. Fine dining is not just about going out and eating. Fine dining is about
elevating the dining experience of consumers through ambience, décor,
presentation of the food, quality of service,use of gourmet ingredients, etc.
High-end or fine dining is slowly coming of age in India. While restaurants are
placing a lot of emphasis on delivering high quality food and excellent dining
experience, Indian consumers known to be quite cost conscious are willing
to spend more and more on experiential eating.
New cooking techniques like sous vide are being experimented with in the
Indian restaurant kitchen and many of them are inviting foreign chefs to give
the Indian consumer a taste of authentic global cuisine.
According to a 2013 NRAI report on food services in India as published in
hospitalitybizindia.com, the fine dining segment is growing at a healthy rate
of 15 percent and depends largely on the affluent consumer. The report
states further that the chain fine dine market in India, which has around 50
players with 150-200 outlets spread across various cities, is currently worth
Rs. 500 crores and estimated to reach Rs. 1,010 crores by 2018.
Taking advantage of this growing trend, many celebrity chefs have set up
their own signature restaurants in the country. Sanjeev Kapoor
of KhanaKhazana fame owns the hugely popular Yellow Chilli restaurant
chain. The restaurant serving contemporary Indian food is doing extremely
well in many cities across the country.
Jiggs Kalra, another well-known name in the culinary circles in India,
founded the Punjab Grill chain of restaurant offering delectable North Indian
cuisine before selling his stake in early 2012. But Kalra along with his son
Zorawar are back in the business with the high end Masala
Libraryrestaurant in Mumbai and Delhi.
Masala Library is just one of the restaurants set up by the father-son duo as
part of their JV with Mumbai-based Mirah Hospitality called Massive
Restaurants. They have another chain of restaurants called Made in Punjab,
but that’s more casual than Masala Library.
In addition to this, the Kalras have added another restaurant to their
repertoire called Pa PaYa. Pa PaYa is a modern Asian bistro and tapas bar
bringing a hitherto lesser known cooking technique called molecular
gastronomy to the Indian food table.
Many Indian chefs based overseas are also returning to India to seize the
opportunity. They are taking the international dining experience to a whole
new level with their global menus adapted to traditional Indian flavors. One
of them is the London-based Michelin star chef Vineet Bhatia, who has
opened two contemporary Indian restaurants called Azok and Ziya in
Mumbai.
It’s not just Indian, but also international chefs who recognize the huge
untapped market and have set up high end restaurants in the country. Ian
Kittichai, the famous New York chef, opened a Thai restaurant in Mumbai
called Koh in August 2010. Since he imports all his ingredients, he is able to
serve his diners authentic Thai fare with a modern twist.
An interesting trend has begun and due to an increased interest in India as
an investment destination, many international fine-dining chains are waiting
in the wings to set up shop in India. The Indian consumer has a lot to look
forward to in terms of experiential cuisine in the coming years.
5. Niche restaurants make their presence felt
Another interesting development in the restaurant industry is the rise of
niche restaurants serving specific cuisines and specialties. No longer is the
restaurant business divided into North Indian and South Indian. There are
many more categories of specialty restaurants serving delicacies from
Kashmir to Kerala.
It’s simple – people want to taste good food. They want to taste different
food. The state or cuisine specific restaurants are simply meeting the
demand of the new Indian consumer who doesn’t shy away from
experimenting with food that he or she is not entirely familiar with.
Some of the popular niche restaurants in India include Oh! Calcutta, which
started out as Only Fish, and served authentic Bengali fare; Pind
Baluchioffering dishes from the Baluchistan region spanning across Pakistan,
Iran, and Afghanistan; Gajalee chain of restaurants serving Malvani-style
seafood; and Zambar  serving Chettinad, Kuttanad, Malabar, Coorgi,
Mangalorean, and Madras curries and vegetables.
Even lesser known cuisines of Odisha and Nagaland are finding many takers
with Delhi’s Naga Kitchen and Bangalore’s Dalma doing roaring business.
And it isn’t just traditional and local Indian flavors that are finding favor with
diners, but also international cuisines. Up until a few years ago, the only
international cuisine that worked for the Indian palate was perhaps Chinese.
Since then, the Indian palate has grown to accommodate global cuisines.
So, we have popular London-based Hakassan restaurant serving Cantonese-
style cuisine, Las Vegas’ Le Cirque serving up authentic French and Italian
dishes; South African casual dining chain Nando’s famous for its peri-peri
chicken; and American fast food chain Taco Bell serving Mexican inspired
dishes setting up shop in India.
Besides these international chains, there are many restaurants started by
Indian entrepreneurs serving global cuisines like Thai, Japanese, Lebanese,
European, and popular American food. If it’s authentic traditional and
international flavors that the Indian consumer is after, these restaurants
ensure they get what their desire.
6. The upsurge of food courts
The National Restaurant Association of India (NRAI) in its report has
predicted an exponential growth in kiosks and food courts in India. The
factors responsible for this rapid growth, according to the NRAI, include
lower rentals as compared to restaurant space, higher return on investment,
brand penetration, and new location opportunities.
While they made their debut in the West in the 1980s and have now become
an essential part of airports, shopping malls, and evening business centers
and educational institutions abroad, food courts are still evolving in India
(though growing in popularity rapidly).
The Indian food court story is mainly being driven by the growing mall culture
in the country. In fact, food courts and malls have a symbiotic relationship
wherein food courts help the mall increase footfall and revenue by drawing
customers, while depending heavily on a steady stream of shoppers that the
mall attracts to its retail outlets.
Since many Indians with higher disposable incomes are looking to combine
their shopping experience with a quick bite, food courts are drawing
consumers in large numbers. All food courts usually have more or less the
same floor plan – a common dining area mainly indoors and on the top floor of
a mall/commercial center with kiosks and stalls by multiple F&B vendors
surrounding it.
It’s not hard to understand why these food courts are gaining such
widespread popularity. One, people can enjoy a vast variety of cuisines under
one roof unlike a restaurant that typically serves a specific cuisine. Two, the
prices for food items are generally lower than what you would pay at a
restaurant, so people find value for money in them. And finally, the self-
service, fast-paced, and casual atmosphere of food courts is a big draw for
people who want to make a quick eating stop and don’t want the fuss
involved in going to a restaurant.
In addition to the serious shopper, food courts provide an economical
hangout for youngsters and a convenient getaway for office goers who want
to escape for a quick bite, a hot cup of coffee, or a sugary delight in the
middle of the working day.
Global consultancy Cushman & Wakefield, in a 2014 report on India retail,
projected the total mall supply by the end of the year in the top eight cities of
the country to reach approximately 14 million square feet (msf), which is
nearly 200 percent more than the supply received in 2013.
Since food courts are an essential part of a mall and their most important
tenant, the food court growth story is set to continue. However, the industry
does need to overcome certain challenges such as heavy reliance on
international brands, cafes, and established QSR chains. What this means is
that you are likely to see more of brands like McDonalds, Pizza Hut,
and Starbucks rather than smaller and lesser-known fast food chains in the
malls. Proper seating arrangement and vendor combination to ease
competition are other two big hurdles that Indian food courts have to cross
to be able to achieve long-term success.
7. Food moves from the street to online space
Rapid urbanization, higher disposable income, and all the other factors that
led to the growing culture of eating out in India are also responsible for the
emergence of a new crop of diners – the ordering-in or take-away diner. While
previously there were many caveats to ordering-in such as minimum order
value, small delivery radius, and misunderstood and misplaced orders; the
growth of food delivery aggregators like FoodPanda and Zomato has changed
all that.
These aggregators, also available as apps on smartphones, have made it
easier than ever for the Indian diner to order food from his/her favorite
restaurant without worrying about whether the restaurant delivers to their
location and if the person at the other end has heard their order and/or
address right.
What’s more, there are added benefits to ordering online such as consumers
can take their time reviewing and choosing their dishes without someone
breathing down their neck, they can double-check their orders before making
payment, and they have a variety of payment options available to them
ranging from the standard cash on delivery and credit/debit card payment to
online wallets like Paytm and Mobikwik.
According to an article appearing in iamwire.com (Rise of Online Food
Ordering Startups in India: Opportunities, Challenges and Innovations), there
has been an exponential growth in food ordering startups in India over the
past one year.
TastyKhana and Just Eat, which have been bought over by their biggest
competitor FoodPanda, raised $5 million and $89.1 million respectively from
investors. FoodPanda itself has raised a whopping $147.3 million, whereas
new entrant TinyOwl has managed to raise $20 million of investor money.
Meanwhile, businesses from other areas have also started to enter this
lucrative market, according to the iamwire article. JustDial, which was until
now a purely local search service, has spread its wings into the online food
delivery business and cab aggregator Ola has also entered this segment by
piloting its food delivery service called Ola Café in Mumbai, Delhi, Hyderabad,
and Bengaluru in March this year.
The Ola Café service claims to deliver food in less than 20 minutes. Users
can place orders from 12 pm to 11pm and make payment using cash or Ola
Money.
Besides these food delivery aggregators, many quick service restaurants
like Domino’s, McDonalds, and Faasos have also launched their own online
ordering platforms.
8. Industry drivers, key statistics, & trends
Even though there’s a growing eating out trend in India, Indians still lag far
behind the West and even some Asian countries when it comes to dining at
restaurants. According to the National Restaurant Association of India
(NRAI), Chinese eat out 60 times a month; Thai people eat out 45 times a
month; and Indonesians eat out 15 times in a month. Indians, on the other
hand, eat out about 2-4 times in a month on an average.
Indians also spend far less money on dining at restaurants as compared to
some of their Asian counterparts. For example, people in Japan spend an
average of $213 on eating out, while those in Singapore and Hong Kong
spend $212 and $195 respectively. The average monthly expenditure on
eating out is only $20 in India.
Clearly, Indians have a lot of catching up to do with other countries in Asia
and the West so far as eating out is concerned. But the restaurant industry
has nothing to worry about as there are many drivers of growth for this
business in India. These growth engines are both consumer as well as
enterprise driven. Some of thekey engines of growth, as listed by NRAI in its
report, include:
Changing demographics: There’s a vast pool of working population in India,
which includes women. There’s an upwardly mobile middle class, which is
liberal and progressive. In addition to that, there’s a rapid increase in nuclear
families and all of these factors contribute to the growth of the restaurant
industry.
Greater spending power: India’s per capita income has been increasing
steadily and this has led to an increase in the disposable income of Indians.
Added to that is the concept of double-income households which is the result
of more women joining the workforce. All this has led to an increase in the
purchasing power of Indians, which is driving the growth of the food service
industry.
Increased exposure: More and more Indians are traveling abroad, which has
increased their awareness about global cuisines. Popular food and cooking
shows on television such as MasterChef have also led to greater exposure to
gourmet food.
India as a travel destination: With India projecting itself as a major tourist
destination to the world abroad, restaurants in the country have all the
incentive to expand their repertoire and up the level of their services to cater
to a growing international market.
Infrastructure and IT development: For the customers, this has meant an
enhanced dining experience due to factors like lower waiting time and
improved ordering, which keeps them coming back for more and drives the
growth of the industry. For restaurants, infrastructure and IT development
helps them control costs, minimize waste, maintain quality, etc. and helps
them improve their bottom-line. IT-driven business intelligence and data
analysis helps them streamline their business and improve results.
According to NRAI’s 2013 India Food Services Report as published in
hospitalitybizindia.com, the food service industry in India is worth an
estimated Rs. 247,680 crore ($48 billion) and projected to grow to Rs.
408,040 crore ($78 billion) by 2018 at a CAGR of 11 percent.
The unorganized sector, which includes the dhabas and roadside vendors,
comprises 70 percent of the market and is worth Rs. 1,72,685 crore . The
organized sector consisting of fine & casual dining restaurants, bars &
lounges, quick service restaurants or QSRs, food courts, cafes, and kiosks,
holds the remaining 30 percent share of the market. However, the organized
food service industry is projected to grow rapidly at a CAGR of 16 percent
and its market value is expected to reach Rs. 145,770 crore ($28 billion)
compared to the current Rs. 67,995 crore by 2018.
 The restaurant industry is a major contributor the country’s economy.
According to the NRAI’s 2013 report, the food service industry contributes
approximately 2.3 percent of the total GDP and is set to become a much
larger contributor when compared to other service industries over the next
few years.
Besides, the industry is a significant tax contributor and employer. According
to NRAI data, the food services industry was providing direct employment to
nearly 5 million people in 2010, which is five times more than the IT sector
and 10 times more than the hotel business. It was also contributing a
whopping Rs. 1,000 crores annually in Value Added Tax (VAT).
The future looks promising for the restaurant industry albeit some challenges
such as high food inflation, over licensing, high taxation, introduction of new
taxes, and increased competition to name a few.
But a fast maturing market that is becoming increasingly experimental with
its food, the growing ease and convenience of ordering in, the introduction of
new and interesting menus like breakfast and high tea, the widening reach of
social media, and international chains scrambling to set up shop in the
country – all point to a healthy growth for India’s food service sector over the
next few years.
About AIMS Institutes:
The restaurant industry in India has witnessed an unprecedented
transformation with the entry of a variety of national and international
players. This has, in turn, given birth to a huge demand for qualified
professionals in the sector and all related industries. Thanks to the
technological revolution, Indian restaurant setups have now gone online to
gain more customers and serve them better.
But the demand-and-supply graph isn’t quite the way it should be. With a
noticeable shortage of skilled professionals, the restaurant industry presents
a whole gamut of opportunities waiting to be grabbed. Enter culinary arts
institutes. Traditional cooking schools and hotel management colleges have
now expanded the range of education they offer in order to satisfy industry
demands. Foreign universities are investing time and money to train Indian
students to make them able and employable.
In this mishmash of culinary arts schools, AIMS Institutes stand out as the
frontrunners. Their Department of Hotel Management has been consistently
ranked third in Karnataka, fourth in South India and Twelfth in India.
Moreover, the institute’s association with ALMA, Italy, which is the world’s
leading international educational and training centre for Italian Cuisine, has
made it one of the most sought-after colleges in India with the following
courses on offer:

 Bachelor of Hotel Management (BHM)

 Bachelor Degree in Hospitality Administration and Event Management
 AIMS – ALMA Dual Degree (BHM + ALMA)
 Diploma in Culinary Arts of Italian Cuisine
 AIMS – ALMA Certificate Programme in Culinary Arts of Italian Cuisine
 Master of Tourism Administration (MTA)

Recognized as one of the top three Hospitality Education institutes in

Bangalore, the students of AIMS Institutes have access to the best industry
tools and technologies, opportunities to meet and interact with industry
professionals, star up-to-date with the latest trends and land great job
opportunities.

Restaurant companies are essentially retailers of prepared foods, and their operating
performance is influenced by many of the same factors that affect traditional retail stores. For
the most part, restaurants have business models that are relatively easy to understand, and the
array on the Value Line page is the same as that of a standard industrial company.
Nonetheless, there are a number of unique factors to consider when making investment
decisions regarding this large and segmented industry.
Competition between restaurants is intense, since dining options abound. And, while there are
certainly dominant players in this industry (especially among fast-food purveyors), no one
company has the market cornered. Indeed, virtually every restaurant location must compete not
only against other publicly traded chains, but also a wide array of small, local establishments.
Competitors include everything from delis and pizzerias to fine-dining restaurants. And, of
course, it is relatively easy to forgo prepared foods, altogether, in favor of home cooking, which
is usually a less expensive option. Thus, restaurant meals are discretionary purchases, and the
industry tends to be highly cyclical.

Sales
Top-line growth is typically generated in two ways, opening locations and boosting same-store
sales. Opening new doors is a straightforward strategy, and usually the main driver of revenue
when a company is in its early stages. As a chain grows in size, however, it becomes
increasingly difficult to capture benefits. The best, most profitable locations are established first,
and then managers must be careful not to place restaurants too close together, lest they
cannibalize each other's sales.
Comparable-store sales, or "comps", is a valuable metric to examine when analyzing
restaurants. Comps are particularly important once a company reaches maturity, since they
become the primary driver of growth. Product innovations and menu-price increases are two of
the most common ways to increase same-store sales. Remodeling existing locations is another
way to boost guest traffic. Furthermore, promotions and limited-time offers are widely used to
attract diners. Investors should also pay attention to trends in the dollar value of the average
guest check, as this can shed additional light on what exactly is driving sales.

Margins
Management's execution and ability to deliver a menu that appeals to a wide range of palates
go a long way toward determining a restaurant's margins. Most companies in this industry have
operating margins in the mid- to upper teens, and net profit margins in the mid- to high-single
digits. Food costs are obviously an important line item and, at times, can fluctuate wildly. Prices
for staples, such as corn, chicken, beef and dairy, can move greatly, depending on factors like
crop yields, feed costs and other external demand factors.
Labor is another major cost for service-oriented restaurants. Typically, workers earn modest
salaries, often at or just slightly above government-mandated minimum wages. Employees that
fall into this category are usually fast-food workers, dishwashers and bus boys. Servers, who
make the lion's share of their money through tips, are usually paid even less. Consequently,
changes to federal or state minimum-wage laws can have a noticeable impact on a restaurant's
costs and margins.

Fast Food vs. Casual Dining

Restaurants can be loosely broken down into two broad categories: fast food and casual sit-
down establishments. The same general factors discussed above dictate the performance of
each group, but sit-down restaurants tend to be more expensive, making them even more
sensitive to consumer budgets and the health of the economy. Fast-food restaurants, being less
dependent on macroeconomic conditions, are better defensive investment plays. In a
recessionary environment, their convenience and value make them attractive options for diners
seeking inexpensive meals or for those trading down from casual-dining establishments.
Convenience is a major part of the fast-food business model, so a vast network of stores is
essential to success. In addition to expansive hamburger chains, there are a number of large
players that focus on niches, such as sandwiches and pizza.
Fast food is responsible for most of the industry's international sales. Foreign markets offer vast
growth potential for companies willing to take on the challenge of finding a successful formula
that appeals to a wide array of customs and tastes. A well-know brand name provides a huge
leg up when expanding overseas, which is one reason why fast-food makers dominate the
international arena. The convenience of these restaurants and their typically inoffensive menus,
which appeal to most diners, are other pluses.

Investment Considerations
Restaurant stocks have a number of attractive attributes. Their business
models are easy to understand, as are the factors that effect their
performance. Most are cyclical, so broad economic conditions often play an
outsized roll in the group's overall performance. However, fast-food retailers
can sometimes provide more shelter in a down economy. Conservative
investors might find the stocks of mature operators appealing as growth-and-
income holdings. Conversely, fledgling companies, with new or unique
formats, use most of their cash flow for expansion, and their stocks may
offer attractive 3- to 5-year appreciation potential to the more ventures

SWOT analysis of Various food portals

ZOMATO
Strengths in the SWOT analysis of Zomato
First mover advantage – One of the best competitive advantages of Zomato is that it is the first
mover in many of the nations where it is establishing itself. Directories and other forms of
restaurant ratings might exist. But as an app Zomato is excellent and many countries (like India)
have loved the usability of the Zomato app.

Evergreen industry – The restaurant industry is an evergreen industry. Sure, there may be
recessions and other downturns which might affect the industry. But overall, this industry is
going to stick around at all times and is only going to grow with rising disposable income.

Fast Expansion – It is appreciative that Zomato has expanded so fast. It is already in 24

countries and is expanding year on year.

Fantastic design of the app – Zomato has regularly won awards for its app design and for its
user-friendliness. The App design is fantastic and it helps you discover restaurants nearby as well
as in an area you are going to visit.

Number of users – Zomato has a huge number of users using their app. At the same time, the
site also has 90 million visitors a month approximately. With so many users following the app
and site, there are more reviews and hence more chances to find better restaurants.

Focused approach – The brand has a very focused approach and has always tried to bring the
most of out of its unique offering. It is well connected with restaurants and regularly takes
feedback from customers as well as restaurants. This focused approach has also helped the brand
image and reputation of the firm.

Weaknesses in the SWOT analysis of Zomato

Security issues for the app – A major issue for Zomato in the past has been some security
issues due to which the app was hacked and at least 17 million users data was copied. Such
security issues are a nightmare for internet companies.

Still a lot of expansion required – Considering that the app has established in 24 countries,
there is good expansion. But at the same time, the app has been started 7 years back and with
the amount of funding available for Zomato, the expansion can be much faster. It is allowing
other services to establish themselves in this niche before it reaches their country.

Word of mouth and Facebook check-ins – Besides such apps, in many places word of mouth
still trumps apps and at the same time, Facebook check-ins are a strong competitor
wherein people might not need Zomato. Thus, it is an app for early adopters but definitely not
for laggards.

Opportunities in the SWOT analysis of Zomato

Further expansion – The number 1 opportunity for Zomato is to expand to more countries and
establish its base faster. Service industry has a major problem that services can be copied very
fast and very easily. As a result, it is critical for Zomato to establish and expand itself faster.

More acquisitions – There are and were many small players in this space. Zomato can acquire
several of its competitors and at the same time, it has to keep an eye on the tech industry and
acquire any tech innovation it can get its hands on to keep on rising.

Cloud restaurants – Zomato is coming up with the concept of Cloud restaurants wherein
restaurants will not have to get a physical space to actually sell their food products. Instead,
they can sell from Zomato.

Creating a community – Zomato does have a huge following but the users do not interact with
each other. Creating a forum and a community out of the users already following Zomato can be
a huge benefit for the brand.

Adoption of the internet and Smartphones – There is a huge increase in the adoption of
Internet across developing and underdeveloped countries as well. Similarly, adoption of
smartphone has also increased. Thus more and more orders and research about restaurants
can happen online instead of through physical visits.

Threats in the SWOT analysis of Zomato

Google’s schema module – One of the major threats Zomato faces right now is the Schema
module of Google wherein google locations itself is getting in restaurant recommendations.
Even google homepage shows the google maps page where you can search for restaurants
within your locality. Google being such a big brand, zomato faces huge competition from them.

Market followers and challengers – In the service industry, it is very easy to replicate the
success of another service product or offering. Similarly, marketing followers and challengers
can slowly take away the market share of Zomato
TripAdvisor SWOT Analysis

1. Strong international presence in 45 countries like U.S., U.K., Ind

2. It has 300 million + unique monthly visitors
3. Feature like “Just For You” which offers personalized recomme
strategy
4. Prominent acquisitions have made it a strong brand
5. Nearly 3000 people are a part of the organization
strengths 6. It is a pioneer in Hotel and flights booking, Vacation rentals, Re

1. Theft of email addresses from its database  creates a sense of

2.Controversies regarding the validity of reviews done about hot
Weaknesses value proposition

1.Acquisition of online travel booking portals to expand its portfo

2.Myster guest surveys to have honest reviews about hotels
Opportunities 3. Expanding tourism worldwide and people reading more review

1.Popularity of online travel portals like Make my trip and Yatra e

in India
Threats 2. Combo packages of flight plus hotel offered by various portals

Instagram SWOT Analysis

 1. Ease of posting across multiple platforms (Facebook, Twitter, Google+, etc.)
2. User base – 300+ Million monthly active users
3. Innovation – First social media exclusively for photos
4. Can leverage the strengths of its parent company ‘Facebook’-deep pockets
5. High quality employees
6. Availability of filters helps users to make their photos unique, event stylized
7. Direct Messaging (Instagram Direct) – instead of messaging to the world, you
in a way engage in a picture conversation directly.
Strengths 8. Strong backing of parent company

1. Privacy has been raised as an issue by certain users

Weaknesses 2. Many similar social media platforms means limited market share growth

1. Product extension can boost presence

2. Increasing internet penetration & number of smartphone users
3. Rapid technological development
Opportunities 4. More advertising & marketing can increase product awareness

1. Entry barriers are less and hence other players can easily enter
2. Continuous innovation is needed to engage users; else users get bored of thi
Threats 3. Intense competition

FACEBOOK

Facebook SWOT analysis

Strengths Weaknesses

Integration with websites and applications 1. Weak CTR of advertisements

More than a billion active monthly users 2. Social network lacks of some features
Excellent users experience 3. One source of revenues – advertisement
Understanding of user’s needs and behavior 4. Attitude towards users’ privacy
5. Lack of website customization
6. Weak protection of users’ information
 Opportunities Threats

Increasing number of people using Facebook through 1. Increasing number of mobile internet use
mobile devices 2. Users using ad-block extensions
Expansion to China 3. Slow growth rate of online advertising
Diversify sources of revenue 4. Identity thefts
Open Facebook marketplace 5. Weak business model

SWOT Analysis

1.  It is the largest American Chinese restaurant chain in the Unit

2. It has close to 1,700 plus restaurants located across all differen
3. Offers a variety of food along with combo meals 
4.  Panda Express is among the US's 25 largest quick-service oper
5. The chain was one of the earliest entrants into the supermarke
6. Strategically located in mall food courts and other non-traditio
campuses, and theme parks
7. It has a successful track record of making Asian cuisine accessi
8. Strong following among Asian, Hispanic, and Caucasian diners
Strengths 9. Leveraged lovable pandas in their name

1. Restricted to one cuisine thus restricting its customer base

2. Specialty ingredients used in Chinese food might be difficult to
Weaknesses 3. Restricted in a few geographies means lower brand recall

1. There is a large Chinese base in the US leading to huge custom

2. Venturing into newer markets
Opportunities 3. Introducing more items on its menu

1. Managing huge employee base can be an issue

2. Stiff competition from multi cuisine restaurants
Threats 3. Presence of strong competitors in the Chinese restaurant segm
The above listed swot is of Panda express

INFLUENCE OF RATINGS AND REVIEWS ON CONSUMERS

Product reviews drive channel preferences

Consumers prefer to shop through channels that make product

information, including ratings and reviews, easily accessible. If e-
commerce sites or mobile apps lack the product information
shoppers need to confi dently make a purchase, they will search for
it elsewhere, and retailers risk losing them to a competitor who is
providing the information. As the retail industry becomes
increasingly omnichannel, retailers should incorporate ratings and
reviews at every touch point.

 More than half (57%) of online shoppers reported specifically

seeking out websites with product reviews.
 Seventy percent of mobile shoppers reported being more likely to
purchase a product if the mobile site or app they’re purchasing from
has reviews.

How Shoppers Consume Product Reviews

As consumers are using new channels to seek out reviews, their

information consumption habits are changing as well. Shoppers
should be able to search for product information and fi nd what they
need with minimal eff ort. Most consumers read between one and 10
reviews and thus need information presented in an easy-to-scan
format. Additionally, consumers are seeking out negative reviews to
validate the authenticity of those reviews and the trustworthiness
of the site.

Just as the fi nding and consuming of reviews should be made easy,

the process of leaving a review must be simple as well. Less than
half of consumers contribute reviews and Millennials, who consult
review feedback most frequently, are least likely to contribute.

 More than half (53%) of shoppers consider retail websites to be the

most trustworthy source of reviews.
 Eighty-two  percent of consumers specifically seek out negative
reviews. For shoppers under 45, it jumps to 86%.
 Three out of four shoppers prefer tag-based reviews, which provide
a quick snapshot of review keywords and sentiment.
 On average, 42% of consumers write reviews, while for shoppers 18-
29, only 32% contribute review feedback.Consumers are influenced by other
people more than they realize (or are willing to admit).

According to the Wall Street Journal, social norms influence consumption behavior and even
private interests, including one’s taste in music. This is what makes the concept of social proof a
powerful one. 

What is social proof?

Science describes social proof as a psychological phenomenon in which people follow the actions of
others in an effort to reflect what is considered correct behavior for any given situation -- including
online experiences. Simply put, social proof influences people's decisions on how they should
behave. 

We've traditionally turned to a variety of useful sources as social proof. These include credible
experts, thought leaders, celebrities, friends and the wisdom of the crowd. But today's diners rarely
go to a restaurant without first visiting Yelp, and shoppers seldom make a meaningful purchase
without first reading what verified buyers have to say. Online reviews have significant effects on
purchasing behaviors. Predictably, they've emerged as one of the most potent forms of social proof.

When customers read reviews on sites such as Yelp, Google, Amazon or TripAdvisor, they depend
on star ratings to determine the quality of a product or service. They read others' comments and
ask increasingly specific questions. 

 “Will this bank location help solve my problem the way it solved others’ problems?”
 “Is the food as good as advertised? What do previous diners really think?”
 “How long will I have to wait before I see the doctor? How long did others have to wait?”
 “Based on others’ experiences, what potential issues or problems might I have to face when
I decide to buy this product?”

Do reviews really guide purchase decisions?

According to YouGov, 78 percent of consumers in the United States read reviews before making a
purchase decision. YouGov's report reinforces findings in a previous study that found that 87
percent of consumers trust online reviews as much as they trust friends and family. On the other
end of the spectrum, four out of five consumers reverse their purchase decisions based on negative
reviews.

People take positive reviews and high ratings as social proof a product or service is worth the
purchase. They reason, “This has great reviews, so I’m buying it.”

How do reviews shape perception and future feedback?

According to a study published in  Cornell Hospitality Quarterly, the average rating for a hotel with
11 to 20 reviews is 3.5 out of 5 stars, with “terrible” reviews (a rating of 1 star) at close to 12
percent. Interesting, as a hotel sees 101 reviews or more, its average star rating increases to 3.9. The
feedback pattern, therefore, favors quantity. The more your business is reviewed, the likelier you
are to receive higher ratings.

Apart from providing social proof for customers looking to make a purchase decision, reviews also
provide social proof in other ways. These online testimonials shape how people perceive brands.
And reviews also influence what people think they should say, when it's time to add their own voice
to the conversation. 

A customer’s opinion about a Yelp-listed restaurant with 100 reviews and an average rating of 4.5
stars is less likely to go against the grain and offer a counterpoint to all the positive feedback. The
consumer thinks, “This has great reviews, so I’m going to say the same about it.”

How should you manage and respond to reviews?

To stay competitive, you must be able to effectively manage your online reputation. Track and
monitor your reviews. Know when and where your customers are talking about your brand.
Respond to customer feedback, both positive and negative. Dive deeper into the comments to look
for useful insights and information that will help you improve the customer experience.
 CONCLUSION

WHAT BLOGGING IS ALL ABOUT?

A Brief History of Blogging

Initially, blogging involved a personal web log, in which a person would journal about their day.
From "web log" came the term "blog."

Like most new innovations on the Internet, many entrepreneurs saw a marketing potential in
having a blog, and blogging took off from there. Not only can a blog be used for marketing, but
also, a blog can be a home business in and of itself.
Blog Versus Website

Many people are still confused over what constitutes a blog over a website. Part of the problem
is that many businesses use both, integrating them into a single web presence. But there are
two features of a blog that set it apart from a traditional website.

1. Blogs are updated frequently. Whether it's a mommy blog in which a woman shares
adventures in parenting, a food blog sharing new recipes, or a business providing
updates to its services, blogs have new content added several times a week.
2. Blogs allow for reader engagement. Blogs are often included in social media because of
the ability for readers to comment and have a discussion with the blogger and others
who read the blog makes it social.

Why Is Blogging Is So Popular?

There are several reasons why entrepreneurs have turned to blogging.

1. Search engines love new content, and as a result, blogging is a great search engine

optimization (SEO) tool.

1. Blogging provides an easy way to keep your customers and clients up-to-date on what's
going on, let them know about new deals, and provide tips. The more a customer comes
to your blog, the more likely they are to spend money.
2. A blog allows you to build trust and rapport with your prospects. Not only can you show
off what you know, building your expertise and credibility, but because people can post
comments and interact with you, they can get to know you, and hopefully, will trust you
enough to buy from you.

1. Blogs can make money. Along with your product or service, blogs can generate income
from other options, such as advertising and affiliate products.

Is there a Downside to Blogging?

Blogging is popular because it works as a marketing tool and makes money. But blogging isn't
all rainbows and unicorns in the world of online income. Before starting a blog as a means to
make money or to promote your existing business, you should consider these potential
downsides:

1. Blogging requires a great deal of time. For blogs to be effective at SEO and engaging
readers, it needs to be updated regularly. The Internet is littered with abandoned blogs
that haven't been updated in months or even years. The success of blogging comes
from having people return, and they only return when there's new stuff to read. That
means generating content at least several times a week, which takes time.
2. You need ideas to write about. To keep the content coming, you have to have ideas to
write about. The good news is that you don't have to write it all. You can have guest
writers or hire freelancers. Another option is to curate content from others or do an
alternative post, such as using video.
 3. The payoff isn't immediate. One of the biggest frustrations with blogging is that it's time-
consuming with little payoff in the beginning. It takes time to build up a readership and
momentum.

How to Start a Blog

The good news is that starting a blog or adding a blog to your existing site is relativity easy and
affordable. There are free blog options such as WordPress.com and Blogger, but to retain
control and professional image, consider investing in a domain name and hosting, and installing
WordPress or other content management system on your host. Most webhosts offer this.

Once your blog is up and running, you need keep it active with new content to grow your
business. While your blog can compliment an existing business, it's also a great way to add
additional income. You can promote other companies' products and services in affiliate
marketing. You can offer advertising or feed ad networks on to your blog. If you have a service
business you're promoting with your blog, you can create your own information products to
compliment it.

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list, and reaching out to other bloggers, podcasters, and media outlets for publicity.

What does Artificial Intelligence (AI) mean?

Artificial intelligence (AI) is an area of computer science that emphasizes the creation of
intelligent machines that work and react like humans. Some of the activities computers with
artificial intelligence are designed for include:

 Speech recognition
 Learning
 Planning
 Problem solving

Artificial intelligence is a branch of computer science that aims to create intelligent machines. It
has become an essential part of the technology industry.
Research associated with artificial intelligence is highly technical and specialized. The core
problems of artificial intelligence include programming computers for certain traits such as:

 Knowledge
  Reasoning
 Problem solving
 Perception
 Learning
 Planning
 Ability to manipulate and move objects

Knowledge engineering is a core part of AI research. Machines can often act and react like
humans only if they have abundant information relating to the world. Artificial intelligence must
have access to objects, categories, properties and relations between all of them to implement
knowledge engineering. Initiating common sense, reasoning and problem-solving power in
machines is a difficult and tedious approach.
Machine learning is another core part of AI. Learning without any kind of supervision requires an
ability to identify patterns in streams of inputs, whereas learning with adequate supervision
involves classification and numerical regressions. Classification determines the category an
object belongs to and regression deals with obtaining a set of numerical input or output
examples, thereby discovering functions enabling the generation of suitable outputs from
respective inputs. Mathematical analysis of machine learning algorithms and their performance
is a well-defined branch of theoretical computer science often referred to as computational
learning theory.
Machine perception deals with the capability to use sensory inputs to deduce the different
aspects of the world, while computer vision is the power to analyze visual inputs with a few sub-
problems such as facial, object and gesture recognition.
Robotics is also a major field related to AI. Robots require intelligence to handle tasks such as
object manipulation and navigation, along with sub-problems of localization, motion planning
and mapping.

WHY RESEARCH AI SAFETY?

In the near term, the goal of keeping AI’s impact on society beneficial motivates
research in many areas, from economics and law to technical topics such
as verification, validity, security and control. Whereas it may be little more than a
minor nuisance if your laptop crashes or gets hacked, it becomes all the more
important that an AI system does what you want it to do if it controls your car, your
airplane, your pacemaker, your automated trading system or your power grid.
Another short-term challenge is preventing a devastating arms race in lethal
autonomous weapons.
In the long term, an important question is what will happen if the quest for strong AI
succeeds and an AI system becomes better than humans at all cognitive tasks. As
pointed out by I.J. Good in 1965, designing smarter AI systems is itself a cognitive
task. Such a system could potentially undergo recursive self-improvement,
triggering an intelligence explosion leaving human intellect far behind. By inventing
revolutionary new technologies, such a superintelligence might help us eradicate
war, disease, and poverty, and so the creation of strong AI might be the biggest
event in human history. Some experts have expressed concern, though, that it
might also be the last, unless we learn to align the goals of the AI with ours before it
becomes superintelligent.

There are some who question whether strong AI will ever be achieved, and others
who insist that the creation of superintelligent AI is guaranteed to be beneficial. At
FLI we recognize both of these possibilities, but also recognize the potential for an
artificial intelligence system to intentionally or unintentionally cause great harm.
We believe research today will help us better prepare for and prevent such
potentially negative consequences in the future, thus enjoying the benefits of AI
while avoiding pitfalls.

HOW CAN AI BE DANGEROUS?

Most researchers agree that a superintelligent AI is unlikely to exhibit human
emotions like love or hate, and that there is no reason to expect AI to become
intentionally benevolent or malevolent. Instead, when considering how AI
might become a risk, experts think two scenarios most likely:
1. The AI is programmed to do something devastating: Autonomous
weapons are artificial intelligence systems that are programmed to kill. In the
hands of the wrong person, these weapons could easily cause mass casualties.
Moreover, an AI arms race could inadvertently lead to an AI war that also
results in mass casualties. To avoid being thwarted by the enemy, these
weapons would be designed to be extremely difficult to simply “turn off,” so
humans could plausibly lose control of such a situation. This risk is one that’s
present even with narrow AI, but grows as levels of AI intelligence and
autonomy increase.
2. The AI is programmed to do something beneficial, but it develops a
destructive method for achieving its goal: This can happen whenever we
 fail to fully align the AI’s goals with ours, which is strikingly difficult. If you ask
an obedient intelligent car to take you to the airport as fast as possible, it
might get you there chased by helicopters and covered in vomit, doing not what
you wanted but literally what you asked for. If a superintelligent system is
tasked with a ambitious geoengineering project, it might wreak havoc with
our ecosystem as a side effect, and view human attempts to stop it as a threat
to be met.
As these examples illustrate, the concern about advanced AI isn’t malevolence but
competence. A super-intelligent AI will be extremely good at accomplishing its
goals, and if those goals aren’t aligned with ours, we have a problem. You’re
probably not an evil ant-hater who steps on ants out of malice, but if you’re in
charge of a hydroelectric green energy project and there’s an anthill in the region to
be flooded, too bad for the ants. A key goal of AI safety research is to never place
humanity in the position of those ants.
WHY THE RECENT INTEREST IN AI SAFETY
Stephen Hawking, Elon Musk, Steve Wozniak, Bill Gates, and many other big names
in science and technology have recently expressed concern in the media and via
open letters about the risks posed by AI, joined by many leading AI researchers.
Why is the subject suddenly in the headlines?
The idea that the quest for strong AI would ultimately succeed was long thought of
as science fiction, centuries or more away. However, thanks to recent
breakthroughs, many AI milestones, which experts viewed as decades away merely
five years ago, have now been reached, making many experts take seriously the
possibility of superintelligence in our lifetime. While some experts still guess that
human-level AI is centuries away, most AI researches at the 2015 Puerto Rico
Conference guessed that it would happen before 2060. Since it may take decades
to complete the required safety research, it is prudent to start it now.

Because AI has the potential to become more intelligent than any human, we have
no surefire way of predicting how it will behave. We can’t use past technological
developments as much of a basis because we’ve never created anything that has
the ability to, wittingly or unwittingly, outsmart us. The best example of what we
could face may be our own evolution. People now control the planet, not because
we’re the strongest, fastest or biggest, but because we’re the smartest. If we’re no
longer the smartest, are we assured to remain in control?

FLI’s position is that our civilization will flourish as long as we win the race between
the growing power of technology and the wisdom with which we manage it. In the
case of AI technology, FLI’s position is that the best way to win that race is not to
impede the former, but to accelerate the latter, by supporting AI safety research.

THE TOP MYTHS ABOUT ADVANCED AI

A captivating conversation is taking place about the future of artificial intelligence

and what it will/should mean for humanity. There are fascinating controversies
where the world’s leading experts disagree, such as: AI’s future impact on the job
market; if/when human-level AI will be developed; whether this will lead to an
intelligence explosion; and whether this is something we should welcome or
fear. But there are also many examples of of boring pseudo-controversies caused by
people misunderstanding and talking past each other. To help ourselves focus on
the interesting controversies and open questions — and not on the
misunderstandings — let’s  clear up some of the most common myths.

TIMELINE MYTHS

The first myth regards the timeline: how long will it take until machines greatly
supersede human-level intelligence? A common misconception is that we know the
answer with great certainty.

One popular myth is that we know we’ll get superhuman AI this century. In fact,
history is full of technological over-hyping. Where are those fusion power plants and
flying cars we were promised we’d have by now? AI has also been repeatedly over-
hyped in the past, even by some of the founders of the field. For example, John
McCarthy (who coined the term “artificial intelligence”), Marvin Minsky, Nathaniel
Rochester and Claude Shannon wrote this overly optimistic forecast about what
could be accomplished during two months with stone-age computers: “We propose
that a 2 month, 10 man study of artificial intelligence be carried out during the
summer of 1956 at Dartmouth College […] An attempt will be made to find how to
make machines use language, form abstractions and concepts, solve kinds of
problems now reserved for humans, and improve themselves. We think that a
significant advance can be made in one or more of these problems if a carefully
selected group of scientists work on it together for a summer.”

On the other hand, a popular counter-myth is that we know we won’t get

superhuman AI this century. Researchers have made a wide range of estimates for
how far we are from superhuman AI, but we certainly can’t say with great
confidence that the probability is zero this century, given the dismal track record of
such techno-skeptic predictions. For example, Ernest Rutherford, arguably the
greatest nuclear physicist of his time, said in 1933 — less than 24 hours before
Szilard’s invention of the nuclear chain reaction — that nuclear energy was
“moonshine.” And Astronomer Royal Richard Woolley called interplanetary travel
“utter bilge” in 1956. The most extreme form of this myth is that superhuman AI
will never arrive because it’s physically impossible. However, physicists know that a
brain consists of quarks and electrons arranged to act as a powerful computer, and
that there’s no law of physics preventing us from building even more intelligent
quark blobs.

There have been a number of surveys asking AI researchers how many years from
now they think we’ll have human-level AI with at least 50% probability. All these
surveys have the same conclusion: the world’s leading experts disagree, so we
simply don’t know. For example, in such a poll of the AI researchers at the 2015
Puerto Rico AI conference, the average (median) answer was by year 2045, but
some researchers guessed hundreds of years or more.

There’s also a related myth that people who worry about AI think it’s only a few
years away. In fact, most people on record worrying about superhuman AI guess it’s
still at least decades away. But they argue that as long as we’re not 100% sure that
it won’t happen this century, it’s smart to start safety research now to prepare for
the eventuality. Many of the safety problems associated with human-level AI are so
hard that they may take decades to solve. So it’s prudent to start researching them
now rather than the night before some programmers drinking Red Bull decide to
switch one on.
CONTROVERSY MYTHS
Another common misconception is that the only people harboring concerns about AI
and advocating AI safety research are luddites who don’t know much about AI.
When Stuart Russell, author of the standard AI textbook, mentioned this during his
Puerto Rico talk, the audience laughed loudly. A related misconception is that
supporting AI safety research is hugely controversial. In fact, to support a modest
investment in AI safety research, people don’t need to be convinced that risks are
high, merely non-negligible — just as a modest investment in home insurance is
justified by a non-negligible probability of the home burning down.

It may be that media have made the AI safety debate seem more controversial than
it really is. After all, fear sells, and articles using out-of-context quotes to proclaim
imminent doom can generate more clicks than nuanced and balanced ones. As a
result, two people who only know about each other’s positions from media quotes
are likely to think they disagree more than they really do. For example, a techno-
skeptic who only read about Bill Gates’s position in a British tabloid may mistakenly
think Gates believes superintelligence to be imminent. Similarly, someone in the
beneficial-AI movement who knows nothing about Andrew Ng’s position except his
quote about overpopulation on Mars may mistakenly think he doesn’t care about AI
safety, whereas in fact, he does. The crux is simply that because Ng’s timeline
estimates are longer, he naturally tends to prioritize short-term AI challenges over
long-term ones.

MYTHS ABOUT THE RISKS OF SUPERHUMAN AI

Many AI researchers roll their eyes when seeing this headline: “Stephen Hawking
warns that rise of robots may be disastrous for mankind.” And as many have lost
count of how many similar articles they’ve seen. Typically, these articles are
accompanied by an evil-looking robot carrying a weapon, and they suggest we
should worry about robots rising up and killing us because they’ve become
conscious and/or evil. On a lighter note, such articles are actually rather impressive,
because they succinctly summarize the scenario that AI researchers don’t worry
about. That scenario combines as many as three separate misconceptions: concern
about consciousness, evil, and robots.
If you drive down the road, you have a subjective experience of colors, sounds, etc.
But does a self-driving car have a subjective experience? Does it feel like anything
at all to be a self-driving car? Although this mystery of consciousness is interesting
in its own right, it’s irrelevant to AI risk. If you get struck by a driverless car, it
makes no difference to you whether it subjectively feels conscious. In the same
way, what will affect us humans is what superintelligent AI does, not how it
subjectively feels.

The fear of machines turning evil is another red herring. The real worry isn’t
malevolence, but competence. A superintelligent AI is by definition very good at
attaining its goals, whatever they may be, so we need to ensure that its goals are
aligned with ours. Humans don’t generally hate ants, but we’re more intelligent
than they are – so if we want to build a hydroelectric dam and there’s an anthill
there, too bad for the ants. The beneficial-AI movement wants to avoid placing
humanity in the position of those ants.

The consciousness misconception is related to the myth that machines can’t have
goals. Machines can obviously have goals in the narrow sense of exhibiting goal-
oriented behavior: the behavior of a heat-seeking missile is most economically
explained as a goal to hit a target. If you feel threatened by a machine whose goals
are misaligned with yours, then it is precisely its goals in this narrow sense that
troubles you, not whether the machine is conscious and experiences a sense of
purpose. If that heat-seeking missile were chasing you, you probably wouldn’t
exclaim: “I’m not worried, because machines can’t have goals!”

I sympathize with Rodney Brooks and other robotics pioneers who feel unfairly
demonized by scaremongering tabloids, because some journalists seem obsessively
fixated on robots and adorn many of their articles with evil-looking metal monsters
with red shiny eyes. In fact, the main concern of the beneficial-AI movement isn’t
with robots but with intelligence itself: specifically, intelligence whose goals are
misaligned with ours. To cause us trouble, such misaligned superhuman intelligence
needs no robotic body, merely an internet connection – this may enable
outsmarting financial markets, out-inventing human researchers, out-manipulating
human leaders, and developing weapons we cannot even understand. Even if
building robots were physically impossible, a super-intelligent and super-wealthy AI
could easily pay or manipulate many humans to unwittingly do its bidding.

The robot misconception is related to the myth that machines can’t control humans.
Intelligence enables control: humans control tigers not because we are stronger, but
because we are smarter. This means that if we cede our position as smartest on our
planet, it’s possible that we might also cede control.