India's hotel industry is experiencing an unprecedented boom, driven by increasing numbers of business and tourist arrivals.

But how long can the good times last?

Some figures :

Hotel Imperial New Delhi: 99.57 % occupancy . Hotel Trident Hilton,Gurgaon (suburban Delhi): 98.3 % occupancy. Indian hotels are witnessing mindblowing occupancy rates. Increase in average room rent for the entire hotel industry over the last year: 35 %.

Unmet demand for hotel rooms: 1,50,000 rooms. Additional demand this year: 15,000 rooms.
The boom has attracted several global players, ranging from Starwood and Mariott to Four Seasons and ShangriLa. The largest hotel company in the world,French chain Accor, has entered India and is now devising aggressive plans for expansion in the market. Several others are racing to increase their presence in India, including the Marriott group. Currently Marriott has over 1,000 rooms spread across four properties in Mumbai and Goa.

The established hotel chains

A number of global players are already well established in India. These include Hilton, Shangri-La, Radisson, Mariott, Meridien, Sheraton, Hyatt, Holiday Inn, InterContinental and Crowne Plaza.

Investments

Now besides hotel companies, even the investment firms and private equity companies are beginning to get excited about India. Berggruen Holdings India, a subsidiary of New York-based investment company Berggruen Holdings,has announced that it is seed-funding a non-luxury hotel chain in India. Private equity firm Warburg Pincus

Tourist boom

The tourism traffic has been growing between 20-28 % every year for the last four years and this rate of growth is expected to continue for the next few years.

The constant boom and the resultant demandsupply mismatch has led to sharp increases in the average room rates and thus pushing up revenues of industry players (hotels, tour operators, airlines, shipping lines, etc)
The tourism sector is expected to perform very well in futureand the industry offers an interesting investment opportunity for longterm investors. Most of the five-star hotels are seeing more than 80 % occupancy and some of the lesserknown five-star hotels are overbooked.

Taj group of hotels is the largest chain in India- with several Hotels abroad also The parent Hotel-The Taj Mahal Hotel, Bombay is rated among the 10 best hotels in the world Mr.Mansheti Nuser wanji Tata, in 1894 formed the Indian Hotels company and built the exquisitely beautiful Taj Mahal Hotel in Bombay Taj has 50 Hotels of which 48 are operational, 38 destinations and is the largest Hotel chain in the country

In Taj tradition, one finds congenial atmosphere of true business hotel coupled with local handicrafts and a special emphasis on cuisine The uniqueness of the Taj Group lies in the sum of its parts in providing a living heritage of India, together with superb comforts and modern facilities Home away from home. 2 factors:- Accommodation & Services

Taj Inner Circle Taj Epicure Plan Benefits That Customers Enjoy As A Silver & Gold Member
Customers will be greeted with flowers & fruits in their room Check-in & departure formalities will be easier, faster & flexible Receive special discount on rooms at Taj leisure hotels Avail of double occupancy at no extra cost Entitled to a priority wait-list

Points Redemption Taj Club

Maintaining suggestion boxes at every touch point/point of interaction with the customers. Taking feedback not only from external customers but also the internal customers i.e., the employees. Proper check on the hotel staffs and processes efficiency by the management, say by employing Mystery Customers. Keeping regular track of the sales data for further leads and followup. Employing effective CRM software to improve guest satisfaction, lower operating costs, build guest loyalty, and increase revenues.

Having Guest History programs- keeping a databank of customer profiles along with such details as room preferences, amenities preferred, special requests, meal preferences, wallet services, sending birthday cards to the loyal guests and even their spouses and giving them a hassle-free check-in procedure-like sending them pickup and drop facilities. Employing an efficient system of complaints handling as complaints are the opportunities to improve, to impress the customers and to turn complaining customers into loyal ones. Giving recognition awards to attract old customers. Giving the customers a more personalized and empathic services as building good rapport with the

The Taj marked out three separate entities for the Taj Group: Business, Leisure and Luxury. Though the concept of these sub-brands had come into existence earlier, in the mid nineties, it was in 1999-2000, that the hotels became operationally different. Which meant that though the heads of these three divisions sat at head office, their territory is scattered geographically, according to which type of hotel they look after.

Strategy A higher emphasis was placed on the business segment as the profits are higher (this market being less price-sensitive as compared to the luxury segment). There was a proliferation of the Taj Presidency hotels not only in new cities, but also smaller towns. The group also kept looking at new opportunities. The action plan is more opportunities, adding to and complementing the brand, says Krishnakumar

Hospitality experts believe that the Indian hotel industry will witness higher than usual growth in the coming peak season. The good times for the Indian hospitality industry are here to stay, with top-end hotels experiencing high room occupancy rates even in the lean season.

The lean season has been exceptionally good for us. Our room occupancy rate has been around 89 per cent and we are looking at over 95 per cent occupancy for the period September to December, says Kapil Chopra, general manager,
Trident Hilton, Gurgaon.

There was an increase of 15 % in the number of international tourist arrivals in India and 14 % in the foreign exchange earnings in the first quarter of 2006 as compared to the same period last year.
The non-luxury segment in particular has been perking up with more and more investors spotting the demand supply imbalance, surge in domestic travel and growth in spending among middle-class Indians.

Long turn, profitable relationships can be built when both, the service provider and the customer, rise above the 'transaction' approach, and work in an atmosphere of mutuality and trust. Relationships, like real life, goes through ups and downs, and it takes a great amount of maturity and courage to handle the 'lows'. Relationships provide 'security. Top management must be committed to the relationship, as their example is followed throughout the organization. Cross functional teams are required to meet the goals, especially where quick responses are required.

The world's leading hotel brands joining the battle

The country has been flooded by some of the world's leading hotel brands. New brands such as Amanda, Satinwoods, Banana Tree, Hampton Inns, Scandium By Hilt and Mandarin Oriental are planning to enter the Indian hospitality industry in joint ventures with domestic hotel majors. Unitech, which is setting up two hotels in Delhi,has already formed a joint venture with Marriott International to run its three new hotels in India, which are expected to start operations by 2008. The three new hotels will be located in Kolkata, Gurgaon and Noida. We are investing around 700 crore rupees to set up these hotels, says Unitech managing director Sanjay Chandra. All other majors including Marriott, Hyatt, Hilton, Accor, Four Seasons etc are briskly reinforcing their presence in India.

The movement is not one-way. Cash-rich Indian hotel companies have been acquiring properties overseas. The Tata group's Indian Hotels Company is in the process of acquiring Bostonbased luxury hotel the Ritz-Carlton for around $170 million dollars (around 765 crore rupees). Due diligence is likely to be completed soon. The hotel will be acquired through the companys New York-based subsidiary, says RK Krishna Kumar, vice chairman of Indian Hotels. Indian Hotels is looking to strengthen its presence in the United States with this acquisition. It has also set up properties in the Middle East, the United Kingdom and Africa. Its fierce rival, Oberoi group, has also been active overseas with properties in Saudi Arabia, Mauritius, Egypt, Australia and Indonesia, and elsewhere. With growing competition, hotels are under tremendous pressure to generate new lines of revenue with creative approaches. With newer players poised to enter the market one of the key factors that will drive future demand is alternate revenue streams. Hotels are trying every possible way to generate cash from alternative sources to achieve economies of scale. Reducing transaction costs, increasing productivity and promoting traditional Indian values

Many business hotels in India are integrating full-fledged spas on their premises, originally a main stay of resort properties. Another interesting trend in India is that of mixed-use developments. While the concept has proved to be successful abroad, it is still at the embryonic stage in India. In this type of development, the real estate would typically include an apartment block or a commercial block (retail or office) along with a hotel. However, in order to attract more visitors, India still needs to dramatically increase the number of rooms available.

The lack of adequate infrastructure development. The airports at the primary gateway cities of Delhi and Mumbai have been privatised, and work has commenced on modernisation. New privately owned international airports are expected to be commissioned at Hyderabad (2008) and Bangalore (2009), which will give a large boost to the economic growth of these areas.
There is still need to improve air connectivity; rail and road connections as well as general infrastructure like power and water. The result of the industry's success. As competition increases, there is a definite pressure on ARR and operating margins. The industry market will definitely shift from being demand-driven to supply-driven and that the hotel companies will need to revisit their strategies and, of course, their prices. Some players are already preparing for the difficult times when the ARRs are expected to fall by 30-40 percent in the next 3-4 years and then the distinguishing factor for the hotels will be the offer in its entirety rather than just the price or the facilities that the hotels offer.