A

Project Study Report

On Titled

CRM_IN_HOSPITELTY Submitted in partial fulfillment for the Award of degree of

Master of Business Administration

SESSION (2010-2012)

Submitted To: Vivek Khambra (Faculty of Management studies)

Submitted By: yogendra agrawal MBA- 4th SEM.

MORDEN INSTITUTE OF TECHNOLOGY & RESEARCH CENTER ALWAR

DECLARATION
I, yogendra agrawal, a student of MBA 4th Semester, MORDEN INSTITUTE of TECHNOLOGY & RESEARCH CENTERALWAR, hereby de-clare that project report entitled " CRM_IN_HOSPITELTY " is the outcome of my own and genuine work and the same has not been submitted to any other Universi-ty/Institute for the award of any degree or professional diploma. Date : Place :

Signature of Student

EXECUTIVE SUMMARY

Hotel operators and observers often employ industry-wide averages as key points of comparison and analysis for room rates, occupancy, and revenues. The use of simple averages, however, can be misleading if one does not take into account the possibility that a mean will be pulled in one direction or another by extreme values. This analysis of three industry averages shows that those averages are, indeed, subject to distortion, or skew. The analysis, which examines figures for virtually all brand-name hotels in the United States, determined that the means for average daily rate (ADR) and revenue per available room (RevPAR) are skewed in a positive direction by hotels with extremely high rates. On the other hand, occupancy is skewed in a negative direction by a group of hotels with inordinately low occupancy levels. Many of the extreme values are found in the top-25 markets, which have hotels with inordinately high ADRs. Analysis of those markets shows that, once again, the overall statistics are distorted by a relatively small set of hotels with exceptional ADRs and occupancies. However, each of the top markets shows a distinctive rate and occupancy pattern. The pattern of skewed operating statistics carries over into individual lodging segments. The greatest distortions arise in the luxury and upscale segments, while economy and budget hotels record more consistent (normally distributed) statistics. Finally, the analysis shows that although the events of created much turmoil for theindustry, the hotel business had already cooled substantially from its record pace of a year earlier. In conclusion, managers must be careful in applying overall industry statistics to their own situation and should take into account the factors that distort operating statistics.

yogendra agrawal
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Scope of the report

At the backdrop of such a conducive business atmosphere 'Prefeasibility Report on Five- star Hotel Industry' attempts to examine such critical factors which will provide vital inputs in general to the potential investors and estimation of commercial viability of such an investment.

- It presents the market analysis of Indian hotel industry in terms of structure& segmentation, market size, major hotels etc.

- It analyses the steps involved in setting up a hotel describing the technical aspects in terms of locational details and land requirement.

- It assess the manpower planning and financial estimate involved in setting up a hotel.

- Brings an insight into the procedure for setting up a hotel, type of machinery & floors space required, requirement of regulatory permissions & clearances.

INTRODUCTION OF INDUSTRY

Global travel increased by 6% in 2007 compared with 2006, crossing tourism forecasts for the fourth year in succession. Among the various regions, the Middle East registered the highest growth in arrival of international tourists with 46 million tourists compared with 41 million in 2006, a growth of 12.2%.The opening up of the aviation industry in India has resulted in exciting opportunities for the hotel industry. - The share of Travel & Tourism industry to the global GDP was 6.48% in the year 2007 with value of US$ 3,493.19 billion and industry demand contributed to 13.21% of global GDP in 2007. - Middle East was the fastest-growing region in terms of arrivals of international tourists during 2007. - According to the report by World Travel and Tourism Council, India currently ranks 18th in business travel and will be among the top 5 nations by the end of 2010. - ASSOCHAM has projected that Medical Tourism is likely to become the leading foreign exchange earner for India - India is now emerging as one of the hot destinations for medical - tourism after Singapore, Thailand, Hong Kong, Malaysia, Philippines, Columbia A touch of tenderness, a helping hand, a welcoming visage... the Indian hospitality sector is certainly the most apt replication of the belief ATITHI DEVO BHAVA'. Good quality products and services at affordable prices should be the USP of any successful venture - and hotels in the country boast of exactly this! According to the world travel and tourism council, the growth in the hospitality industry is pegged at 15% every year, and with 2, 00,000 rooms (both luxury and budget) needed in the country, the segment is poised for a stupendous growth.

Travel tales
While the high influx of foreign tourists has ensured huge footfalls for the sector over the years, internal tourism too has, off late, begun offering great potential. With travelers taking new interests in the country, players in the hospitality sector have had to offer the best of services, at affordable prices. Also, with the USD 23 billion software services sector pushing the Indian economy skywards, more and more IT professionals are flocking to Indian metro cities, thus signaling a boom time for the hotel and hospitality segment. Several other factors such as Commonwealth Games in Delhi are fueling the need further.

The best bet

The Indian hospitality industry is projected to grow at a rate of 8.8% between 2007-16, placing India as the second-fastest growing tourism market in the world. Initiatives like massive investment in hotel infrastructure and open sky policies made by the government are all aimed at propelling growth in the hospitality sector.

"Hotel and hospitality industries are among the biggest employment generators in the country. Towards propelling its growth, while the government should confer infrastructure status to the hotel industries, several taxation issues also need to be rationalized. Further permits and licenses required for the hotel operations need to be rationalised by offering a "single window" mechanism," says Sanjay Gupta, CMD, Neesa Leisure Ltd - the Group which boasts of providing state-of-the-art facilities and services at its hotels. Be it Cambay Sapphire - the elegant 3 star business hotel at Ahmedabad or The Cambay Grand - the upcoming 5 star hotel in Ahmedabad that takes contemporary luxury to new heights with opulent rooms and suites, exotic spa, virtual golf, and multi cuisine fine dinning, redefining luxury is the perennial mantra in each of Cambay's hospitality projects. Some of the Group's forthcoming ventures include The Cambay Spa & Resort at Neemrana, Rajasthan - a proposed five star business hotel boasting of one of the largest conference and convention facilities, another venture of Neesa Leisure Ltd in Dahej (SEZ)to have 100 rooms including apartment and conference facilities and Cambay Sapphire, Jodhpur - a business hotel. Exclusive and innovative initiatives like the Cambay projects certainly focus on ensuring a bright future for the Indian hotel industry. The government's decision to substantially upgrade 28 regional airports in smaller towns and privatization & expansion of Delhi and Mumbai airport has improved the business prospects of hotel industry in India. Also, the upgrading of national highways connecting various parts of India has opened new avenues for the development of budget hotels in India. Couple this with the availability of qualified human resources and the hospitality sector has already got great growth prospects!

BACKGROUND OF THE HOTEL INDUSTRY

The Hotel Industry comprises a major part of the Tourism industry. Historically viewed as an industry providing a luxury service valuable to the economy only as a foreign exchange earner, the industry today contributes directly to employment (directly employing around 0.15 million people), and indirectly facilitates tourism and commerce. Prior to the 1980s, the Indian hotel industry was a slow-growing industry, consisting primarily of relatively static, single-hotel companies. However, the Asiad, held in New Delhi in 1982, and the subsequent partial liberalization of the Indian economy generated tourism interest in India, with significant benefits accruing to the hotel and tourism sector, in terms of improved demand patterns. Growth in demand for hotels was particularly high during the early 1990s following the initiatives taken to liberalize the Indian economy in FY1991, as per the recommendations of the International Monetary Fund (IMF). The euphoria of the early 1990s prompted major chains, new entrants and international chains to chalk out ambitious capacity additions, especially in the metropolitan cities. However, most of these efforts were directed towards the business travelers and foreign clientele. In recent years, the hotels sector has grown at a faster rate than GDP. As a result, the share of hotels & restaurants in GDP at current prices has increased from 1.2per cent in FY2000 to 1.5per cent in FY2005. In constant (1999-2000) prices, the GDP from hotels and restaurants has increased from Rs. 222.65 billion in FY2000 to Rs. 335.49 billion in FY2005. As a result, the share of hotels and restaurants in total GDP at constant prices has increased from 1.24per cent in FY2000 to 1.40per cent in FY2005.

STRUCTURE OF THE INDUSTRY

Hotels in India are broadly classified into 7 categories (five star deluxe, five-star, four star, three star, two star, and one-star and heritage hotels) by the Ministry of Tourism, Government of India, based on the general features and facilities offered. The ratings are reviewed every five years. As of December 2005 (latest available figure) there are following number and category of hotels.

Star Category
5-Star

No.of Hotels
82

No.of Rooms
18764

Deluxe
5-Star 4-Star 3-Star 2-Star 1-Star Heritage To be classified 92 132 704 587 212 83 50 11332 9401 31039 19031 695 2216 5127

Total

1934

103973

Source: Ministry of Tourism, Government of India

The table excludes hotels in the unorganized sector that have a significant presence across the country and cater primarily to economy tourists. Premium and Luxury Segment This segment comprises the high-end 5-star deluxe and 5-star hotels, which mainly cater to the business and up market foreign leisure travellers and offer a high quality and range of services. The segment accounted for 29per cent of the total hotel rooms in the country in December 2005.

Mid-Market Segment
This segment comprises 3 and 4 star hotels, which cater to the average foreign anddomestic leisure travellers. This segment also caters to the middle level business travelers since it offers most of the essential services of luxury hotels without the high costs since the tax component of this segment is lower compared with the premium segment.

Budget Segment
These comprise 1 and 2 star hotels referred to as Budget Hotels. These categories do not offer as many facilities as the other segments but provide inexpensive accommodation to the highly price-conscious segment of the domestic and foreign leisure travellers.

Heritage Hotels
In the past four decades, certain architecturally distinctive properties such as palaces and Forts, built prior to 1950, have been converted into hotels. The Ministry of Tourism has Classified these hotels as heritage hotels.

Others
At any point in time, applications for classification are usually pending with the Ministry of Tourism because of which such properties remain unclassified. The number of hotel rooms pending classification has declined from historical 15-20per cent to 5per cent of the total rooms available in the recent past.

CURRENT SCENARIO OF HOTEL INDUSTRY

Over the last decade and half the mad rush to India for business opportunities has intensified and elevated room rates and occupancy levels in India. Even budget hotels are charging USD 250 per day. The successful growth story of 'Hotel Industry in India' seconds only to China in Asia Pacific. 'Hotels in India' have supply of 110,000 rooms. According to the tourism ministry, 4.4 million tourists visited India last year and at current trend, demand will soar to 10 million in 2010 to accommodate 350 million domestic travelers. 'Hotels in India' has a shortage of 150,000 rooms fueling hotel room rates across India. With tremendous pull of opportunity, India is a destination for hotel chains looking for growth. The World Travel and Tourism Council, India, data says, India ranks 18th in business travel and will be among the top 5 in this decade. Sources estimate, demand is going to exceed supply by at least 100% over the next 2 years.Five-star hotels in metro cities allot same room, more than once a day to different guests, receiving almost 24-hour rates from both guests against 6-8 hours usage. With demand-supply disparity, 'Hotel India' room rates are most likely to rise 25% annually and occupancy to rise by 80%, over the next two years. 'Hotel Industry in India' is eroding its competitiveness as a cost effective destination. However, the rating on the 'Indian Hotels' is bullish. 'India Hotel Industry' is adding about 60,000 quality rooms, currently in different stages of planning and development and should be ready by 2012. MNC Hotel Industry giants are flocking India and forging Joint Ventures to earn their share of pie in the race. Government has approved 300 hotel projects, nearly half of which are in the luxury range. Sources said, the manpower requirements of the hotel industry will increase from 7 million in 2002 to 15 million by 2010. With the USD 23 billion software services sector pushing the Indian economy skywards, more and more IT professionals are flocking to Indian metro cities. 'Hotel Industry in India' is set to grow at 15% a year. This figure will skyrocket in 2010, when Delhi hosts the Commonwealth Games. Already, more than 50 international budget hotel chains are moving into India to stake their turf. Therefore, with opportunities galore the future 'Scenario of Indian Hotel Industry' looks rosy. It is expected that the budget and mid-market hotel segment will witness huge growth and expansion while the luxury segment will continue to perform extremely well over the next few years. The roles of the multinational companies are significant with their increasing contribution to the Economy. Basically Services are intangible deeds, processes and performances that cannot be touched, seen or felt but can be experienced. The Service sector is characterized by its diversity. Global opportunities are growing due to accelerated growth of the service economy.

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In the hospitality industry, Average room rate (ARR) and occupancy are the two most critical factors that determine the profitability, since most of the marginal revenue gets added to the bottom-line. ARR in turn depends upon location, brand image, star rating, quality of facilities, pricing of value added services, complementary services offered and the seasonal factor. The hotels to manage and invest their fund in India adopt many business strategies to establish their place of business and create innovative service packages to their custom. In a long-term perspective, these measures bring significant financial returns. The hotel industry in India has a latent potential for growth. This is because India is an ideal destination for tourists as it is the only country with the most diverse topography and relative political stability. At present India attracts approximately 2.5 Million tourists every year, which is just 0.4% of the world tourist arrivals. Normally the Multi national hotels operated In India can be owned, leased or acquired under management contract basis. Hotel operators want the leverage on their management expertise and brand equity without making enormous capital investment. In management contract agreements a fee calculated as a percentage of revenue and/or operating profit is charged. Typically, the management fee is to the tune of 3% of the total revenue and 7% of gross operating profits. Most players, with the exemption of IHCL and EIH, have entered into a marketing tieup with major international hotel chains. Thus we have Hyatt Regency a renowned international hotel chain having tied up with AHL, Leela having tied up with Kempinski and ITCH having a franchisee agreement with ITT Sheraton to use the latter's brand name. For the Indian hotel owners and the international hotel chains the benefit is mutual, tie-up with an international hotel chain puts the hotel on the global map with access to chain's reservation network worldwide. For the international hotel chain they can ride on the boom of the industry without making enormous capital investments on infrastructure and facilities. Associations with international brand also play a major role in image building and attracting foreign tourists. However the value of the international brand gets diluted if a foreign entity enters an agreement with several Indian companies. Luxury hotels operate under single tariff structure whereby the foreign tourists are charged in dollar terms whereas the domestic guest is charged the equivalent amount in rupees. The luxury hotels earn about two-thirds of their revenue from foreign tourists. Leisure travelers constitute approximately 76.5% of the total tourist arrivals whereas business travelers constitute 21% of the total arrivals. The remainder is accounted by students. The hotel industry is the second largest foreign exchange earner and between 1991 and 1998 there has been a 100% growth in foreign tourists. Hotels benefit from rupee depreciation as over 60% of revenues in the luxury hotel segment are in foreign currencies. Thus any depreciation of the rupee goes directly to the bottom line (FOREX income is also fully tax exempt), as none of the costs are directly linked to the exchange rate. The hotel debt environment is also improving. While many countries are hampered by a still sluggish economy, those with a low interest rate environment with
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relatively stable-banking conditions will provide opportunities for hotel investors to raise capital. For hotel lenders, from a risk/return basis, there has never been a better time to provide new capital to this industry in India 10

FEATURES OF HOTEL INDUSTRY

The hospitality industry consists of companies within the food services, accommodations, recreation, and entertainment sectors. The hospitality industry is a several billion dollar industry that mostly depends on the availability of leisure time and disposable income. A hospitality unit such as a restaurant, hotel, or even an amusement park consists of multiple groups such as facility maintenance, direct operations (servers, housekeepers, porters, kitchen workers, bartenders, etc.), management, marketing, and human resources. Usage rate is an important variable for the hospitality industry. Just as a factory owner would wish to have his or her productive asset in use as much as possible (as opposed to having to pay fixed costs while the factory isn't producing), so do restaurants, hotels, and theme parks seek to maximize the number of customers they "process".

In viewing various industries, " barriers to entry " by newcomers and competitive advantages between current players are very important. Among other things, hospitality industry players find advantage in old classics (location), initial and ongoing investment support (reflected in the material upkeep of facilities and the luxuries located therein), and particular themes adopted by the marketing arm of the organization in question (such as a restaurant called the 51st fighter group that has a WW2 theme in music and other environmental aspects). Very important is also the characteristics of the personnel working in direct contact with the customers. The authenticity, professionalism, and actual concern for the happiness and well-being of the customers that is communicated by successful organizations is a clear competitive advantage This significant growth of the tourism industry is the direct result of changes in international consumer behaviors as well as economic prosperity and political stability within the region. Historically, the supply of lodging facilities within the region has proved to be both inadequate in terms of product quality as well as insufficient in quantity for meeting the increasing levels of demand.

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These elements of supply and demand have created a favorable investment climate for development within the region, resulting in a real estate boom in both tourism and residential development. The growth in residential real estate development has been primarily driven by foreign demand for vacation and retirement homes in both urban and resort destinations within the region. Investment and development has been further supported by the variety of financial incentives for investment in tourism projects offered by national governments as well as the availability of local capital for the financing of large projects. The first goal is to find ways to operate the hotel according to the idea of a triple bottom line, which embodies profitable operation combined with attention to the people who use and work in the hotel and a focus on careful stewardship of resources. While that goal is important, even more vital is to use the hotels position as an industry leader in the nations capital to demonstrate to the hotel industry, customers, and vendors that sustainable operation is the best strategy to ensure successful hotel operation. The sustainability initiative goes beyond such well-known ideas as reusing guest linens, recycling waste materials, and changing to compact fluorescent lamps.

CLASSIFICATION OF HOTELS:
Classification is based on many criteria and classifying hotels into different types is not an easy task. The hotel industry is so vast that many hotels do not fit into single well defined category. Industry can be classified in various ways, based on location, size of property etc. The main hotel chains of India are: The Taj Group of Hotels, the Oberoi Group and ITC Welcome group.

Some of the international chains are Hyatt, Marriott , and Le Meridian etc. these properties have also come up in India now.

1.Based on location City center : Generally located in the heart of city within a short distance from business
center, shopping arcade. Rates are normally high due to their location advantages. They have high traffic on weekdays and the occupancy is generally high. Example: Taj Mahal , Mumbai

Motels: They are located primarily on highways, they provide lodging to highway
travelers and also provide ample parking space. The length of stay is usually overnight.

Suburban hotels : They are located in suburban areas, it generally have high traffic on
weekend. It is ideal for budget travelers. In this type of hotel rates are moderately low.

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Airport hotels : These hotels are set up near by the airport. They have transit guest who
stay over between flights.

Resort hotels : They are also termed as health resort or beach hill resort and so depending
on their position and location. They cater a person who wants to relax, enjoy themselves at hill station. Most resort work to full capacity during peak season. Sales and revenue fluctuate from season to season.

Floating hotels : As name implies these hotels are established on luxury liners or ship. It
is located on river, sea or big lakes. In cruise ships, rooms are generally small and all furniture is fixed down. It has long stay guest.

Boatels: A house boat hotels is referred as boatels. The shikaras of Kashmir and
kettuvallam of kerala are houseboats in India which offers luxurious accommodation to travelers.

Rotels : These novel variants are hotel on wheel. Our very own "palace on wheels" and
"Deccan Odessey" are trains providing a luxurious hotel atmosphere. Their interior is done like hotel room. They are normally used by small group of travelers.

2. Based on Size of Property

The main yardstick for the categorization of hotel is by size the number of rooms available in the hotel.

Small hotel: hotel with 100 rooms and less may be termed as small hotels. Medium sized hotel : hotel which has 100-300 rooms is known as medium sized hotel. Large hotels : hotel which have more than 300 rooms are termed as large hotels. Mega hotels : are those hotels with more than 1000 rooms. Chain hotels : these are the groups that have hotels in much number of locations in India
and international venues.

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3. Based on the Level of Service

Hotels may be classified into economy, and luxury hotels on the basis of the level of service they offer.

Economy/ Budget hotels : These hotels meet the basic need of the guest by providing
comfortable and clean room for a comfortable stay.

Mid market hotels : It is suite hotel that offers small living room with appropriate
furniture and small bed room with king sized bed.

Luxury hotels : These offer world class service providing restaurant and lounges,
concierge service, meeting rooms, dinning facilities. Bath linen is provided to the guest and is replaced accordingly. These guest rooms contains furnishing, artwork etc. prime market for these hotels are celebrities, business executives and high ranking political figures. Example: Hyatt Regency, New Delhi.

4. Based on the Length of Stay

Hotel can be classified into transient, residential and semi residential hotels depending on the stay of a guest.

Transient Hotel : These are the hotel where guest stays for a day or even less, they are
usually five star hotels. The occupancy rate is usually very high. These hotels are situated near airport.

Residential hotels : These are the hotel where guest can stay for a minimum period of one
month and up to a year. The rent can be paid on monthly or quarterly basis. They provide sitting room, bed room and kitchenette.

Semi residential hotels : These hotels incorporate features of both transient

andresidential hotel.

5. Based on Theme
Depending on theme hotel may be classified into Heritage hotels, Ecotels, Boutique hotels and Spas.

Heritage hotel : In this hotel a guest is graciously welcomed, offered room that have their
own history, serve traditional cuisine and are entertained by folk artist. These hotels put their best efforts to give the glimpse of their region . Example: Jai Mahal palace in Jaipur.

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 Ecotels : these are environment friendly hotels these hotel use eco friendly items in the
room. Example: Orchid Mumbai is Asia first and most popular five star Ecotels.

Boutique hotels : This hotel provides exceptional accommodation, furniture in a themed

and stylish manner and caters to corporate travelers. Example: In India the park Bangalore is a boutique hotel.

Spas : is a resort which provide therapeutic bath and massage along with other features of
luxury hotels in India Ananda spa in Himalaya are t he most popular Spa.

6. Based on Target Market Commercial hotel : They are situated in the heart of the city in busy commercial areas so
as to get good and high business. They cater mostly businessmen.

Convention hotels : These hotels have large convention complex and cater to people
attending a convention, conference Example: Le meridian , Cochin, is a hotel with largest convention center in south India.

Resort hotels : These leisure hotels are mainly for vacationers who want to relax and
enjoy with their family. The occupancy varies as per season. The atmosphere is more relaxed. These are spread out in vast areas so many resorts have solar powered carts for the transport of guest.

Suite hotels : These hotel offer rooms that may include compact kitchenette. They cater to
people who are relocating act as like lawyers, executives who are away from home for a long business stay.

Casino hotels : Hotel with predominantly gambling facilities comes under this category,
they have guest room and food and operation too. These hotels tend tocater leisure and vacation travelers. Gambling activities at some casino hotels operate 24 hours a day and 365 days

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DEMAND DRIVERS
The hotel and restaurant industry of India was Rs. 658.89 billion during 2007-08. Travel & Tourism Industry of India was valued at US$35.73 billion in 2007, contributing 3.56% to Indias GDP. The number of foreign tourists arriving to India reached 5.08 million compared with 4.45 million in the year 2006, showing growth of 14.16%. Indias share in international tourist arrivals at global level gradually improved from 0.46% in 2004 to 0.49% in 2005 and further to 0.52% in 2006 and 0.56% in 2007. The number of domestic tourists in India was 526.57 million compared with 461.76 million in 2006, showing growth of 14.03%. There are 1,437 hotels approved and classified by the Ministry of Tourism, Government of India, with a total capacity of 84,327 hotel rooms as on December 31, 2007. Indian hotel industry is currently adding about 60,000 quality rooms, which are expected to be ready by 2012.

International Tourist Traffic

The foreign tourist arrivals in India increased at CAGR of 5.5per cent from 2.29 million in 1996 to 3.92 million in 2005. Significantly, the bulk of international arrivals into India, both in 2004 and 2005, have been business travelers. Main reason for this increase has been following fundamental factors: Indias strong GDP growth. Opening of sectors of the economy to private sector/ foreign investment. Strengthening of ties with the developed world. Reforms in aviation sector which led to better connectivity with many countries (such as ASEAN) and created additional capacity on existing routes (for e.g. USA, Middle East). Also, introduction of low cost airlines also contributed to the demand. The increase in international flights, seat capacity and frequency into the country and the decision to allow private airlines like Jet Airways and Air Sahara to fly overseas has had a positive impact on tourist and business arrivals into India, by way of providing additional seats to

Key destinations
.Development of infrastructure by the Government Indias emergence as an outsourcing hub. Success of Incredible India campaign and other tourism promotion measures. Indias growing recognition as an exciting place to visit (The Readers Travel Awards 2006, conducted by Cond Nast Travellers has recently placed India at number four among the worlds must-see countries, up from number nine in 2003) has helped boost its image as a leisure destination.

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Foreign Tourist Arrivals

Foreign Tourist Arrival (Nos.) Months January February March April May 2005 385977 369844 352094 248416 225394 2006* 444260 407198 390824 309775 258527 2007* 514453 462578 443976 334558 271454 Percentage Change 2006/05 15.1 10.1 11.0 24.7 14.7 2007/06 15.8 13.6 13.6 8.0 5.0

Total

1581725

1810584

2027019

14.5

12.0

Foreign Exchange Earnings

Foreign Exchange Earnings (in Rs. billion) MONTHS January February March April May 2005 23.26 23.43 22.11 16.50 14.53 2006* 27.22 26.36 24.34 21.27 16.74 2007* 33.00 30.04 27.99 23.41 18.59 Percentage Change 2006/05 17.0 12.5 10.1 28.9 15.2 2007/06 21.2 14.0 15.0 10.0 11.0

Total

99.83

15.94

133.03

16.1

14.7

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KEY SUCCESS FACTORS

The market for the hotel industry can be divided into the following key consumer segments based on purpose of visit:

The Business Traveler

The Business Traveler is a businessman or a corporate executive travelling for business purposes. This segment includes corporates, both domestic and foreign, who open offices in the hotel premises during start-ups, corporate executives who make extended stay either for long duration projects or while waiting for permanent accommodation (primarily expatriates) and convention arrivals. While the senior executives usually stay in 5 star hotels, the middle level executives, who are much larger in number, stay in the budget hotels. This segment offers better realizations, as they demand relatively smaller discounts on room rents (about 10per cent-15per cent), use more of facilities such as PCs, fax multi-media, conference halls. Also, the Food & Beverage (F&B) revenues are better as they usually eat in the hotel itself due to their busy schedules.

The Leisure Traveler

The Leisure Traveler could either be a foreigner or a domestic traveler whose primary purpose of visit is holiday or site seeing. Among non-business foreign tourists the primary motivation for visiting India is largely cultural attraction followed by conferences and conventions, tourist attractions like beaches, wild life, hill resorts etc. Usually, leisureravelers are part of a package run by a tour operator. The margins offered by leisure travelers tend to be lower because of two reasons. Firstly, they seek higher discounts and also provide less F&B revenues as they usually eat out. The business offered by this segment is highly seasonal and tends to peak in the September to March period.

Airline Cabin Crew

Airline Cabin Crew forms another important segment because of the repetitive and guaranteed nature of the business that they provide. Usually, these are a part of an annual contract whereby, in return for a fixed rate, a certain number of rooms are provided on demand for cabin crews. With discount rates in the range of 40per cent and 50per cent, this represents a low-yield segment for hotels in general

Premium and Luxury Segment

This segment comprises the high-end 5-star deluxe and 5-star hotels, which mainly cater to the business and up market foreign leisure travelers and offer a high quality and range of services. The segment accounted for 29per cent of the total hotel rooms in the country in December 2005.
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ENVIRONMENTAL ISSUES
International Society of Hospitality Consultants (ISHC) represents a significant part of the lodging industry's brain power; it was disheartening that rising energy costs and other environment-related issues. Is it any wonder that the lodging industry has such a long way to go to become sustainable? Keeping in mind that there are a lot of positive things happening in the industry, and that there are a lot of industry leaders who do recognize the importance of environmental protection, here is my own list for the New Year: The Environmental Issues Facing the Hospitality Industry in 2009. Staying ahead of rising energy costs. Yes, the industry did get a breather from skyrocketing energy costs in the second half of 2008, but prices were still higher than the previous year for the fifth straight year. Climate change. As evidence continues to mount regarding the reality of global warming, how will the lodging industry react? What companies will demonstrate the greatest leadership? Indoor air quality. Last year saw Marriott, Westin and others transition to 100percent nonsmoking environments. What chains will be next? Increasingly, voters and travelers are clamoring for clean air. At the association level, the lodging industry is hungry for leadership: individuals to take the lead in pushing the industry toward sustainability. Who will step forward? Meeting planners increasingly will require green practices as they select their meeting destinations. What hotel companies and cities will be best positioned to take advantage of this trend? There is a need for a greater environmental presence at the lodging industry's largest trade shows. Will that happen in 2009? The National Restaurant Assn. show in Mumbai will feature a Green Restaurant Products Pavilion for the second year. It will be 40 percent larger than last year. Other major industry shows the International Hotel/Motel & Restaurant Show and the many large hotel chain conferences -- should consider similar setups. Green lodging certification programs are popping up at the state level around the country. National level programs also continue to grow in India. Will 2009 be the year when stakeholders in these programs start to talk to one another with the goal of establishing one green hotel rating system? Greenhouse gas/carbon offsetting programs are becoming more common. In 2008, Vail Resorts announced it will offset 100 percent of its energy use by purchasing nearly 152,000 megawatt-hours of wind energy. What other companies will joinVail Resorts and others in doing this in 2009.

These are just some of the environment-related issues the lodging industry will face in the New Year. As you meet with your management teams this month, be sure to set measurable, green goals and make the environment a priority. If you do so, you can be sure that 2009 will be a much more profitable year for everyone

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DOMESTIC PLAYERS
Major players in the Indian Hotel Industry: Hotel Chains
They comprise major players including Indian Hotels Company Limited (the Taj Group) and associate companies, EIH Limited (the Oberoi Group), ITC Hotels Limited (the ITC Welcome Group), Indian Tourism Development Corporation (ITDC) and Hotel Corporation of India (HCI) (the latter two being under the Public Sector). Most of these chains had an established presence in one or more metro cities prior to the tourism boom of the 1980s. Subsequent to the tourism boom, these chains aggressively expanded their presence in other locations. The private players among the hotel chains are industry leaders and have well-established brand identities across the different industry segments.

Small Chains
They are companies that have come up after the tourism boom of the 1980s and 1990s. Due to lack of prior experience in the hotel industry, these players have preferred toopt for operating/management arrangements with international players of repute.Some of the companies in this category are Hotel Leela Venture (with Kempinski),Asian Hotels (Hyatt International Corporation), Bharat Hotels (formerly with Holiday Innand Hilton and now with Intercontinental). As late entrants, most of these hotel companies have fewer properties, compared with the big chains. However most of these players haveinitiated expansion plans during the late 1990s.

Public Sector Chains

ITDC and HCI boast of some of the best locations in major cities but are relative underperformers, as compared with their private sector counterparts International Hotel Chains They are also looking at India as a major growth destination. These chains are establishing themselves in the Indian market by entering into joint ventures with Indian partners or by entering into management contracts or franchisee arrangements. Some of the players who have already entered or plan to enter the Indian market include Marriott, Star wood, Berggren Hotels, Emaar MGF. Most of these chains have ambitious expansion plansespecially with a strong focus on the budget segment and tier II cities.

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 Localized Hotel Companies

They are mainly comprise early entrants who have an established localized presence and who preferred not to expand during the tourism boom but focus on building and catering to a loyal customer base.

The Indian Hotels Company

The Indian Hotels Company and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces, recognized as one of Asia's largest and finest hotel company. Incorporated by the founder of the Tata Group, Jamsetji N Tata, the company opened its first property, The Taj Mahal Palace Hotel, Bombay, in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003. Taj Hotels Resorts and Palace scomprises 59 hotels at 40 locations across India with an additional 17 international hotelsin the Maldives, Mauritius, Malaysia, United Kingdom, United States of America, Bhutan,Sri Lanka, Africa, the Middle East and Australia.

The company has had a long-standing commitment to the continued development of the Indian tourism and hospitality industry. From the 1970s through the 1990s, the Taj played an important role in launching several of India's key tourist destinations. Workingin tandem with the Indian government, the Taj developed resorts and retreats while thegovernment developed roads and railways to India's hidden treasures.

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GOVERNMENT POLICIES
Tourism being a concurrent subject under the Indian constitution, both the centraland state governments regulates the hotel industry. The regulations include statutory and regulatory sanctions (or approvals and licenses) from the Central and State departments or agencies. This includes license to operate a restaurant, a hotel license (issued by municipal authorities), license from police (issued by local police) and a bar license (issued by excise department).

Tourism Policy
In order to develop tourism in India in a systematic manner, position it as a major engine of economic growth and to harness its direct and multiplier effects for employment and poverty eradication in an environmentally sustainable manner, the National Tourism Policy was formulated in the year 2002. Broadly, the Policy attempts to: Position tourism as a major engine of economic growth Harness the direct and multiplier effects of tourism for employment generation, economic development and providing impetus to rural tourism Focus on domestic tourism as a major driver of tourism growth Position India as a global brand to take advantage of the burgeoning global travel trade And the vast untapped potential of India as a destination Acknowledges the critical role of private sector with government working as a pro-active facilitator and catalyst Create and develop integrated tourism circuits based on Indias unique civilization, heritage, and culture in partnership with States, private sector and other agencies Ensure that the tourist to India gets physically invigorated, mentally rejuvenated,culturally enriched, spiritually elevated and feel India from within.

The Governments major policy initiatives include:

Liberalization in aviation sector Pricing policy for aviation turbine fuel which influences internal air fares Rationalization in tax rates in the hospitality sector Tourist friendly visa regime Immigration services
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 Procedural changes in making available land for construction of hotels Allowing setting up of Guest Houses The Indian Ministry of Tourism has identified 31 villages across the country to be developed as tourism hubs. The states in which these villages have been identified include Himachal Pradesh, Gujarat, Maharashtra, Bihar, Karnataka, Madhya Pradesh, Andhra Pradesh, Kerala, Tamil Nadu, Orissa, Assam, Sikkim, Rajasthan and West Bengal.

Governments Open Skies Policy

The Governments Open Skies policy, permission for domestic airlines to commence International flights, start-up of various low-cost carriers, and fleet expansion by domestic players have created a huge incentive for domestic travelers to explore far-off destinations within and outside India. The booming aviation business is bringing an everincreasing number of passengers to India, and pulling Indians out of their homes and into hotels. The numbers, according to the Ministry of Tourism, speak for themselves: The number of domestic and international passengers has increased fifteen-fold to 73.34 million in 2005/06 since 1970. Domestic air passenger traffic grew by 16.8 per cent in 2005/06 compared to 2004/05. International passenger traffic observed a growth of 16.9 per cent in the same period. Private airlines accounted for 77.0 per cent of the total domestic traffic.

Foreign Trade Policy

The Foreign Trade Policy announced in April, 2006, offered following incentivesto the hospitality industry: Hotels and Restaurants are allowed to import duty free equipment and other items including liquor, against their foreign exchange earnings under the Served from India Scheme. As in previous years, this entitlement is 5per cent of previous years foreign exchange earnings for hotels of one-star and above (including managed hotels and heritage hotels) approved by the Department of Tourism and other service providers in the tourism sector registered with it. The stand-alone restaurants will be entitled to duty credit equivalent to 10per cent of the foreign exchange earned by them in the preceding financial year (instead of the earlier
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20per cent). Service exports in Indian Rupees, which are otherwise considered as having been paid for in free foreign exchange by RBI, will now qualify for benefits under the Served from India Scheme. Also, foreign exchange earned through International Credit Cards and other instruments as permitted by RBI for rendering of service by the service providers shall be considered for the purposes of computation of entitlement under the Scheme. Benefits of the Scheme earned by one service provider of a Group company can now be utilized by other service providers of the same Group Company including managed hotels. The measure aims at supporting the Group service companies not earning foreign exchange in getting access to the international quality products at competitive price and providing services of international standards. This new initiative allows transfer of both the script and the imported input to the Group Service Company. The earlier provision allowed transfer of imported material only.

FDI in Hotel and Tourism Sector

100 per cent FDI is permissible in the sector on the automatic route. The term hotels Include restaurants, beach resorts, and other tourist complexes providing accommodation and/or catering and food facilities to tourists. Tourism related industry include travel agencies, tour operating agencies and tourist transport operating agencies, units providing facilities for cultural, adventure and wild life experience to tourists, surface, air and water transport facilities to tourists, leisure, entertainment, amusement, sports, and health units for tourists and Convention/Seminar units and organizations. For foreign technology agreements, automatic approval is granted if: Up to 3 per cent of the capital cost of the project is proposed to be paid for technical and Consultancy services including fees for architects, design, supervision, etc. up to 3 per cent of net turnover is payable for franchising and marketing/publicity Support fee, and up to 10 per cent of gross operating profit is payable for management fee, including incentive fee.

Other Government Initiatives

Government has undertaken following initiatives to attract both inbound and outbound Tourists: Incredible India - Under this program the Government promotes India through various integrated marketing programs. Atethie devo bhava (guests are equal to god) - Under this program the Government create

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awareness among Indian people who come in contact with the tourist. Various Infrastructure building initiatives Encourage religious tourism for instance promotes various places in India as Buddhist abodes. Other projects are the Rs. 5,400 million National Highways Development Project, the 5,846 km Golden Quadrilateral and the 7,300 km north-south and east-west corridors. Sagarmala project which intends to create a network of seaports, which will change the way people discover and experience real India.

FISCAL REGULATION

India's credit-starved hotel industry can now afford to heave a sigh of relief. In a move that promises to make credit easily available to the sector, the Union tourism ministry has permitted the hotel industry to go in for external commercial borrowings up to $100 million during the current financial year. Meanwhile, the Reserve Bank of India too has removed hotels from the 'commercial real estate' classification. This two-pronged push will make larger credit available to the capital-intensive and credit starved hospitality industry at lower rates of interest, thus bringing down the high cost of the hotel projects. Tourism ministry sources have that said that efforts are on to obtain infrastructure status for hotel projects and the RBI's approval is being sought for this. This will help the interest rate to go down further to single-digit levels for hotels. Sources said yet another proposal of the ministry pending with RBI is to provide fiscal amenities for creation of additional hotel room capacity to meet the surge in demand in the tourism sector. The ministry has been canvassing that the hotel segment of the tourism industry is highly capital-intensive and has a long gestation period. India is already facing acute shortage of quality accommodation for both international as well as domestic tourists. With the delinking of hotels from commercial real estates, promoters will be able to seek capital loans from banks and ease out the liquidity issues particularly to the new hotel projects, the sources added. Food processing in India covers a spectrum of products from agriculture, horticulture, plantation, animal husbandry and fisheries. While India has an abundant supply
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of food, the food processing industry is still nascent with only two per cent of fruit and vegetables, and 15 per cent of milk produced being processed. The processed food industry food industry ranks fifth in size in the country, representing 6.3 per cent of GDP. It accounts for 13 per cent of the country'sexports and 6 per cent of total industrial investment.

The industry size is estimated at US$ 70 billion, including US$22 billion of value added products. FDI in the Food Processing Sector has witnessed over two and a half times increase from Rs 174 crore in 2005 to Rs 441 crore in 2007. It is expected that FDI inflow into the processed food sector would be in the region of Rs 1,300 crore in 2009. This sector is emerging as one of the fastest growing sectors with international retailers like Wal-Mart, Carrefour and Woolworth taking interest in the Indian market.

Policy initiatives
The Indian government has abolished licensing for almost all food and agro- processing industries. Automatic investment approval (including foreign technology agreements within specified norms), up to 51 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of the food processing sector. Wide-ranging fiscal policy changes have been introduced progressively. Excise and Import duty rates have been reduced substantially. Many processed food items are totally exempted from excise duty.

Hospitality industry in India

The hospitality Industry in India is poised for major growth. 20,000 more hotel rooms are required for the Commonwealth Games. To cater to the demand for rooms fiveyear tax holiday for two, three and four-star hotels, as well as, convention centers. Hospitality India which encases various categories of equipment being used, offers a platform for the manufacturers and suppliers to display the latest state of the art equipment manufactured by them. For achieving international standards, investment is being made by manufacturers on improving skills of manpower, in quality machinery and tools and latest technology. Areas which have seen remarkable change in these years are bakery, laundry and food service equipment.

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AAHAR 2009
AAHAR 2009 will offer a segmentised platform for showcasing the developments and progress achieved in the processed food and hospitality sectors, through a wide ambit of display covering products, technologies and services, and the scope embodied by them for investment and tech up gradation. On display will be all kind of foods, processed food, alcoholic (subject to obtaining prior permit from the office of Excise Commissioner of NCT of Delhi) and other beverages, food processing, packaging, mill machinery and equipment; poultry and farm equipment and supplies, dairy and confectionery equipment, airconditioning, refrigeration and cold storage systems, air and water pollution control equipment and accessories, hotel and kitchen equipment and tableware, laundry, interior and house keeping, health and fitness equipment, consultancy services and hospitality supplies. This exposition helps the visitors from the hospitality sector to find a one window solutionto their need to provide hygienic environment at back of the house (kitchen), good quality food and higher level of productivity. AAHAR also brings together potential business partners from India and abroad and provides a platform for implementing in government schemes for infrastructural development like establishing food parks, packaging and valueadded centres, integrated cold-chain facility, irradiates and modernized abattoir. It also offers a reliable and time tested forum for B2B transactions, exploration of joint venture and technological up-gradation and sourcing opportunities. Significantly, with 20 per cent rise in participation, the forthcoming edition of the fair will be divided into two independent shows viz. ` FOOD INDIA'covering food and food processing sector and `HOSPITALITY INDIA ' representing hotel and restaurant equipment and supplies.

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INTERNATIONAL SCENARIO
Tourism has suddenly become a booming sector. During 2007, an estimated 4.4 million tourists visited the country, registering a growth of 14 per cent. With this robust trend in tourism, the hotel industry has also witnessed a rise in the growth and over the last decade and half, there has been a mad rush to India for business opportunities, elevatingroom rates and occupancy. The Hotel Industry in India is second only to China in Asia Pacific.

India is a destination for hotel chains looking for growth. According to the World Travel and Tourism Council, India ranks 18th in business travel and will be among the top 5 in this decade. Hotels in India have a supply of 110,000 rooms. At the current trend, demand will soar to 10 million in 2010. With a shortage of 150,000 rooms, likely to result in demandsupply disparity, room rates will see a rise to 25 per cent annually and occupancy would rise by 80 per cent over the next two years. The industry seems to be fast getting rid of competition when it comes to being a cost-effective destination. The industry is adding about 60,000 quality rooms, currently in different stages of planning and development and should be ready by 2012. Government has approved 300 hotel projects, nearly half of which are in the luxury range. The manpower requirements will increase from 7 million in 2002 to 15 million by 2010.The hotel industry is set to grow at 15 per cent a year.

This figure will skyrocket in 2010, when Delhi hosts the Commonwealth Games. Already, more than 50 international budget hotel chains are moving into India to stake their turf. Therefore, the future scenario of the Indian hotel industry looks rosy. The government of India has taken a number of steps to promote tourism. An amount of Rs 0.6 bn is to be allocated for the Commonwealth Games. Income tax exemption for 5 years is granted to two, three or four star hotels established in specified districts having UNESCO-declared World Heritage Sites. The hotel should be constructed and start functioning during the period April 1, 2008 to March 31, 2013. The industry wants it to be treated at par with other infrastructure sectors such as roads, ports and telecommunications and be granted full tax benefits. The slowdown in the global economy, rising crude prices and higher airfares has affected the hotel sector to a certain extent. Due to rising costs, companies are facing pressure on their earnings. Plus, cost cutting measures have led to lower business tourist arrivals in recent times. There is an urgent need for the hotels to adopt cost cutting devices. These can include using resources more efficiently; minimizing waste production; using products and materials that have the least negative impact on the environment, both in use
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and source of origin; pursuing action programs that benefit the environment in the local community; and fostering the education of environmental awareness, both internally and externally. Waste management; energy conservation; water use; and laundry and dry-cleaning should be given priority because these areas have huge wastages which can be curbed. Paper and stationery can be recycled; air conditioners and other electrical appliances should be switched off when not in use. Some hotels also offer free wine and hence it should be available in only those rooms where it is demanded. People generally tend to misuse the free stuff that is available in the hotels. Hence, it should be made available onlyon demand. The government should increase its budget towards the hotel industry as it isobserving high rates of growth and can lead to Indias development as well . 'Hotel Industry in India' have supply of 110,000 rooms. According to the tourism ministry, 4.4 million tourists visited India last year and at current trend, demand will soar to 10 million in 2010 - to accommodate 350 million domestic travelers. 'Hotels in India' has a shortage of 150,000 rooms fueling hotel room rates across India. With tremendous pull of opportunity, India is a destination for hotel chains looking for growth. The World Travel and Tourism Council, India, data says, India ranks 18th in business travel and will be among the top 5 in this decade. Sources estimate, demand is going to exceed supply by at least 100% over the next 2 years. Five-star hotels in metro cities allot same room, more than once a day to different guests, receiving almost 24-hour rates from both guests against 6-8 hours usage. With demand-supply disparity, 'Hotel India' room rates are most likely to rise 25% annually and occupancy to rise by 80%, over the next two years. 'Hotel Industry in India' is eroding its competitiveness as a cost effective destination. However, the rating on the 'Indian Hotels' is bullish. 'India Hotel Industry' is adding about 60,000 quality rooms, currently in different stages of planning and development and should be ready by 2012. MNC Hotel Industry giants are flocking India and forging Joint Ventures to earn their share of pie in the race. Government has approved 300 hotel projects, nearly half of which are in the luxury range. Sources said, the manpower requirements of the hotel industry will increase from 7 million in 2002 to 15 million by 2010. With the USD 23 billion software services sector pushing the Indian economy skywards, more and more IT professionals are flocking to Indian metro cities. 'Hotel Industry in India' is set to grow at 15% a year. This figure will skyrocket in 2010, when Delhi hosts the Commonwealth Games. Already, more than 50 international budget hotel chains are moving into India to stake their turf. Therefore, with opportunities galore the future 'Scenario of Indian Hotel Industry' looks rosy.

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Indian tourism and hospitality sector has reached new heights today. Travelers are taking new interests in the country which leads to the upgrading of the hospitality sector. Even an increase in business travel has driven the hospitality sector to serve their guests better. Visiting foreigners has reached a record 3.92 million and consequently International tourism receipts have also reached a height of US$ 5.7 billion. Hospitality Industry is closely linked with travel and tourism industries. India is experiencing huge footfalls as a favorite vacation destination of foreigners and natives and the hospitality industry is going into a tizzy working towards improving itself.

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Organization overview
INTRODUCTION

THE TAJ GROUP OF HOTELS

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

The founder of the house of Tatas, Mr.Mansheti Nuser wanji Tata, in 1894 formed the Indian Hotels company and built the exquisitely beautiful Taj Mahal Hotel in Bombay. The doors opened in 1903 and has been a landmark by the Gateway of India ever since.

In 1971, the 220 roomed Taj Mahal Hotels in Bombay was converted to a 325 Roomed hotel, and a multistory structure was built adjoining the original property. In 1972, the Lake Palace at Diaper and Rambagh Palace in Jaipur was linked to the Taj and a Chain was born. In 1974, a new company was floated, which created the Taj Coromandel in Madras. In the same year the chain broadened with the acquisition of fort Aquada Beach Resort in Goa...

In 1976, Fishermans Cove was built which is 30 minutes drive from Madras on the Bay of Bengal with a Private Beach. In the same year, the Taj Group opened the Taj Flight Kitchen in Bombay, Catering to both domestic and international flights.

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In 1978, the glittering Taj Mahal was opened in Delhi, and this was followed by The Taj Ganges in Varanasi after two years.

The1980s was to see a rapid expansion of the group and the gigantic Taj Palace in New Delhi was opened. The Shiv Nivas Palace at Diaper and TAC (Taj Air Caterers) in New Delhi Airport were also opened. Followed by this was the opening of Taj Residency in Bangalore, the Savoy Hotel in Ooty and the Raj Mahal Palace in Jaipur and the Taj View Hotel in Agra.

Taj has been operating in the USA, the UK, the Maldives, Oman and Srilanka and the Taj Empire continues to expand further. today Taj has 50 Hotels of which 48 are operational, 38 destinations and is the largest Hotel chain in the country. Taj is only the only hotel group that knows India and South Asia so well, and does so with such complete style. Earlier, taking residence with The Taj Group has been a grand occasion. When The Taj Mahal Hotel, Mumbai, inaugurated in the 1903, the event was described as a resplendent debut by The Times, London.

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Taj Palace is Luxury Hotel under Taj Group of Hotels. It is ideally located, 10 minutes from the Airport, 10 minutes from down town situated amidst 6 acres of landscaped greenery; Taj Palace hotel offers convenience and gentle ambience. The hotel combines attractive functionality with style in a peaceful symbiosis. In Taj tradition, one finds congenial atmosphere of true business hotel coupled with local handicrafts and a special emphasis on cuisine. Taj Palace has 421 rooms and suites. Each Deluxe Business floor room is a modern business centre. So too is their exclusive club floor rooms. Within quiet reason, everything that one wishes is available round the clock Taj Palace hotel including the finest cuisine in town. On request in-room fax, E-mail facility, Laptop computer, background information on major Indian industries, plus on line accessibility to world business information is available. There are six restaurants and a bar in the hotel to offer its guests. To name the few are Orient Express, Isfahan, The Tea House of the August Moon, Handi and My Kind of Place(Discotheque). There are six Luxury Hotels which offer a whole of elegant living and upto the minute business amenities, as a part of Rs.300 crore upgradation programme. All Luxury Hotels now have renovated rooms, a state of the art Business Centre and a modern Fitness Centre. The Taj group also has eight Business Hotels spread over different corners of the country. There are 20 Taj Leisure Hotels out of which 16 are in India and 4 are abroad.

The Taj Group is Indias one of the finest and largest hotel chain which is offering 48 hotels within 34 locations across the subcontinent. This growth has been as diversified as it has been impressive. In addition to its admirable luxury hotels, The Taj Group includes business hotels, beach resorts, palace, garden retreats and other comfortable accommodation. Talking about Internationally, The Taj Group also has properties in key cities like London, New York, Washington DC Chicago and also at locations in the Middle East and in African states.

The Taj group uniqueness lies in the sum of its parts in providing a living heritage of India, together with superlative comforts and its modern facilities. All of these things combine to make The Taj Experience a must.

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THE TAJ
The Indian Hotels Company Limited (IHCL) and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces and is recognised as one of Asia's largest and finest hotel company. Incorporated by the founder of the Tata Group, Mr. Jamsetji N. Tata, the company opened its first property, The Taj Mahal Palace Hotel, Bombay in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003.

Taj Hotels Resort and Palaces comprises more than 60 hotels in 45 locations across India with an additional 15 international hotels in the Malaysia, United Kingdom, United States of America, Bhutan, Sri Lanka, Africa, the Middle East and Australia.

Spanning the length and breadth of the country, gracing important industrial towns and cities, beaches, hill stations, historical and pilgrim centres and wildlife destinations, each Taj hotel offers the luxury of service, the apogee of Indian hospitality, vantage locations, modern amenities and business facilities.

IHCL operate in the luxury, premium, mid-market and value segments of the market through the following:

Taj (luxury full-service hotels, resorts and palaces) is our flagship brand for the worlds most discerning travelers seeking authentic experiences given that luxury is a way of life to which they are accustomed. Spanning world-renowned landmarks, modern business hotels, idyllic beach resorts, authentic Rajput palaces and rustic safari lodges, each Taj hotel reinterprets the tradition of hospitality in a refreshingly modern way to create unique experiences and lifelong memories.

Taj also encompasses a unique set of iconic properties rooted in history and tradition that deliver truly unforgettable experiences. A collection of outstanding properties
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with strong heritage as hotels or palaces which offer something more than great physical product and exceptional service. This group is defined by the emotional and unique equity of its iconic properties that are authentic, non- replicable with great potential to create memories and stories.

Taj Exotica is our resort and spa brand found in the most exotic and relaxing locales of the world. The properties are defined by the privacy and intimacy they provide. The hotels are clearly differentiated by their product philosophy and service design. Taj Safaris are wildlife lodges that allow travelers to experience the unparalleled beauty of the Indian jungle amidst luxurious surroundings. They offer Indias first and only wildlife luxury lodge circuit. Taj Safaris provide guests with the ultimate, interpretive, wild life experience based on a proven sustainable ecotourism model.

Premium Hotels (premium full-service hotels and resorts) provide a new generation of travelers a contemporary and creative hospitality experience that matches their work-hard play-hard lifestyles. Stylish interiors, innovative cuisine, hip bars, and a focus on technology set these properties apart.

The Gateway Hotel (upscale/mid-market full service hotels and resorts) is a panIndia network of hotels and resorts that offers business and leisure travelers a hotel designed, keeping the modern nomad in mind. At the Gateway Hotel, we believe in keeping things simple. This is why, our hotels are divided into 7 simple zones- Stay, Hangout, Meet, Work, Workout, Unwind and Explore.

Ginger (economy hotels) is IHCLs revolutionary concept in hospitality for the value segment. Intelligently designed facilities, consistency and affordability are hallmarks of this brand targeted at travelers who value simplicity and self-service.

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Taj Hotels Resorts and Palaces is committed to replicate its domestic success onto international shores with plans to build an international network of luxury hotels, which will provide an exemplary product-service combination and in the process create a global brand. The current international portfolio includes luxury resorts in the Indian Ocean, business and resort destinations in the Middle East and Africa, serviced apartments in the UK, the first hotel in Australia and three a top-end luxury hotels in the US.

Throughout the Companys expansion, its mandate has been twofold: to infuse a sense of Indian heritage and culture within each diverse property, while also anticipating the needs and desires of the sophisticated traveler. Over the years, the Taj has won international acclaim for its quality hotels and its excellence in business facilities, services, cuisine and interiors.

Taj Hotels further expanded its global footprint by securing management contracts at Palm Island, Jumeirah in Dubai, Saraya Islands in Ras Al Khaimah, Aldar Group in Abu Dhabi, UAE Langkawi in Malaysia and Thimpu in Bhutan. The most significant additions to the portfolio have been The Pierre, the iconic landmark hotel on New York's Fifth Avenue, Taj Boston and Blue, Sydney.

The presence of Taj Hotels Resorts and Palaces internationally has been developed through a network of Taj regional sales and PR offices in the United Kingdom, France, Germany, Italy, Dubai, Singapore, Australia, Japan, Russia and the United States of America.

At the Taj Hotels Resorts and Palaces luxurious living and fine dining find common ground. Whether it is introducing exotic world cuisines to India or taking authentic Indian fare to the world, the Taj Hotels Resorts and Palaces is renowned for the eclectic culinary experiences it brings to its guests. Through a vast repertoire of

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award-winning restaurants, legendary recipes from royal kitchens and celebrated food festivals, the Taj has pioneered innovation in fine dining across the world.

Taj Hotels also promise a whole new experience of tranquillity and total wellness, through Jiva Spas a unique concept, which brings together the wisdom and heritage of the Asian and Indian Philosophy of Wellness and Well-being. Rooted in ancient Indian healing knowledge, Jiva Spas derive inspiration and spirit from the holistic concept of living. There is a rich basket of fresh and unique experiences under the Jiva Spa umbrella of offering, Yoga and Meditation, mastered and disseminated by accomplished practitioners, authentic Ayurveda, and unique Taj signature

treatments. Royal traditions of wellness in service experiences, holistic treatments involving body therapies, enlivening and meaningful rituals and ceremonies and unique natural products blended by hand, come together to offer a truly calming experience.

IHCL operates Taj Air, a luxury private jet operation with state-of-the-art Falcon 2000 aircrafts designed by Dassault Aviation, France; and Taj Yachts, two 3-bedroom luxury yachts which can be used by guests in Mumbai and Kochi, in Kerala.

IHCL also operates Taj Sats Air Catering Ltd., the largest airline catering service in South Asia, as a joint venture with Singapore Airport Terminal Services, a subsidiary of Singapore Airlines. Additionally, it operates the Indian Institute of Hotel Management, Aurangabad since 1993. The institute offers a three-year diploma, designed with the help of international faculty and has affiliations with several American and European programmes. The Taj began a century ago with a single landmark The Taj Mahal Palace Hotel, Mumbai. Today, the various Taj hotels, in all their variety and historical richness, are recognised internationally as the symbols of true Indian hospitality. The Companys history is integral to Indias emergence into the global business and leisure travel
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community; and looking to the future, Taj Hotels Resorts and Palaces is well positioned to meet the increase in travel activity with the rapid expansion of the Indian economy. The Taj Group is also investing heavily on CRM systems to maintain customer databank with their profiles to give a quicker and personalized service to their loyal clientele. The Taj gives high priority to guest satisfaction.

They even have an SMS service to keep track of lost/missed calls by the customers while they are away. They have employed applications like PMS, CRS and CIS to keep track of customers profiles which includes information such as their spending patterns and their special needs also. They employ data mining technique to get and act on data and also give credit to the employees who get compliments from the guests.

Other reward programs include Taj Inner Circle and the Epicure plan to give the customers a host of privileges as silver and gold card holders. The challenge is to balance between the long-term goals and short-turn gains.

Some key learnings are:

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'.
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 Relationships provide 'security'. Strategic bundling of services is a useful methodology in this context.

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.

Facilities & Services Guests are offered a range of comprehensive and efficient business and leisure facilities. Facilities & Services Hotel Business Services include: Audio/Visual Equipment Business Centre-24 hrs Laptop on hire, with prior intimation Video Conferencing Indoor and Outdoor banqueting facilities are available Hotel Leisure and Other Services include: 24 hrs Front DeskAirport Transfer - On Request Astrologer On Call Banquet Facility Bar & restaurants Barber Shop Beauty Salon Bell - Desk Services Car Rentals Currency Exchange Express Check in Check out

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Facilities For the Physically Challenged Florist Health Club Health/Ayurveda Centers Hotel Safe Internet Access Available in Rooms Internet/E-mail/Fax Facilities Interpreter Services Laundry Services Library Lounge Luggage Storage Medical Services-Doctor on Call Phone-Two Telephone Lines in Rooms Postal/Parcel Services Room Service-24 Hrs Shopping Arcade Travel Desk - Ticketing, Tours Rooms & Suites

Taj has 149 guest rooms including Superior Rooms, Deluxe Rooms, Luxury Rooms and a Suite. All the rooms are elegantly furnished and offer contemporary amenities. All the rooms have full length glass windows and some rooms offer a view of the Rose Garden and the Shivalik mountain range.

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Amenities
* 42 Plasma TVs with satellite programs * Hard Flooring * Movable work table * Strong Task Lighting * 2 line direct dial telephones * In-room tea/coffee makers * Minibar * Wi-Fi Internet throughout the hotel

Room Types:
1.Superior Rooms The hotel has elegantly styled and well appointed Superior Rooms, of 350 sq ft, that offer all the mentioned amenities. 2. Deluxe Rooms The hotel has Deluxe Rooms, of 350 sq ft, that offer enhanced in-room amenities and access to the private lounge. Guests are also offered a choice of buffet breakfast at the private lounge or Caf 17. 3. Luxury Rooms The hotel has Luxury Rooms, of 550 to 650 sq ft, that offer enhanced amenities, some of which are partitioned into separate living and sleeping areas. In-room check in as well as Happy Hours at the private lounge are offered.

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4. Presidential Suite The hotel has a luxurious two-room Presidential Suite spreading across 1080 sq ft. The suite offers a choice of special amenities and services: Complimentary buffet breakfast at the Lounge from 0730 - 2200 hrs on the fifth floor A bottle of wine in the room Happy hour at the Lounge from 1830 - 1930 hrs where we serve cocktails with a selection of hors d'oeuvers Tea / Coffee through the day in the Lounge Use of the meeting room in the Business Centre for 1 hour (per stay), subject to availability Complementary ironing (1 set per stay) Personal butler on request Food and Wine From casual, all-day dining to speciality dining, guests can savour a choice of gourmet cuisines. Black Lotus: Serves the choicest Schezwan cuisine for lunch and dinner. Attire: Smart Casual Cafe 17: Caf 17, the all-day dining restaurant serves an array of multi-cuisine specialties. Attire: Smart Casual Dera: The elegant Indian restaurant with an inviting ambience. Attire: Smart Casual Lava Bar: This multi-level retro-themed bar exudes verve and style. Attire: Casual

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Recreation The hotel offers a choice of leisure and recreational activities and facilities that are ideal for guests wishing to unwind. The Heath Club has a state-of-the-art gym and a rooftop swimming pool.Sightseeing and shopping trips can also be organized.

Recreational Facilities Fitness Centre- well equipped Steam Chill Shower Roof top Swimming Pool Jacuzzi inbuilt cold water Golf

VISION STATEMENT OF THE TAJ To lead and become the international benchmark in the hospitality Industry, in India and in key regions of the world. To dazzle and delight the customer with the highest quality hotel products, food and beverage experience and above all exceptional service standards.

THE CREDO OF THE TAJ Promise to deliver: Warm welcome. Anticipatory service. Defect free product. Fond farewell.

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ORGANISATION STRUCTURE

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SALES & MARKETING

Hierarchy Sales and Marketing Officer Asst. Sales & Marketing Manager Sales Executive Office Assistant A large number of radical strategic activities covered in marketing that tells the clientele about the services and facilities offered to the guest so that the clientele knows about the market mix. This is a key department in any hotel because determination of the sale is important for any hotel. The activities undertaken include determination of rooms and f&b sale, miscellaneous sales, sales of the hotel is a well guarded company secret Marketing includes: Range of sales activities. Advertising in all media. Public relation. Development of communication services and reservation.

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Sales techniques: Selling of hotel services is done through marketing groups or directly with public through travel agencies. The process of selling is done with certain policies in mind. Planning is important aspect that includes group and convention sales, travel agents, banquets sales. Detailed research is carried out to ascertain sources of business, other job include administering and managing the departments for the proper delivery of service sold, communicating with sources of business. Group conventions: In this, the department evaluates the no. of rooms that are estimated to be allotted for group sales. Banquet sales This type of business includes wedding dinner, cocktail parties, social events, etc. pre-established menu along with their prices are used so that the customer could select an appropriate menu. The main source of business is the local community in which the hotel is situated. Proper relationships are maintained with people, companies and local organizations; because they have periodic functions and meetings. Advertising It requires careful planning and organization. The steps are as followed: Hence sales and marketing are complementary. If marketing establishes what people need then sales demonstrates how their needs could be fulfilled.

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Reservation This is a section of the front office, which is the hub of the department, requests for reservation of the room from various sources and the informations processed, properly documented, stored and retrieve at the appropriate time induce a guest his room upon arrival. Rooms being a highly perishable commodity (as the sale of rooms is linked with a time element) it is the duty of the reservation department that rooms are not allowed to perish. Modes of Reservation The different modes of reservation are as follows: Letters Telex Telegrams Telephones In Person E-Mail Fax

Sources of Reservation The usual sources from which reservation sources are airlines, wholesale tour operators, travel agents (local and foreign), free individual travelers, groups, companies leading hotels of the world trust, instant reservation system, sales department, embassies, and institutions. Types of Plans A plan is a package proposal of rooms and meals, and some times even travel. A European plan will include only a room whereas the rest of the services would be charged for American plan, which would include meals usually breakfast and the evening meal as well as the room rental included in the room rate. The packages offered by the hotel are inclusive of a airport transfer, breakfast at the citrus and the room rate.

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Guest History Card This is done in order to give a guest extra attention and special care. It's usually done for repeat clientele. For example some guest may like a non smoking room and some may like a hard mattress. This is where the front office informs the housekeeping department or the relevant department that special care must be taken in order to ensure a comfortable, carefree stay at the hotel. All such information is maintained by the front office and is fed into the computer.

Rates followed by Reservation A Rack Rate This is the highest room rate charged by the hotel. It is the rate given to the guest who does not fall into any particular category, such as a walk-in guest who requests a room for the night. Corporate Rates These are room rates offered to business people staying in the hotel. This can be further broken down into Business people who are frequent guests (a specified number of visits per week or per month) and guest who are employees of a corporation that has contracted for a rate that reflects all business from that corporation. Commercial Rates These are room rates for business people who represent and have infrequent or sporadic patterns of travel. Collectively this group can be a major segment of hotel guest and thus warrant a special rate..

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Group Rates These are rates offered to a large group of people visiting the hotel for a common reason. The marketing and sales department usually negotiates this rate with a travel agency or with a professional organization. Family Rates These are room rates offered to encourage visits by families with children. This rate is offered to families during seasonal or promotional times.

Day use Rate A room rate based on the length of stay of a guest, which is applied to guests who use a room only for 3-4 hours in a day.

Process of Reservation All the reservations coming in are recorded on a form called the reservation form. The detail such as the name of the guest booking the reservation, company name, address, telephone number etc. it also consist of the name of the guest, his designation, arrival and departure time, mode of payment, type of room, number of persons and so on. The reservation is then fed into the computer, the availability is checked and confirmation letter that may be sent either through e-mail or through fax and then the room may be blocked for the following dates. Billing may be direct or indirect; increase of direct billing the guest pays for all his expenses through his personnel account. In indirect billing the company pays on behalf of the guest, a letter of a fax must be sent by the company on its letterhead stating the mode of payment. If payment be made after a certain period of time, or on behalf of the hotel a on time credit authorization slip is filled up and signed by the finance manager and also by the marketing and sales manager. 3 copies are made
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and filled in the necessary files. The reservation forms are clotted according to dates and alphabets of the guest lasts name. Special importance is given to group reservation; a reservation assistant is appointed as the group coordinator and will carry out all the operations relating to the group and will coordinate with the marketing and sales person or with the travel agent who has made the reservation.

Reservation codes Reservation codes are a sequential series of alphanumeric combinations that provide the guest a reference for a confirmed or a guaranteed reservation. This code indicates that accommodation has been secured for a specific date with a commitment to pay for at least the first room night. The code will identify the hotel chain/referral group, the arrival date and the departure date the type of accommodation, the mode of payment and the sequential number of reservation. Fore Casting Reservation Forecasting or room forecasts, which involves projecting room sales for a specific period of time, is naturally the next step after the data form the reservation process has been collected, this step includes previewing the effects of reservation on the income statement, scheduling labour, and planning for use of facilities. This process of projecting sales and related expenses is very important to the successful management of the hotel. This information is also important to the financial controller, General manage and to the owner of the hotel. They use this information in managing the finances of the hotel; it is also used to project the yearly or quarterly financial projections. Reservation Cycle Receive guest call Listen to guest request Check for room availability Create profile & ask for company, nationality, inner circle member. If the guest is 1st timer then apply BAR rates.
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 Make reservation filling all the required details in the profile Reconfirm the reservation, give the conformation no. to the guest. Update in Fidelio, take print out.

THINGS TO REMEMBER Reservation staff should identify themselves to the caller. Greet the guest like: Good morning Reservations This is XTZ calling How may I assist you Use head sets to minimize background sound & also it increases efficiency of the person as both the hands are free.

PRICING STRATEGIES What do the following words have in common? Fare, dues, tuition, interest, rent, and fee. The answer is that each of these is a term used to describe what one must pay to acquire benefits from another party. More commonly, most people simply use the word price to indicate what it costs to acquire a product. The pricing decision is a critical one for most marketers, yet the amount of attention given to this key area is often much less than is given to other marketing decisions. One reason for the lack of attention is that many believe price setting is a mechanical process requiring the marketer to utilize financial tools, such as spreadsheets, to build their case for setting price levels. While financial tools are widely used to assist in setting price, marketers must consider many other factors when arriving at the price for which their product will sell.

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. For some marketers more time is spent agonizing over price than any other marketing decision. In this tutorial we look at why price is important and what factors influence the pricing decision.

What is Price? In general terms price is a component of an exchange or transaction that takes place between two parties and refers to what must be given up by one party (i.e., buyer) in order to obtain something offered by another party (i.e., seller). Yet this view of price provides a somewhat limited explanation of what price means to participants in the transaction. In fact, price means different things to different participants in an exchange:

Buyers View For those making a purchase, such as final customers, price refers to what must be given up to obtain benefits. In most cases what is given up is financial consideration (e.g., money) in exchange for acquiring access to a good or service. But financial consideration is not always what the buyer gives up. Sometimes in a barter situation a buyer may acquire a product by giving up their own product. For instance, two farmers may exchange cattle for crops. Also, as we will discuss below, buyers may also give up other things to acquire the benefits of a product that are not direct financial payments (e.g., time to learn to use the product).

Sellers View - To sellers in a transaction, price reflects the revenue generated for each product sold and, thus, is an important factor in determining profit. For marketing organizations price also serves as a marketing tool and is a key element in marketing promotions. For example, most retailers highlight product pricing in their advertising campaigns.

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Price is commonly confused with the notion of cost as in I paid a high cost for buying my new plasma television. Technically, though, these are different

concepts. Price is what a buyer pays to acquire products from a seller. Cost concerns the sellers investment (e.g., manufacturing expense) in the product being exchanged with a buyer. For marketing organizations seeking to make a profit the hope is that price will exceed cost so the organization can see financial gain from the transaction. Finally, while product pricing is a main topic for discussion when a company is examining its overall profitability, pricing decisions are not limited to for-profit companies. Not-for-profit organizations, such as charities, educational institutions and industry trade groups, also set prices, though it is often not as apparent . For instance, charities seeking to raise money may set different target levels for donations that reward donors with increases in status (e.g., name in newsletter), gifts or other benefits. While a charitable organization may not call it a price in their promotional material, in reality these donations are equivalent to price setting since donors are required to give a contribution in order to obtain something of value

Importance of Pricing When marketers talk about what they do as part of their responsibilities for marketing products, the tasks associated with setting price are often not at the top of the list. Marketers are much more likely to discuss their activities related to promotion, product development, market research and other tasks that are viewed as the more interesting and exciting parts of the job. Yet pricing decisions can have important consequences for the marketing organization and the attention given by the marketer to pricing is just as important as the attention given to more recognizable marketing activities. Some reasons pricing is important include:

Most Flexible Marketing Mix Variable For marketers price is the most adjustable of all marketing decisions. Unlike product and distribution

decisions, which can take months or years to change, or some forms of

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promotion which can be time consuming to alter (e.g., television advertisement), price can be changed very rapidly. The flexibility of pricing decisions is particularly important in times when the marketer seeks to quickly stimulate demand or respond to competitor price actions. For instance, a marketer can agree to a field salespersons request to lower price for a potential prospect during a phone conversation. Likewise a marketer in charge of online operations can raise prices on hot selling products with the click of a few website buttons.

Setting the Right Price Pricing decisions made hastily without sufficient research, analysis, and strategic evaluation can lead to the marketing organization losing revenue. Prices set too low may mean the company is missing out on additional profits that could be earned if the target market is willing to spend more to acquire the product. Additionally, attempts to raise an initially low priced product to a higher price may be met by customer resistance as they may feel the marketer is attempting to take advantage of their customers. Prices set too high can also impact revenue as it prevents interested customers from purchasing the product. Setting the right price level often takes considerable market knowledge and, especially with new products, testing of different pricing options.

Trigger of First Impressions - Often times customers perception of a product is formed as soon as they learn the price, such as when a product is first seen when walking down the aisle of a store. While the final decision to make a purchase may be based on the value offered by the entire marketing offering (i.e., entire product), it is possible the customer will not evaluate a marketers product at all based on price alone. It is important for marketers to know if customers are more likely to dismiss a product when all they know is its price. If so, pricing may become the most important of all marketing decisions if it can be shown that customers are avoiding learning more about the product because of the price.

Important Part of Sales Promotion Many times price adjustments are part of sales promotions that lower price for a short term to stimulate interest in the product marketers must guard against the temptation to adjust prices too frequently since continually increasing and decreasing price can lead

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customers to be conditioned to anticipate price reductions and, consequently, withhold purchase until the price reduction occurs again.

Factors Affecting Pricing Decision For the remainder of this tutorial we look at factors that affect how marketers set price. The final price for a product may be influenced by many factors which can be categorized into two main groups:

Internal Factors - When setting price, marketers must take into consideration several factors which are the result of company decisions and actions. To a large extent these factors are controllable by the company and, if necessary, can be altered. However, while the organization may have control over these factors making a quick change is not always realistic. For instance, product pricing may depend heavily on the productivity of a manufacturing facility (e.g., how much can be produced within a certain period of time). The marketer knows that increasing productivity can reduce the cost of producing each product and thus allow the marketer to potentially lower the products price. But increasing productivity may require major changes at the

manufacturing facility that will take time (not to mention be costly) and will not translate into lower price products for a considerable period of time. External Factors - There are a number of influencing factors which are not controlled by the company but will impact pricing decisions. Understanding these factors requires the marketer conduct research to monitor what is happening in each market the company serves since the effect of these factors can vary by market

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Steps in the Price Setting Process We view price setting as a series of decisions the marketer makes in order to determine the price direct and indirect customers pay to acquire the product. Direct customers are those who purchase products directly from the marketer. For example, consider the direct pricing decisions that take place when a new novel is sold:

The steps I nclude: 1. Examine Company and Marketing Objectives 2. Determine an Initial Price 3. Set Standard Price Adjustments 4. Determine Promotional Pricing 5. State Ownership and Payment Options

What is Revenue Management?

To sell the right product to the right customer at the right time for the right price, thereby maximizing revenue from a companys product.

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For rational pricing Things important are

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Volume Relationship Considerations Maintain long term relationships with customers who: Demonstrate control Have the ability to move market share Special Corporate Rate offered to those who: Demonstrate Control

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Taj chandigarh had to come up with various pricing strategies to promote its business Till now it had monopoly in the market, but now Mount view as another five star it needs to redefine the strategy And over period of time other five stars hotel are expected to be city, so need of the hour to do maximum promotion and build volume relationship with customer.

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DIFFERENT REWARD PROGRAMMES OFFERED BY TAJ GROUP OF HOTELS TO ITS CUSTOMERS/GUESTS

1. Taj Inner Circle Taj Inner Circle, the frequent guest programme, allows guests to earn points whenever they stay or dine at The Taj. Guests can then redeem their points for specially selected rewards like complimentary stays at Taj hotels, resorts, and palaces.

2. Taj Epicure Plan

The Taj Epicure Plan is an optional add-on dining plan to the Taj Inner Circle. Members earn Epicure points for expenditures incurred on food and beverages, at participating Taj restaurants in India

3. About the Taj Inner Circle

The Taj Inner Circle has three membership levels Blue, Silver and Gold. Customers/Guests join at the Blue level and start earning on their stay or dining or both expenses at all Taj properties. To qualify for the Taj Inner Circle Silver membership level, customer need to accumulate 250 points in any continuous 60day period i.e. spend Rs.25,000 (INR), excluding taxes, in any continuous period of 60-days. Members who spend Rs.2,00,000 (INR), excluding taxes, in continuous 12month period, will be automatically upgraded to Gold status. Gold card members enjoy enhanced privileges and accumulate points at a faster rate i.e. they earn at the rate of 1 point for every Rs.80 spent, excluding taxes. Gold and Silver card members of the Taj Inner Circle also enjoy a host of privileges like easier check-in check-out formalities, discounts and priority wait-listing.

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4. About the Epicure Plan

The Epicure Plan, an optional add-on to the Taj Inner Circle, is an exclusive dining plan that offers Taj Inner Circle members special privileges and rewards for expenditures incurred on food and beverages, at participating Taj restaurants in India.

Members of the plan receive a "Smart" membership card for instant recording, updating and redemption of points. Taj Inner Circle Blue members who opt for the Epicure Plan will be automatically upgraded to the Silver level whereas members on the Silver or Gold tier will continue to enjoy their existing membership levels.

Non-Taj Inner Circle members who wish to enroll on to the Epicure Plan will receive a complimentary Taj Inner Circle Silver membership. Membership is available at an annual fee of Rs. 2500, which is payable by credit card, cheque, or demand draft (Drawn in favor of Indian Hotels Company Limited). Alternatively, guests can make payments in cash when applications are made directly at Taj hotels.

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Enhanced benefits for Epicure Plan members As a Silver level Epicure Plan member, one enjoys all the privileges extended against the Taj Inner Circle Silver level membership. In addition, the member also receives the following benefits.

Free couple entry to the following Taj discotheques on Wednesdays: Insomnia- The Taj Mahal Palace & Tower, Mumbai My Kind of Place- Taj Palace Hotel, Delhi Free couple entry to the following Taj discotheques on Saturdays: T2- Taj Krishna, Hyderabad

Free couple entry to the following Taj discotheques on Sundays: Incognito- Taj Bengal, Kolkata

BENEFITS THAT CUSTOMERS ENJOY AS A SILVER & GOLD MEMBER

In addition to rewards, customers enjoy a host of privileges that have been created to enhance customers experience at the Taj. From the moment customer check in at any of participating hotels, they will be treated as a very special guest, in more than one way:

o Customers will be greeted with flowers & fruits in their room o Check-in & departure formalities will be easier, faster & flexible o Receive special discount on rooms at Taj leisure hotels o Avail of double occupancy at no extra cost o Entitled to a priority wait-list.
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5. Points Redemption

Epicure points can be redeemed to settle stay or dining bills at participating Taj hotels in India. Points will be instantly deducted from the accumulated points in the membership account. Members can even entertain or holiday at exotic Taj hotels in exchange of Epicure points.

Redemptions for holidays are subject to availability and prior reservation. Participating Taj hotels or restaurants can close out bookings for these redemptions. Please note that only Inner Circle points can be accumulated at Rambagh Palace, Jaipur. Epicure points cannot be earned at this hotel. Taj Epicure Diners Club Card: Experience the art of fine living with this exclusive card, guests can receive exclusive benefits across 43 Taj properties and over 200 Taj restaurants.

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INTRODUCTION OF STUDY
[ INTRODUCTION OF CRM ]

1. Introduction

1.1 What is Customer Relationship Management (CRM)?

CRM entails all aspects of interaction a company has with its customer, whether it is sales or service related. It even uses technology to streamline processes that impact customer loyalty, service delivery and quality management. Today, businesses are facing an aggressive competition and they have to make Efforts to survive in a competitive and uncertain market place. People have realized that managing Customer relationships is a very important factor for their success. Customer relationship management (CRM) is a strategy that can help them to build long-lasting relationships with their customers and increase their profits through the right management system.

Customer is the most important person for a business. He is not an interruption to our work but the purpose of it. He is not an outsider; he is a part of it. We are not doing him a favour; he is doing us a favour by giving us an opportunity to serve him (MAHATMA GANDHI)

It has grown mainstream and is being implemented in a wide range of companies and organizations such as manufacturing, financial services, transportation and distribution, medical services and products, consumer package goods and others. This explosive growth of CRM reflects the intersection of genuine market need and enabling technology. And, in this growth period, the impetus for CRM is shifting from
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an emphasis on efficiency, i.e., doing more things faster with less cost, to effectiveness, i.e., doing things better for increased revenue with a high "return on relationships (ROR)". The biggest management challenge in the new millennium of liberalization and globalization for a business is to serve and maintain good relationship with the king the customer. In the past producers took their customers for granted, because at that time the customers were not demanding nor had alternative source of supply or suppliers. But today there is a radical transformation. The changing business environment is characterized by economic liberalization, increasing competition, high consumer choice, demanding customer, more emphasis on quality and value of purchase etc.

All these changes have made todays producer shift from traditional marketing to modern marketing. Modern marketing calls for more than developing a product, pricing it, promoting it and making it accessible to target customer. It demands building trust, a binding force and value added relationship with the customers.

The process of developing a cooperative and collaborative relationship between the buyer and seller is called customer relationship management shortly called CRM. According to Ashoka dutt head of Citi Bank the idea of CRM is to know the individual customer intimately, so that the company has a customized product ready for him even before he asks for it.

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Aims of CRM The CRM is a new technique in marketing where the marketer tries to develop long term relationship with the customers to develop them as life time customers. CRM aims to make the customer climb up the ladder of loyalty.

The company first tries to determine who are likely prospects i.e. the people who have a strong potential interest in the product and ability to pay for it. The company hopes to convert many of its qualified prospect into first time customers and then to convert those first time customers into repeat customers. Then the company tries to convert these repeat customers into clients they are those people who buy only from the company in the relevant product categories. The next challenge for the company is to convert these client into advocates. Advocates are those clients who praise the company and encourage others to buy from it.

The ultimate challenge is to convert these advocates into partners where the customers and the clients work actively together to discover ways of getting mutual benefit.

Thus in CRM the key performance figure is not just current market share but share of life time value by converting customers into partners.

In CRM the company tries to identify that small percentage (20%) of key account holders whos contribution to the company revenues is high (80%). So from this point of view, CRM is also known as KEY ACCOUNT MANAGEMENT.

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OBJECTIVE OF CRM

The objective of CRM (customer relationship management) is to recognize and treat each and every customer as an individual. It is very essential for any business to know that how to differentiate customer treatment according to an individual preferences. For differentiate customer treatment, the companies use personalized service and customized products which make some customers feel special and others simply appreciate good behavior. It humanizes their purchase or service request or complaint. Personalization and customization doesnt mean maintaining only customer loyalty, but also driving purchases higher. Getting closer to customers and effectively responding to their needs is a great way to boost their loyalty and encourage deeper business relationship. The task of getting and retaining customers requires even greater skill and effort. The business needs to ensure that the service works as the customer actually wants it to, and the customers want to do business in 'their' way, not to be forced to do it in the enterprise's way. Most companies consider them customer-focused and believe that in being so they are servicing the customer. But eventually, being customer interaction with

focused means to have a consistent, dependable and convenient

customers in every encounter. CRM technologies focus on managing all interactions that an organization has with its customers, in order to leverage the data in a variety of business applications. Where a profitable relationship already exists, CRM can especially boost superior service at a lower cost. In addition to this it helps to serve customer's unspoken needs.

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Generally speaking, the five needs of customers are:(a) Service (b) Price (c) Quality (d) Action and (e) Appreciation. (By Raghunath & Shields 2001)

Apart from these, there would be needs, which even the customers have not taken care of, but which, if would have satisfied will lead to higher customer loyalty.

CRM, if practiced properly might lead to cross-selling and up selling of products and services. Cross-selling means selling the right product to the right customer. One other relevant and important attribute of CRM is its ability to help in the ego-mending of customers. This, if practiced efficiently, soothes the customer's negative emotions he could have, due to the non-attainment of his expectations regarding the product or the service.

The adoption of CRM in the hospitality industry has been impeded by a number of factors. These include the persistently fragmented nature of the industry, the disparate, proprietary and relatively immature nature of IT systems, and the additional complexity associated with managing a perishable product that is sold through a variety of distribution channels. However, more rapid progress is being made due in part to the continued consolidation between hospitality companies and hospitality IT vendors.

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1.2 Research Questions a) How will CRM help to retain customers in hotel industry?

b) What are the new marketing approaches in hotel industry?

c) How CRM can be effectively administered?

1.3 Scope of the Study This study will provide an insight into the hotel industry and the steps being taken by them to improve their relationship with their guests/customers. From the study, one can infer the present scenario of the practices and programs being followed by the leading players in this sector and the steps being followed by them to enhance customer retention, customer satisfaction and in turn, leading to enhanced profits and brand image in the minds of the customers.

1.4 Objectives of the Study The primary objective would be:

To study Customer Relationship Management in the Hotel Industry To study the programs and practices of CRM employed by the leading hotels in India. To study the measures to build a better relationship between the customer/guest and the hospitality unit.

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Why customer relationship management

A satisfied customer in 10 years will bring 100 more customers to the company.

It costs 7 time more to attract a new customer than to serve an old one.

20% of the companys loyal customers account for 80% of its revenues. (Paretos principle).

The chances of selling to an existing customer are 1 in 2, the chances of selling to a new customer are 1 in 16.

Eight ways to keep customers for life

1. Every part of the companys marketing effort should be geared towards building lifetime relationships.

2. People want to do business with friendly people. To have effective relations a friendly attitude must permeate in the organization.

3.

Information technology developments should be positively used to serve the

customers.

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4. The company should always be flexible to bend its rules and procedures in the clients favor.

5. The company should communicate with its customers even when it is not trying to sell something.

6. The company can communicate and develop stronger customer bonding by providing financial and social benefits.

7.

The company should try to know all its customers including their lifestyles,

hobbies, likes and dislikes etc. 8. The company should make it a point to deliver more than what is promised.

How to introduce CRM in the company There are four key steps for putting one to one marketing program to work Step 1 : Identify your customers To launch a one to one initiative the company must be able to locate and contact a fair number of customers or at least a substantial portion of its valuable customers. It is crucial to know the customer details as much as possible, not just their names or address, but their habits, preferences and so forth.

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Step 2 : Differentiating your customers Customers are different in two principal ways, they represent different levels of value and have different needs. Once the company identifies its customers differentiating them will help the company to focus its efforts to gain the most advantage with the most valuable customers. Step 3 : Interacting with the customer Interaction is also a crucial component of a successful CRM initiative. It is important to remember that interaction just not occur through marketing and sales channels, customer interact in many different ways with many different areas of the organization so to foster relationship all the areas of the organization must be accessible to the customer. Step 4 : Customize your enterprises behavior Ultimately to lock a customer into a relationship a company must adapt some aspect of its behavior to meet customers individually expressed needs this might mean mass customizing a manufactured product or it might involve tailoring some aspect of the service surrounding the product. Research Project on Customer Relationship Management Review of the Existing Literature With the available literature we can summarize Customer Relationship Management (CRM) in the words of various authors as followsAccording to Shani and Chalarani Customer Relationship Management can be defined as an integrated effort to identify, maintain and build up a network with the individual customers and to continuously strengthen the network for the mutual benefit of both parties, through interactive, individualized and value added contracts over a long period of time."

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In the words of Lekha Customer Relationship Management (CRM) aims at delivering better products and value to the customers through better understanding of his needs.

Conceptualization A firm in textile industry has to maintain good relations with its customers. They have to retain the customers for a long time to avail the benefit of their relations. The customer relationship management is one of the effective tool to identify, establish and maintain relationship with the customers. With the help of this research we are going to identify the importance of CRM in textile industry. Focus of the problem The textile industry is basically manufacturing based industry. Through this study we are going to identify the importance of CRM in the textile industry. How it is benefited from CRM? Is their any relevance of implementing CRM? And what role does information technology can play in CRM? Objectives of Project Report on Customer Relationship Management

To study the current practices of Customer Relationship Management (CRM). To find out the impact of CRM on the profitability of the organization. To study the factors affecting the CRM practices. To study the role of information technology in CRM.

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CRM AN-OVERVIEW
About Customer Relationship Management - CRM The generally accepted purpose of Customer Relationship Management (CRM) is to enable organizations to better serve its customers through the introduction of reliable processes and procedures for interacting with those customers. In today's competitive business environment, a successful CRM strategy cannot be implemented by only installing and integrating a software package designed to support CRM processes. A holistic approach to CRM is vital for an effective and efficient CRM policy. This approach includes training of employees, a modification of business processes based on customers' needs and an adoption of relevant ITsystems (including soft- and maybe hardware) and/or usage of IT-Services that enable the organization or company to follow its CRM strategy. CRM-Services can even redundant the acquisition of additional hardware or CRM software-licenses. The term CRM is used to describe either the software or the whole business strategy oriented on customer needs. The second one is the description which is correct. The main misconception of CRM is that it is only software, instead of whole business strategy. Major areas of CRM focus on service automated processes, personal information gathering and processing, and self-service. It attempts to integrate and automate the various customer serving processes within a company.

There are three parts of application architecture of CRM:

1. Operational - automation to the basic business processes (marketing, sales, service) 2. Analytical - support to analyse customer behaviour, implements business intelligence alike technology 3. Cooperational - ensures the contact with customers (phone, email, fax, web...)

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Operational part of CRM typically involves three general areas of business. They are (according to Gartner Group) an Enterprise marketing automation (EMA), Sales force automation (SFA) and a Customer service and support (CSS). The marketing information part provides information about the business environment, including competitors, industry trends, and macro environmental variables. The sales force management part automates some of the company's sales and sales force management functions. It keeps track of customer preferences, buying habits, and demographics, and also sales staff performance. The customer service part automates some service requests, complaints, product returns, and information requests. Integrated CRM software is often also known as "front office solutions." This is because they deal directly with the customer. Many call centers use CRM software to store all of their customer's details. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving the customer quickly and efficiently, and also keeping all information on a customer in one place, a company aims to make cost savings, and also encourage new customers

CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels.

Importance of Customers There exists a wide-spread mistaken notion that CRM is some kind of a manifestation of technology only. Another interesting thing is that even those who have implemented highly technological installations for their CRM initiatives, quite often can be seen to have forgotten the basis of this modern concept, i.e., making profitable relationships with their customers. This significant part is left to the technology alone (Schneider and Bowen, 1999). Such a situation arises mainly because of the inability or reluctance of the management to accept the importance of
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customers and serving them to keep them satisfied and happy, which otherwise may result in low sales and hence low profits. "One widely accepted marketing rule-ofthumb claims that the average, unhappy customer tells eight other potential customers about his negative experience." (Lemon, et al, 2002) Some decades ago, most of the companies concentrated mainly on higher productivity through higher levels of efficiency of employees as well as machines, cost-reduction tactics and on attracting more customers through the classic marketing tactics such as TV advertisements, mass mailings, bill boards etc. But the sudden growth and expansion of services sector proved that these would not convert into profits, as was expected. Moreover, the emergence of faster, cheaper and more efficient systems of communication, transport and information technology has made the business enterprises realize that the competition is just a mouse click away. These changed, new environment of business unveiled the importance of keeping the existing customers loyal so that they would not switch over to the competition, without much thinking. This led to the increased awareness of companies about the importance of serving the customer needs with a higher level of quality and in a way which is convenient and beneficial to both the companies and the customers. (Anton, 2005)

Four Parameters to Measure CRM Success

a) CRM's ability to impact corporate strategy: Without a corporate strategy, giving emphasis to a customer-centric CRM initiative can be made fully successful. approach, no

b) Successful technology integration: The technology which has been used across different departments of an enterprise should be integrated to give a comprehensive and successful CRM application.

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c) Enhanced strategic partnerships: For a good CRM implementation, there should be a co-ordinate effort among the different partners to the enterprise.

d) Assimilation of CRM related technologies: Those who are responsible for the CRM activities should thoroughly be conversant with the technological aspects of that particular technique. Otherwise, misuse or under utilization of these technologies may take place resulting in partial or full failure of those activities.

Return on Investment (RoI) of CRM

Rigorous financial scrutiny of all Information Technology IT) investments have now become the rule. This same rule is applicable to the technology used in the CRM also. The failures of some CRM installations in some of the industries have given way to think about the Return on Investment (RoI) of CRM. (www.ascenantone.com) Now there are specific analytical tools which will their return on investment of CRM. help organizations to measure

According to George Varghese, Head

(Marketing), SAS India, "Operational CRM can improve efficiency but it is difficult to calculate RoI. (Mohan Babu, 2003) To calculate RoI, enterprises need to build organizational intelligence, customer intelligence and supplier intelligence to get a unified 360 degree view of customers, suppliers and organizations." (Dyche, 2004)

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Factors to be considered while calculating RoI:-

1. Savings in the form of reduced use of time to manage customers and customer transactions. 2. Savings in the form of time needed to assemble and consolidate sales forecasts. 3. Additional revenue in terms of increased lead generation. 4. Additional revenue in terms of increased loyalty. (Berry, 1983) sales due to increased customer

CRM is an integration of contact management, sales automation, marketing automation, customer service and support, e-commerce, partner and channel management etc. It is not just a software solution, but also, a set of skills and competencies that will enable a company to better leverage and profit from each and every customer relationships. When the goal of cheaper, faster, better service is considered, the results far outweigh the challenges. Several big organizations have failed to know what the customer really wants and several others, after knowing, could not really translate these requirements into deliverance. At the same time we are able to see small shop keepers doing CRM extremely well. Good CRM is all about replicating the same experience with the use of technology.

CRM and Technology

In CRM the important functions are collecting customer data, analyzing them and making relationships with the prospective customers based on the analyzed information. Among these three main functions, the first and the last ones are making direct contact with customers, while analyzing data is not.
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The operational CRM deals with those which make customer contacts or otherwise called as touch points. Analytical CRM does the job of analyzing the accumulated data from the various touch points with the aid of business intelligence.

By using the new CRM techniques the companies are trying to provide a consistent but tailored customer experience across all contact points with the customers.

He Components of Operational CRM:1. Customer Service and Support (CSS): These applications basically automate the support and service functions, including analysis and also provides workflow engines that facilitate efficient problem and inquiry dynamic escalation, scripting tracking and resolution. capabilities They also provide customizable,

for the customer

service representatives or

executives as well as the potential to record customer responses in a shared storehouse. Call centers use operational CRM tools; They also integrate telephony integration capabilities which allows automatic with computer call routing with

automatic screen pop-ups containing all customer and product information to the agent's work stations as the agents are answering or initiating calls. (Chaudhuri & Shainesh 2001) 2. Sales Force Automation (SEA): These are tools which automate the collection and distribution of all types of sales or sales related informations. SEA allow for the design of sales teams bas ed on particularly defined criteria. Calendar management, activity management, sales reporting and forecasting, lead distribution and tracking of sales contacts with customers solutions.
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and prospects

are some of the capabilities offered

within these

3. Marketing Automation (MA): These applications provide the ability to create automated marketing campaigns and track the results. Generating lists of customers to receive mailings or telemarketing calls, scheduling automatic or manual follow-up activities and receiving third-party lists for incorporation into the campaigns are all typical functions. Internet personalization tools are offered here to track behavior on a web-site and allow tailoring of the contact experience, or generation of specific cross-selling opportunities based on this behavior. Inbound and outbound e-mail management capabilities are also becoming popular components of the marketing automation suites. (Key Note , 2003)

Analytical CRM - How It Functions?

According to Hart et al, (2002) Analytical CRM involves the analysis and interpretation of large amounts of cross functional data collected from the customer activities occurred at the front-office. This data is regularly stored in a data

warehouse, which is actually a storehouse of corporate data from various sources intended to facilitate business analysis. The major types of analysis of data are the following:

1) OLAP: Online Analytical

Processing

is one of the

most popular

type of

decision-support analysis, allowing the average business person to explore data online with the aim of focusing on detailed data at a lower and lower level of the data hierarchy. More often, this means generating an online report, analyzing the results and submitting a detailed query in order to understand the result data. OLAP analysis requires the analyst to have a query or hypothesis in mind for clearly understanding the result.

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2) Data mining: Data mining tools identify patterns in data and deliver valuable new informations that can increase a company's understanding of itself and its customers. It is commonly used to help data analysts search for information they dont yet know to look for, often involving no hypothesis. The three types of data mining are(Dyche, 2004):

o Prediction:

The use of historical data to determine future behaviors.

Predictive modeling generates output that populates a model or structure to represent the results.

o Sequence: Sequential analysis identifies combinations of activities that occur in a particular order. This is used to determine whether customers are doing things in a particular order. It can help a business to distill behavior from events captured from various operational systems around a company to determine patterns.

o Association: Association analysis detects groups of similar items or events. The association algorithm is often applied to market-basket analysis to help business understand products which are usually being purchased together. The product affinity concept is the base, here.

3) Click stream analysis: By analyzing the click streams of an internet user, one can understand how the user arrived at the site, how long he stayed, what he did during his visit and when he returned. The whole process is similar to a hidden camera recording the activities of a shopper in a store. These data are stored either as part of companys data warehouse or as separate click stream data store called "data web house: If examined regularly with consistent metrics, click streams reveal certain patterns of web-user behavior. (Schneider and Bowen, 1999)

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4) Rules based personalization analysis: These analytical tools are based on the concept of personalization. Here the software makes recommendations based on the personalized/customized website of a customer. Rules based personalization most often involves rules that have been hard-coded into software. For this reason it is often difficult to maintain and support.

5) Collaborative filtering: This is otherwise known as 'adaptive personalization.' This gets smarter as it observes customer behaviors and applies them to new circumstances. Collaborative filtering uses the behavior of other 'like' visitors as the basis for its recommendations. These tools are often more complex, and thus more expensive, than rules-based personalization. (Akhtar, Prashant & Pankaj, 2002)

Some Applications of Technology in CRM 1. Call centers: These are organizations which deal directly to the customer

interactions. These are otherwise known as "Customer Care Centre" or "Contact Centre" indicating more technological sophistication and multichannel support. Call centre technologies entered the market place to effectively alleviate some of the

repeat work and increase efficiencies, allowing companies to handle escalating call volumes. Customer Service Representatives (CSRs) could look up similar calls and resolutions while a customer was on the phone, without having to repeat research. The software tools being used in the call-centers also provide forecasting of call

volumes to ensure adequate call centre staffing. (Lemon, et al, 2002) 2. Web based self-service: The customers themselves, without the help of a live person can resolve their problems or find out answers to their queries using the web. This model is founded on the principle of enabling customers, partners and employees to obtain informations or conduct tran sactions directly over the internet, avoiding time-consuming and costly traditional processes involving multiple verbal or written interactions. It provides control, performance, convenience and efficiency. (Chaudhuri & Shainesh 2001)
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3. Customer satisfaction measurement: Survey mails are the major way for companies to monitor customer satisfaction. Nowadays, these survey forms are even personalized to specific customers or customer groups. Responses are input into customer databases and included as part of individual customer profiles. Such tracking of customer satisfaction over time enables a company to fine tune how it communicates with its customers according to their preferences. (Mohan Babu, 2003) Now, the paper based surveys are giving way to electronic surveys. 4. Call-scripting: Automatic scripts generated for customer service representatives, based on an individual customer's segment and/or customer profile contents. Scripts remove the guess work from determining how to respond to a customer query or complaint, guiding representatives through a dialogue with the customer and thus optimizing discrete customer interactions. 5. Cyber agents: This is a kind of an improved or modified form of the concept of self-service. Cyber agents are 'lifelike representatives' normally depicted on a companys web site as a real person. This attempt to pull together the best of both personalization and advanced technology. It is given a personality and is having facial expressions and volume. Usually a cyber agent addresses the web visitor with his/her first name. It can draw from the wealth of detailed information to answer basic FAQs as well as guide a customer to the appropriate screen for a definite purpose/action. (Raghunath & Shields 2001)

6. Web site: It is the efficient and effective use of worldwide web for providing information to the customers, by a company who had created that site, in a hasslefree manner. The main advantage of a web site is its 24 hours accessibility. Usually gathering information from the site is a simple task and is cost-effective. In the US and in the developed countries web is extensively used. In the case of monetary transactions, if it is a high involvement activity most of the customers prefer the offline mode mainly due to their concern over security problems in monetary transactions, through the net. (Key Note , 2003)

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Industry Definition Abbey (1999) proposes a hotel industry in a primarily a service sector emphasis in given on the role played by relationship marketing. You are nothing without our customers understanding that your organization exists for no other reasons than to meet customer needs and expectations. Its imperative is to develop proactive methods for understanding what customers like and dislike. If you believe other wise, just look behind you at the long queue off competitors lined up and waiting for the opportunities to prove you wrong. CRM is a business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales and service processes. CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy and culture. (Anton, 2005) In hospitality, each customer relationship has value and should be managed effectively. There is opportunity for repurchase and recommendation from each past customer. The administration of the information about this past guest and the effective integration of the information into frontline guest services programs is the challenge of CRM implementation.

Advantages of CRM

Using CRM, a business can: Provide better customer service Increase customer revenues Discover new customers Cross sell/Up Sell products more effectively Help sales staff close deals faster Make call centers more efficient Simplify marketing and sales processes

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Generally, following are the type of data a CRM project includes (Lemon, et al, 2002):

Responses to campaigns Shipping and fulfillment dates Sales and purchase data Account information Web registration data Service and support records Demographic data Web sales data

Key Features of CRM Tools

CRM includes all business processes in sales, marketing, and service that touch the customer.

With CRM software tools, an enterprise might build a database about its customers that describes relationships in sufficient detail.

The management, salespeople, people providing service to the customer can access information, match customer needs with product plans and offerings, remind customers of service requirements, check payment histories, and so on.

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 E-CRM or Web based CRM E-CRM application in hotel industry are straddling across business functions to retain, capture and capitalize on customer data, i.e. integrating all aspects of business process and systems by keeping the customers as the core. e-CRM projects are no longer viewed as stand-alone implementations but are now being increasingly pursued in context of larger business objectives and core strategic agendas. Corporations realize that the true values of their customers in down turn are the ones that will be equipped, tied over the slump and jump start, consolidate and thrive.

e-CRM Components in Hotel Industry

Sales functionality: Contact management profiles and history, account management including activities, order entry, proposal generation

Sales management functionality: pipeline analysis (forecasting, sales cycle analysis, temporary alignment and assignment, roll up and drill down reporting).

Telemarketing/Telesales functionality: call list assembly, auto dialing, scripting, order taking.

Time management functionality: single user and group calendar/scheduling, e-mail

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Customer service and support functionality: incident assignment, escalation, tracking/reporting, problem management/resolution, order

management/promising, warranty/contract management

Marketing functionality: campaign management, opportunity management, web-based encyclopedia, configuration, market segmentation, lead

generations/enhancement/tracking.

Executive information functionality: extensive and easy-to-use reporting

ERP integration functionality: legacy systems, the web, third party external information

Data synchronization functionality: mobile synchronization with multiple field devices, enterprise synchronization with multiple databases/application servers

E-commerce functionality: manages procurement through EDI link and webserver and includes B2B and B2C applications

Service

support

functionality: Worker

orders,

dispatching,

real

time

information transfer to field personnel via mobile technologies (Rmana & Somayajulu, 2005)

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 Customer Relationship Management Software for the Hotel Industry

EXAMPLE:Guest Ware is a unique Customer Relationship Management System (CRMS) designed specifically for the lodging industry to provide personalized guest recognition and exceptional service quality. Leading hotel management companies use Guest Ware to improve guest satisfaction, lower operating costs, build guest loyalty, and increase revenues. (www.guestware.com)

Guest Ware is installed in over seven hundred hotels and resorts worldwide; including Marriott International, Kimpton Hotel Group, Hyatt Hotels, Star wood and many independent hotels and resorts.

Marketing Solution - The CRM Approach Now more than ever, it is critical for hospitality sales and marketing professionals to maximize their return on investment (ROI) in marketing. Experts agree targeted marketing to existing customers is the best way to increase marketing ROI. Most industry consultants estimate the cost of finding a new customer is between 5 and 10 times the cost of retaining an existing customer.

Improvement Analysis - Implement Process Improvement Industry surveys show that guests are less likely to return if they experience a problem during their stay. Guest Wares Improvement Analysis tools provides with the information to eliminate recurring problems and keep guests coming back, so to lower operating costs and increase guest satisfaction at the same time. (Raghunath & Shields 2001)

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Comment Card Tracking - Listen to your Customers Customer survey on restaurant or an extensive questionnaire of guests, the GuestWare Comment Card Tracking system assists to manage customer feedback. Guest Ware will improve productivity in the follow-up process and provide valuable management reports to maximize the benefits of your surveys.

Guest ware Enterprise Solution For Effective Means Intended for hotel chains, brands and management companies, the Enterprise Guest Ware database maintains a single view of the customer essentials for CRM. Enterprise Guest Ware enhances property management systems (PMS) and central reservations systems (CRS). It allows hotel companies to implement enterprise CRM while leapfrogging existing hotel technology investments.

Communications Server - Two-way Messaging The Guest Ware Communication Server integrates two-way messaging (or other types of text-based messaging) with Guest Wares Rapid Response. It allows staff to receive and close requests and maintenance issues from a pager or cell phone. The software helps streamline service delivery and uses existing e-mail systems or a modem to communicate with most two-way messaging devices.

With the latest offerings in CRM, Hoteliers can: Develop comprehensive guest profiles from reservation information and demonstrate to guests/customers that the property is in touch with their needs Drive guest-centric data down to the transaction level, allowing employees and guest-facing technology to deliver greater value to the guest/customers.

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Generate a realistic profile on the spending and stay patterns of guests, allowing the property to create guest-centric marketing for increased loyalty and spending.

ITC Maurya Sheraton - Field selling, Loyalty programs, Reservation systems, Web & Call centers are the major sources of database development. The hotel has 35,000 members in its database. They regard this management of their database as an asset because it enables a superior customer understanding.

CRM Success

Seeing CRM initiatives take hold and begin to pay off is often a waiting game. Its not a flip-the- switch product that automatically spits out results or something that will take affect overnight and cause profits to skyrocket while you sleep. The puzzle must be completed and time must play its part before true success will be seen. However, through dedicated and smart planning, businesses should see markedly increased profits, as satisfied customers will continually re-visit them. Gradually, as businesses get to know their customers, their customers get to know them, and a closely aligned partnership is formed. This one-to-one relationship is the catalyst that sparks both lifetime customer loyalty and revenue increase.

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In the true spirit of thinking outside of the box, experts at the Gartner Group believe the most successful organizations will be those who, through innovation and focus on business effectiveness rather than merely efficiency, manage to break the mold of traditional business thinking. Being effective is paramount. The end goal of better serving customers and enabling a high percentage of customer retention cannot be met with out creative thinking and effective planning and actions. The task of perfecting the relationship between business and customer is always on going and requires special dedication and innovation as the commerce markets continually change and fluctuate. And over time, customers change, as does their behavior and needs, and business must be able to respond to that. Being on the cusp of the industry and always having a hand on the pulse of the customer is the key for success. As the CRM initiative begins to take hold, key players will soon see patterns emerge among customers, will discover what a productive strategy is and what is not. This is the essence of a successful CRM project: being able to really know what will work for your customers, what satisfies them, and what keeps them loyal. The ability to get an accurate gut feeling about the marketing campaigns, new products, and the type of policies customers will respond to is invaluable. This kind of customer knowledge only comes from really digging in and being savvy about how you go about understanding the people that you hope will continuously call on the services and products of your business. The ROI in this case would be compelling indeed.
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Research Methodology
A research design is simply a plan for study in collecting and analyzing the data. It helps the researcher to conduct the study in an economical method and relevant to the problem. Research methodology is a systematic way to solve a research problem. The methodology should combine economy with efficiency.

Research design The study conducted here is exploratory cum descriptive.

Collection of the data There are two types of data. Primary data Primary data is that data which is collected for the first time. These data are basically observed and collected by the researcher for the first time. I have used primary data for my project work. Secondary data secondary data are those data which are primarily collected by the other person for his own purpose and now we use these for our purpose secondly. Data collection

Data is collected through schedule.

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RESEARCH PROCESS Research Research is common parlance refers to a search for knowledge. The Advanced Learners Dictionary of Current English lays down the meaning of research as A careful investigation or inquiry specially through search for new facts in any branch of knowledge According to Redman & Mory A systematized effort to gain new knowledge.

The present study focuses on 1. EFFECT OF PRICING STRATEGIES ON REVENUE GENERATION. 2. CUSTOMER SATISFACTION EVALUATION

Research Methodology- It is the way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them.

Types of research Design:1. Descriptive Research Design Descriptive research studies are those studies which are concerned with describing the characteristics of a particular individual, or of a group.

2. Hypothesis Research Design Hypothesis testing research studies (generally known as

experimental studies) are those where researcher tests the hypotheses of causal relationship between variables.

3. Exploratory Research Design - Exploratory research studies are also termed as formularize Research studies. The main purpose of such studies is that of formulating a problem for more precise investigation or of developing the working hypothesis from and operational point of view. The major emphasis in such studies is on the discovery of idea and insights. As such the research design appropriate for such studies must be flexible enough to provide opportunity for considering different aspects of problem under studies.

This

study

is

descriptive

and

analytical

(EFFECT

OF

PRICING

STRATEGIES ON REVENUE GENERATION) in nature while it seeks to identify the present

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scenario of the pricing practices being followed by the leading hotel TAJ CHANDIGARH for revenue generation

DEFINING THE RESEARCH PROBLEM AND RESEARCH OBJECTIVES The definition of the problem includes the study of the topic EFFECT OF PRICING STRATEGIES ON REVENUE GENERATION. It sates the relationship between pricing and revenue.

1. To know the different pricing technique. 2. Beter plan implementation. 3. Measures to be taken in future for pricing .

DEVELOPING THE RESEARCH PLAN Data Source: The type of data taken into consideration for this topic is the primary data.. It was collected by me while doing tanning with marketing department with Taj hotel Chandigarh

VARIOUS PARAMETER USED IN RESEARCH OF CUSTOMER SATISFACTION

Research Design - Descriptive Data Source - Primary & Secondary data Research Instrument - Questionnaire Types of Questionnaire - Structure and non-disguised Sample Plan - chandigarh Sample Size - 66 Sampling Procedure - Non Probability sampling (Judgment sampling) sampling method - Personal survey method

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FINDINGS

Revenue management is a process that can significantly increase revenues of capacity-constrained firms through better inventory management and pricing. By using RM concepts, these firms can protect premium inventory for sale at higher prices, stimulate market growth by offering discounts and minimize wastage of perishable inventory.

Some Characteristics:

CHARACTERISTICS Physical Fences

HIGHER PRICE

LOWER PRICE

View

Pool view, ocean view, hill view Bigger room with more facilities and gadgets Weekday bookings

Non-scenic view

Size

Smaller rooms with fewer facilities Weekend bookings

Temporal Logical Fences

Length of Stay

Short stay. Often one or two days

Longer stay. One night revenue can spoil three nights revenue when demand is high

Flexibility

Cancellations and rescheduling are allowed at a

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High penalty for cancellation

low penalty

and schedule changes

Time of Purchase

Bookings are made very close to date of check-in Are rewarded loyalty

Bookings are made quite early

Privileges

privileges either as free services or free stay vouchers Corporate business customers booking frequently Physical delivery and confirmations

No privileges

Size of Business Provided

Self funding vacationers booking rarely

Point of Sale

By email or phone

Survey findings: 1. At the survey conducted upon 66 people, it was found that people visiting here are Basically for business purpose, as Chandigarh is not a tourist spot, so a huge potential can be still exploited if it works with collaboration with Chandigarh tourism. 2. It has a galore of facilities and all these are well maintained. 3. The service rendered by the hotel staff is exemplary. The rooms are designed with great care and precision. Everything about the room makes you feel like staying there forever. The toiletries provided by this hotel are of a high standard and most of them are boutique products. 4. The gym is well equipped and the steam bath is very relaxing after a hectic day at work. The swimming pool is majestic and is located on the first floor of the hotel with a great view of the surroundings.

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5. The hotel has a shopping complex inside it to keep the guests busy in the evening! The corridors are also designed with great care to keep the guests comfortable. 6. Then the hotel is placed in sector 17 where the market is. Also the rose garden is very close. 7. Service provided is at its best.

The customers of COMPANY are the wholesalers throughout India. COMPANY also export the fabric to countries like Egypt and U.A.E.

The needs of the customers are clearly defined and the products are customized according to the needs of the customers. Customers comments and complaints are welcomed and resolved quickly and positively. Comments and complaints are taken through face to face interviews.

The company conducts customer satisfaction surveys through research agencies.

The company provides credit facility to its customers up to 90 days. If the customers pay within 7 days they are given 4% cash discount.

Sales

persons

of

the

company

maintain

frequent

and

informative

communication with the customers.

Business process is regularly reviewed to eliminate non value-adding activities. The average sale per customer has increased by 15% and customers response to the marketing activities is also improving. Customer retention is also improving.

The factors which have an impact on the CRM are organization culture, support from top management, interpersonal skill of the sales personals and working environment of the company.

Analysis

The customers of the COMPANY are the wholesalers. It is because the number of retailers is very large as compared to the wholesalers. So it is not
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possible for the company to approach to the retailers. Therefore the company sells to the wholesalers and then wholesalers sell to the retailers.

Customers are encouraged to give suggestions and complaints so that the company can improve its working and services. If the customers complaints are not resolved the customers will be dissatisfied and the company may lose its customers.

Different customers have different requirements. So the company customize its product accordingly to satisfy the customers. It also gives more choice to the customers.

To get the information about the customers and to measure the satisfaction the company conducts surveys. Because of the expertise needed in the research the company give this work to research agencies like AC NILSON.

The company gives credit facility to its customers to increase the sales volume. If the company do not sell on credit the customers may switch over to other companies.

The company maintains frequent communication with the customers. As soon as the product is ready or a new product is launched the information is provided to the customers. Communication is also necessary to maintain the interest of the customers in the company.

The company gives concession to its regular customers so as to retain its most valuable and profitable customers.

The company regularly reviews the business process in order to eliminate non value-adding activities, to reduce the cost and to make the whole work efficient and effective. If the internal customers are not satisfied and there is lack of coordination among the departments then it will affect the external customers also.

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PORTERS FIVE FORCES MODEL

INTRODUCTION
Porters model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change.

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Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porters model supports analysis of the driving forces in an industry. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry.

1.BARGAINING POWER OF SUPPLIERS

The term 'suppliers' comprises all sources for inputs that are needed in order to provide goods or services. The high class hotels are operating by few hotel chains like-TAJ,EIH,ITC&THE LEELA PALACE so they have a control over the industry. There are no substitutes for spas and five star hotels. The hotels customers are fragmented, so they have to reduce their bargaining power to attract the customers. The Taj, ITC& Oberoi are having various rates and tariffs. Because they are having their own brand image. The hotel chains are operating different services like Spas, Boatels, Resorts, City Centers, Heritage HOTELS, etc. 2 . BARGAINING POWER OF CUSTOMERS Similarly, the bargaining power of customers determines how much customers canimpose pressure on margins and volumes.

The hotel industry is one of the most invested in its fixed assets. So they are trying to recover their amount quickly. The suppliers are providing better information about them to attract the customers .Here the buyers are highly informed. If the hotel price changes are moderate, the Customers have low margins and are pricesensitive. Some unseasoned timings the hotels are offering discounts and incentives to reduce the bargaining power of buyers.

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3.THREAT OF NEW ENTRANTS The competition in an industry will be the higher; the easier it is for other companies to enter this industry. In such a situation, new entrants could change major determinants of the market environment (e.g. market shares, prices, customer loyalty) at any time. There is always a latent pressure for reaction and adjustment for existing players in this industry. The foreign hotel chains are tied up with Indian hotels to reduce the initial cost and using the latters brand name. Brand loyalty of customers like TAJ, ITC, and LEELA PALACE affects the new entrants. Access to raw materials and Distribution channels are controlled by Existing players like TAJ, ITC, and LEELA PALACE. The cost of land in India is high at 50% of total project cost as against 15% abroad. This acts as a major deterrent to the Indian hotel industry. In India the expenditure tax, luxury tax and sales tax inflate the hotel bill by over 30%. Effective tax in the South East Asian countries works out to only 4-5%. 4. THREAT OF SUBSTITUTES A threat from substitutes exists if there are alternative products with lower prices of better performance parameters for the same purpose. They could potentially attract significant proportion of market volume and hence reduce the potential sales volume for existing players. This category also relates to complementary products. Brand loyalty of customers (TAJ, ITC, LEELA PALACE, etc,) is dominating the substitutes. The hotel relationship with customer and costs also the reasons to switching to substitutes. The price variation of same class hotel services from various brands is one of the reasons to choose a substitute. The present demand and supply of hotel rooms is one of the reasons to choose a substitute. More fixed cost and switching costs affects the business.

5. COMPETITIVE RIVALRY BETWEEN EXISTING PLAYERS

This force describes the intensity of competition between existing players (companies) in an industry. High competitive pressure results in pressure on prices, margins, and hence, on profitability for every single company in the industry. The top competitors in hotel industry are having the same services like five star, spas, boatels and motels, heritage hotels and palaces.
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The healthy competition among the all players is helping to increase the industry growth. Intense in metro cities, slowly picking up in secondary cities.

MARKET SHARES
The tourism in India has seen a steep decline over last 12 months and the effects of that have seen Hospitality Industry in India cut to half. ASSOCHAM recently released the report on the performance of Hospitality Industry. Mumbai terrorist attack combined with the global slowdown, have severely impacted the bottom line to the extent of 64 per cent of the Indian hospitality sector, as per the analysis carried out by the Associated Chamber of Commerce and Industry of India (ASSOCHAM). Here are some of the key findings of the report: The average net profit of 10 hotels has declined by 65 per cent in Q4 FY 09 as compared to the Q3 FY 09. Out of these 10 hotels, in Q4 FY 09, 8 hotels have registered decline in net profit on sequential basis. The interest cost of 10 hotels went up by 51.65 per cent in the fourth quarter of FY 09. The fall in total income was about 4.47 per cent as compared to the third quarter of FY 09. The total expenditure in fourth quarter of FY 09 rose by 7.47 as compared to the third quarter of FY 09. The share of Travel & Tourism industry to the global GDP was 6.48% in the year 2007 with value of US$ 3,493.19 billion and industry demand contributed to 13.21% of global GDP in 2007. Middle East was the fastest-growing region in terms of arrivals of international tourists during 2007. According to the report by World Travel and Tourism Council, India currently ranks 18th in business travel and will be among the top 5 nations by the end of 2010. ASSOCHAM has projected that Medical Tourism is likely to become the leading foreign exchange earner for India India is now emerging as one of the hot destinations for medicaland tourism after Singapore, Thailand, Hong Kong, Malaysia, Philippines, Columbia

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While the inflow of foreign tourist came down sharply and the rates shrieked, there has been a rise in expenses as based on profitability and cost parameters of the hotels on the quarterly results posted by hotel companies listed on the Bombay Stock Exchange (BSE) from 1st April-25 th - May 2009.

The total income of such hotels, which included income from operation and other income also, registered average decline by 4.47 per cent in Q4 FY 09 as compared to the Q3 FY 09. The income from operation also showed the average decline by 4.63 per cent, during Q4 FY 09. Hotel companies such as TAJGVK Hotels & Resorts Limited has registered decline in net profit by 41.49 per cent in Q4 FY 09 as compared to the Q3 FY 09 followed the Jaypee Hotels Limited which registered decline in net profit by 44.86 per cent during the same period. The other hotels which registered major decline in net profit were Oriental Hotels Limited (28.34 per cent), Jindal Hotel Limited (58.12 per cent) and Howard Hotels Limited (57.28 per cent).

Performance Analysis of Hotel Industry Parameters Income from Operation Total Income Employee Cost Fuel, Power and Light Total Expenditure Interest Net Profit Per cent Change -4.63 -4.47 7.47 11.28 19.84 51.65 -64.80

Source: Corporate Announcements for the year ending 2008-09.

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The cost of power, fuel & light increased by 11.28 per cent in Q4 FY09 as compared to the Q3 FY 09. Among the hotels, Jindal Hotels Limited incurred maximum expenditure on the cost of power, fuel & light by 147.81 per cent, along with TAJGVK Hotels & Resorts Limited (20.34 per cent), Asian Hotels Limited (17.79 per cent) and Despite the decline in income top line and bottom line, the cost of hotel industry went up by 20 per cent during Q4 FY 09 as compared to the Q3 FY 09.

The maximum rise was incurred by Asian Hotels Limited (11.57 per cent) followed by Jaypee Hotels Limited (10.85 per cent) and TAJGVK Hotels & Resorts Limited (8.30 per cent). The rapid pace of expansion in hospitality sector of India raised the interest cost borne by the Indian hotel industry. The borrowing cost of the hotels went up by 51.65 per cent in fourth quarter of FY 09, while the total income decreased by 4.47 per cent during the period. The ten hotels analyzed by the AFP registered rise in interest cost, the. maximum increase was incurred by TAJGVK Hotels & Resorts Limited (193.51 per cent) followed by Howard Hotels Limited (164.94 per cent) and Oriental Hotels Limited (89.10 per cent) among others. The employee cost of hotels also registered a rise in the total expenditure during the period. The employee cost of hotels rose by average 7.47 per cent in Q4 FY 09 as compared to the Q3 FY 09. The hotels that witness maximum rise in employee cost include Asian Hotels Limited (24.91 per cent), TAJGVK Hotels & Resorts Limited (24 per cent), Howard Hotels Limited (21.65 per cent), Ishwar Bhuvan Hotels Limited (15.45 per cent) and Oriental Hotels Limited (13.27 per cent) among others in Q4 FY 09 as against Q3 FY 09.

Example of CRM Implementation

This is according to VisiGlobe solutions (for CRM):-

VisiGlobe offers variety of CRM solutions. These solutions can be ranged from providing CRM software to providing turnkey solutions including project

management, software, training and support. Guest satisfaction is the most important aspect of CRM approach of VisiGlobe. Guest requests are continuously observed, services improved and provided seamlessly. On the other hand, staff performance and guest satisfaction surveys are tracked. It helps hotels to improve guest satisfaction at least 20%. This increase provides a minimum of 5% increase in revenue.

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Happy guest returns and advises VisiGlobe is used for guest satisfaction survey, guest request and problems follow-up, staff performance tracking, department performance tracking, guest satisfaction in overall hotel performance. It has a direct connectivity to PMS -

Property Management Software. All available information in PMS are retrieved directly into VisiGlobe.CRM and processed. A call center is established. All reported problem and request are entered into the system and dispatched to runner to solve the issue. Closed issues are instantly closed in the system. All issue is solved timely. Each department manager tracks related issues and if necessary, he can act immediately. This ensures all guest problems are solved before he leaves. Some part of our CRM solutions:

o Guest Recognition To know more about guests and to serve better.

o Incident Tracking Solving problems on time without leaving any un-solved issue.

o Rapid Responce Priority required requests are tracked and solved.

o Improvement Analysis To improve service quality and reduce cost. o Guest Comment Card Tracking
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To evaluate and analyze guests feedbacks.

o Relationship Marketing Marketing through guest history analysed with requests and comments. o Facilities Maintenance Planned room and property maintenance to offer problem free service.

o Communication Server All requests are delivered to specific person on time via electronic transmission.

CRM means different things to different companies. Just as customers are unique, companies are unique. James Dunham, general manager, Travel and Transportation for Siebel Systems, said, Our customers apply CRM tools differently depending on their businesses drivers. A property that has optimized occupancy uses CRM differently than one with low occupancy because their needs are different.

Think of CRM as a way of life rather than a technology. Having said that, todays technical possibilities are a crucial enabler for doing a much better job of embracing our customers than we ever could have in the past. Structured databases, robust wide area networks and technologically aware hotel guests are all part of the mix that has elevated the art of customer relationship management. The technology allows us to do it better, but without effective leadership in the hotel companies and buy-in from line employees it remains only a good idea.

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Strategic Elements of CRM:Our experience and research identifies five crucial elements required for a successful CRM initiative in any service organization. For some companies, additional elements may become equally crucial, but we see these strategic concepts as universal:

1. Guest recognition 2. Data capture and maintenance 3. Channel integration and consistency 4. Ranking and discrimination 5. Two-way personalized dialogs

Lets examine each of these areas in more detail.

Guest Recognition

Recognition means many things. A smiling face, recalling a preferred room type or a welcome back greeting are all common recognition experiences in the hotel industry. These are all typical recognition interactions between a repeat visitor to a given hotel and a front of house employee endowed with a hospitality work ethic.

When recognizing a customer of the brand more so than of the hotel, the challenges expand geometrically, but so do the opportunities. Many of the multi-brand companies succeed in this area by training reception staff to acknowledge the guests participation in the multi-brand frequency program (i.e. I have your frequency program number on your reservation.), but that is only part of the story.

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Figure 1 GuestWare Enterprise Editions Preference entry screen. Note Global Preferences denoted by red G. The trick is to get the relevant information in front of the line employees rather than keeping it locked up in an offline analytical database or centralized system not available to hotel personnel. If you want to impact service delivery, the information must be in the hands of line employees.

An essential concept in discussing guest recognition is that of preferences. Capturing, retaining and making effective use of expressed customer preferences is the essence of guest recognition. You are not only acknowledging that the guest has a prior relationship with the enterprise, but you are able to do something useful for the guest with that knowledge.

A corollary conclusion is that in order to manage preferences effectively, you must limit the number of preferences you are willing to track to some number that can be communicated across the enterprise. The GuestWare Enterprise Edition (www.guestware.com) offers an interesting enhancement to this strategy: The platform stores and communicates global or universal preferences for the guest across all hotels in the company (smoking or newspaper preferences, for example). Yet it also supports the capture of local preferences, unique to the individual
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property, so that a preference of room away from snowmaking appears at the ski resort, but not the center city property.

Taking this approach to a deeper implementation than most hotels, the Wequassett Inn of Chatham, Mass. (www.wequassettinn.com) sends lifestyle data capture forms out to past guests during the off-season. The responses are added to the guest history records in the resorts Lodging Touch property management system (www.hotelinfosys.com). Each week the management team reviews the profiles of returning guests prior to arrival and takes action accordingly. Some Wequassett guests actually get items added to the dining room menu specifically for them based on management using the captured data effectively.

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Data Capture and Maintenance

In order to present information about a guests preferences to a guest service agent, you first have to capture it and scrub it. As time goes on, you also need to maintain it. A crucial consideration in capturing data is to make sure that you have vehicles for data input from all plausible touch points with the guest. Property-level personnel must have both a means and an incentive to capture relevant data about a guests expressed preferences.

Scrubbing data means standardizing the address and other crucial fields to ensure mailability. Standardized data is crucial to support effective house holding (the process of matching similar records into a single customer master record or into creating a new master). A related requirement is NCOA matching, periodically passing records through the National Change of Address database, to identify people that have moved and told the postal service, but not you. (And you always wondered how that pesky CD club keeps finding you)

A number of software vendors offer licensed or hosted solutions to data hygiene challenges. Some are shrink-wrapped and some are large-scale mainframe applications. Group 1 Software (www.g1.com), well established in the gaming segment of the industry, offers a broad range of data quality and CRM tools to optimize the mailability of every record in your system.

Finally, guest profiles and preferences change over time. A complete CRM strategy needs a vehicle for updating the profile accessible to both the guest and to staff.

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Channel Integration and Consistency

Many of todays consumers prefer to conduct transactions over the Internet. As long as the Web-based front-end systems are integrated into the other systems (PMS and CRS for example), this is a good thing for the hotel enterprise. Some travelers would prefer to speak to a live reservations agent, whether at the property or in the central reservations office.

The key thing for the hotel company is to ensure that the guest receives the same recognition and differential treatment no matter what channel they prefer to use to interact with the firm. Just as we strive to offer consistent rate and availability from all channels, we must strive for consistent guest recognition from all channels.

Likewise, as we work for channel integration in guest recognition, so must we reach for it in service delivery. Integrating many of the various hotel management functions at the database level is one strategy that has been attempted by several industry stalwarts, notably M I C R O S -F i d e l i o (www.micros.com) and Springer-Miller Systems (www.springermiller.com). A new entrant to the market includes Enablez (www.enablez.com), a Toronto-based provider of an integrated property-level platform extending to spa management and ski lift ticketing as well as the more typical PMS/ POS functions.

Another approach is to utilize best-of-breed applications with robust interfaces. Manhattan East Suite Hotels (www.mesuite.com) MAGIC (Marketing And Guest Information Center) effectively links the CRS, PMS, CRM database and the Web site (see figure 3). This integration delivers a single, integrated view of the customer and his needs across all 10 hotels and all customer touch points.

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Ranking and Discrimination

Some customers are worth more to your business than others and you need to invest more of your scarce resources in the most valuable customers, and less in the others. This strategy is perhaps the most difficult element of CRM for hoteliers to accept, but it is absolutely essential. While the grand tradition of hospitality is to value every guest and deliver outstanding service to all of them, in practice it simply isnt possible. Furthermore, there are certainly toxic customers that are simply bad for your business and you want to make sure they dont come back. Ask any casino about their black-list policiescertainly a legitimate form of CRM in action. There are any number of ranking methods available to the industry, among them frequency program production, recency/frequency/ money (RFM) scores or simply number of room nights. Siebels Dunham said, Whatever scoring metric makes the most sense for your organization, you must include a multi-channel strategy to advise the agent on the right product bundle at the right price to that high- or low-value guest at the right moment in order to cross-sell or upsell them. That is one way a complete CRM strategy drives top-line revenue.

Figure 3 Screen shot from http://www.mesuite.com/member/Profile.cfm, the

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Web front-end of Manhattan Easts MAGIC product, showing deep integration of CRS, PMS, CRM and Web site, and also the ability for the guest to maintain his own profile.

Part of your CRM strategy needs to be a means of ranking your guests to identify the most valuable and then servicing them differentially. By extension, you also want to identify low-value customers who are potentially better customers, and offer them enhanced services as well.

Two-way Personalized Dialogs

This area is perhaps the most exciting and potentially rich CRM strategy active today. Rather than relying on mass-market advertising or segmented newsletters to members of a frequency program, this element pursues personalized communications with customers as individuals, with content specifically about the customers interests and preferences.

Most of these communications include a tangible and specific call to action, encouraging the customer to do something with the communication, thus establishing a two-way dialog. These dialogs serve both to reinforce the connection between the firm and the customer and to provide opportunities for more information and sales with the customer.

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SWOT ANALYSIS

STRENGTHS

* A very wide variety of hotels is present in the country. * There are international players in the market such as Taj and Oberoi & International
Chains

* A manpower cost in the Indian hotel industry is one of the lowest in the world. * India offers a readymade tourist destination with the resources * Natural and cultural diversity * Demand-supply gap * Government support * Increase in the market share

WEAKNESSES

* The cost of land in India is high at 50% of total project cost as against 15% abroad. * The hotel industry in India is heavily staffed. * High tax structure in the industry makes the industry worse off than its international. Only
97,000 hotel rooms are available in India today.

* Only limited value added service * Poor support infrastructure * Slow implementation * Susceptible to political events.

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OPPORTUNITIES

* Demand between the national and the inbound tourists can be easily managed due to
difference in the period of holidays.

* In the long-term the hotel industry in India has latent potential for growth. * Unique experience in heritage hotels. * Rising income. * Open sky benefits.

THREATS

* Guest houses replace the hotels. * Political turbulence in the area reduces tourist traffic and thus the business of the hotels * Changing trends in the west demand similar changes in India * The economic conditions of a country have a direct impact on the earnings in hotel
industry.

* Lack of training man power in the hotel industry. * Fluctuations in international tourist arrivals. * Increasing competition

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Recommendations
Few ways that an hotelier can do to improve sales 1. Myth of selling rooms at lower rate First, one needs to overcome this myth that lowering the room rates would sell more rooms and increase the room revenue. It may sell a few more rooms, but it rarely sells enough rooms to offset lowered rates. Its simple economics, simply selling more rooms increases expenses, while even slightly higher rates increase profit. As occupancy demand increases, ADR should increase as well. The tell-tale sign of a hotel-in-trouble is to see increase in occupancy and decrease in average rate. An hotelier who understands and employs the tactics of revenue management monitors and adjusts rates in reaction to fluctuations in current and future occupancy demand. For many hotel owners and managers, reducing rates is the lazy-man form of marketing. Its generally their first thought when sales are low, after-all, it takes very little thought and certainly very little research and/or effort. And, it also ignores the fact that people dont buy rate, they buy value. Sometimes, lower rates are interpreted as having lower value or too good to be true. When sales demand is low, one should look to value-added marketing and position the hotel properly within your marketplace. If the hotel deserves to be in the number one position because of its location, facilities and amenities, one should make sure it is positioned that way. 2. The Power of the Internet Take a serious look at a hotels web site, next year; more than 65% of a hotels business will be directly or indirectly influenced by the Internet. Before an hotelier looks to have another web site designed, he should get an analysis of the current site. A good analysis will give him a clue as to what is working or isnt working very well on his hotels site.

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This analysis can be used to guide the new designer to create a functional web site. One should remember that search engine optimization must be incorporated into the design of the site; its not something used after the site is completed. Its an absolute fallacy to think that SEO can be applied to a poorly designed web site to increase traffic. SEO must be incorporated into the design of the site itself. The number of hotels getting ripped-off by techie-talking web designers is astounding. An article written by a web site design company thinks that, having an average of only 2% of site visitors who actually make a reservation is a good average. The site needs to be designed to be easily found through search and, once found, it needs to have the necessary elements of location, facilities, attractions, and value to persuade its visitors to make a reservation.

3. Commitment to Revenue Management It is very important to make a commitment to learn and use revenue management to increase occupancy and average rate. It takes a little effort to do the necessary research, but the rewards are great. Revenue management relies upon an hoteliers ability to look into the near and distant future to view occupancy demand and making rate decisions. Measuring reservation booking pace and being aware of occupancy generators in the hoteliers place creates smart decisions. 4. Technology One should go online and subscribe to at least three free online newsletters. Keep ones knowledge base current with the happenings in the industry. One can learn a great deal from the successes and failures of others.

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In this era of globalization where Customer is the King, customer expectations are going up which is making the situation more and more competitive. As the product is becoming generic in nature, the hotel industry can no longer rely on the traditional marketing strategies to retain the customers.

Customer Relationship Management is one of the key tools to fight this cut throat competition and stand out as a superior brand.

On the basis of the study, I would like to recommend some suggestions which could be implemented profitably by the industry.

1. Surveys: Conducting monthly guest/customer surveys, club surveys, room comment cards, toll free guest assistance centers can help in getting customer feedback and to improve in the areas where there is a lag as suggested by the feedback.

2. Maintaining suggestion boxes at every touch point/point of interaction with the customers.

3. Taking feedback not only from external customers but also the internal customers i.e., the employees.

4. Proper check on the hotel staffs and processes efficiency by the management, say by employing Mystery Customers.

5. Keeping regular track of the sales data for further leads and follow-up

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6. Employing effective CRM software to improve guest satisfaction, lower operating costs, build guest loyalty, and increase revenues.

7. 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 pick-up and drop facilities.

8. 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.

9. Giving recognition awards to attract old customers.

10. Giving the customers a more personalized and empathic services as building good rapport with the customers goes along way in having satisfied and return customers.

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CONCLUSION
This hotel industry analysis report helps to know the full information of Indian hotel industry. The government support towards the hotel industry and its development is appreciable. It creates interest of the competitors to grow drastically. The hotel industry comprises a major part of the tourism industry. The hotel industry contributes employment and economical growth of the country. The report shows that the present and future skyrocket scenario of the industry. Various classes and categories of hotels and their services of the industry are very effective. The market share and expansion of industry in Indian economy is rosy day by day. At present the government is very liberal in regulating and licensing to the hotels because to increase foreign tourist average daily rate From this study it can be concluded that the customer relationship management in Company is satisfactory. The company is using various CRM practices like customization of the product, maintaining interaction with the customers regularly and providing good quality product etc. Customer relationship management has a certain impact on the profitability of the company. Average sale per customer has increased 15% over the last two years. Customer response rate towards marketing activities is also improving. There are various factors affecting the customer relationship management like working environment of the company, support from top management and coordination among the departments of the company. Information technology is not used as much as it should be. The company is using traditional tools of CRM like quantitative research, personal interviews. The company should modern tools like data mining, contact center, e-CRM and web based survey tools.

Limitations of Customer Relationship Management

Time constraint is unavoidable limitation of my study. Financial problem is also there in completing this project in a proper way. As no work has been done earlier in this regard so scarcity of secondary data is also there.

Inadequate disclosure of information is also the problem.

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Suggestions

There should be more and more emphasis given by the company for satisfying the customer up to a apex limit and by providing the utility of every penny of his money.

There should be more use of information technology. The company should be flexible to bend its rules and procedures in the clients favour.

The company can communicate and develop stronger customer bonding by providing social and financial benefits.

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Bibliography:
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