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0 Introduction
Indian tourism and hospitality industry have become one of the key drivers of
economic growth in India. India is an ancient civilization and their population was
1.252 billion at year 2013 (WorldBank, 2013), and it has advantages in development
of tourism. India rich in tourism resources due to its historical and religious states.
The Main India offers several touristic options due to its vastness and diversity, which
attracting all kind of tourist from all of the world. For examples, Agra has been
ranked on the 16th place in the world focus on the protection of cultural centre, which
boosts cultural tourism. Moreover, Himalayas Mountain attracts a lot of adventure
tourists (IBEF, 2015).
The total contribution of Tourism Industry in India to GDP was 6.2% in 2013
and 6.3% in 2014 (wttc.org, 2014).
grown slowly in the last 3 years, 7.46 million at 2014, 6.8 million at 2013 and 6.6
million at 2012. Foreign exchange earnings (FEEs) in India grew 7.1% in 2014
compared to 5.9% in 2013 (ibef.org, 2015). According to India Tourism Statistic
(2012), The Delhi Airport had the highest number of FTAs in India followed by
Mumbai airport, Chennai airport, Bengaluru airport and Kolkata airport.
According to David Scowsill, president & CEO, WTTC (2014), India has great
chance to benefit from visa reforms and infrastructure improvements under the new
government. However, David Scowsill also said that Indias hospitality and tourism
sector economy is comparatively low towards the contribution overall in Indias
economy in contrast with others industries. This reflect the seriousness of the
problem that India faces.
important centres), The Gateway Hotel (upscale/mid-market full service hotels and
resorts) and The Ginger (economy hotels) brand of hotels (Tajgroup.com, 2015).
The Taj Mahal Palace & Tower has a strategic location. It locates beside Taj
Mahal Palace which is the most famous tourist attraction in India. According to
National Geographic (2015), Taj Mahal is one of the most well-known building in the
world because its ironic structure and it has artistic and scientific accomplishments
of a wealthy empire. From the annual report of Taj Group in 2013-2014 showed that
Taj Group has total income of 1,929.51 /ten million in 2014 and 1,875.86 /ten million
in 2013.
Visa system has brought a long-term change for the tourism industry. Additionally,
ease of tourist entry rules leads to increase in tourists arrivals, which will boost the
hotel occupancy rates (Sitaram, 2014). Undoubtedly, the government is serious on
extending the facility and access for more countries. ETA has covered almost 40 per
cent of the source markets; hence after ETA projected expansion the percentage will
go up to 63 percent (Hospitality Biz India, 2015).
However, growth in occupancy rates of Taj Mahal Palace Hotel would urge
revenue management team to reconsider their pricing strategy. Pricing strategy
defines as methods, which company uses to price their products and services.
According to Mattila and ONeil (2003), occupancy is one of the trigger to price
adjustments in the room rates. Consequently, due to limited capacity the hotel will
need to adjust pricing strategy in order to balance supply and demand.
For example:
It is assume that in year 2016, India will become one of the worlds
fastest growing major economy and it will surpass China according to International
Monetary Fund (IMF). In year 2014, the outlook for travel and tourism in India were
shown positive with total GDP growth to reach 4.3% (Appendix 2). The causes of this
growth is much being driven by higher consumer spending due to the recession
stage had recovery and enable them to gather pace and became firmly established.
During the long haul travel in year 2014, tourists are expected to spend more per trip
and stay longer on their holidays for example, European markets and it is also
foresee to gain a greater share of international tourism demand (Council, 2015).
Inflation rate in India in 2014 had reach 6.37% according to World Statistic
(Appendix 3). The inflation rate of India has been increased over the decade,
however it has been decreased since year 2010. This will slightly affected GDP
growth of the country due to skyrocketing inflation (Travel&Tourism, 2014). Hence,
its seems as a profitability for the tourism companies and they started to edge up
and create job employment in the process. Travel and Tourism predicted the industry
in the future ten years will increases in their growth rates of over 4% per annum and
become the higher growth rates compared to other sectors. India economy had been
steady after the election held during year 2014, and with the GDP (Gross profit
domestic) increasing to 7.3% its indicates the national debt is decreasing. The
reason for India GDP to sustain is because their economic liberalization since 1991
year and encourage the trades eventually ending with some public monopolies
(Travel&Tourism, 2014).
Indias foreign exchange reserves in year 2014 had a record of US$ 322
billion, it is the highest figure when compared the previous high almost US$ 321
billion in year 2011 September (Appendix 4). Based on latest data, an accretion of
US$ 2.7 billion during January 16, 2015, is due to the increase in foreign currency
assets (Ezell and Atkinson, 2014). Besides, the economy in India shown their
imports growth is faster than the export growth, this indicates India needs to capture
more capital flows to the finance deficit. This large deficit eventually leads to the
depreciation of country currency rates Rupee in 2012 2014. While the large
amount of deficit remains, the will be a fear of further devaluation of the currency and
also it will leads to rise of cost of living among the economy. Thus, India economy
needs to rebalance and put more attention to improve the competitiveness of exports
sectors (Paul, 2013).During the seven-year period through 2013, there is a sharply
growth 150% of the supply of hotel room in India (Khosla, 2014). There is 4.5%
increase supply of hotel room in year 2013 compare to 2012 (Tajhotels.com, 2014).
The Director of hospitality at Cushman & Wakefield India (2014) said, huge market
demand in between 2009 and 2011 is slowly missing. According to the Cushman &
Wakefield report (2014), there are around 52000 new hotel rooms supplies;
hospitality sector would be over 65% rise in total hotel inventory by 2017.
As demand and supply mismatch and customer cost control, put an enormous
pressure on hotel occupancies and average rate and this has led India hotel 2%
decrease in RevPAR in Indian Hospitality Industry in 2013 (Tajhotels.com, 2014).The
Indian economy slowdown and the sudden increase in capacity had impacted Taj
Mahal to implement the new marketing strategy in order to capture more tourists.
Firstly, according to the director of Taj mahal Rhohit Khosla, they had been through
30 years of tough times and manage to sustain, based on the current economy, Taj
mahal hotel had gone through renovation process and emerged into new looked.
However, due to limited capacity hotel, they only managed to invested 20million USD
dollar in order to reposition one of the budgets hotel Taj Samudra as luxurious hotel.
Besides, Mr Rhohit stated that, consumers that travel to their country in year 2014
tends to spend more and stay longer after been through the recession stage.
Thus, to increase customer loyalty and capture more diversified market, Taj
Mahal hotel had introduced their new caf lacttice that upon the arrival of their guest,
they can enjoy their beverages in the lounge. This also enables the Taj mahal hotel
to earn positive word of mouth and allows them to create brand awareness. To
further enhance relationship with the guest, they have implement the new check in
system called sit down check in. This system work as the guest can sit on the
desk that prepared in the lobby and it is a one to one interaction (Business Today,
2015). In product wise, Taj hotel had implement new swimming pools, upgraded their
fitness center and create new restaurant to fulfill each categories consumer in order
for them to spend. This is because they understand the spending power of consumer
able to contribute to the local economy.
In term of pricing, Taj hotel segment their own market as luxury business
traveler, hence they need to charge high price to the guest. This is also usually Taj
hotel overhead cost is extremely high, hence in order to make profit, high price is
required to charge to the stay in guest (Business Today, 2015). Taj hotel notice that
the currency of their country is decreasing, hence to attract more foreign tourist to
stay and spend in their hotel, they reaffirms their brand and differential themselves
with competitors in two phases: Literal and metaphorical.
This means literal is using calendar campaign includes offline and online
promotion, internal engagement or social media engagement while metaphorical is
using roadshows and joint advertising. With the amount of promotional activities, its
manage to grab guest attention and eventually they spend more on their activities
and it also able to meets the Taj hotel objective is that to establish taj hotel is the
preferred vacation and accommodation option in India. This enable Taj hotel tackled
on currency discretion issues (Taj Hotel and Resorts, 2014).
result saturated hotel industry market creates highly competition among hotel
establishments in India.
Nowadays, in order to succeed in competitive hotel industry market in India, it
is no longer enough to provide such facilities as high speed Wi-Fi, room service and
fitness centres. It is vital for the Taj Mahal Palace hotel to examine on current
technological advancements, which enhance hotels operations in order to make its
services quick, superior and distinct. The hotel should pay more attention to their
competition capabilities, by comparing and analysing competitive advantages and
disadvantages of their rivals in terms of new products, promotions, prices and
innovations. Nevertheless, it will provide useful inisght into rivals strengths and
weaknesses, as well reveal new opportunities in their marketplace.
The latest technological innovation launched in Aloft hotels at the end of 2014,
creates a huge competition to many hotel establishments in India and to Taj Mahal
hotel itself. The new technology represents the keyless entry by using the mobile
phone as a room key. The system allows guests to avoid long registration procedure
and do check-in and out by using their mobile phones and also use it as a room key.
Thereby, these technological innovation gives to Aloft hotels market benefits in terms
of market share. Their customers are viewing this techno as a helpful innovation to
get the fastest access to their rooms. According to Digital, Loyalty & Partnership
Marketing (2014) 80 percent of population will own a mobile phone by 2020.
Consequently, the new implemented technologies are able to deliver fast and
personalized service, thereby gives to Aloft priority to capture more market share.
The new competitors for Taj such as Accor, Carlson Rezidar, Intercontinental,
Hayatt hotel are moving on into new technology. This is because these are well
established company and able to have strong amount of cash flow that enables them
to engage with global network and expanded their businesses to create attractive
loyalty programme. In comparison, Taj Mahal hotel is lack of technological and
innovative equipment. Its loyalty programmes has that are not strong and welldeveloped, which may cause customers dissatisfaction (Cuckoo, 2013). Moreover,
the hotel charge for using Wi-Fi while Aloft provide free Wi-Fi for all guests. Also, the
highly set prices but the lack of provided facilities are able to influence on Taj Mahal
performance.
innovations and react on the changes in the hotel market will have an influence on its
occupancy rate and overall performance.
6.0 Recommendations
Hospitality industry in India has emerged as one of the driven factors among
the service sector in India (India Brand Equity Foundation, 2015), and thus attracted
investors to invest on this particular industry by fulfilling the demands of tourist
towards hospitality industry.
The higher number of investors to invest in the hospitality industry in India had
improved the economy of India. In the year from 2000 to 2015 the tourism industry
has attracted around us 7862.08 million. According to India Brand Equity Foundation
(2015), India hospitality industry has grown by 10-15 per cent on the back of better
consumer sentiment with the change of government. However, the boosting of
investors in this industry created the problem of penetration pricing
industry. The higher the competitor in this service industry, the higher the changes of
penetration pricing occur. As it is served as one of the strategy used by firms to
attract more customers to their new products and service from their competitors.
(Investopedia, 2015).
In order to expand the economic engagement, the India government has
promote trade and investment cooperation, bilateral economic in the world economy
to enhance the role of emerging market (Ellings, 2014). Thus, the open of business
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There are few recommendations for India policy maker in order to sustain
their economy in long run. Firstly is look into overarching domestic, Best Public
Policies Practices Council should be establish in order to manage effective economic
growth policies and practices in Indias states which enables to promotes them at the
national level across India. Furthermore, it is suggest that to look into specific
domestic, in this case will be tourism industry. Since unemployment rate in India
remain high, it is suggest to reform their labor market laws in order to generate more
flexible labor market and create more job employment. Based on the current
economy, it should impose good and service tax (GST) that helps to bring stability to
cooperate tax code and sustain in economy. Lastly, in international point of view,
since the current economy is stable now, it should complete the U.S and India
Bilateral Trade and investment Agreement to facilitate foreign direct investment to
country and slow down the depreciation of currency rate. It is suggest that joining the
international negotiations will helps them to expand product coverage of ITA
(Information Technology Agreement) (Council, 2015)
In technology wise, Taj Mahal Palace Hotel needs to consider competitive
analysis strategies. By analysing competitive intelligence hotel will be enabled to get
competitors capabilities and vulnerabilities in such aspects as: technological
advancements, financial strengths, marketing strategies and so on. Moreover,
competitive analysis facilitates in anticipating rivals actions in the marketplace. This
analysis includes legal methods of identifying competitors and tracking their
activities. For example: firms annual reports, websites, analysing competitors
customer reviews and so on. Eventually, Taj Mahal hotel will be equipped with
information about new technological advancements, which they can use and adopt in
their business operations or even leverage existence technology into new
innovations (Sharma, 2010)
7.0 Conclusion
In the conclusion, one of the most earning and profitable industry in the world
are tourism industry. It employ maximum of labour, contributes to country GDP at the
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same time, thus the value of this industry and country is significant. Technology is
one of the issues cannot neglected when come to hospitality industry, and advanced
technology will increase the competitive advantage for the particular industry.
Meanwhile, services also key factor to determine competitive advantage. The
change of politic issues in India had create more opportunity not only in domestic but
also brings them to the new stage. Hence in summary, the external issues in the
country able to impact the hospitality industry.
Nevertheless, Taj Mahal Hotel marketing strategies are impacted by the
forces of external environment, which urge them to consider these influences to be
sustainable in the marketplace and competitive among their rivals.
8.0 Reference:
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9.0 Appendix
1) Foreign Tourist Arrivals to India grew by 5% in Apr- Mar 2014 to 6.95 Million
arrivals as compared to 6.62 Million last year.
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