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“MARKETING MANAGEMENT POLICIES OF SHANGRI-LA”
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Certificate of origin
to the best of our knowledge , no part of this report has been reproduced
from any other report and the contents are based on original research.
Signature signature
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Acknowledgement
Signature
Shrey Chandhiok
(student)
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Table of Content
1-Certificate
2-Acknowledgement
3-Hospitality Industry Review
4-Indian Scenario
5-Global Scenario
6-Company Profile
7-Research Objective
8-Research Methodology
9-Data Collection
10-SWOT
11-Findings
12-Suggestions
13-Conclusion
14-Questionaire
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Executive summary
The project aims to study the various systems, practices and structures
followed by the Sales Department in the Shangri-la Hotel, New Delhi and
recommended appropriate strategies to the hotel for improving its financial
operations.
The report on Indian Hotel Industry provides an in-depth view of the sector
in marketing and sales sector. The report starts with the global hotel industry
to give a perspective of the Indian hotel industry in the global context.
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In this study I have attempted to analyze the functioning of the various sub –
departments under the marketing and sales department in the hotel by
collecting data from various employees. Valuable information about the
quality of the operations of the sales department towards to timely and
effective fulfillment of the organizational goals were collected and analyzed
The data’s were collected from the employees of the sub – departments of
the marketing and sales department in the hotel and used as samples of the
study. Data’s been collected through personal discussion and structured
questionnaire
As per the study, it is analyzed and found that the operations in the sales
department in the hotel are running smoothly with timely accomplishment of
targets and the employees are also satisfied on the other grounds such as
timely achievement of targets, availability of materials to do the work etc.
As per the responses analyzed, I felt that some of the areas in the department
needs due consideration and need to be carried out in a better manner instead
of following the old ways of doing those things which have been mentioned
in the report.
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HOSPITALITY INDUSTRY – AN OVERVIEW
The hospitality industry is a 3.5 trillion dollar service sector within the
global economy. It is an umbrella term for a broad variety of service
industries including, but not limited to, hotels, food service, casinos, and
tourism. The hospitality industry is very diverse and global. The industry is
cyclical; dictated by the fluctuations that occur with an economy every year.
Points to be noted:
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HOSPITALITY INDUSTRY IN INDIAN SCENERIO
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Of the 161 projects in India's pipeline, 100 will have 4 and 5 star
designations. The other 61 are 1, 2 and 3 star developments. A number of
them are new economy brands recently designed for the Indian market place.
Taj's Ginger Hotels is one such brand, Lemon Tree and Red Fox are others in
this category.
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HOSPITALITY INDUSTRY – GLOBAL SCENERIO
MARKET VALUE
The global hotels and motels industry grew by 5.9% in 2005 to reach a value
of $ 448.3 billion.
In 2010, the global hotels and motels industry is forecast to have a value of
$554.3 billion, an increase of 23.7% since 2005.
MARKET SEGMENTATION I
The domestic consumer sector dominates the global hotel and motels
industry, accounting for 65.7% of it’s total value.
MARKET SEGMENTATION II
Europe has the most lucrative hotels and motels industry, which accounts for
42.7% of the global value.
MARKET OVERVIEW
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Market definition
The hotels and motels market value consists of all revenues generated by
hotels, motels and other accommodation providers through the provision of
accommodation and food service. The value does not include any revenues
generated through other interests, such as casinos, shops and
telecommunication services. The market is segmented according to the
origin of the revenues ( domestic consumers, domestic business and
international business and consumers). Any currency conversions included
within this report have been calculated using constant annual average
exchange rates.
MARKET ANALYSIS
The global hotels and motels industry has grown by 15.1 % over the past
five years and is set to grow by further 23.7 % by 2010. Therefore, the
industry is expected to expand by 42.3% over the course of the research
period. There was slow growth at the beginning of the period attributable to
the global slowdown in the economic growth, and the effect on the travel
and tourism of the 9/11 attack.
The global hotel and motel industry generated a total revenue of $ 448.3
billion in 2005, representing a compound annual growth rate (CAGR) of
3.6% for the five – year period spanning 2001 – 2005. The European
industry accounts for 42.7% of the global market and grew at a CAGR of
2.4%. The Asia – Pacific market is the most rapidly expanding industry and
grew at CAGR of 4.7 %. This is partly due to the boost in the consumer
incomes within the region, especially in China.
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Domestic consumers form the leading revenue source for the global industry,
amounting to $294.7 billion in 2005, equivalent to 65.7% of the total
industry value. In comparison the international sector was worth $85.3
billion, which represented a 19 % share of the industry’s value. The business
customer sector is expanding both in revenues and volumes, but tends to be
a high – end market, it’s development is currently overshadowed by the
volume growth in the consumer market.
MARKET VALUE
The global hotels and motels industry grew by 5.9 % in 2005 to reach a
value of $ 448.3 billion. The compound annual growth rate of the industry in
the period 2001 – 2005 was 3.6%.
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Company profile
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The Kuok family immigrated to Malaysia, then under British control, from
the Fujian province in China in the first decade of the 20th century. Under
patriarch Kuok Keng Kang the family entered the trading business, dealing
in rice, flour, and sugar. Kuok, like many successful Chinese emigrés, sent
his children overseas to study. Son Robert, born in 1927, went to the Raffles
school in Singapore, where he became good friends with Tun Abdul Razak
and Tun Hussein Onn, both of whom later became Malaysian prime
ministers, and Lee Kuan Yew, who became the first prime minister of
Singapore after its independence.
Although his education was cut short by World War II, Robert Kuok's
friendships were to play an important role in his later career. Kuok's use of
"guanxi" (which in Chinese refers to having a network of prominent allies)
enabled him to build his empire rapidly both during and after the war. Kuok
also was gifted with the ability to spot opportunity, and especially to see into
the long term. During the Japanese occupation of Malaysia and Singapore
during the war, Kuok went to work for Mitsubishi, where he learned
Japanese. This enabled him to emerge as an important supplier of basic
foodstuffs.
Following the war, Kuok recognized that heavy competition and low
margins had made the rice trade unattractive. Instead, Kuok switched his
efforts to the sugar trade, and moved to England, where he learned his way
around the commodities markets before returning to Malaysia. Following
Malaysia's independence in 1957, Kuok's guanxi enabled him to build a true
sugar empire, developing significant plantations. In 1959, Kuok entered
sugar refining as well. Before long, Kuok had established a reputation as the
"Sugar King," controlling as much as 10 percent of the world's sugar supply.
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Despite remaining a minority in Malaysia, the ethnic Chinese community
had long dominated the country's economy. Growing demands for a more
equitable distribution of wealth in the country led Kuok to transfer his
business empire to Singapore in the late 1960s and early 1970s. Nonetheless,
Kuok supported the need to establish a more equitable distribution of wealth,
if only to ensure the country's political and economic stability.
At the same time, Kuok had begun to expand his business interests into other
areas. In the mid-1960s, for example, Kuok entered flour milling and
trading. The Kuok Group, as Kuok's business empire came to be known, also
added interests in palm oil (PPB Oil Palms Bhd.), tanker operations
(Malaysian Bulk Carries Bhd.), and even media interests, particularly the
South China Morning Post. Yet among Kuok's most significant and most
successful ventures was his entry into the real estate and property
development sector in the early 1970s. Kuok's Kerry Properties became his
real estate flagship, emerging as one of the leading property groups in Hong
Kong, with significant real estate holdings and developments throughout the
Asian region, including the Chinese mainland, as well as Australia and
elsewhere.
Among Kuok's early real estate purchases was a hotel property in Singapore.
Built in 1971, this property became the starting point for the later Shangri-La
luxury hotel chain. Initially, the Kuok group turned over the management of
its hotel property to Westin Hotels. In 1981, however, the company added its
second hotel, in Kowloon. The new hotel marked Kuok's entry into direct
hotel management, as well as ownership. Launching the Shangri-La brand,
Kuok founded a new company for its hotel interests, Shangri-La Hotels &
Resorts, in 1982. An important factor behind Shangri-La's later success was
Kuok's willingness to turn over its direction to hotel industry professionals
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David Hayden and Robert Hutchinson, both of whom had worked for
Westin.
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Shangri-La grew only slowly during the 1980s, however. By the beginning
of the 1990s, the group counted just six hotels. Yet the company had
developed a strong foundation for growth into the new decade. In the early
1990s, the company doubled the number of hotels, owned by Kerry
Properties and other Kuok companies, adding sites in Hong Kong, the
Philippines, and Fiji. In the meantime, the Kuok Group began expanding its
property interests in mainland China, launching 12 new developments,
including hotels, in the early 1990s.
In the mid-1990s, Kuok set up a second property ownership vehicle,
Shangri-La Asia Ltd., which paid the Kuok group HKD $4.2 billion to
acquire the existing Shangri-La properties in 1995. Shangri-La Asia was
then listed on the Hong Kong and Singapore Stock Exchanges, reducing
Kuok's stake to less than 63 percent. The following year, Shangri-La Asia
paid another HKD 2.5 billion ($321 million) to buy up the 12 Kuok hotel
properties under development in China. Then, in 1997, property-owning
Shangri-La Asia took over hotel management company Shangri-La Hotels &
Resorts, becoming an integrated hotel management and ownership group.
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sector and from the country's fast-growing economy in general at the dawn
of the 21st century.
Shangri-La also had begun developing its interests beyond the Asian region.
At the beginning of the century, the company added its first hotel in the
Middle East, in Dubai. The company also acquired its first North American
property, the Pacific Palisades in Vancouver, Canada.
RESEARCH OBJECTIVES
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RESEARCH METHODOLOGY
Unscientific method
Scientific method
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DATA COLLECTION
The data information collected from the various sources were divided into
two parts.
They are:
a. Primary source
b. Secondary source
Primary source
Secondary source
The secondary data is the information, which already exists. The secondary
data was collected from journals, magazines, books, dissertations, and
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observation of respondents. The research specific information was less
available more emphasis was given on the primary data.
Method of analysis
The data collected through questionnaire and the records available was
examined in detail. It was further classified and tabulated for the purpose of
analysis to generalize percentages.
SAMPLE DESIGN
SAMPLE SIZE
Ten to Twenty (10 - 20) samples were collected from various sub –
departments in the total integrated finance department for the purpose of
collection of data.
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SAMPLING METHOD
Convenient sampling
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A sample was chosen keeping in mind the objectives of the research and
time constraints, convenience-sampling method was usual for choosing this
sample size. With the use of a series of focus survey of One Hundred and
fifty (150) samples were chosen.
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Open-ended
Direct question
Multiple choice
Questionnaire was framed by taking opinion of the staff of the hotel, some
expert opinion and the reference of various articles and research reports.
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The results of the study will be applicable only to the respective hotel on
which the report has been prepared.
The financial operations of the hotel industry are subject to change in the
future due to many reasons.
Graph 3.1 Global hotels and motels industry value: $ billion, 2001 - 2005
MARKET SEGMENTATION I
The domestic consumer sector dominates the global hotels and motels
industry, accounting for 63.7% of it’s total value. The international sector
accounts for a future 19% of the industry.
MARKET SEGMENTATION II
Europe has the most lucrative hotels and motels industry, which accounts for
42.7% of the global value. The Europe accounts for a further 26.9% of the
global industry’s revenue.
Table 3.3: Global hotels and motels industry segmentation II: % share, by
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value, 2005
Geography % Share
Europe 42.70 %
US 26.90 %
Asia – Pacific 19.60 %
Rest of the world 10.70 %
Total 100.0 %
Graph 3.3: Global hotels and motels industry segmentation II: % share, by
value, 2005
COMPETITIVE LANDSCAPE
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especially the case in the developed world where the industry is struggling to
present itself as a competitive employer. The demand for staff is also subject
to seasonal fluctuations, leading to the frequent hiring of the agency staff
that are more expensive to employ, and thereby tend to diminish profits.
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The nature of the consumer is also changing: there is an ageing demographic
resulting from the ‘baby boom’ generation in the west, which is now
approaching retirement age. Disposable incomes are on the rise and continue
to grow across the emerging world as well. The simultaneous drop in leisure
time among the working population leaves cash – rich, time – poor
consumers who are prepared to pay more to enjoy the holiday time available.
It now costs less to travel due to the proliferation of no – frills, low fare
airlines and other modes of budget travel, which have placed downward
pressure on the overall cost of transport. These drivers of tourism growth
will tend to increase revenues for hospitality players globally.
In 2010, the global hotels and motels industry is forecast to have a value of
$554.3 billion, an increase of 23.7% since 2005.
The compound annual growth rate of the industry in the period 2005 – 2010,
is predicted to be 2.3 %.
Table 3.4: Global hotels and motels industry forecast: $ billion, 2005 - 2010
Year $ Billion % Growth
2005 448.3 5.90 %
2006 468.6 4.50 %
2007 489.4 4.50 %
2008 510.8 4.40 %
2009 532.4 4.20 %
2010 554.3 4.10 %
CAGR, 2005 – 2010 4.3 %
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Graph 3.4: Global hotels and motels industry forecast: $ billion, 2005 - 2010
SWOT ANALYSIS
STRENGTHS
Core business.
Finance is the central department of the hotel.
Maintenance of the physical evidence of records avoids legal risks.
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WEAKNESSES
OPPORTUNITIES
THREATS
FINDINGS
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As per the workload the payable section is under staffed, any
absenteeism of a staff member of this section can seriously affect the
smooth functioning of the department.
Lot of paper work is being performed for maintaining the record of
each and every transaction in the department which leads to wastage
of loads of paper on a daily basis.
Delay in meeting out the payment deadline of the suppliers due to
which the relation between the suppliers and the payables is affected.
Absence of a corporate culture.
The profits after tax of the company is expected to rise from 6 crores 7
lakhs in 2007 – 2008 to 9 crore 20 lakhs in 2008 – 2009 which is an
increase of 37.31 %.
The sales are expected to increase from 17 crore 60 lakhs in 2007 –
2008 to 21 crore 80 lakhs in 2008 – 2009 which is an increase of
23.86 %.
The important documents like checks which are to be provided as
accommodation for bills to the BTC’s or the Bill to Company’s are not
kept in a proper place which may lead to subsequent consumption of
time to find out the proper stocks.
All the sub – departments under the whole finance department uses
different sets of software’s for carrying out their operations.
A proper database is not maintained electronically for the records of
the finance department which could be accessed and viewed from all
the departments.
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SUGGESTIONS
Whatever knowledge I have of the subject on the basis of that I have come
up with the following suggestions for the department.
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Respect for the fellow colleagues is very important, which is a very
important concept in which area this department lacks.
Breaking the workload of the payable department.
Proper shelves should be maintained in the accounts stores for
maintenance of the records.
The hotel should try to implement the modern software’s like ERP for
finance and MRP for purchases for effectively carrying out it’s work.
A proper training should be provided to all the concerned staff in the
hotel if new procedures are introduced to reduce errors.
Implementation of the BPR (Business Process Reengineering)
concept.
Discontinuous thinking.
Reorganizing and breaking outdated rules and assumptions , organize
around outcomes, not tasks.
Let users perform the process and put the decision point where work
is being performed.
Subsume information processing work into the real work that
produces the information.
Treat geographically dispersed resources as if they were centralized
(virtual corporation).
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Capture information once, at the source.
CONCLUSION
The study is all about the functioning of the Sales department in the ITC
Sheraton Hotel. To tap the above mentioned opportunities the finance
department in the hotel should function properly. Thus this study will help in
finding out how the financial flow of operations is carried out in the hotel
industry.
QUESTIONNAIRE
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Q2.) Which method is used by the F&B Controls for determining the closing
stock?
a.) Weighted average method.
b.) FIFO.
c.) LIFO.
Q3.) Which method is used by the purchase department when they order
material?
a.) ABC analysis.
b.) Ratio analysis.
c.) None of the above.
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OPEN ENDED QUESTIONS
Q6.) What are the main factors responsible for increase in the profit for the
current year as compared to the previous year?
Q12.) What growth in sales and growth have you seen in the hotel for the
period you have been working in the hotel?
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