PROJECT REPORT ON INDUSTRY ANALYIS - DESK RESEARCH ON

HOSPITALITY AND RENTAL CAR INDUSTRY

SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

IN PARTIAL FULFILLMENT FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION (MBA)

SUBMITTED BY:

2K181064: DISHA BARBHAI

2K181075: PRATIKSHA GAIKWAD

2K181077: VARSHA GHAVATE

2K181079: MONIKA GOWARDHAN

2K181085: PRATIKSHA JAWALE

UNDER THE GUIDANCE OF: DR. MIHIKA KULKARNI

THROUGH

1|Page
 SMT. HIRABEN NANAVATI INSTITUTE OF MANAGEMENT & RESEARCH FOR
WOMEN

2018-2019

INDUSTRY ANALYSIS - DESK RESEARCH

ON
HOSPITALITY

2|Page
 INDEX

Sr.No Topic Pg.no Sign

1. Industry Analysis – The Basics 4
2. Promoters And Management Ethos 13
3. External Environment 19
4. Financials 28
5. Recent Development 31

3|Page
1. A BRIEF OUTLINE OF HOSPITALITY INDUSTRY:

The hospitality Industry includes the broad category of fields including event planning, cruise
line, transportation, tourism industry, lodging and theme parts. It is a multi billion dollar
industry. The success of hospitality industry depends on the disposable income and leisure
time. It consists of multiple groups such as facility maintenance and direct operations. There are
many companies who are operating

Hyatt Hotels Corporation

Hyatt Hotels Corporation is an American multinational operator, owner, and franchisor

of resorts, hotels, and vacation properties. It is headquartered in Hyatt Center, Chicago, llinoi. Its
different brands are Park Hyatt, Andaz, Hyatt Centric, Ziva, Hyatt Hotels, Residence Club etc.

InterContinental Hotel Groups

InterContinental Hotel Groups was founded in the year 2003. The company is headquartered
in Denham, Buckinghamshire, United Kingdom. Its brands include Candlewood Suites, Crowned
Plaza, Holiday Inn, EVEN Hotels, InterContinental, Kimpton Hotels, Holiday Inn
Express, Hotel Indigo, Hualuxe, and Resorts and Stay bridge Suites. The Americas office is
in Dunwoody, Georgia in Greater Atlanta. The Asia, Middle East, and Africa offices are
in Singapore. The Greater China offices are in Pudong, Shanghai. The company worldwide
headquarters and Europe offices are in Denham, Buckinghamshire in England.

Marriott International

Marriott International was founded in the year 1927. It is headquartered in Bethesda,

Maryland. Marriott was founded by John Willard Marriott in 1927 when he and his wife, Alice
Sheets Marriott, opened a root beer stand in Washington, D.C. Marriott International was formed
in 1993 when Marriott Corporation split into two companies, Marriott International and Host
Marriott Corporation. It is one of the top hospitality companies in India. The different Marriott
brands are St. Regis, Ritz- Carlton, JW Marriott,

Radisson Blue Hotels

Radisson Blue Hotels are one of the top hospitality companies in India. It is the group of hotels
located nationally and internationally.

4|Page
 Taj Hotels Resorts & Places

Taj Hotels Resorts & Places was founded in the year 1903. It is headquartered in Express Towers
Nariman Point. It was founded by Jamshedji Tata. It is headquartered in Mumbai, Maharashtra.
It is one of the India largest business conglomerates.

 Hospitality Industry In India: A Big Contributor To Economy's Growth

 The hospitality sector has the potential to be the main driving force behind the growth of the
economy

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

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

Infrastructure development is the backbone and key to the growth of the hospitality sector. Taxes
on real estate development for the hospitality sector must be lowered to boost investments as
there is an acute shortage of good quality accommodation in the country. Secondly, the industry

5|Page
 has been clamoring for industry status for over two decades. Providing industry status to the
hospitality sector will go a long way in attracting investment and development of the sector.
With India projected to be the fastest-growing nation in the wellness tourism sector in the next
five years, at over 20 per cent gains annually through 2017 (SRI International), infrastructure
development becomes critical in order to support this growth.

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

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

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

The Drivers of Change in Indian Hospitality

To find out the funding scenario in 2018 with respect to Indian hospitality services, Entrepreneur
India has composed a list of startups that could drive the next-gen funding and investments to
solve a multitude of issues plaguing the Indian hospitality scene. Here, it is worth remembering
that some of these startups are backed by international VC firms:

 OYO: This hospitality chain now spans PAN-India and covers more than 8500 hotels. USP of
OYO has been its ability to generate a list of hotels, which do not burn a hole in the pockets of
customers looking at staying in these. This startup covers all category of hotels right from budget
up till presidential suites; whilst offering good booking deals.

6|Page
 As stated above, OYO raised $10million in funding from China Lodging in 2017. The startup,
founded in 2013 by Ritesh Agarwal in Gurugram, has so far raised in excess of $400million in
capital with nearly 20 investors having funded the venture at various stages. OYO has raised
funds in as many as 8 rounds.

 Fabhotels: This budget hotel aggregator was founded in 2015 by Vaibhav Aggarwal and
Aadarsh Manpuria in Gurugram. Total capital raised by this early-stage startup is nearly $35
million with investors such as Acela Partners and Goldman Sachs associated with the venture at
varying funding stages. Fabhotels has also been backed by Aarin Capital that is led by Mohandas
Pai.

 Colive: This Bengaluru-based seed venture, founded by Suresh Rangarajan and Sundari
Rangarajan, harnesses technology to let people search (online) for branded serviced homes
located close to their workplaces or educational institutions. USP of Colive is that the aggregator
offers fully-furnished serviced apartments at affordable prices.

Colive, as recently as February 2018, raised $1.8million in a round led by Ncubate Capital
Partners.

 Room On Call: Room On Call lets business travellers book hotels online. These bookings are
technology-driven, and generally associated with deals & discounts, and are spread out across
most Indian cities. The startup also works with hotels by offering expertise on infrastructure &
budget management.

Room on Call was founded in 2015 in Gurugram; the venture raised $2 million in 2016 in a
round led by CASHurDRIVE.

 Zomato: Popular food (restaurant) search and delivery app Zomato recently raised a whopping
$200million in a Series I led by Ant Financial. The venture, ever since its inception in 2008, has
managed to affect as many as 11 acquisitions and even pump in capital to Hyderabad-based Tin
Men in 2017. Apart from food delivery, Zomato also doubles up as a Google for restaurants and
hospitality in India and the UAE.

As of now, Zomato has raised more than $400 million capital from a range of investors including

7|Page
 Sequoia Capital and Info Edge. The food delivery service was started by Deepinder Goyal and
Pankaj Chaddah in Gurugram .

 Trilyo: This Bengaluru-based startup uses AI-driven voice and chat to assist customers with a
variety of queries concerning hospitality in India. Trilyo’s AI-driven platform takes care of a
whole initial set of hotel processes including front desk management, and feedback monitoring;
both of which are vital for customer engagement and retention. This approach is aimed at letting
hotels drive sales whilst managing customer preferences with the same level of priority.

The startup also works on a data-driven model where analytics are used to track customer
preferences (with respect to hospitality services), and generating customized offers in a bid to
achieve customer retention.

Very recently, Trilyo raised $250,000 in a fresh round of funding led by Pulse Venture Capital.
With this round of funding, Trilyo’s overall capital raised amounts to more than $250,000
considering the fact that the AI-driven startup raised undisclosed funding in 2016.

 Zostel: Zostel is a chain of backpacker hostels in India operating in 25 Indian cities, and in
Nepal. These are ideal for backpackers travelling for adventures and fun. This venture lets
travellers stay in hotels at picturesque locations; USP is its service model that offers authentic
local experiences to explorers at reasonable costs.

Zostel, founded in 2013 in Jaipur, has raised $1 million in capital. The last round of funding was
in 2014.

 Goomo: Not an essential startup, but still considered a major player in the hospitality sector by
analysts and investors, Goomo was the leader in 2017 among other ventures to have raised
private equity worth $50million. The lead investor was New Delhi-based Emerging India that
pumped in $50 million.

As far as its services are concerned, Goomo is a travel-tech company targeting leisure travellers,
corporate, and the B2B sectors in India. Goomo lets people obtain customized travel and stay
options, through data-analytics.

8|Page
 ZiffyHomes : This startup founded by Sanchal Ranjan, Sallil Agarwal, and Saurabh Kumar in
2015; raised INR 2 crores in angel investment during a round in January 2018 led by angel
investor Bikky Khosla of Trade India.

ZiffyHomes uses data analytics and artificial intelligence to enable customers to find homes on
rent online.

 Treebo Hotels: Bengaluru-based Treebo Hotels is a technology-driven accommodation booking

platform through which customers can track affordable hotels across India. This startup founded
in 2015 by Rahul Chaudhary, Kadam Jeet Jain, and Sidharth Gupta.

Treebo raised $34 million in 2017 in a Series C lead by Ward Ferry Management and Karst Peak
Capital. With this round, Treebo’s total raised capital amounts to $57 million, with as many as 5
investors including the likes of SAIF Partners, and Matrix Partners.

Departments of Hotel

Ancillary Support Services

Guest Laundry and Valeting Marketing

Guest Telephones Property Operation

Other Guest Services Maintenance and Energy

Administrations and General

9|Page
Market Share

 Hyatt Hotels Corporation

Market share is the percentage of a market (defined in terms of either units or revenue)
accounted for by a specific entity. In a survey of nearly 200 senior marketing managers,
67% responded that they found the revenue- "dollar market share" metric very useful,
while 61% found "unit market share" very useful

 InterContinental Hotel Groups

 Marriott International
 Radisson Blue Hotels

10 | P a g e
 Taj Hotels Resorts & Places

The Taj Hotel's market positioning and competitive Market Efficiency

Marketing position refers to the location of a brand which is relative to its competitors in the
customer's mind. A hotel's positioning is based on the special features or attributes like food and
beverage service and particular comforts like airport convenience. They have positioned
themselves as a high end luxury segment. It has made its consumers to feel the taste of the
royalty in the modern world. This made the group different from their world wide competitors
Hilton, Oberoi and Marriott groups. They have scattered worldwide in the countries like
Australia, Bhutan, Malaysia, Maldives, South Africa, England, Sri Lanka and US

Strategy

A hotel's business strategy has two basic differentiation, they are market emphasis or a cost
emphasis. In this situation hotel follows the hybrid strategy which blends the strategy of market
emphasis and cost emphasis. A critical issue facing the market emphasis is to differentiate
themselves from the competitor. The business class segment is comparatively generate profit
high than the other segment in the hotel business. This specific is highly price sensitive when
compared to the luxury and leisure segment. By utilizing the strategy of exploring the business
class they have placed their Taj Presidency hotels in both the metro cities and also in small
towns.

11 | P a g e
The Taj marked out the three separate entities like Taj group, business, leisure and luxury. The
concept of these sub brands have come into existence in early 1990's where the management
operation was completely different. The territory is scattered geographically according to the
three divisions.

Segmentation

Taj group has classified their service into three different categories and they are Business,
Leisure and luxury. They have categorized their business and created their sub-brands in the
early and in themed of nineties, the period was 1990 - 2000. Taj group have showcased them as a
luxury hotel among their competitors. They are the pioneer of this business and continuously
achieving the standard and increased their benchmark. They are targeting their own audience
who has been their customer for a long time.

12 | P a g e
 2. PROMOTERS AND MANAGEMENT ETHOS
Csr policy of Hyatt company
Hyatt Hotels Corporation launched a new corporate philanthropy program called Ready to
Thrive, which focuses on investments in education in its efforts to create economic opportunities
that will in turn lead to healthier communities and improved lives.
According to UNESCO (United Nations Educational, Scientific and Cultural Organization),
more than 793 million people around the world are illiterate. Additionally, more than 60 million
children worldwide do not have access to education and will likely never learn to read or write.
Hyatt's Ready to Thrive invests in community organizations and programs that are devoted to
improving literacy and education for children worldwide. In this vein, Hyatt has worked with the
Pearson PSO +0% Foundation's
“Our focus on literacy and career development goes beyond charitable giving – it is a strategic
investment of our resources to create a lasting impact for local communities and for our
company,” said Mark Hoplamazian, president and CEO for Hyatt Hotels Corporation H +0%.
“We know that a solid education is essential for economic growth, job creation and income
generation, all of which are critical to creating thriving communities and to the success of our
business."

InterContinental Hotel Groups

1. Holiday Inn : Holiday Inn is a British-owned American brand of hotels, and a subsidiary
of InterContinental Hotels Group. Founded as a U.S. motel chain, it has grown to be one of the
world's largest hotel chains, with 1,173 active hotels and over 214,000 bedrooms as of
September 30, 2018.[3] The hotel chain's headquarters are in Denham, Buckinghamshire.

Csr policy of hospitality industry :

CORPORATE SOCIAL RESPONSIBILITY :
The trend of recent years is the idea that companies operating in the context of what is today
commonly understood as business, should or at least it is expected from them that their objective
is not just profit but also increasing well-being within the society (Robins,2005), in other words
not only taking, but also giving. However, this theory is very tricky and not everyone has to
agree with it. The actual expansion of the concept of social responsibility can already be seen
with the employees themselves, while this process further leads to a greater range of the society
and then spreads all the way to the dimension of local communities or stakeholders from across
the Word (Pelvic, 2010).Here it would be appropriate to recall a bit of the very essence of this
phrase. The current concept of social responsibility is reminiscent of the medieval conception of
love, which has several degrees and distinguishes the direction and object, the first stage of eros
is directed to a partner, the second to children, in other words to a wider interior, and finally ends

13 | P a g e
in agape (Cilek, 2011). Therefore, expressing love to the country and surroundings. In the old
days, a significant bearer of responsibility was the Church ,especially those religions that
systemically faced enemies or poverty, whether it is debt relief in different periods, which can
also be transformed to its present form. Since in the modern western world the influence of the
Church has a rather decreasing tendency, the Martin Lorene ,
state departments and its tasks are weakening, civilization itself can break down just as it
happened with all previous ones, and therefore it is necessary to shift responsibility back again to
the people themselves, the society and companies (Cilek, 2011).
For this reason, it is necessary to ask where to get the feeling of something you can call
happiness. With great probability it is possible to say that fulfillment or participation is
responsible for this feeling, when happiness and success cease to be an antisocial reality. Firstly,
it must be said that CSR is a concept that has many definitions, as well as ways of naming,
whether it's long-term sustainable development, corporate sustainability or responsible
entrepreneurship. Likewise, it is possible to look at the concept of CSR from a different
perspective. Whether it relates to the term public benefit when business is thought of within the
community, where the impacts are placed on the society and environment, along with the
incorporation of all involved parties. (Kotler, 2010). At other times, an opinion may be seen in
CSR as sustainability or sustainable development, where companies defend their business as
being needed in the wider society and also friendly to the environment, i.e. ecologically and
ethically (Hamilton, 2012). A completely different view is held by Preston and Sachs (2002),
under which companies that do not actively contribute to the welfare of the society in the
industry of which they do business, do not have their own right to exist. It is the ethically
responsible companies and those which thereby contribute in the context of societal standards
that tend to be the ones who are more oriented toward the consumer industry (Cilek, 2011)such
as hospitality tourism. The concept itself has its origins primarily in the USA and its
development has lasted for several decades, but only recently have the issues associated with
CSR developed at a more dynamic pace and it is experiencing a boom in all aspects (Dyrtr,
2006) . How ever, as mentioned earlier, this results in a certain non-uniformity of terminology
and that is give to the rapid development and the large scope of different sectors. The definitions
of the term have already been mentioned but it is also possible to define the basic characteristics
that belong to the concept of CSR. According to Srpova (2010), it could be as follows:
•The principle of voluntarism, thus voluntarily developing activities and the related acceptance
of obligations that are beyond what is required.
•Involvement of the company - implementation of CSR into corporate strategy.
•Pro-active cooperation with all involved parties, employees, customers, stakeholders and
dialogue with them.
•Long term horizon and time periods and the associated systematics, or objectives with long-
term sustainability.
•Responsibility to society.
•The company's commitment to contribute to the development of the quality of life.

14 | P a g e
 Corporate social responsibility is as previously stated, voluntary, while its boundaries are not
clearly demarcated and so apart from the broad discussion, which is something extra, there is a
lot of space here for different understandings and interpretation, therefore all definitions and
approaches, of which there are many, are becoming some
what uncertain and therefore there is great space here for interpretation. Even though there are
many definitions of the term CSR and this concept, overall it involves and covers the obligations
of a company, during the performance of which i.e. doing business in a certain segment)
economical, social and environmentally sustainable development are upheld, and this includes
the involvement of all participating Parties Martin Lorenc, (Dyrtr, 2006). In other words, it is
business that has a positive impact on society .Researchers interested in CSR can be divided into
two groups. This mainly concerns their view of business in society in general. (Kuldova, 2010).
One of these groups is convinced that the sole responsibility of companies is to provide goods
and services, showing a profit. The biggest advocate of such theories and also the biggest
opponent of all CSR supporters is Milton Friedman (1994), according to who there is only one
corporate social responsibility and that is to use its resources and engage in such activities whose
sole purpose is to increase profit as long as it does not break the law, does not have a deceptive
character and is not involved in fraud.
rental car industry :
Global Corporate Responsibility Policy :
At the heart of Enterprise Holdings’ approach to corporate responsibility is an enduring
commitment to manage our transportation business for the long term.
We believe that strong business growth is built on putting the needs of customers, the growth of
employees and the health of local communities first. Through our global corporate responsibility
efforts, we’re investing in making our business and our world a better place through initiatives
that:
• Promote the viability of mobility and alternative fuels
• Increase access to fuel-efficient vehicles
• Improve the resource efficiency of our operations
• Minimize waste throughout the lifecycle of our vehicles
• Minimize the impact of vehicle rental by offering carbon offsets that support renewable
energy projects
• Support causes that improve the quality of life in local communities; and
• Enhance relief efforts in the wake of natural disasters

Csr policy of Hyatt company

Hyatt Hotels Corporation launched a new corporate philanthropy program called Ready to
Thrive, which focuses on investments in education in its efforts to create economic opportunities
that will in turn lead to healthier communities and improved lives.

15 | P a g e
According to UNESCO (United Nations Educational, Scientific and Cultural Organization),
more than 793 million people around the world are illiterate. Additionally, more than 60 million
children worldwide do not have access to education and will likely never learn to read or write.

Hyatt's Ready to Thrive invests in community organizations and programs that are devoted to
improving literacy and education for children worldwide. In this vein, Hyatt has worked with the
Pearson PSO +0% Foundation's

“Our focus on literacy and career development goes beyond charitable giving – it is a strategic
investment of our resources to create a lasting impact for local communities and for our
company,” said Mark Hoplamazian, president and CEO for Hyatt Hotels Corporation H +0%.
“We know that a solid education is essential for economic growth, job creation and income
generation, all of which are critical to creating thriving communities and to the success of our
business."

InterContinental Hotel Groups

1. Holiday Inn : Holiday Inn is a British-owned American brand of hotels, and a subsidiary
of InterContinental Hotels Group. Founded as a U.S. motel chain, it has grown to be one of the
world's largest hotel chains, with 1,173 active hotels and over 214,000 bedrooms as of
September 30, 2018.[3] The hotel chain's headquarters are in Denham, Buckinghamshire.

Csr policy of hospitality industry :

CORPORATE SOCIAL RESPONSIBILITY :

The trend of recent years is the idea that companies operating in the context of what is today
commonly understood as business, should or at least it is expected from them that their objective
is not just profit but also increasing well-being within the society (Robins,2005), in other words
not only taking, but also giving. However, this theory is very tricky and not everyone has to
agree with it. The actual expansion of the concept of social responsibility can already be seen
with the employees themselves, while this process further leads to a greater range of the society
and then spreads all the way to the dimension of local communities or stakeholders from across
the Word (Pavlik, 2010).Here it would be appropriate to recall a bit of the very essence of this
phrase. The current concept of social responsibility is reminiscent of the medieval conception of
love, which has several degrees and distinguishes the direction and object, the first stage of Eros
is directed to a partner, the second to children, in other words to a wider interior, and finally ends
in agape (Cilek, 2011). Therefore, expressing love to the country and surroundings. In the old
days, a significant bearer of responsibility was the Church, especially those religions that
systemically faced enemies or poverty, whether it is debt relief in different periods, which can

16 | P a g e
also be transformed to its present form. Since in the modern western world the influence of the
Church has a rather decreasing tendency, the Martin Lorenc,

state departments and its tasks are weakening, civilization itself can break down just as it
happened with all previous ones, and therefore it is necessary to shift responsibility back again to
the people themselves, the society and companies (Cilek, 2011).

For this reason, it is necessary to ask where to get the feeling of something you can call
happiness. With great probability it is possible to say that fulfillment or participation is
responsible for this feeling, when happiness and success cease to be an antisocial reality. Firstly,
it must be said that CSR is a concept that has many definitions, as well as ways of naming,
whether it's long-term sustainable development, corporate sustainability or responsible
entrepreneurship. Likewise, it is possible to look at the concept of CSR format different
perspective. Whether it relates to the term public benefit when business is thought of within the
community, where the impacts are placed on the society and environment, along with the
incorporation of all involved parties. (Kotler, 2010). At other times, an opinion may be seen in
CSR as sustainability or sustainable development, where companies defend their business as
being needed in the wider society and also friendly to the environment, i.e. ecologically and
ethically (Hamilton, 2012). A completely different view is held by Preston and Sachs (2002),
under which companies that do not actively contribute to the welfare of the society in the
industry of which they do business, do not have their own right to exist. It is the ethically
responsible companies and those which thereby contribute in the context of societal standards
that tend to be the ones who are more oriented toward the consumer industry (Cilek, 2011)such
as hospitality tourism. The concept itself has its origins primarily in the USA and its
development has lasted for several decades, but only recently have the issues associated with
CSR developed at amore dynamic pace and it is experiencing a boom in all aspects (Dyrtr, 2006)
. However ,as mentioned earlier, this results in a certain non-uniformity of terminology and that
is give to the rapid development and the large scope of different sectors. The definitions of the
term have already been mentioned but it is also possible to define the basic characteristics that
belong to the concept of CSR. According to Strove (2010), it could be as follows:

•The principle of voluntarism, thus voluntarily developing activities and the related acceptance
of obligations that are beyond what is required.

•Involvement of the company - implementation of CSR into corporate strategy.

•Pro-active cooperation with all involved parties, employees, customers, stakeholders and
dialogue with them.

•Long term horizon and time periods and the associated systematics, or objectives with long-
term sustainability.

•Responsibility to society.

17 | P a g e
•The company's commitment to contribute to the development of the quality of life.

Corporate social responsibility is as previously stated, voluntary, while its boundaries are not
clearly demarcated and so apart from the broad discussion, which is something extra, there is a
lot of space here for different understandings and interpretation, therefore all definitions and
approaches, of which there are many, are becoming some

what uncertain and therefore there is great space here for interpretation. Even though there are
many definitions of the term CSR and this concept, overall it involves and covers the obligations
of a company, during the performance of which i.e. doing business in a certain segment)
economical, social and environmentally sustainable development are upheld, and this includes
the involvement of all participating parties Martin Lorenc, (Dyrtr, 2006). In other words, it is
business that has a positive impact on society. Researchers interested in CSR can be divided into
two groups. This mainly concerns their view of business in society in general. (Kuldova, 2010).
One of these groups is convinced that the sole responsibility of companies is to provide goods
and services, showing a profit. The biggest advocate of such theories and also the biggest
opponent of all CSR supporters is Milton Friedman (1994), according to who there is only one
corporate social responsibility and that is to use its resources and engage in such activities whose
sole purpose is to increase profit as long as it does not break the law, does not have a deceptive
character and is not involved in fraud.

rental car industry :

Global Corporate Responsibility Policy :

At the heart of Enterprise Holdings’ approach to corporate responsibility is an enduring

commitment to manage our transportation business for the long term.

We believe that strong business growth is built on putting the needs of customers, the growth of
employees and the health of local communities first. Through our global corporate responsibility
efforts, we’re investing in making our business and our world a better place through initiatives
that:

• Promote the viability of mobility and alternative fuels

• Increase access to fuel-efficient vehicles

• Improve the resource efficiency of our operations

• Minimize waste throughout the lifecycle of our vehicles

• Minimize the impact of vehicle rental by offering carbon offsets that support renewable
energy projects

• Support causes that improve the quality of life in local communities; and

18 | P a g e
• Enhance relief efforts in the wake of natural disasters

19 | P a g e
3. EXTERNAL ENVIRONMENT

Laws Governing Hospitality Industry

With opening up of the Indian economy after 1991 and the adoption of globalization, there has
been a steep rise in the operational activities of various sectors that were earlier very dormant.
One of the best examples of this is the hospitality industry. One of the major parts of this sector
is the hotel industry.

The expanding activities of the hotel industry have turned it into a multimillion-dollar industry.
Hotel industry consists of restaurants, lodging places, theme parks, event planning, etc. and
includes activities such as facility maintenance and direct operations including servers, porters,
housekeepers, bartenders, kitchen keepers, etc. Such services that are provided by the hotels
constitute to be the subject matter of laws that regulate the hotel industry.

Until recently, there were not many stringent requirements of compliance attached to these laws.
Due to rise in the number of cases of food poisoning, rising concerns and public conscience,
these laws now demand a stringent compliance. Apart from regulating the areas mentioned
above, hotels are also obliged to protect their customers from harms that are criminal in nature
such as thefts, bodily harms, and even potential harms from terrorist groups.

Associations governing hotel industry

Apart from certain laws, there are certain industry associations that govern the working of hotels
in India:

 The Federation of Hotels and Restaurants Association of India

 The Hotel and Restaurant Association of Eastern India
 The Hotel and Restaurant Association of Northern India
 The Southern India Hotel and Restaurant Association
 The Hotels and Restaurant Association (Western India)
 Hotel Association of India

Licenses required for opening a hotel

To open a hotel, there are various licenses that are required to be obtained. Such licenses include:

20 | P a g e
 Police License / Registration.
 A license under Shops & Establishments Act.
 A license under Prevention of Food Adulteration Act.
 Registration under the Luxury Tax Act.
 Registration under the Sales Tax Act.
 Registration under the Contract Labor Act.
 Registration under the Pollution Control Act.
 Registration under the Apprentices Act.
 Registration under the Provident Fund Act.
 Registration under the ESI Act.
 Entertainment License on Festival Occasions.
 License for Chimney under the Smoke Nuisance Act.
 Registration under the Weights & Measures Act.
 Factory License for Laundry.
 Central Excise License for Bakery Products.
 Registration & Permits under the Motor Vehicle Act for Tourist Coaches / Taxies.
 Eating House License.
 Municipal Beer Bar License.
 License for storage of Diesel Oil.
 License for storage of Kerosene & Compressed Gas (LPG).
 Sign Board Directions, Neon Signs.
 License to deal in Foreign Exchange under FEMA.
 Cold Storage License, (if over 25 cubic ft.).
 License for Boiler & Generators and Mixers and Grinders.
 Bar License (Foreign Liquor).
 Dance License
 Mild Liquor License.
 Temporary License for Awnings & covering of Terrace during monsoon.
 Building Completion Certificate.
 Copy Right License for Playing of Music.
 Lodging House License
 Approval from the Department of Tourism, Government of India.
 Registration from GTDC for new projects under the Package Scheme of Incentives.

Laws governing Hotel Industry

The laws that govern the Hotel Industry can be classified into the following broad categories

21 | P a g e
 Establishment and Commissioning of Hotels
The first head of laws that govern the hotel industry include the laws regarding commissioning
and construction of hotels, restaurants, guest houses and other establishments of such kind. These
laws also include laws such as Foreign Exchange Management Act, Industrial Licensing
Policies, and land laws, etc. Hotel insurance policies, especially the customized ones can fulfill
the growing needs of the hotel industry. It can cover all its establishments ranging from spa to
guest houses and apartments, bed and breakfasts, etc. Other insurance policies such as the
standard insurance policy would cover risks and damages arising from accidents, fire, natural
calamity, etc.

 The operation, management, and maintenance of Hotel Industry

The second head of laws that govern the working of hotel industry is related to matters such as
management, maintenance and the operational activities of hotels. Such laws include insurance
laws, laws regarding safety and security of workers, food and hygiene standards, obtaining
licenses, Food and Drug Administration Act, Shops and Establishment Act, etc. For example,
Acts such as the Food Adulteration Act would prohibit the sale of substandard food items
thereby protecting the customers from the potential harm caused by poisonous food and
protecting their interest by eliminating the fraudulent practices. The Food Safety and Standards
Act would set up criteria for manufacture, storage, distribution and sale and trade of food
substances so that they remain fit for human consumption for a considerable period. The Legal
Metrology Act would regulate the use of standards of weights and measures. The Copyright Act
would protect the rights relating to expression in the form of literature, drama, music, art or
architectural works. In fact, hotels are required to take such copyright licenses before they
organize any event such as plays or musical shows, etc.

 Taxation, Employment, and Contracts in Hotel Industry

The third set of laws that govern the working of a hotel are related to the contracts that it enters
into with other enterprises or employment contracts, for example, the Apprentice Act,
Employees State Insurance Act, etc. These laws also include the manner in which such entities
are taxed. Taxes may include income tax, service tax, expenditure tax, excise duty, luxury tax,
entertainment tax, value added tax, etc. Legislations such as the Shops and Establishment Act or
the Employees State Insurance Act would aim at regulating the relationship between employers
and employees in the hotel. The former would lay certain statutory obligations on the employers
in matters related to wages, work hours, holidays, paid leaves, provision for payment for
overtime work, etc. The latter is a social security scheme that would mandate the employers to
protect the interest of the workers in times of contingencies such as sickness, maternity leaves,
physical impairment or injuries occurring from the workplace, subsequent medical care. The

22 | P a g e
 Provident Fund Act mandates the creation of provident fund schemes for the employees. The
Apprentices Act shall govern the working of apprentices in the Hotel Industry.

 Other laws governing Hotel Industry

Other laws that may govern the working of hotels may include local law norms or other local
land norms or guidelines issued by the tourism industry such as approval of hotels at project
stage and classification & reclassification of hotels, guidelines for classification of heritage
hotels, Time Share Resorts (TSR), Stand Alone Restaurants, guidelines for apartment hotels,
guidelines for approval of guest houses, Hospitality Development and Promotion Board,
implementing a transparent system for the effective monitoring of hotel projects, ensuring timely
accrual of approvals / clearances / NOCs by the multiple agencies and facilitating the
implementation of hotel projects, expeditious clearances, etc. will enable completion of hotel
projects in time leading to enhancement of room availability for the tourists.

Hotel & Restaurant Approval & Classification Committee

The Hotel and Restaurant Approval & Classification Committee inspects and assesses the hotels
based on the kind of facilities that they provide. The two categories of hotels that they inspect are
first, hotel projects that are approved at the implementation stage and secondly, the operational
hotels which are classified into various categories. About the former, the Ministry of Tourism
after certain documentation provides project approvals that shall remain valid for five years.
Once the hotel reaches its operative stage, the approval ceases to exist within three months. The
respective hotel must apply for the classification during these three months. Once the
classification is obtained, it becomes valid for 5 years.

Keys issues affecting the industry.

1. The Constantly Changing Expectations of Customers

The customer is the King in the hotel industry or hospitality industry on the whole.

The whole purpose of the industry is to keep customers happy. But the margins are now
decreasing.

Keeping customers happy is not enough anymore. As a Hotel Manager, you need to find ways to
delight customers now.

You would need to find a way to bridge the gap between perception and actual delight.

23 | P a g e
Even the service that delighted customers last time would now be an expectation. So, delighting
customers in the hospitality industry is getting more difficult with changing customer
expectations.

Changing times have brought about changed demands from customers.

Managers in the hospitality industry are facing completely different problems today than they did
in the past owing to new technological advancements and different customer behavior.

With the emergence of apps, for instance, consumers are now beginning to expect a level of
convenience and efficiency that must be catered to.

So, taking a cue from the social media and digital channels, the hotel managers must act to
surpass and delight their customers’ every time they walk in.

2. Continued Technological Changes and regular innovation

Today, hotel guest are more tech-savvy than ever. Dealing effectively and profitably with this
saviness is one of the top management issues in the hospitality industry today.

When they choose to stay in one hotel over the other, they expect to find free Wi-Fi, flat-screen
TVs, USB ports and so on.

Hotels and other businesses in the hospitality industry are relying heavily on technology to
streamline their services.

Keeping up with technology is one of the major issues faced by hotel managers, but when dealt
with properly, it is definitely worth it.

Technology in the Hotel Industry is helping transform businesses in the current competitive era.
Over the past couple of decades, major Innovation in the Hospitality industry is driven by
technology.
3. Political and Security challenges

This again is a one of the top management issues in the hospitality industry.

24 | P a g e
The issue of managing the macro issues dealing with the socio-political as well as economic
challenges.

The threat of terrorism today has changed how people travel and where they travel.

Hotel managers are tasked with the duty of ensuring that proper surveillance systems are
installed and maintained throughout so that guests can feel comfortable and safe.

To deal with security challenged, hotel managers have to rely on high tech gadgets and software,
which can be expensive to acquire and maintain.

According to studies from the Journal of Hotel and Business Management, a lot of macro, as
well as micro factors, account for security threats.
These range from micro issues like Data theft to macro issues like Terrorism.

A lot of countries like Egypt, Turkey, Syria etc. have faced issues due to terrorism while political
and economic issues have hurt economies like Greece, Portugal etc. in the past.

The issue is serious whether we discuss data and credit card security to life hazards and terrorist
threats. Hotel Managers need to anticipate as well as study any potential threats and be prepared
to minimize losses in such a situation or to prevent it altogether.

25 | P a g e
Risk Management is thus a crucial point to cover for all hospitality Managers.

4. Skilled labour shortage, staff turnover and Irregular working hours

This is one of the major challenges in the hotel industry.

Staff turnover in the hospitality industry is almost double the average across industries.

This can be said to the biggest management issue in the hotel industry.

In the recent years, the high turnover and increasing competition has only added flame to the
issue of the skilled labour shortage in the hospitality industry on the whole.

Because customers expect a lot more nowadays, employees in the hospitality industry, in turn,
are forced to deal with long and sometimes irregular working hours.

To make sure that everything is running smoothly at all times, managers have to find new ways
to manage their stress because they cannot afford to lose it or burnout.

26 | P a g e
According to research from Big Hospitality, salary is the most important factor to consider for
retaining best staff in the hospitality industry
Another important thing for maximum staff retention in the hospitality industry is to invest in
training.

Better training programmers, hospitality industry certifications, online hospitality courses and on
the job training can help decrease issues and enhance skilled labour percentage.
However, as a hotel manager, the onus is on you to ensure that the turnover is low and that every
single one of your team is taken well care of.

Compassionate leadership is one of the key attributes of managers today. Proper team
management is considered one of the top Management tips for Hospitality Managers.

5. Booking and Revenue challenges

Today, guests have several options to choose from, which has forced managers to up their
marketing and advertising game.

This has created revenue challenges whereby if managers are unable to keep up with their
competitors, they risk losing loyal customers and share of the local business.

It is thus important to understand the booking ecosystem and have the best strategic partners in
place.

Increasing cost and decreasing revenue come up as one of the key management issues in the
hospitality industry.

6. Seasonality of the hospitality industry

Peak seasons in the hospitality industry tend to bring a lot of business but it also brings with
undue stress to the management and its staff.

Managers are also charged with the responsibility of keeping up with the ongoing changes in
booking and pricing, which can be daunting for anyone.

Everyone is required to make the most during peak season.

27 | P a g e
 While more staff, as well as resources, are required during peak season, the percentage drop
heavily during lean season making it difficult for hospitality managers to ensure profitability.

Innovation, diversification and effective management would continue to hold the key in terms of
managing the issue of seasonality in the hospitality industry.

Sustainability & Environmental Issues in the Hospitality Industry

 Water usage -- This is a big one! Many resorts and hotels have a lot of water waste from long
guest showers and huge pools. In restaurants, they use water for dishes and often the machines
are not efficient at saving water.
 Energy usage -- This impacts all organizations in the hospitality industry. This includes the
electricity of restaurants, hotels, and resorts, as well as the gas used by tourism, ski resorts, and
more.
 Food waste -- Often times foods are not reusable and are then thrown away. This creates
problems for the environment, both in the action of throwing out the food and the demand it
places on the environment to produce more.
 Pollution -- This is an issue anytime there are high outputs of oil, natural gas, gasoline, or coal.
Whether these are used for energy or they are used for transportation, the amount of pollution
caused by organizations in hospitality can be a big problem.
 Garbage/waste -- This becomes important because items that are not recyclable will eventually
clog up the environment and create trash. Anything from cups to the way a company prints
agendas and maps, can either increase or decrease the trash produced, which can litter the
environment.

All of these issues have become important in all facets of the hospitality industry.

28 | P a g e
4. FINANCIAL RATIOS

Current Ratio:

The current ratio is a liquidity ratio that measures whether or not a firm has enough resources to
meet its short-term obligations. It compares a firm's current assets to its current liabilities, and is
expressed as follows:

Current Ratio= Current Asset/Current Liabilities

The Current Ratio of Taj Hotel is 0.75 while the Current Ratio of Oberoi Hotel is 6.81. This
means that Oberoi Hotel has enough short term resources to meet its short term obligations.

Earnings per Share (EPS):

Earnings per share (EPS) are the portion of a company's profit allocated to each outstanding
share of common stock. Earnings per share serve as an indicator of a company's profitability.
EPS is calculated as:

EPS = (Net Income - Dividends on Preferred Stock) / Average Outstanding Shares

The EPS of Taj Hotel is 42.18 and the EPS of Oberoi Hotel is 26.23, which means that Oberoi
Hotel is more profitable than Taj Hotel. This reveals that Oberoi Hotel is the most efficient
company in terms of generating Earnings Per Share.

Operating Profit Margin:

The operating profit margin ratio indicates how much profit a company makes after paying for
variable costs of production such as wages, raw materials, etc. It is also expressed as a
percentage of sales and then shows the efficiency of a company controlling the costs and
expenses associated with business operations. Furthermore, it is the return achieved from
standard operations and does not include unique or one time transactions.

Operating profit margin = Operating income ÷ Total revenue

The Operating Profit Margin of Taj Hotel is 21.89% and that of Oberoi Hotel is 51.86%. Oberoi
Hotel is highly successful in controlling the expenses by registering the OPM of 51.86%. Hence,
Oberoi Hotel is the most efficient in controlling expenses when compared to the other company.

29 | P a g e
Debt Equity Ratio:

Debt/Equity (D/E) Ratio, calculated by dividing a company’s total liabilities by its stockholders'
equity, is a debt ratio used to measure a company's financial leverage. The D/E ratio indicates
how much debt a company is using to finance its assets relative to the value of shareholders’
equity. The formula for calculating D/E ratios is:

Debt/Equity Ratio = Total Liabilities / Shareholders' Equity

The Debt Equity Ratio of Taj Hotel is 0.63 while that of Oberoi Hotel is 0.02 which indicates
that Taj Hotel has more debt comparatively Oberoi Hotel.

Return On Net Worth:

Return on Net Worth is a ratio developed from the perspective of the investor and not the
company. By looking at this, the investor sees if entire net profit was passed on to him, how
much return he would be getting. It explains the efficiency of the shareholders’ capital to
generate profit.

RONW = Net Income / Shareholders’ Equity

The RONW for Taj Hotel is 2.86% and that of Oberoi Hotel is 7.80%. Oberoi Hotel has a
reasonable yield compared to Taj Hotel.

Fixed Assets Turnover Ratio:

The fixed-asset turnover ratio is, in general, used by analysts to measure operating performance.
It is a ratio of net sales to fixed assets. This ratio specifically measures how able a company is to
generate net sales from fixed-asset investments, namely property, plant and equipment (PP&E),
net of depreciation. In a general sense, a higher fixed-asset turnover ratio indicates that a
company has more effectively utilized investment in fixed assets to generate revenue.

The fixed-asset turnover ratio is calculated as:

Fixed Assets Turnover Ratio of Taj Hotel is 0.56 and that of Oberoi Hotel is 3.39. Hence,
Oberoi Hotel is the most efficient company in managing their investments in fixed assets.

30 | P a g e
5. RECENT DEVELOPMENTS:
 Technology

Technology is advancing at a faster pace than ever before, and this is changing both the
expectations of patrons as well as the way in which the hospitality industry conducts its business.
Some of the trends in industry are leading to great improvements and savings for hospitality
industry companies; while some are changing how hotel developers plan their buildings,
infrastructure, management structure and staffing requirements.

In this article, Aurecon’s experts look at some of the latest trends in industry.

Wi-Fi infrastructure overhauls

Nowadays, hotel guests who travel with devices such as phones, tablets and computers no longer
see Wi-Fi as a perk, but as a must-have when they check in at a hotel.

Hotel guests expect to be able to connect to the internet seamlessly and without too many
interruptions, leading hotels to invest in better, faster Wi-Fi infrastructure so that people can do
business and use their technology devices with ease when they book their stay.

Hotels are also starting to move away from user pay models. In the past, hotels could charge
exorbitant rates and guests knew they would have to pay if they wanted to go online. Installing
and maintaining a hotel-wide wireless network may be coupled with costs, but many leading
hotel groups have started to install high density Wi-Fi and started to offer in-building mobile
phone coverage as guests have come to expect these services during their stay (not only for
themselves, but also for their guests if they are hosting a conference or function at the hotel). It
might not yet be financially feasible for hotels to completely abandon the user pay model, but
many of them are re-thinking their current infrastructure and pricing models.

Digital conference facilities

Besides being able to offer high density Wi-Fi for conferences and meetings, hotels also need to
be able to offer access to audio-visual (AV) and digital facilities for conferences. While the
amount of AV and digital equipment that goes into a typical conference room is fairly minimal,
staging companies are often hired for various projects in order to equip the facility as required.

31 | P a g e
A key component in designing effective conference facilities that can accommodate this type of
technology is creating easily accessible, concealed pathways in ceilings and flooring where
adequate power and data connectivity can be facilitated. If a hotel has extensive conference
facilities, network design becomes critical to ensure indoor mobile phone coverage, Wi-Fi
connectivity, VoIP, real time location services (RTLS) and internet protocol television (IPTV) as
well as all the accompanying AV and digital equipment.

Mobile communication and automation

In many airports, it’s no longer necessary to stand in a queue to check in and people are
expecting the same kind of easy, technology-driven check-ins at hotels. Guests want to be able to
do everything from checking in at a venue’s automated kiosk to ordering room service with a
digital device instead of standing in queues and moving around the hotel premises to order food.

Thanks to digital innovation and social media, guests also expect digital interactions with the
hotel to be personalized. When investing in digital apps for check-ins, room service and other
customer-oriented digital interactions, hotel operators are investing in systems and technologies
that can personalize the experience for guests, including a guest’s name being displayed on the
welcome desk at a digital check-in station; their food preferences or past purchases being
displayed in a digital room-service order system; and similar.

In addition, the ‘concierge in your pocket’ concept is fast gaining popularity due to its ability to
allow operators to include useful information such as surrounding entertainment venues; medical
facilities; and similar services.

Like many of the other technology trends in the hospitality industry, investing in a check-
in/concierge app requires a small initial investment and can lead to greater efficiency and savings
as hotel staff are able to focus on customer service and property developers don’t have to create
large static reception desks at each entrance and hotel location.

32 | P a g e
NFC technology
Near field communication (NFC) technology is the next-generation short-range high frequency
wireless communication technology that gives users the ability to exchange data between
devices. Communication between NFC devices can transfer data at up to 424 kbits/second and
the communication is enabled when two devices touch each other, which makes mobile
payments (by touching the smart phone to a credit card) an instant, secure process. This
technology is also ideal for self check-ins by guests at hotels as well as the next trend in this
article: smart room keys.

Besides payments and an easier way to gain entry to hotel rooms, NFC technology can also be
used to personalize a guest’s experience at a hotel or resort. For example, advertising can be
targeted based on gender and age (so if a child walks by a digital sign in the lobby, the
advertisement can change to promote a local theme park or the hotel’s kids club) and this
technology could also be used to track loyalty points from a guest’s use of the conference
facilities or room service. This opens many doors for hotels who want to offer a more
personalized experience at their establishment.

Robots and infrared sensors

Some hotels are already offering more futuristic experiences, with robots delivering any items
ordered through room service to a guest’s door. A boutique hotel that is nestled between Apple’s
headquarters and other tech companies, called Aloft Cupertino, has a robot butler called Botlr
that is able to move between the various floors of the hotel in order to take items such as
toothbrushes, chargers and snacks to guests. These types of digital systems not only make it easy
for hotel staff to deliver items to guests, but it also offers a forward-facing digital experience to
people who stay at the hotel.

Infrared scanners are now also used to minimize disruptions relating to housekeeping (which is a
common complaint from customers). Instead of hanging a ‘Do Not Disturb’ sign on doors or
having cleaning staff wake up traveling guests with knocks and phone calls, hotel staff can take a

33 | P a g e
more innovative approach by using infrared scanners that will detect body heat within a room
and tell cleaning staff that they should rather come back later if the room is currently occupied.

Smart room keys

Hotels will increasingly install smart room access systems that allow guests to unlock their doors
by simply swiping their phones across a keyless pad on the door. Starwood (owner of the
Sheraton, Weston and “W” hotel chains) has already upgraded 30,000 room locks across 150
hotels with this system and Hilton will be implementing a similar system at 10 of their US
properties this year. In 2016, they will be deploying the smart room key technology globally.
This technology will mean that guests don’t have to worry about picking up keys and front desk
staff won’t have to issue new keys in the event that a guest loses their room key.

Another innovative way to offer a keyless experience is through fingerprint-activated room entry
systems and retina scanning devices. Retina scanning is even more accurate and secure than
fingerprint scans and hotels like the Nine Zero Hotel in Boston have already installed an iris scan
system in place of key cards to control access to the hotel’s presidential suite.

Entertainment on tap
According to a Smith Micro Software trend report entitled The Future of Hotel In-Room
Entertainment; people are increasingly plugging in their own devices for in-room entertainment.
The hotel room’s television, radio and clock are taking a backseat as travellers use their own
technology to keep themselves entertained. An earlier survey by Smith Micro Software showed
that 81% of respondents wanted access to mobile video content at hotels and 55% said that
mobile content availability at a hotel would influence where they choose to stay.

¶¶ Cloud services
Being able to provide entertainment on tap and mobile content has led to the trend of hotels
investing in cloud services. While hotels want to be able to offer digital content, they don’t

34 | P a g e
necessarily want to invest in IT infrastructure and IT staff, making cloud computing the ideal
solution.

Not only is the initial capital investment lower than IT infrastructure and servers, but it gives
hotels the flexibility to expand and adjust their IT needs along with business growth, invest in
upgrades without causing a complete IT system overhaul and it removes the administrative
burden of managing an IT system in-house. Cloud computing is becoming the norm and we will
continue to see hotel groups replacing their legacy IT infrastructure with cloud solutions.

Feedback on social media

Technology has infiltrated almost every aspect of our lives and hotel developers need to realise
that almost any person checking in at a hotel, resort, spa or lodge, will have a smartphone in their
pockets.

Many companies in the hospitality industry are already using social media to their advantage as
guests check-in on location-based social media apps, tweet about their experience on Twitter and
share their holiday photos with friends and followers on Instagram and Facebook. This trend will
continue and hotels can expect to see even more social media engagement from guests who use
these platforms to give feedback about their experience, complain and give compliments about
their stay. Hotel staff are also expected to provide feedback and address and complaints or
queries from guests in real-time.

From an online, reputation management perspective, this is a trend that marketers and hotel
management need to manage proactively. Consumers don’t make decisions about where they’re
going to travel to or book a stay in a vacuum – they turn to community-developed content and
rating systems such as Trip Advisor and social media to make decisions about holiday
destinations, hotels and leisure. This shift has led to many hotel and leisure groups developing
active social media monitoring and communication strategies in order to stay on top of what’s
being said about them online and making sure that both marketing and operational staff address
feedback that has been given online.

An additional way in which operator can take full advantage of technology in this space is using
it to communicate how well they are doing (in real time) with respect to their various
environmental initiatives (such as real time electricity/water usage reporting, etc.)

Converged LANs to support multiple services

Converged local area networks (LANs) will also help hotels to create more intelligent buildings.
A variety of computer-based building services can be automated in order to control lighting,
refrigeration, air-conditioning and heating. Besides reducing energy consumption, converged
LANs can also be set up to provide a smarter, more personal experience. If a guest is known to

35 | P a g e
prefer his or her room temperature at 18°C with the lights dimmed to 65%, for example, this can
be programmed before the guest checks in at the hotel.

Integrated, seamless experiences

Technology doesn’t mean that customer experience can only happen online and through devices,
check-ins and online comments. All of these experiences need to be part of an integrated,
dynamic system so that the guests’ experiences are at the forefront of the marketing and

operational team’s mind. If a guest leaves a comment about their stay when they check-out of the
hotel, for example, the right people need to reply and acknowledge this type of communication.
If a guest leaves a complaint about not being able to stream mobile content during their stay, then
processes should be put in place to ensure the right person follows up by communicating with the
guest and solving the problem at the hotel.

Marketing, management and hotel developers can no longer work in silos and these technology
trends are giving them the opportunities, tools and solutions they need to create memorable
experiences that can lead to positive change and growth in the industry.

Mergers and Acquisitions:

Consolidation has increased across the hotel industry in the past few years, as conditions get
better for mergers and acquisitions, and anxiety grows over the state of the hotel cycle and
importance of scale.
Here is a list of some of the major industry consolidation from the last two and a half years:
Shanghai Jin Jiang International Hotels Group + Louvre Hotels Group
Shanghai-based Jin Jiang agreed to purchase French company Louvre Hotels Group in
November 2014 for more than €1.2 billion ($1.35 billion). The deal completed in March 2015.
Marriott International + Delta Hotels & Resorts
Marriott International agreed to acquire Canada-based Delta Hotels & Resorts in January 2015
for 168 million Canadian dollars (approximately $127.5 million). The deal completed in April
2015.
Jin Jiang International + Plateno Hotels
China’s Jin Jiang International acquired an 81% stake in Jakarta-based Plateno Hotels Group in
September 2015 for an undisclosed price.
Jin Jiang Hotels Group + Vienna House Group
Jin Jiang acquired an 80% stake in China-based Vienna House Group for approximately $289
million. The deal was announced in August 2015 and completed in 2016.

36 | P a g e
Singha Estates, Fico Holding U.K. + Jupiter Hotels Limited
The joint venture of two Thai companies acquired the U.K.’s Jupiter Hotels Limited in
September 2015 for £160 million ($211.6 million).
Marriott International + Starwood Hotels & Resorts Worldwide
Marriott International announced in November 2015 it would acquire Starwood Hotels &
Resorts Worldwide for $12.2 billion, including $11.9 billion in stock. Marriott in March
2016 increased its cash offer to $10 billion in Marriott stock and $3.6 billion in cash, following
a bidding war with China’s An bang Insurance Group. The deal finalized in September 2016.
Louvre Hotels Group + Nordic Hotels AG
Louvre Hotels Group acquired Germany’s Nordic Hotels AG in December 2015 for an
undisclosed price.
Commune Hotels & Resorts + Destination Hotels
Commune Hotels & Resorts and Destination Hotels announced in January 2016 the two
companies had merged. In September 2016 the company announced its name change to Two
Roads Hospitality.
HNA Tourism Group + Carlson Hospitality Group
China’s HNA Tourism Group announced in April 2016 it would acquire Carlson Hospitality
Group for an undisclosed sum. The deal closed in December 2016.
SBE + Morgan’s Hotel Group
SBE in May 2016 said it entered into a definitive agreement to acquire Morgan’s Hotel
Group for a total enterprise value of approximately $794 million. The deal closed in December
2016.
Benchmark Hospitality International + Gemstone Hotels & Resorts
Benchmark Hospitality International announced its merger with Gemstone Hotels & Resorts in
July 2016.
Red Lion Hotels Corporation + Vantage Hospitality
RLHC announced in September 2016 it would acquire Vantage Hospitality Group for $23
million and 690,000 shares of stock. The deal closed later that month.
Pace Holdings Corporation + Playa Hotels & Resorts
Pace Holdings Corp., an affiliate of TPG, announced in December 2016 it agreed to acquire
Playa Hotels & Resorts. The deal closed in March 2017 and resulted in a combined company
trading on the NASDAQ under the name Playa Hotels & Resorts.
Hyatt Hotels Corp. + Miraval Group
Hyatt Hotels Corp. in January 2016 announced it acquired New York-based wellness resorts
operator Miraval Group for $215 million. The deal was closed at the time it was announced.
China Lodging + Crystal Orange Hotels
China Lodging Group in February 2017 reached an agreement to acquire all equity interests in
Crystal Orange Hotel Holdings for an initial aggregate consideration in cash of approximately
3.7 billion Chinese Yuan ($540 million). The deal closed in May.

37 | P a g e
Labour Issues:
Turnover is a problem in the hospitality sector. According to a survey by the Bureau of Labor
Statistics, leisure and hospitality had some of the highest turnover rates, with an average
between 4.8 and 5.5 percent from February to June 2013. Along with construction, these figures
were consistently among the top two industries. Varied schedules are the likely cause, explains
Joe McInerney, president of the American Hotel and Lodging Association, in an article for the
Wall Street Journal. However, low pay can also contribute to turnover.
Owning a company in the hospitality industry can be a challenge for many small business
owners. Although working in this industry can be very satisfying for those who enjoy being
around people, the fast-paced nature can make it difficult for owners to keep up with it. A
successful hospitality-oriented business owner must thrive under pressure, have the ability to
think quickly, and understand the importance of keeping up with constantly changing rules and
regulations.
Recruitment
With relatively high turnover rates, it should come as no surprise that recruiting is another
problem facing HR in the hospitality industry. Even finding candidates with the skills to succeed
in entry-level positions has become an issue. Part of the problem is pre-employment
assessments, explains Joyce Gioia, CEO of Employer of Choice. When an establishment fails to
fully assess candidates, it increases the chances of placing the right person in the wrong role.

Management Skills
Employees in the hospitality industry are often promoted to management positions without
receiving proper training. If a manager is unable to perform his job properly, your business will
suffer. The manager needs to have people skills, so he can relate to both employees and
customers. He also needs to have experience in a leadership position, so he is comfortable
leading and managing your staff. Simply promoting a long-term employee to a leadership
position and expecting him to know how to be a manager does not work.
Company Policies and Procedures
Many small businesses in the hospitality industry do not have a clear set of policies and
procedures for employees to follow. Not only can this create confusion for members of your
staff, it can also cause health and safety issues for your business. You should have a set of
written standard operating procedures so your employees know what is expected of them. If an
accident happens or a legal complaint is filed against your business, you may even need to use
your set of policies and procedures as part of a defense in a court of law. Many employees in the
hospitality industry have taken their employer to court over job-related issues and have won
their case because the company did not have a set of written policies and procedures to use in its
defense.
Theft
Many businesses in the hospitality industry have major issues with employee theft. Your
employees have access to the products it takes to run your business. For a restaurant this

38 | P a g e
includes items such as food, alcohol, decor objects and even cash. It can be relatively easy for a
dishonest employee to steal these items from you. It is important to regularly check inventory
levels and monitor employee behavior to ensure your business is not the victim of employee
theft. If a staff member is stealing from your business, this can have a major impact on profit
levels and the financial stability of your company.
Training
High turnover in the hospitality industry commonly leads to staffs composed of poorly trained
employees. If your business is short-staffed the first thing on your mind might be putting a new
employee to work instead of teaching him to do his job the right way. While this may provide a
short-term solution to your staffing issues, it will ultimately hurt your business in the long run.
An employee who has not received proper training can’t do his job properly, which can result in
safety hazards, frustration, unsatisfied customers and frustrated senior staffers.
Morale
The morale of your staff needs to be high to provide good customer service, but this can be
difficult to achieve in the hospitality industry. High employee turnover can lead to low morale.
This results from a mixture of skilled and unskilled employees, which can be very frustrating for
talented workers. Long hours and stressful working conditions, especially when your business is
understaffed, cause also have a negative impact on employee morale.

39 | P a g e
 INDUSTRY ANALYIS - DESK RESEARCH
ON
RENTAL CARS

40 | P a g e
 INDEX

Sr.No Topic Pg.no Sign

1. Industry Analysis – The Basics 42
2. Promoters And Management Ethos 48
3. External Environment 58
4. Financials 62
5. Recent Development 78

41 | P a g e
 1. INDUSTRY ANALYSIS

A car rental, hire car, or car hire agency is a company that rents automobiles for short periods of
time, generally ranging from a few hours to a few weeks. It is often organized with numerous
local branches (which allow a user to return a vehicle to a different location), and primarily
located near airports or busy city areas and often complemented by a website allowing online
reservations.

Car rental agencies primarily serve people who require a temporary vehicle, for example, those
who do not own their own car, travelers who are out of town, or owners of damaged or destroyed
vehicles who are awaiting repair or insurance compensation. Car rental agencies may also serve
the self-moving industry needs, by renting vans or trucks, and in certain markets, other types of
vehicles such as motorcycles or scooters may also be offered.

Alongside the basic rental of a vehicle, car rental agencies typically also offer extra products
such as insurance, global positioning system (GPS) navigation systems, entertainment systems,
mobile phones, portable Wi-Fi and child safety seats.

The earliest known example of cars being offered for rent dates to 1906. The German company
Sixth was established in 1912 under the name Sixth Autofahrten und Selbstfahrer (Sixth Car
Cruises and Self Drivers)

Industry Analysis

The Car Rentals segment contains vehicle rentals for private use that have been booked via the
Internet or an app. This segment takes into account time-based rental deals with upfront fixed
costs from professional car rental services such as SIXT, Hertz, and Budget.

The following are not included: carpools, chauffeur services, taxis, or car-sharing offers with
usage-based or quote-based pricing models.

The Current Potential

Businesses are increasingly recognizing the lucrative opportunity across the length and breadth
of India presented by the rise of the car rental economy. The interesting thing to note is that only

42 | P a g e
10% of the car rental market is organized. The remaining 90% remains a potentially unorganized
market waiting to be tapped via technology-driven solutions. This presents a huge opportunity in
both – self-drive car rentals as well as chauffeur-driven car rental services.

The current model of a car rental business is dotted by common characteristics across India –
unregulated, transactional, low margin, and operationally intensive. A handful of online car
rental businesses like Zoomcar, Carzonrent and Ola Rentals have gained significant traction in
this space. The market is wide open for new entrants and they can build a robust vehicle/car
rental startup with specific use cases and vehicle categories.

Popular Online Car Rental Apps & Services In India

Startups and vehicle fleet owners and operators can take a cue from the below success stories and
leverage car rental app development expertise to launch a successful car rental business.

1. Myles
Owned by Carzonrent, the 21-city coverage of Myles is one of the better success stories in
car rental space. From as less as 2 hours, stretching to months, you can own a Myles car for
a range of service tenure.
2. ZoomCar

From a Nano to Mercedes GLA, this well-known self-drive car rental service provider offers a
diverse range of cars for its customers.

3. Ola Rentals

Launched in June 2016, Ola Rentals provides multiple types of vehicles – from SUVs to
hatchbacks. The attractive pricing makes Ola Rentals a great option for those who want to attend
meetings, shop around the city, go for a weekend trip, or make a family visit to a function or
event. Claiming a market share of 60%, Ola Rentals is one of the biggest players in the car
rentals segment in India.

4. Uber Hire

The time-based on-demand car rental service from Uber is great for those who have to make
multiple stops while driving across the city. Once their pilot run in Kochi was executed
successfully, it launched full scale in Feb 2017 with operations across 8 cities.

5. ECO Rent A Car

It offers diverse services like cars on rent, cars for corporate employees, transportation for
company staff, and cars for specific events. It specializes in high-end luxury cars available on its
rolls.

43 | P a g e
Future of Car Rental Business

The Indian Car Rental Industry has grown leaps and bounds over the years due to a rising
demand for better and sustainable modes of transportation among its growing urban population.
Driven by a hunger to experience vast avenues, coupled with an innate fear of missing out on
certain opportunities, the millennial youth of India is gradually becoming the force that is fueling
the growth of the car rental industry.

According to a report by Ken Research – a global aggregator & publisher of Market intelligence
research reports, the Indian car rental market’s revenue is projected to grow at a considerable
Compound Annual Growth Rate (CAGR) of 35 per cent. Furthermore, this sector is expected to
be worth more than INR 800 billion by 2019, which is quite an encouraging aspect for market
players in this segment.

TRENDS

Car rental in India registered further strong retail current value sales growth in 2017. This was
primarily driven by the increasing number of millennia’s in the country. The average age of the
population is below 30-year-old, and most young adults do not want to invest in a car, preferring
to rent a car to drive intercity for weekend getaways. This consumer base stimulated demand for
car rental services in India. However, this represented primarily leisure non-airport car rental
demand, mostly for short duration trips or weddings.

Market Overview

Car rental and leasing industry is one of the fastest growing segments in the transportation
industry of India. More importantly, the organized car rental and leasing market is still miniature
as compared to rest of the car rental market in India, which constitutes only 4-5% of the market
in terms of absolute number of vehicles. The rest of the market is acquired by independent
market players who own fleets of 2-50 cars and typically have a presence in 1 or 2 cities. Further,
growth in number of foreign and domestic travellers in the country and rising consumer base for
car rental industry owing to rapid urbanization has significantly strengthened the growth of car
rental industry. Moreover, the poor public transport system in the country with widespread
smartphone usage offers the great potential for the development of car rental services in India.
However, the lower cost of public transport as compared to taxi rental is one of the major factors
restraining the market growth .

44 | P a g e
Goldstein Research analyst forecast India car rental & leasing market is anticipated to grow at a
CAGR of +17% over the forecast period as investments by the new and existing market players
in the region is expected to upsurge in coming years to cater the huge demand for rented
transportation in the region.

India Car Rental & Leasing Market Segmentation

By Rental Type

o Chauffeur Drive
o Special Events
o Self-Driving
o Business Rental

Based on the rental type chauffer drive or taxi services acquired the largest share of more than
70% share in India car rental and leasing market. On the other hand, self-driving segment is
likely to be the fastest growing segment, which is expected to grow at a CAGR of +19% over the
forecast period. Business car rental and leisure car rental are predicted to record a similar CAGR.

By Services Type

45 | P a g e
 o Interstate Services
o Intrastate Services
o Airport Transfers

By Vehicles Type

o Luxury Cars
o Executive Cars
o Economy Cars
o Sports Utility Vehicles
o Multi Utility Vehicles

By Mode of Booking

o Online Bookings
o App-based car rental services
o Web-Based Car Rental Services

Pricing Policies

The price will depend on the type of car and whether or not your driver speaks English
(these drivers typically cost a bit more). The charge is per kilometer, and you'll always
have to pay a minimum per day (usually 250 or 300 kilometers) no matter what distance
is traveled. The rates for each type of car do vary by company and by state, although the
following is a general estimate:

 Small Car -- Typically an air-conditioned Tata Indica, starting from about 10 rupees per
kilometer. It's cheaper to hire a modern car than one of the atmospheric old Ambassadors,
which will cost you about 15 rupees per kilometer. These cars comfortably fit two
passengers but can fit four.
 Medium Car -- Typically a Toyota Innova SUV or Mahindra Xylo, starting from 13
rupees per kilometer. These cars comfortably fit four passengers but can fit six.

 Large Car -- Typically a Tempo Traveller, starting from 18 rupees per kilometer. These
unique vehicles are like mini buses and can fit up to 10 passengers. Larger ones are
possible.

The rates are for travel from destination to destination. They usually include fuel,
insurance, tolls, state taxes, parking, and the driver's food and accommodations. Rates for
hire for sightseeing within a city are less.

46 | P a g e
Car Rentals – Indian Youth’s most preferred Mode of Transport

The car rental market has several factors in its favor that are responsible for its growing success
in the country. Let us explore the most prominent advantages of this industry:

 Easy availability – With Car rentals, consumers can easily find the best vehicular options
based on their requirements. Whether it is for reaching another city, attending an event or
business meeting, or simply for travelling, car rental services offer a wide range of
vehicles that best suit an individual’s needs.
 Better chance of accommodating a big group – A typical hatchback car can only
accommodate a maximum of 5 people. However, for those who wish to travel in a larger
group, car rentals are the best option. Most car rental service providers these days allow
people to pick the vehicle of their choice for their travelling needs, while some have an
in-house team of dedicated professionals who can help customers choose a vehicle based
on their individual requirements.
 Limited responsibility regarding vehicle repair and/or maintenance – Perhaps one of the
biggest advantages that rental cars have over personally owned cars lies in its limited
scope for repair and maintenance. While most car rentals companies do have guidelines
in place in case of accidental damages caused to their vehicles by the customer, it usually
involves an advance security deposit or minimal charges.
 Rental Cars are cost effective – Despite being a relatively new market, rental cars get an
upper hand over personally owned ones when it comes to being pocket-friendly. This
commuting option is cost effective, allowing customers to save a lot of money, while also
enjoying a hassle free experience.

47 | P a g e
 2. PROMOTERS AND MANAGEMENT ETHOS

Business Function Carried Out Online:

These days, it has become quite common for people to book or rent cars as and when they want,
or from wherever they are via tech-enabled online car rental services that can be accessed with
just a touch or tap of a button. Since most people possess smartphones nowadays, accessing such
services seem like child’s play – Pick, check availability, book the car, done. It is really as
simple as that. Integrating comprehensive technology in one’s car rental business has enabled
many business owners to expand their services on a wider user spectrum, a move that has helped
in significantly improving their overall customer experience.

What’s more, such online platforms have managed to accelerate the growth of India’s car rental
industry, and have also enabled several offline service providers to upgrade their business model
and explore more opportunities and gain more customers by following the digital route.

 Background Of promoters groups

 Myles
 NEW DELHI: New Delhi-based Carzonrent, one of India’s largest car rental companies,
will be spinning off its self-driving business Myles, into a separate unit, and is also in the
market to raise fresh capital to grow the venture.

The decision to spin off Myles into a new entity was first reported by ET in 2014, and the
company has now appointed a consultant to oversee the process. Carzonrent, the parent
company, will also look at raising about $20 million (about Rs 135 core), specific ..
Myles, according to Rajiv Vij, managing director of Carzonrent.

 ZoomCar
Zoomcar is a self-driver car rental company headquartered in Banglore, India. The company
was founded in 2013 by David Back and Greg Moran, as of April, the company operates in
45 cities across the country.

Type Private

48 | P a g e
  Transportation,
Industry  Food Delivery

Founded 3 December 2010; 8 years ago

Bhavish Aggarwal
Founder
Ankit Bhati
Bangalore, Karnataka
Headquarters ,
India[1]
India, Australia, New Zealand, UK
Area served
(169+ cities)
Bhavish Aggarwal CEO
Key people
Ankit Bhati CTO
 CSR Policy

 Overview
 As a corporate entity, our Company “Ecos (India) Mobility & Hospitality Private
Limited” recognizes that its business activities have wide impact on the societies in
which it operates, and therefore an effective practice is required giving due consideration
to the interests of its stakeholders including shareholders, customers, employees,
suppliers, business partners, local communities and other organizations.
 The vision of the Company is “to actively contribute to the social and economic
development of the communities in which it operates.”
 CSR Policy & Initiate of the Company
 In order to fulfill the above objective, Corporate Social Responsibility (CSR) Policy of
the Company has been framed, under which the Company shall undertake the CSR
activities through the “Aashirwad Trust” established in the year 2016 by the Promoters of
the Company to initiate necessary steps/ activities for advancement and betterment of the
society.
 The Trust is an irrevocable public charitable trust made for the benefit of all persons
belonging to different communities irrespective of their caste, creed or religion.
 The trust is constituted with the object of:-
a) Promoting education, including special education and employment enhancing vocation
skills or professional training especially among children, women, elderly, youth and the
differently abled and livelihood enhancement projects;
 b) Running and organizing basic educational facilities to helpless children; looking after
their health and creating atmosphere for their upliftment;
 c) To establish schools, colleges and other educational institutions as would be
considered necessary and expedient for the benefit of the beneficiaries;

49 | P a g e
  d) To establish, maintain and support libraries, reading rooms for advancement of
education and knowledge in general;
 e) Affording of medical relief to public in such manner as the Trustee may think fit;
 f) Eradicating hunger, poverty and malnutrition, promoting health care including
preventive health care and sanitation and making available safe drinking water;
 g) Promotion of Indian and orient therapies of medical science to serve the masses by
naturopathy, Ayurveda, yoga and other alternatives medicine;
 h) To provide medical aid, medical facilities or assistance for medical treatment and for
that purpose, inter alia, to enter into agreement or agreement with any hospital,
dispensaries and allied institution or with any physician, surgeon or specialist for
achieving this object in such manner and to the extent the trustees deem it expedient and
necessary;
 i) To institute scholarships to the deserving and/or needy amongst the beneficiaries with
the objectives of promoting education at all stages;
 j) To finance education of the deserving and/or needy with such conditions or regulations
as the trustees would deem necessary in the general interest of the trust;
 k) To afford relief to the poor in such manner as the Trustee may deem fit including
distribution of free food and clothes to the poor and needy;
 l) To set up and help by endowment or other or otherwise institution or funds for the
benefits of the poor widows;
 m) To subscribe, contribute and/or donate to any public funds or institutions or public
charitable trust for the promotion of any public charitable trust as are authorized by this
Deed;
 n) To provide legal assistance to ladies harassed for dowry and other reasons;
 o) Promoting gender equality, empowering women, setting up homes and hostels for
women and orphans; setting up old age homes, day care centers and such other facilities
for senior citizens and measure for reducing inequalities faced by socially and
economically backwards groups;
 p) To have playgrounds and other equipment’s to promote education and general health
of the beneficiaries;
 q) To open welfare centers for the beneficiaries for promoting health, education, culture
and such other similar objectives as would result in the general betterment of the public;
 r) To seek cooperation and guidance from other trust having similar aims and objects and
to extend cooperation to all other trusts having similar aims and objects, financially and
socially;
 s) To organize programmer and seminars for exchange of experiences thoughts of
different organizations, institutions and persons;
 t) Training to promote rural sports, nationally recognized sports, Paralympics sports and
Olympic sports;

50 | P a g e
  u) All other activities which are helpful for the upliftment of human as whole, in the eyes
of the trust;
 v) Contribution to Prime Minister Relief Fund.
 The aforesaid objects are stipulated in the Trust Deed.
 To attain its CSR objectives in a professional and integrated manner, activities shall be
carried out by the “Aashirwad Trust”, in accordance with the provisions of Section 135 of
the Companies Act, 2013 and Schedule VII of the Act and the Companies (Corporate
Social Responsibility Policy) Rules, 2014 or as may be amended from time to time.
 Pursuant to the provisions of sub section (5) of section 135 of the Companies Act, 2013,
the Company shall spend in every financial year at least 2% of the average net profits of
the Company made during the three immediately preceding financial years in the
activities mentioned in the CSR Policy and/or Trust Deed or as may be amended from
time to time.
 Under the terms of CSR Policy, if the amount allocated and transferred for the purpose of
compliance for CSR activities remains unutilized, it will not lapse and will be carried
over to the next year which will accumulate in non-lapsable pool as provided in CSR
Policy of the Company.
 Towards achievement of CSR objectives, the Company shall abide by the CSR Policy of
the Company framed in accordance with the Companies Act, 2013 and Rules framed
thereunder or as may be amended from time to time.
 Objectives to be covered under CSR Policy
 Our Company is vigilant in its enforcement towards corporate principles and is
committed towards sustainable development and inclusive growth.
 The Company constantly strives to ensure strong corporate culture which emphasizes on
integrating CSR values with business objective.
 The vision of the Company is “to actively contribute to the social and economic
development of the communities in which it operates”.
 In so doing build a better, sustainable way of life for the weaker sections of society and
raise the country’s human development index.
 To attain its CSR objectives in a professional and integrated manner, followings are the
activities which may be carried out by the Company, in accordance with the provisions of
Section 135 of the Companies Act, 2013, Schedule VII of the Companies Act, 2013 read
with the Companies (Corporate Social Responsibility Policy) Rules, 2014.
 – Eradicating hunger, poverty and malnutrition, promoting preventive health care and
sanitation and making available safe drinking water,
 – Promoting education, including special education and employment enhancing vocation
skills especially among children, women, elderly, and the differently abled and livelihood
enhancement projects,
 – Promoting gender equality, empowering women, setting up homes and hostels for
women and orphans; setting up old age homes, daycare centers and such other facilities

51 | P a g e
 for senior citizens and measures for reducing inequalities faced by socially and
economically backward,
 – Ensuring environmental sustainability, ecological balance, protection of flora and
fauna, animal welfare, agro forestry, conservation of natural resources and maintaining
quality of soil, air and water;
 – Protection of national heritage, art and culture including restoration of buildings and
sites of historical importance and works of art; setting up public libraries; promotion and
development of traditional art and handicrafts,
 – Measures for the benefit of armed forces veterans, war widows and their dependents;
 – Training to promote rural sports, nationally recognized sports, paraolympic sports and
Olympic sports;
 – Contributions or funds provided to technology incubators located within academic
institutions which are approved by the Central Government,
 – Rural development projects,
 – Slum Area Development
 – Any other project, welfare activity in line with the aims and objectives specified above
and within the ambit of the provisions of Section 135 of the Companies Act, 2013 read
with (Corporate Social Responsibility Policy) Rules, 2014, and duly approved by the
Board of Directors of the Company;
 – As a part of CSR strategy, in line with the aims and objectives specified above, the
scope of CSR activities would cover the following areas:
 a) Education;
 b) Health;
 c) Drinking Water/ Sanitation;
 d) Environment;
 e) Community Development and Social Empowerment;
 f) Generation of employment opportunities and livelihood;
 g) Any other activity as may be identified by Board of Directors.

Responsibility of CSR Committee

 – Formulation, development, amendment in policy framework and broad guidelines for
selection of the projects, planning, budget execution and monitoring;
 – Selection of a project in accordance with policy framework and guidelines, prepare a
project report along with estimated cost and send for the approval of Board;
 – Formulation of strategies for efficient implementation along with other stakeholders
like civil society and implement the project as per guidelines;
 – Supervision, coordination and implementation of CSR activities/ projects;
 – Compilation of information and preparation of regular/ annual reports etc;

52 | P a g e
  – To coordinate with various other departments for exchange of information for
promotion of CSR activities and ensure harmony in activities by different agencies;
 – Submit quarterly and annual statements of physical and financial progress to the Board;
 – To consider and approve the projects for CSR activities and submit annual budgetary
allocation among various projects;
 – To arrange workshops, training etc. to sensitize the staff for better implementation of
the policy;
 – To keep up-dated CSR policy including the changes/ clarifications suggested/issued by
the Ministry of Corporate Affairs and other government agencies;
 Implementation Procedure
 – Discussions and interactions with various private/ Government bodies/ Government
officials may be held to identify the areas for undertaking CSR activities;
 – While identifying the CSR activities, emphasis shall be on the areas related to the
business of the Company;
 – A survey may be carried out to find out the needs and requirements of community
before planning a project;
 – The target beneficiaries, the local authorities, institutions etc. involved in similar
activities if need be, may be consulted in the process of planning and implementation of
CSR program;
 – Based on the need analysis survey, prepare a detailed program report reflecting content,
objectives, major milestones, time frame for implementation, budget thereof and
implementing agency.
 The investment in CSR activity would be project based and for every project, time-frame
and periodic targets would be finalized at the outset along with the modalities for the
concurrent and final evaluation.
 – Ensure that that the CSR activities are in accordance with the approved policy.
Activities related to sustainable development will form a significant element;
 – May assign CSR projects to NGOs/ specialized agencies under an MOU/ Agreement
reflecting the mutual terms and conditions for the projected activities. The Committees
should make all efforts to verify the reliability and past track record of the engaged
agency and only agencies of good repute may be engaged.
 Monitoring and Evaluation
 – The impact of the CSR activities undertaken should be quantified to the extent possible
with reference to baseline data, to be created before the start of any project. Therefore,
Base-line surveys would be an integral part of CSR program so that progress can be
measured. Photographic record may be maintained wherever possible;
 – For proper and periodic monitoring of CSR activities, if considered necessary, the
programs undertaken under CSR policy may be evaluated through a suitable independent
external agency and the evaluation should be both concurrent and final.

53 | P a g e
  Governances

Effective Corporate Governance Framework

 Need for effective framework

 Globalization, spate of M&As, jurisdictionsloosingimportance–needforcommonlanguage-
CG;language-CG;
 For corporate sector – competition, capital ,talent & technology – CG;
 Responsibility of Government & Regulators to provide effective legal structure – Indian
scene –MCA, SEBI, RBI & IRDA

 Redefining the legislative framework

 Initiatives
 New Companies Act – inducing good CG practices through self regulation, responsive
legal framework based on shareholders’ democracy; disclosure based regime; rational
penal provisions with built-in deterrence and effective protection
 Amendments to the Acts governing three professional
institutes(ICAI/ICSI/ICWAI)withaviewtostrengthenthedisciplinary(ICAI/ICSI/ICWAI)wi
thaviewtostrengthenthedisciplinarymechanism and bring transparency in their working.
 Notification of Accounting Standards with a view to bring the disclosure norms in tune
with the international reporting standards;
 SEBI – Clause 49 – Appointment of IDs, Audit committee, Code of conduct, disclosures
of related party transactions, remunerations, compliance of accounting standards,
certifications of CEO & CFO ,Compliance Certification & Whistle-blower policy
(optional);
 Other initiatives
 Setting up of Investor Education and Protection Fund
 Empowering investors through the medium of education and information with the help of
education and information with the help of investor associations, VOs, NGOs, etc.;
 Launching of websites – www.investorhelpline.inand www.watchoutinvestors.com;
 Setting up of NFCG in partnership with stakeholders – CII, ICAI & ICSI;

 Major initiatives under NFCG

 Foundation has launched a website of NFCG for dissemination of policies for better
corporate governance;

 Various orientation programmers for Directors through Centers of Excellence, seminars

and conferences

54 | P a g e
 topropagatetheneedforfollowinggoodcorporatepropagatetheneedforfollowinggoodcorpora
tegovernance practices are being organized;

 Constituted core groups on CG norms for IDs and for Institutional Investors (as a sequel
to World Bank ROSC study) and their reports have also been received;•

 Constituted ore group son Corporate Social Responsibility and for SMES.

 Rental car industry in India initiatives towards social inclusion

Digital: Transforming governance and day-to-day lives

Digital: Transforming governance and day-to-day lives Digital was another name for information
technology (IT) a decade ago. Digital is no longer just about computers and the Internet but also
about mobile phones, social networking, augmented and virtual reality, block chain, artificial
intelligence (AI), mobile apps and much more. Over the years, there has been a tremendous shift
in the way IT has been used. The focus of IT is now moving from simple productivity
improvement and automation to making lives simpler and connected. Digital technology has
transformed our life and work across various institutions, sectors and industries. Decades ago, it
was hard to imagine mundane tasks such as grocery shopping and consultation with a doctor
taking place over a video call from the comfort of home. Life is now unimaginable without
smartphones or high-speed Internet. Digital has pervaded nearly all aspects of our lives, be it
health and transport to shopping, education and work life. The global population is forecast to
increase by over a billion people in the next 13 years to reach 8.6 billion in 2030.1 India’s
population is expected to reach 1.35 billion by 2020. Emerging economies are expected to
contribute a majority of the increase in global population. By 2020, a full generation, Generation
C (for connected), would have grown up in a digital world of texting, social networks, mobile
devices and apps and the Internet.2 Population explosion and increasing digital awareness call
for significant changes in the way cities are run and governed and public services delivered to
people. Citizens now anticipate more personalised, connected experiences with the government.
This is where the role of digital becomes all the more vital. The expectations of a modern-day
connected citizen are manifold; some of the basic ones are listed below: The expectations of
citizens are rising. These new aspirations are the driving force behind the transformation of
public service delivery, primarily in high-impact areas such as health, education and social
benefits. With many services such as booking a cab or ordering food made convenient and fluid
with the advent of mobile apps, comparisons between these services and government services are
inevitable. People expect more responsiveness, agility, and accountability from government
services. The digital transformation in governance and public service delivery with information
and communications technology (ICT) is not just enhancing productivity and efficiency but also

55 | P a g e
improving the user experience and promoting connectedness with citizens. Though governments
are making efforts to enhance service delivery through portals, apps and help desks, last mile
connectivity and personalization remain a challenge with regard to citizen services. Governments
need more capacity to comprehend and respond to intricate issues and seamlessly provide
services aligned with national and citizens’ aspirations. A start has been made in this direction
and it needs to be taken forward with the next leap to fulfill the aspirations of people. 1.
Availability of public services on demand 2. Awareness of services and government initiatives
and consequent reduction in physical visits to government offices for processing of requests 3.
Omnichannel delivery of services 4. Single point of access for all government services 5.
Responsive government systems 6. Transparency in processes 7. Alerts and notifications 8.
Engagement/feedback mechanism

Though India has successfully incorporated environmental aspects into the policy framework
way back in 1985, it is in the previous decade, more especially since 2014, proactive
environment conservation initiatives were undertaken by the Union Government. This pro-active
approach is evident from reorganization and renaming of the erstwhile Ministry of Environment
and Forests as the Ministry of Environment, Forest and Climate Change to deal the with ever
increasing threats to the environment from multiple sources.

New methods to deal with environmental issues are –

1. Public Private Partnership: Previously, the government was alone responsible for funding
and executing the environment conservation measures. Over the last three years, the emphasis
was on public private partnership (PPP) to leverage the capital, technology and human resources
available to the private sector. For instance, PPP Model was adopted for forest conservation. As
part of this initiative, the participating companies are allowed to undertake reforestation
measures and utilize the newly developed forest produce for commercial purposes. The PPP
model ensures lesser imports of forest produce, unregulated use of forest resources and
unburdening the exchequer.

Use of technology:

The information and communication technology has been leveraged to a great extent for real
time monitoring of pollutants from industries, status of natural resources and wildlife and
address grievances. The deployment of satellites to monitor forest cover and water bodies,
web-based application on Integrated Waste Management System, deployment of drones for
surveillance in deep forests, use of camera traps for wildlife census illustrate the use of
technology in the environmental management.

56 | P a g e
 3. Active International Collaboration: It includes collaborations at the bilateral and
multilateral level for the protection of the environment. It is evident from the signing of
bilateral agreements and MoUs on renewable energy resources with the developed countries
like the USA and Germany, the submission of Intended Nationally Determined Contribution
(INDCs) to the UNFCCC and the ratification of the Paris Climate Agreement on 2 October
2016. The launch of the International Solar Alliance involving 121 countries of India indicates
its leadership role on the global stage.

4. Timely amendment of Rules: The policy environment has become dynamic to address ever
growing environmental challenges. The release of separate notifications specifying rules for
management of E-Waste, Plastic Waste, E-Waste, Construction & Demolition Waste and
Biomedical Waste in 2016 indicate the government's intention to alter the decades-long policy
eco-system.

5. Procedural Reforms: The procedural reforms were aimed at increasing the transparency,
curbing red tape in environmental clearances and decentralization in decision making. The
launch of the Web Portal for obtaining Coastal Regulation Zone (CRZ) Clearances is outcome
of this reform.

6. Broad-based campaign: Previously, only the government agencies were involved in

spreading the awareness about the environment conservation. However, in the last few years,
with the initiatives like Chintan Shivir, School Nursery Programmers and Climate Change
Special Express, the government could successfully increase the participation of civil society
and school children and educational institutions in the environmental conservation.

Impact Analysis of the Environment Conservation Measures

The major impacts of recent environment conservation measures are -

1. Forest cover: As per India State of Forest Report (ISFR) 2015, which was released in
December 2015, the total forest cover of the country has increased by 3, 775 square kms in two
years. As a result the total forest and tree cover has reached 79.42 million hectare, which is
24.16 percent of the total geographical area.

2. Wildlife population: As per the estimate released by the World Wildlife Fund and the
Global Tiger Forum in 2016, the number of wild tigers has gone up to 3,890, from the earlier
2010 estimate of 3200. It is a good sign since the population of tiger is a keystone species and
considered as a better parameter to gauge the state of wildlife

57 | P a g e
 3. Pollution levels: Despite a series of measures, the quality of air and water pollution has
been deteriorating due to various reasons. The reports suggesting that nearly 80% of India’s
surface water is polluted and worsening air quality index are still the cause of concern and
illustrate the need for strengthening of the existing policy measures in this regard.

4. Administrative Efficiency: The performance of the administration has improved in

recent years due to procedural reforms and deployment of technology on a large scale. As a
result, the average time needed to give an environmental clearance has declined to 109 days
over the last three years from the erstwhile 600 days.

Conclusion

In contrast to the earlier approach of enacting new legislations and launching new schemes,
the recent environment initiatives have a new vigour that includes not only the enlargement
of the issues covered such as climate change, reforestation, protection of wildlife, etc, but
also includes new methods to deal with environmental challenges.

Despite the renewed efforts by the government, the environmental problems are still
persisting due to multiple factors like – growing population, fossil-fuel based
industrialisation, lack of effectiveness in the implementation of rules and regulations. It is
high time, the government, corporate sector and the civil society should come together to
build a sustainable environment to achieve sustainable and inclusive growth.

58 | P a g e
 3. EXTERNAL ENVIRONMENT

In an unprecedented decision, the Competition Commission of India has charged a penalty of Rs

2,545 crore on 14 car makers for infringing trade norms in the spare parts and after services
market, in a 215 page order. The ones penalized include Maruti Suzuki, Tata Motors, Honda
Spiel Cars India, Volkswagen India, Fiat India Automobiles, BMW India, Ford India, General
Motors India, Hindustan Motors, Mahindra & Mahindra, Mercedes-Benz India, Nissan Motor
India, Skoda Auto India and Toyota Kirloskar Motor have also been penalised.

The maximum fine of Rs 1,346.46 crore has been slapped on Tata Motors, followed by Maruti
Suzuki (Rs 471.14 crore), Mahindra & Mahindra (Rs 292.25 crore) and Toyota Kirloskar
Motors (Rs 93.38 crore).

For each Company, the individual penalty amounts to two per cent of their average turnover.
The penalty is to be deposited within 60 days of receipt of the order. While the complaint by
Shamsher Kataria was only against three companies, others were included in the Director
General’s investigation due to the prevalence of anti-competitive issues throughout the
automobile industry. DG is the investigation arm of CCI.

The Commission concluded that these companies abused their dominant position, affecting
around two crore car consumers. The fine on others are General Motors (Rs 84.58 crore), Honda
Spiel (Rs 78.47 crore), Skoda Auto India (Rs 46.39 crore), Ford India (Rs 39.78 crore), Fiat
India Automobiles (Rs 29.98 crore), BMW India (Rs 20.41 crore), Mercedes-Benz (Rs 23.08
crore), Hindustan Motors (Rs 13.85 crore), Volkswagen India (Rs 3.25 crore) and Nissan
Motors (Rs 1.63 crore).

The car companies were asked to work for standardization of an increasing number of parts in
such a manner that they can be used across different brands, like tyres, batteries and so on,
which would result in reduction of prices and also give more choice to consumers as well as
repairers/service providers.

Key initiative by the government to promote the rental car industry:

• Modi government plans major policy push to promote e-vehicles:

Two-wheelers, three-wheelers and non-air-conditioned city buses made by automobile

companies in India will be sold without batteries as part of the plan, thus slashing prices by as
much as 70%. The batteries will be leased at a specified cost and can be swiftly swapped with

59 | P a g e
programme to start scaling in three years. The programme is in the final stages of drafting," the
official said.
"It will take just two-and-half minutes to replace auto batteries and can be done in 10 minutes
when city buses rest after about a 30-km trip. The model, however, will not work for AC cars
and AC buses," the government official said.
The ministries of road transport, power, petroleum and heavy industries are involved in the
programme being framed by the government, he said.
For taxis, the government is considering fast-charging electric stations. Specifications and
guidelines for each type of electric vehicle, lease plans, battery swaps and charging stations are
being worked out.
• Government Initiatives -Indian Auto Industry to conceptualize Make In India :

Government of India aims to make automobiles manufacturing the main driver of ‘Make in
India’ initiative, as it expects passenger vehicles market to triple to 9.4 million units by 2026, as
highlighted in the Auto Mission Plan (AMP) 2016-26.
The Government of India encourages foreign investment in the automobile sector and allows
100 per cent FDI under the automatic route.
In the Union budget of 2015-16, the Government has announced to provide credit of US$ 127.5
billion to farmers, which is expected to boost the tractors segment.
The Government plans to promote eco-friendly cars in the country i.e. CNG based vehicle,
hybrid vehicle, and electric vehicle and also made mandatory of 5 per cent ethanol blending in
petrol.
The government has formulated a Scheme for Faster Adoption and Manufacturing of Electric
and Hybrid Vehicles in India, under the National Electric Mobility Mission 2020 to encourage
the progressive induction of reliable, affordable and efficient electric and hybrid vehicles in the
country
The Automobile Mission Plan (AMP) for the period 2006–2016, designed by the government is
aimed at accelerating and sustaining growth in this sector. Also, the well-established Regulatory
Framework under the Ministry of Shipping, Road Transport and Highways, plays a part in
providing a boost to this sector.
Regulations policy affecting the car rental Industry:
• Transfer Pricing Regulations– the Income Tax Act has provisions which make provisions
for taxation of income arising from transactions between associated enterprises. Transfer Pricing
Regulations lay down that any income arising from such an “international transaction” shall be
computed having regard to the “arm’s length price”. The regulation also lays down the method
to calculate the tax. Since it is already discussed above that the Automotive Sector in India is
one of the largest in the world and producing almost 20 million units a year, the industry is often
subjected to rigorous transfer pricing scrutiny, which may lead to slower growth in the
Automotive Sector.

60 | P a g e
• Research and Development Case Act, 1986– in the previous section, it was discussed
about Automotive Research Association of India. Their main work is to do research and
development work for the Automotive Sector. Here the Research and Development Cass Act
comes into play. The act states that all payment made towards import of technology will attract
a case of 5 %
• Customs Duty– Customs duty is charged when any product is imported to India.
Automobile manufacturers based in foreign countries who want to avail lower custom duties
and pass on the benefits to the customers can import Completely Knocked Down Kits (CKD)
Kits which are charged concessional Customs duty at 10%.[4] At present, if a completely built
unit of any vehicle is imported it attracts a duty of 105%. That is more than twice of the actual
cost of the vehicle itself. While on the other hand a Semi Knock Down Kit attracts an import
duty of only 62% as compared to it.
Controlling ministry of rental car industry

1. Ministry of Road Transport and Highway :

An apex organization under the Central Government is entrusted with the task of formulating
and administering, in consultation with other Central Ministries/Departments, State
Governments/UT Administrations, organizations and individuals, policies for Road Transport,
National Highways and Transport Research with a view to increasing the mobility and
efficiency of the road transport system in the country. The Ministry has two wings: Roads wing
and Transport wing.

Ministry Transport Wing deals with matter relating to Road Transport and is responsible for
such as:

• Central motor vehicle rules.

• Administration of the Motor Vehicles Act.
• Notifications under motor vehicle legislation.
• Promotion of Transport co-operatives in the field of motor transport.
• Evolves road safety standards in the form of a National Policy on Road Safety and by
preparing and implementing the Annual Road Safety Plan etc

2. Ministry of Heavy Industries & Public Enterprises :

The Ministry of Heavy Industries and Public Enterprises, is a Union Ministry under Government
of Indian comprises of the Department of Heavy Industry and the Department of Public
Enterprise. The Ministry focuses on promoting the development and growth of capital goods,
auto, power equipment, manufacturing and engineering industry in the country, framing of
policy guidelines for Central Public Sector Enterprise (CPSE). Under the Ministry, the

61 | P a g e
Department of Heavy Industry is concerned with the development of the engineering industry
viz. machine tools, heavy electrical, industrial machinery and auto industry and administers 32
operating CPSEs. The Department of Heavy Industry seeks to achieve its vision of global
automotive excellence through creation of state-of-the-art Research and Testing infrastructure
through the National Automotive Testing and R&D Infrastructure Project (NATRIP). The
Department of Heavy Industry seeks to achieve its vision by providing necessary support to the
Auto, Heavy Engineering, Heavy Electricals and Capital Goods Sector.

62 | P a g e
 4. FINANCIALS

Car Rental Market by Type of Car (Luxury Car, Executive Car, Economical Car, Sports Utility
Vehicle (SUV), and Multi Utility Vehicle (MUV)) and Rental Category (On Airport and Off
Airport (Local Usage, Outstation)) - Global Opportunity Analysis and Industry Forecast, 2014 –
2022

The global car rental market was valued at $79,648 million in 2015, and is expected to reach
$164,335 million by 2022, growing at a CAGR of 11.6% from 2016 to 2022. With growth in
pollution level and population, car rental industry has experienced a drastic transformation over
the past few years, becoming one of the most prominent industries in fleet transportation.
Manufacturers and consumers rely on various car rental schemes, which are cost-effective, such
as leasing cars from their owners for a period of three years and then putting these cars on rental
through app-based bookings. In addition, car rentals majorly contribute to curb the pollution
level by reducing the volumetric sales of owned vehicles. Moreover, with increase in air traffic
and growth in trend of online car booking, car rentals are the preferred options to travel, as cars
are the most economical and faster mode of transportation. These advantages promote the growth
of the car rental industry at an exponential rate.

The growth of the global car rental market is majorly driven by development of the travel &
tourism industry. Furthermore, rise in disposable income of people in countries such as the U.S.,
Germany, and Italy and enhanced road infrastructure is promoting the growth of the market.
Increase in investment by global funds and players opting for aggregator-based business model
further fueling the market growth. Automobile companies have developed green vehicles to
control the rise in pollution level. Car rental industry contributes significantly in the reduction of
the air pollution level. However, negative impact of volatile prices of gasoline and petroleum
products on economic conditions restraining the market growth. The growth in trend of internet
usage to customize travel trips, reservations, and bookings is expected to unfold various growth
opportunities for the market.

The market segmentation is based on type of car, rental category, and geography. On the basis of
type of car, the market is classified into luxury car, executive car, economical car, sports utility
vehicle, and multi utility vehicle. By rental category, it is bifurcated into on airport and off
airport rental. The off airport rental segment is further divided into local usage, outstation, and
others. Geographically, the market is analyzed across North America (U.S., Canada, and
Mexico), Europe (Germany, France, Italy, UK, and rest of Europe), Asia-Pacific (China, South
Korea, Japan, India, and rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and
Africa).

63 | P a g e
The Eurozone crisis had a negative impact on the travel & tourism sector in the European
countries. Challenging economic conditions and increased competition in the market have
stimulated the operators to improve profitability and remain competitive. Some of the biggest
deals in the car rental market were recorded in the U.S. such as the acquisition of Dollar Thrifty
Automotive Group by Hertz. Several leading car rental operators from North American and
Europeans market are trying to expand their business in Asia Pacific, Africa, and South &
Central America by entering into joint ventures and partnerships to develop new hotels and
benefit from the growing demand for car rentals.

64 | P a g e
Market Dynamics

Asia-Pacific shows the highest growth rate for car rental market. North America accounted for
the largest market share in 2015 in the car rental market. Asia-Pacific is projected to exhibit the
fastest growth in years to come. The emerging countries such as India and China are witnessing
significant growth due to increase in the per-capita income, change in lifestyle of people, rise in
middle-class population, and high standard of living.

The leading players are introducing innovative solutions to cater to customers’ demands and to
expand their business in emerging countries. These players include Avis Budget Group, Inc.,
Carzonrent India Pvt Ltd., Enterprise Holdings Inc., Europa car, The Hertz Corporation, Sixth
Rent a Car, Uber Technologies Inc., Localize, Eco Rent a Car, and Budget Rent a Car System,
Inc. Other players in value chain include German Rent a Car, Tempest Car Hire, DTG
Operations, Inc., and Alamo.

Key Benefits

 The study provides an in-depth analysis of the global car rental market with current
trends and future estimations to elucidate the imminent investment pockets.
 It offers a quantitative analysis from 2014 to 2022, which is expected to enable the
stakeholders to capitalize on prevailing market opportunities.
 It also provides market estimation for 2014 and 2015 and Y-o-Y forecasts from 2016 to
2022, considering 2015 as base.

65 | P a g e
Car Rental Market Key Segments

By Type Of Car

 Luxury Car
 Executive Car
 Economical Car
 Sports Utility Vehicle (SUV)
 Multi Utility Vehicle (MUV)
By Rental Category

 On Airport
 Off Airport
 Local Usage
 Outstation
 Others
By Geography

 North America
 U.S.
 Canada
 Mexico
 Europe
 Germany
 France
 Italy
 UK
 Rest of Europe
 Asia-Pacific
 China
 South Korea
 Japan
 India
 Rest of Asia-Pacific
 LAMEA
 Latin America
 Middle East
 Africa

66 | P a g e
 Market Players in Value Chain

 Avis Budget Group, Inc.

 Carzonrent India Pvt. Ltd.
 Enterprise Holdings Inc.
 Europa car
 The Hertz Corporation
 Sixth Rent a Car
 Uber Technologies Inc.
 Localize
 Eco Rent a Car
 Budget Rent a Car System, Inc.
 German Rent a Car
 Tempest Car Hire
 DTG Operations, Inc.
 Alamo
Car Rental Industry Trends in 2018

Industry Trends Bless sure, Car rental, car sharing, Economic growth, Green Movement,
Industry Trends.

Car rental, industry, trends, car sharing, green movement

Latest car rental industry trends will notably shape the journey of car rental companies in 2018.
From car sharing taking the lead in 2017, to changes in customer persona to ‘blessure traveler’,
the car rental industry had already tested its limits of flexibility. Following the recent
performance, car rental companies must have done something right.

According to Zion Market Research 2017 (source), the future of the global car rental industry is
bright. In 2016, the global car rental market was estimated at approximately $58.26 billion USD,
and is expected to grow at a CAGR of around 13.55 per cent between 2017 and 2022. By 2022,
market is expected to reach approximately $124.56 billion USD.

The global economic recovery played a significant role in the performance of the travel industry.
The global GDP growth went from 3.1 per cent in 2016 to 3.5 per cent in 2017 (source).
Consequently, that lead to an increase in the disposable income for travelers, especially in
developing countries.

Travel industry prospects seem bright for this year as well, as the International Monetary Fund is
expecting 3.6 % global economic growth in 2018. (source)

67 | P a g e
We can certainly argue that the increase in the buying power of consumers, combined with low-
cost airfares in the airline industry, directly influenced the growth in the car rental market. Still
car rental companies cannot rely only on global economic growth for future success.

There are few more aspects that will have a disruptive effect on the car rental industry. Some of
them bringing opportunities and some of them representing challenges. It is up to the car rental
companies to play their cards right in order to ensure positive results in 2018.

Disruption at the car rental desk

One of the main challenges for car rental companies is to provide superior customer service,
especially when it comes to customer complaints. The dissatisfaction comes from different
situations. From a lack of information on additional payments and excess amount, to waiting for
hours in line to get the car they already booked.

Car rental companies have done an amazing job improving response rates, becoming completely
transparent and improving the booking process with new technologies. However, there is one
aspect that hasn’t been tackled yet – completely getting rid of the car rental desk.

The source of this challenge is the increased sensitivity of travelers to the travel experience
quality, followed by the increased importance of customer reviews. Reviews play a huge role in
convincing a customer to take a leap of faith and trust an unknown brand.

For customers, skipping the car rental desk would mean a seamless experience. But car rental
companies have a long way to go, even in times with such accelerated growth in travel
technology. Whether it is going to start as a service for VIP customers, allowing them to pick up
the car with a security code and then expanding it to the whole customer base, it is for us to see.

The sharing economy

” Now that the car rental giants have sold off their extra cars, they can focus on
continuing to grow revenue. But is there really a long-term future for car rentals in a world
that has embraced ridesharing?”

— Andrew Sheivachman

Car sharing has been keeping car rental companies on their toes for a few years now. At the same
time, it pushed them to expand and find opportunities in this shift in customer trends.

Offering car rental by the hour was one of the first resolutions that the leading car rental
companies implemented. which resulted in taking a share of the new demand. (source)

However, the car sharing trend is not slowing down, so again, it is expected that the car rental
companies need to show ingenious ways to keep their share. The leaders in the car rental
industry stepped up first again to lead the game. Both Hertz Global Holdings and Avis Budget

68 | P a g e
Group reached substantial financial results last year. They accomplished the positive outcome by
matching their fleet size with the actual market demand, and selling all the extra vehicles.
(source)

Hertz is taking this challenge one step further by finding additional revenue streams. One is
offering their expertise in fleet management solutions to Uber and Lyft, and another is selling
their vehicles to car sharing drivers. (source)

“Autonomous, the OEMs [Original Equipment Manufacturers], Uber, Apple, Google —

nobody manages large fleets other than the rental car companies, not dealers, nobody,”

– Kathryn Marinello, CEO of Hertz Global Holdings

Increase in oil prices and inflation

While the travel industry can enjoy the outcome of the predicted economic growth in terms of
GDP, the car rental industry will have to face one direct and inevitable economic factor – the
increase in oil prices.

With the constantly growing demand for oil supply, the experts are predicting an increase in oil
and petrol prices in 2018. (source) This will directly influence the car rental industry, since it
adds up to the total cost of car rental products. Even more, this might lead to higher inflation
level, which will directly affect the purchasing power of consumers.

One may say that there is nothing to be done in this case, since car rental companies cannot
influence such economic factors. This leads us to the next trend – the green vehicle.

The green vehicle

Shifting the focus to green vehicles will not only give a more economical alternative to
customers, but will contribute to a bigger cause – increasing awareness about pollution and the
negative effects it has on the environment.

For some car rental companies, this step might be as an alternative to higher oil prices, and for
others, it may be a push by the rigorous emission standards that governments are imposing across
countries.

One recent example is Paris with Mayor Anne Hidalgo’s plan to ban all diesel vehicles from the
city by 2024 when hosting the summer Olympics, and all gasoline-powered cars by 2030.
(source)

Getting on this ride and being part of the green movement seems like a smart strategic decision
for car rental companies in order to strive in the already dense travel market.

Conclusion

69 | P a g e
While some of the trends above seem to be a big challenge for car rental companies, the fact that
they still demonstrate positive growth shows firm determination for keeping their share in the
ground transportation and travel market. We are enthusiastic to see their creative and strategic
approaches that will shape the outcome in 2018.

Global Revenue Ranking (2019) INDIA rank 12th.

 Revenue in the Car Rentals segment amounts to US$338m in 2019.

 Revenue is expected to show an annual growth rate (CAGR 2019-2023) of 14.3%,
resulting in a market volume of US$576m by 2023.
 User penetration is 0.9% in 2019 and is expected to hit 1.1% by 2023.
 The average revenue per user (ARPU) currently amounts to US$26.24.
 In global comparison, most revenue is generated in United States (US$10,289m in 2019).
The Car Rentals segment contains vehicle rentals for private use that have been booked via the
Internet or an app. This segment takes into account time-based rental deals with upfront fixed
costs from professional car rental services such as SIXT, Hertz, and Budget.

The following are not included: carpools, chauffeur services, taxis, or car-sharing offers with
usage-based or quote-based pricing models.

in-scope

 Vehicle rentals for private use that have been booked via the Internet or an app
 Services such as SIXT, Hertz, and Budget
 Prerequisite is an online checkout process
out-of-scope

 Offline and telephone bookings / reservations

 Carpools, chauffeur services, taxis, or car-sharing offers with usage-based or quote-based
pricing models
Analysis -

70 | P a g e
71 | P a g e
72 | P a g e
73 | P a g e
74 | P a g e
75 | P a g e
76 | P a g e
77 | P a g e
 5. RECENT DEVELOPMENTS

The car rental business has been undergoing consolidation, disaggregation, rationalization and
various forms of upheaval. There are seven or eight major rental brands currently, and most of
them have been swapped and traded over the last few decades. For better or worse, the history of
the car rental industry mirrors many of the prominent trends that have defined the business world
over the last 40 years. Rental agencies were snapped up by conglomerates when bigger was
better, then sold off as companies decided to focus on their core competencies and outsource the
rest.

In the era of All Things Mobility, where both carmakers and tech startups are clamoring for a
piece of the ride-hailing pie, it seems like everyone is convinced that fetching a car on demand is
the future. The business model for ride-sharing is at best tenuous in terms of cost vs.
profitability, and the number of players trying to get in on the action has continued to tick
upward. Everyone, from startups such as Uber, Lyft and so on to well established OEMs such as
General Motors, Ford, BMW, Daimler, and even Tesla want to be a part of this movement.

Stagnation of the car rental and fleet management companies, along with the high taxi fare, has
strengthened the entry of ride-sharing into the ground transportation segment. Availability issues,

78 | P a g e
slow turnaround time and high surge prices charged by the car rentals and other ground
transportation companies are the prevalent points in this sector.

Drivers for Consolidation

Car rentals are a lot more consolidated than they appear. Avis owns Avis Car Rental, Budget and
Zipcar. Hertz now owns Dollar and Thrifty. Enterprise owns National and Alamo. Germany’s
BMW has bought out partner Sixth from their joint venture Drive Now, paving the way for a
broader car-sharing and driverless taxi alliance with Daimler to compete against the likes of Uber
and Lyft.

Based on the changing customer needs and the ways in which providers interact with customers,
there has been a shift to integrated mobility solutions and mobility as a service (MaaS), with
players looking to leverage opportunities in an integrated, seamless and transparent service.
Services involve not only car rental and car-sharing schemes, but also a breadth of offerings that
include shared lease plans, P2P rentals, on-demand shuttles, ride-hailing, autonomous technology
pilots and so on. Examples of this include BMW’s “Reach Now,” one app that manages a range
of mobility options; Hertz supplying cars to Uber and Lyft, Enterprise’s piloted program with
Uber, and Daimler’s Mercedes-Benz Vans unit’s joint venture with Via, a U.S.-based, on-
demand shared ride mobility app.

Travelers continue to evolve toward an on-demand, shared mobility and multimodal system.
Advancements in technology have opened up new opportunities for car rental brands to support,
engage and empower their customers via sophisticated apps and mobile services.

Corporate Travel Moving Away from Rentals

Car rental giant Avis witnessed a significant reduction in profits while Hertz reported losses in
recent years and both have more cars in fleet than the demand generated. This is largely due to
vehicles being considered more as service than as an asset. This change in the way of thinking
has altered conventional business travel, as companies are seeking new avenues to reduce
overhead costs.

Conclusion

It's hard to think of an industry that has had more ups and downs than the car rental business.
Mergers and buyouts are not necessarily a bad thing, as they reflect deal-makers willing to
commit capital and they do, occasionally, generate more efficient operations and save jobs. The
probability of a Hertz–Avis merger in the future appears to make sense, as it would allow Hertz
to cut costs by scaling its operations among more retail outlets. A deal of this size will reflect a
logical realignment of the industry.

79 | P a g e
80 | P a g e