Vivek kumar

2010

Supply Creates Its
Own Demand: A Study
of Hotel Industry in
Kolkata
A strategy delineates a territory in which a company seeks to be
unique. Appropriate changes in strategies are mandatory to sustain
in marketplace. This depends on the present situation and future
predications. However, till now very little research has been carried
out for hotel industry in Kolkata, India. This study is focused on point-
of-differentiation; present marketing strategies and demand-supply
gap of luxury hotels in Kolkata. This study also concentrated to find
out gap between guests‟ expectations Vis-à-vis hoteliers‟ perception
about expectation of guests.

ITC, The Sonar
The Luxury Collection

Vivek Kumar
Kolkata ,India

A REPORT
ON
SUPPLY CREATES ITS OWN DEMAND: A STUDY OF
KOLKATA HOTEL INDUSTRY

By
Vivek Kumar (09BS0002756)
ITC, The Sonar
The Luxury Collection

A report submitted in partial fulfillment of the requirements of

MBA Program of

The ICFAI University, Dehradun

Distribution list:
Ms. Snigdha Majumdar (Six Sigma Manager, ITC Sonar)
Mr. Anupam Ghosh (Faculty, IBS Kolkata)

Date of Submission: 14th May, 2010

Supply Creates Its Own Demand: A Study of Hotel Industry in Kolkata

Authorization:

The report is submitted as partial fulfillment of the requirements of
MBA Program of ICFAI University, Dehradun “


Acknowledgement

I would like to thank Mr. Ranveer Bhandari , General Manger ,ITC Sonar for giving me

permission to carry out this project.

With immense pleasure and deep sense of gratitude, I wish to express my sincere

thanks to company guide Ms. Snigdha Majumdar ,Six Sigma Manager, ITC Sonar and

faculty guide Mr. Anupam Ghosh , Lecturer, IBS, Kolkata for his constant interest,

encouragement and expert guidance throughout the course of this project, which

provide the necessary driven force that enabled me to pursue our work with vigor and

keen interest.

I would like to extend a deep sense of heartfelt thank to my friend Harshit sethi, Richa

Ranjan and Sujan Chakarobarty for their guidance and suggestions because without

them this project wouldn‟t have been possible.

At last, I express my sincere gratitude to my peers and family for their moral support

and the love rendered during the course of my dissertation work.


Contents

Authorization: .......................................................................................................................................... i
Acknowledgement................................................................................................................................... ii
Abstract................................................................................................................................................... v
List of Illustration.................................................................................................................................... vi
1. Introduction..................................................................................................................................... 1
1.1. Background .............................................................................................................................. 2
2. Overview of Hotel Industry .............................................................................................................. 4
2.1. Overview: Indian Economics..................................................................................................... 4
2.2. Overview: Hotel Industry in India ............................................................................................. 7
2.3. Overview: Hotel Industry In Kolkata ....................................................................................... 11
3. Research Design............................................................................................................................. 13
3.1. Sampling Frame ..................................................................................................................... 13
3.2. Sample Size ............................................................................................................................ 13
3.3. Methodology ......................................................................................................................... 14
4. Discussion...................................................................................................................................... 15
4.1. Positioning of Hotel industry in Kolkata .................................................................................. 15
4.1.1. Convenient location:....................................................................................................... 17
4.1.2. Service quality ................................................................................................................ 18
4.1.3. Food and Beverage ......................................................................................................... 18
4.1.4. Brand ............................................................................................................................. 19
4.1.5. Other Variables .............................................................................................................. 19
4.1.6. Combining all Variables .................................................................................................. 20
4.2. GAP between customer’s expectation and hotelier’s perception about customer’s need ....... 22
4.2.1. GAP Analysis with Guests................................................................................................ 22
4.2.2. GAP Analysis with IT & ITES industry ............................................................................... 24
4.2.3. GAP Analysis Model for Hotel Industry ........................................................................... 26
4.2.4. FMEA for largest GAP area: Room Service....................................................................... 31
4.3. Present Market Strategies of Hotel Industry in Kolkata........................................................... 35
4.4. Prediction of Demand and supply in Kolkata in future ............................................................ 36


5. Recommendation .......................................................................................................................... 39
6. Conclusion ..................................................................................................................................... 41
Annexure I: About ITC Ltd. ........................................................................................................................ i
Annexure II: About ITC WelcomGroup .................................................................................................... iii
Annexure III: About ITC ,The Sonar (Kolkata,India) ................................................................................... v
Annexure IV: List of Company in Salt Lake..............................................................................................viii
Annexure V: Questionnaire for Guest ..................................................................................................... xi
Annexure VI: Questionnaire for Hotelier ................................................................................................ xiii
Annexure VII: Questionnaire for IT Industry ........................................................................................... xvi
Annexure VIII: Calculation for Area for Perceptual Map ....................................................................... xviii
Bibliography: .......................................................................................................................................... xx
Glossary ............................................................................................................................................... xxii


Abstract

A strategy delineates a territory in which a company seeks to be unique. Appropriate
changes in strategies are mandatory to sustain in marketplace. This depends on the
present situation and future predications. However, little research has been carried out
for hotel industry in Kolkata, India. This study is focused on point-of-differentiation;
present marketing strategies and demand-supply gap of luxury hotels in Kolkata. This
study also concentrated to find out gap between guests‟ expectations Vis-à-vis hoteliers‟
perception about expectation of guests. A survey has been conducted on hoteliers,
guests and IT industry to get to collect the data. Data has been interpreted by
perceptual map, GAP analysis and FMEA (Failure mode and effects analysis).It is found
that guests‟ perceive ITC, The sonar as best hotel in the city (Kolkata, India). This study
also reveals that there is a huge gap in customers‟ expectation and hoteliers‟ perception
regarding room services and restaurants. Hence hotelier should improve service quality
in these two areas to minimize the customers‟ complain. The implication of this study
will be to improve marketing strategies for hotel industry in future. Also this article will
contribute for new entrants to develop proper strategies against different threats.


List of Illustration
List of Figure
Figure 1 : RevPAR and GDP Trend for the Hospitality Industry.................................................................. 6
Figure 2 : Trend of changing Number of Room and hotel throughout decades ........................................ 7
Figure 3: Perceptual map of Different Hotels in Kolkata ......................................................................... 16
Figure 4 : GAP between Guests expectation and Hoteliers Perception about Guest ............................... 23
Figure 5 : GAP between IT & ITES Company's expectation and Hoteliers Perception about Guest .......... 25
Figure 6 : GAP analysis Model for a Hotel from a Hotel Chain ................................................................ 27
Figure 7 : Parato Graph for Complain in Room services .......................................................................... 33
Figure 8 : Area Calculation for Perceptual Map .................................................................................... xviii

List of Tables
Table 1 : ARR of Different Category of Hotel ............................................................................................ 8
Table 2 : Occupancy Level of Different Category of Hotels ....................................................................... 9
Table 3 : Number of Rooms and Hotels in Kolkata.................................................................................. 11
Table 4: Average of Rating corresponding to Hotels and different Factors ............................................. 16
Table 5 : Area under the curve for a Perceptual Map ............................................................................. 21
Table 6 : GAP between guest’s expectation and Hoteliers Perception about Guest ................................ 23
Table 7 : GAP between IT & ITES Company's expectation and Hoteliers Perception about Guest ........... 25
Table 8 : Name of GAPs for Hotel Industry ............................................................................................. 27
Table 9 : Calculation of Risk priority numbers (RPN) For Room Services ................................................. 32
Table 10 : Arrangement of RPN in Descending Order ............................................................................. 33


1. Introduction

Service sector industry is growing in India and it contributes 57 % of total GDP (Central

Statistical Organization,India). Hospitality is one of the service sector industry which is

booming.

Hotel or hospitality is being used as synonyms of each other and throughout the report

these two terms will be used as alternative of each other. Hotel is commercial

establishment providing lodging, meal and other guest services

(BusinessDirectory.com). This is a basic need of hotels but now in a competitive

marketplace it is highly needed to retain the guest1. To get “WOW” from guest all player

in this industry are providing services more than guest‟s expectations. This war, of

getting more and more “WOW” develops tough competition among rivals and ultimately

it increases the bargaining power of customer.

Presently, in all category of hotels in India around 1, 10,000 rooms are available which

is expected to increase by 100 percent by year 2015 ( HVS, 2007). All global players

had planned to tap Indian market and big player like Starwood, Hilton Group, Westin

and Accor had already either directly invested in India or they made collaboration with

any Indian company. Also IT & ITES2 and low cost domestic airline fueled hotel industry

in India.

1
Customer of Hotel Industry is called guest in hospitality industry
2
ITES stand for IT enabled services


Now, due to continuous and rapid changes in hospitality industry in India, it is need to

do in-depth study of hotel for future strategies. This report includes in-depth analysis of

hotel which covers following objectives:

To understand position strategies of five star deluxe hotels in city.

To estimate customer expectation while selecting a luxury hotel.

Present marketing strategies of Hotel industry.

To understand demand supply GAP in Future.

1.1. Background

Kolkata is a metro city in India where development in term of technology from last three

decades is comparatively lesser than other metro cities in India. Now Government is

emphasizing in IT and ITES services to invest inside the city. In term of providing

appropriate infrastructure, Government developed IT park in Kolkata which is known as

“Salt Lake”. After looking positive impact on economy of state (West Bengal),

government has decided to come up with new IT Park called “Rajarhat” which is three

times bigger than “Salt Lake” in area. After development of this ITPark it is expected to

grow per head income and also it will increase number of consumers for hotel industry.

Hotel room‟s demand is very income elastic. It dips or increases faster than the

increase or decrease in income growth. As of now, for hotel industry, Kolkata market is

mostly occupied by business traveler and less by tourist.

In Kolkata, by year 2015, number of domestic and foreign tourism is expected to

increase by 15.63 % and 17.18 % (Ministry Of Tourism, 2008) respectively. It will create


more demand of room for each category of hotels and to meet demand supply gap few

new hotels will be coming in this industry.

Now it is a need to analyze what will be the demand-supply statistics in coming year.

Also it is highly required to understand the impact of above scenario on different

category of hotels.


2. Overview of Hotel Industry

According to an estimate, international tourist inflow in India by 2020 would be 10 million

(World Trade Organization, 2002). This makes the country one of the fastest growing

tourist destinations in the world. India accounts for 0.5% of world tourism ( HVS, 2007).

Strong GDP growth, improving infrastructure, confidence in the country's economic

prospects, open sky policy and the 'Incredible India' campaign has improved the outlook

for India. This positive outlook would increase the tourist arrival in the country. Hence

hotel industry is expected to be the major beneficiary. Even domestic tourism is gaining

momentum. Rising disposable incomes, cheaper airfares and better connectivity would

continue to increase the demand for rooms. Many international hotel chains either have

or are on the lookout for setting up shop in the country. This clearly shows that India is

on the international tourism radar. The five star hotel segments have grown the fastest

during the last five years clocking a CAGR 3 of 12% (World Trade Organization, 2002).

Economic liberalization has given a new impetus to the hospitality industry. The current

gap between supply and demand expected to widen further as the economy opens and

grows (DATAMONITOR, 2009). The country is ranked fourth among the world‟s must

see countries ( HVS, 2007).

2.1. Overview: Indian Economics

India‟s GDP 4 recorded a growth rate of 6.7% for the financial year 2008-09 (Central

Statistical Organization,India) after recording growth above 9% for three consecutive

years. The economic recovery of the country can be further kept on course by a stable

3
CAGR – Cumulative Average Growth rate
4
GDP stands for Gross Domestic Product of India


political environment provided by the Congress-led United Progressive Alliance (UPA)

returning to power through a comfortable majority in the general elections last year.

Policies of the newly elected government of leaning towards disinvestment and

infrastructure development have helped sustain economic growth. The increased

spending on infrastructure development will boost the tourism industry and

backbone of tourism i.e. Hospitality will also grow.

Although the last year began under high inflationary pressures, there were concerns

about negative inflation towards the year end. This financial year saw low inflation levels

and even fears of deflation due to the dropping of the WPI5. In its downward slide from

the previous year's all-time high of 12.38 % (August 2008), WPI for June 2009 turned

negative (-1.3%) The drop in commodity prices can benefit hotel developers, who can

take advantage of cheaper construction materials. This weak period is probably the

best time to make investments into the hotel sector

After the globalization in India, Hospitality industry has seen two cycles for the economy

downturn (Figure 1). The first cycle peaked in 1997, after which it started a downward

trend hitting the bottom in the year 2001/02.The second cycle started with the recovery

of the economy in 2002/03, peaking in 2007/08 after a period of continuous growth.

Figure 1 shows the RevPAR 6 trend for fourteen years, from 1995/96 to 2008/09 along

with the GDP growth rate for the same years. Leading macroeconomic indicators GDP

are correlated to the performance of the hotel industry. However, though the hotel

industry is amongst the first to be hit by a downturn, it is amongst the slowest to

5
WPI stands as Wholesale Price Index of India.
6
RevPAR stand as Revenue Per Available room ,Which is commonly used in hospitality to major the performance


recover since the spending on travel is considered as discretionary for most leisure

travelers and some business ones as well.

Figure 1 : RevPAR and GDP Trend for the Hospitality Industry


2.2. Overview: Hotel Industry in India

The financial year 2008/09 was an unforgettable one for the Indian tourism industry

with the Mumbai terror attacks and the global economic downturn affecting the

industry's performance. The hotel industry, too, observed an overall decline in

occupancy and RevPAR 7 in most cities in India. To analyze the trend of number of

rooms, number of hotels and average number of room per hotel from 1995 till year

2009 in India we can refer the Figure 2.The growth rate in number of room in last

fifteen year is around 132% observed.

Figure 2 : Trend of changing Number of Room and hotel throughout decades

Source: HVS Hotel in India Trend and opportunity 2009

7
RevPAR stand for Revenue Per Available room Which is common terminology in hospitality industry


2.2.1. Luxury hotels and low cost hotels
Throughout this report the term Luxury hotel is used for five star deluxe, five star and

four star hotels where as Low cost hotel means three star hotels. From the Error!

Reference source not found. we can analyze that there is rapid growth in RevPAR during

year 2002/03 to 2007/08. During this period Indian economy was booming .during these

years where we can see growth rate is very high, GDP at factor cost was touching at

nine percent. After year 2007/08 there is a sharp decline in RevPAR due to global melt

down and Mumbai terror strike. We can see the occupancy level of different category of

hotel in the table below. Important fact can be interpreted from this table that there are

decline in occupancy rate and Average room Rate (ARR) of luxury hotel but occupancy

level and ARR in low cost hotel had increased

Table 1 : ARR of Different Category of Hotel


Table 2 : Occupancy Level of Different Category of Hotels

2.2.2. SWOT Analysis of Indian Hotel Industry

From the survey, SWOT8 analysis can be concluded as below:

2.2.2.1. Strength

i. India’s rich culture heritage: With a historical backdrop of 5,000 years, India is
one big package of culture
ii. Demand–supply gap: Indian hotel industry is currently facing a mismatch
between the demand and supply of rooms leading to higher room rates and
occupancy levels.
iii. Government support: The government has realized the importance of tourism
and is willing to spend towards the development of the industry. The „Incredible
India‟ campaign is a product of this realization.

2.2.2.2. Weakness
I. Poor support infrastructure: India is concentrating to improve infrastructure
and India has planned to invest huge amount on infrastructure in 13 plan
compare to 12 plans .China is spending seven times as much as India on
infrastructure (excluding real estate) in absolute terms.

8
SWOT stands for “Strength, Weakness, Opportunity and threat”


2.2.2.3. Opportunity

I. Rising Income: Income for domestic tourist is continuously increasing. Six pay
commissions made government job more attractive and therefore private sector
also changing their compensation structure.
II. Open sky benefits: The opening up of the aviation industry in India brings
exciting opportunities for the hotel industry .Increased airline activity has
stimulated demand and has helped to improve India's troubled infrastructure.
Also the open skies policy has benefited both international and domestic travel.
III. New business opportunities: It is expected that over the next three to five
years, the biggest surge in accommodation demand is expected to come from
commercial zones that are being developed in metro suburbs and secondary
markets. Mixed-use development projects that include retail and commercial
space have also gained momentum. Also the new concept, which is going to gain
importance, is that of budget hotels to make start category of hotels for more
people.

2.2.2.4. Threat

I. Event risk: Events like Mumbai Terror attack, 9/11, SARS outbreak and
Afghanistan and Iraq wars have severely impacted the tourism industry in the
past and the threat remains.
II. Increasing competition: Global hospitality majors like the Four Seasons,
Shangri-La and Aman Resorts are all making their entry into the Indian market.


2.3. Overview: Hotel Industry In Kolkata

Kolkata is business hub for east India and it is only metro city in this region. Total

number of hotel available under different category in east India is 734 out of which 173

hotels are in Kolkata itself. Total number of room available under different category in

eastern India is 9928 out of that 3373 is situated in Kolkata. When we talk about luxury

hotels we can see most of the hotel is situated in Kolkata from this region of country

(Table 3)

Category of Number of Hotel Number of Rooms

Hotels In East India In Kolkata In East India In Kolkata

5 Star Deluxe 4 4 852 852

5 Star 4 2 332 466

4 Star 12 2 176 755

3 Star 33 5 263 1455

Table 3 : Number of Rooms and Hotels in Kolkata

Source: MINISTRY OF TOURISM, 2008. Assessment of requirement of Hotel Room / Accommodation in Metro Cities and

50 major tourist cities in India, p.42

Over the last year, Kolkata witnessed a drop in room night‟s demand and the

occupancies fell by approximately 3% (HVS research on the market pegs this decline at

7%). The slump was a byproduct of the overall dampening of room night‟s demand

across most major Indian cities, following the November 2008 terrorist attacks in

Mumbai and the overall depressed sentiment from the global recession. The average

rates, however, did not see any movement owing primarily to the lack of new supply

entering the market. Additionally, unlike other major cities, Kolkata hotels had not seen

an exponential jump in average rates in the past few years and thus the immediate


need for rate correction was not warranted. Future supply is expected to be absorbed

as room nights demand grows from the central city as well as the new business area of

Salt Lake and Rajarhat. A few hotel projects are under construction and the city is

expected to have an additional thousand branded rooms across various positioning in

the next five years. That being said, while some of these hotel projects are finally seeing

active development, there are several announced projects on EM Bypass and in

Rajarhat that are suffering delays for a variety of reasons. The overall development of

Rajarhat as the new commercial hub of Kolkata has been painstakingly slow and even

stagnant in recent months.


3. Research Design

3.1. Sampling Frame
This research has been started with secondary data collection from several research
journal followed by the questionnaire survey. Questionnaire survey is divided in to three
parts.

First set of questionnaire is designed for guests (Annexure V: Questionnaire for Guest).
This questionnaire helped us to understand customer expectation while they select the
hotels.

Second set of questionnaire is designed for the hoteliers (Annexure VI: Questionnaire
for Hotelier) which helped to understand the strategies adopted by the hotelier for
customer satisfaction and retention of customer. It was an personal interview of different
hoteliers in Kolkata.

Finally, we selected IT & ITES services to interview (Annexure VII: Questionnaire for IT
Industry) since this is the industry which pulls maximum demand of rooms among any
other industry, we tried to understand their requirements.

3.2. Sample Size
During research forty one guests has been interviewed. People, who usually stay in star
category of hotels, were part of this interview as guests. Also we have targeted only
those guests who enjoyed almost all five star deluxe hotels in Kolkata, India.

For the study at random twenty eight IT and ITES industry personnel has been selected.
We have selected those personnel from these companies who usually book hotel rooms
for their employee. During interviewed it was focus to understand why they select
particular hotel for their employee.

To know the strategies of hotel industry seventeen hoteliers were interviewed in
Kolkata, India. This interviewed was done to understand the present strategies and
future opportunity in hotel industry.


3.3. Methodology
This research is started with secondary data collection with several research papers on
hotel industry .After secondary data collection three set of questionnaire were prepared
for guests, for IT industry and for hoteliers.

Guests have been asked to fill a standard set of questionnaire (Annexure V:
Questionnaire for Guest ) Where as, for hoteliers and IT industry, it was a personal
interview (Annexure VI: Questionnaire for Hotelier and Annexure VII: Questionnaire for IT Industry ).

Complete data has been analyzed in MS Excel 2007, with the help of different Radar
chart, bar Chart and line chart.


4. Discussion

4.1. Positioning of Hotel industry in Kolkata
Positioning is the act of designing the company‟s offering and image to occupy and
distinctive place in the mind of target customer (Kotler, Kevin, Koshy, & Mithileshwar,
2009). In hotel industry positioning strategies for existing properties and for new venture
is entirely different (Bowie & Francis, 2004). For existing properties some of the factors
are fixed, those are location, geo-demographic area, and properties current facilities
and properties historic image.

Indian Hotel co., I T C Welcomgroup and EIH are top three hotel chain in India with
market share of 14.35 %, 9.49 % and 8.31 % (Centre for Monitoring Indian Economy,
2010).We have selected three hotels of Kolkata from these three hotel chain to
understand their positioning in the city. Taj Bengal, ITC The Sonar and Oberoi Grand
are the three hotels in Kolkata from Indian Hotel co., I T C Welcomgroup and EIH
respectively. Hyatt regency is also part of this survey since this hotel is the only hotel in
five star deluxe hotels 9 categories in Kolkata which is operated by a global player.

A Perceptual map (Figure 3) has been drawn as per the survey conducted by the
guests10 . While studying the perception of customer we selected eleven attributes. After
a pilot survey it is found that two attribute was confusing to the respondent. Hence
survey to understand the perception of customer is done with nine attributes .Those
nine attributes are Convenient location, Service quality, Food and Beverage, Brand,
Technological advancement, Warmth and courtesy, Safety & Security, Value for money
and Other facilities like spa and business centre (Annexure V: Questionnaire for
Guest).These attribute is rated by guest on five point likert scale from 1-Very Good to 5
– Very Bad. Hence while analyzing the data, smaller the rating is better for particular
attributes. All nine attribute can be explained with the reference of perceptual map
(Figure 3).Explanation of how these nine factors affects to create perception in
customer‟s mind is illustrated below:

9
Five star deluxe is the category of hotel in India which is provided by “Federation of Hotel and Restaurant
association of India (FHRAI)
10
In Hospitality industry, Customer of Hotel is usually called “Guest”.


Convenient
location
3.00
Other facilities
like spa and 2.50 Service quality
business centre
2.00

1.50

1.00
Food and
Value for money 0.50 Beverage
0.00

ITC,The
Sonar
TAJ Bangal
Safety & Security Brand
Hyatt
Regency
Oberoi
Grand
Warmth and Technological Average
courtesy advancement

Figure 3: Perceptual map of Different Hotels in Kolkata

ITC, The TAJ Hyatt Oberoi Average
Sonar Bengal Regency Grand
Convenient location 1.89 2.77 2.45 1.91 2.26
Service quality 1.72 1.54 2.00 2.18 1.86
Food and Beverage 1.67 1.85 2.55 2.55 2.15
Brand 1.61 1.54 2.00 2.18 1.83
Technological advancement 1.78 1.62 1.45 1.82 1.67
Warmth and courtesy 1.61 1.54 1.73 2.18 1.76
Safety & Security 1.50 1.62 1.82 1.73 1.67
Value for money 2.00 2.23 2.09 2.27 2.15
Other facilities like spa and 1.83 1.62 2.00 2.00 1.86
business centre
Table 4: Average of Rating corresponding to Hotels and different Factors


4.1.1. Convenient location:

Location of ITC, The sonar and Oberoi Grand is rated as most convenient by the
guest. Average rating 11 given by guest for ITC, The sonar and Oberoi was 1.89
and 1.91(Table 4) respectively. With a long gap of 0.54 units (i.e. 2.45-1.91) Hyatt
Regency is being rated as 2.45 and being at last position and Taj Bengal is rated
as 2.77.
ITC, The sonar is situated at EM bypass which is in the middle of city (Park
Street) and salt lake area is rated as highest compare to any other location. It
shows convenient location from customer perception as it is convenient from
their workplace and city as well. Second most convenient location for guest was
Oberoi grand which is situated near to esplanade. This esplanade is located in
the heart of the city and is one of the busiest portions (Wikipedia).Esplanade is
near to Dalhousie Square which is filled with several government offices. This
place is accessible for work. We can analyze both the hotels rated at top
because of same factors. But in the Case of Hyatt Regency, this place is near to
Salt lake and Rajarhat which is IT hub for the city but city proximity is not as good
as ITC Sonar or Oberoi. And at last, Taj Bengal is situated in Alipur which is posh
area in Kolkata and its accessibility in business area is comparatively less. Salt
lake, Rajarhat, Park Street, Dalhousie etc are far away from Taj Bengal.
Remember in Kolkata most of the traveler are business traveler and hence for
them Taj Bengal is not convenient place.

Location is the very important for new entrants, since location cannot be changed
unlike other attributes. Most of the traveler in Kolkata are the business traveler
and hence site selection for new entrants in this industry should be in such a way
that business travelers can be targeted.

11
All nine attribute is rated by guest on five point likert scales from 1-Very Good to 5 – Very Bad. Here Average
rating terminology is used for the average of all respondent for particular attribute of respective hotels.


4.1.2. Service quality

Guests perceive the service quality of Taj Bengal is best among these four hotels
followed by ITC, The Sonar (Figure 3).Average rating given by guests for Taj
Bengal is 1.54 where as being at second position ITC, The Sonar has scored
1.72 with a small gap of 0.18 (i.e. 1.71 – 1.54). Service quality of Hyatt and
Oberoi is far away from origin of the graph and customers perceive service
quality of these hotels is not recommended compare to previous two.
ITC, The Sonar can fill this small gap with Taj Bengal by putting little more effort
to improve service quality. During discussion with hotelier it is found that
important reason behind lake of service quality in ITC, The sonar is:
Attrition rate is very high
Training of Taj Bengal is better

4.1.3. Food and Beverage

ITC, The Sonar has rated best by the guest for F&B 12 which is followed by Taj
Bengal. Again for this attribute Oberoi grand and Hyatt regency is rated very
poorly (Figure 3).ITC, the sonar and Taj Bengal has scored average rating 1.67
and 1.85 respectively with gap of 0.18 (i.e. 1.85 – 1.67) .Poorly rated hotel
Oberoi grand and Hyatt regency has achieved same average rating of 2.55
where as Average of all four hotels under this category was 2.15.

In F&B, ITC Sonar has expertise in Indian food. Peshawari and Dumpukhat 13 is
their specialty restaurant which gives the feel of India. Also ITC chain of hotel
gives test of local food and hence ITC sonar has Bengali food also. This
customization for the food creates Point of differentiation (POD) for the ITC,The
Sonar.

12
F&B is the terminology used in hotel industry for food and beverages
13
Peshawari and Dumpukhat is the restaurant in ITC, The Sonar


4.1.4. Brand

Taj Bengal (Indian Hotel co.) topped in Brand name and it scored 1.54 followed by ITC,
The Sonar (I T C Welcomgroup) scored 1.61.There are very small gap of 0.07 (i.e. 1.61
– 1.54 ) in Brand name shows both the brand is almost equally known by the guests.
For this parameter again Oberoi Grand (EIH co.) and Hyatt Regency is rated very poor
(Figure 3)

Being as oldest hotel chain Indian hotel co. is well known by most of the guest. This
brand name is associated with the name of “TATA Group”, which is considered as one
of the most faithful company in India. It might be the reason of scoring highest for Taj
Bengal.

I T C Welcomgroup is almost equally known as Indian Hotel co. I T C welcomgroup
(Annexure II: About ITC WelcomGroup) is associated with one of the premier brand
name I T C which is well known company in India. I T C became famous by selling
tobacco product in 1950‟s and still most of the citizen think I T C stands for “Indian
Tobacco Company” .I T C Diversified (Annexure I: About ITC Ltd.) their business in
several areas and to remove negative image of Tobacco, company is involve is several
social work. Every division of I T C including ITC Welcomgroup has show some part of
corporate social responsibility (CSR). In Recent year, these actions modified their brand
image which is needed still to improve.

4.1.5. Other Variables

Other Variables like Technological advancement, Warmth and courtesy, Safety &
Security, Value for money and Other facilities like spa and business centre are almost
equally rated for all the hotels. It shows this all are mandatory services which every
guests are needed and hence all the hotels are emphasizing almost equally on it. Still
discussion can be extended by taking each and every parameter separately one by one.

The Term Technological advancement refer to computerized reservation system,
development of global distribution network, commercial use of internet, development in


hotel computerized system which has improved in room comfort and security of guest.
The current rate of change in technology is fast and new technologies are constantly
altering the technological environment (Bowie & Francis, 2004). Hyatt regency is rated
best with minute difference with Taj Bengal. Hyatt regency scored 1.45 where as Taj
Bengal scored 1.62 which shows Hyatt regency is more likely then Taj Bengal with a
minute difference of 0.16 (i.e. 1.62 – 1.45).Guest perceives, Hyatt has adopted
advanced technologies since it is having a global experience. ITC, The sonar is also
closer to Taj Bengal with Average rating of 1.78, which is lower then overall average
value of 1.67. Oberoi Grand ranked last by scoring average rating 1.82 which far away
from overall average of 1.67.

When we discuss about Warmth and courtesy, Taj Bengal and ITC Sonar both topped
with almost equal score of 1.54 and 1.61 respectively (Table 4).In ITC Sonar, attrition rate
is comparatively higher then Taj Bengal. Because of this employee cannot give
personalized service as per previous experience of particular guests. It is the important
reason for ITC, The Sonar to score slightly lesser score compare to Taj Bengal. Service
of Hyatt Regency is also acceptable by guest after Taj and ITC Sonar Whereas Warmth
and courtesy of Oberoi Grand is much inferior from the same of other three hotels (Figure
3).

For other three variable like Safety & Security, Value for money and other facilities like
spa and business centre almost all the hotel is perceived equally by the guests ( Figure
3).and hence these variable cannot be treated as positioning difference among all four
hotels in Kolkata.

4.1.6. Combining all Variables

With reference of the positioning map (Error! Reference source not found.), we need to
understand overall position of four hotels in Kolkata. To understand this we calculated
the area under the perceptual map (Annexure VIII: Calculation for Area for Perceptual Map).
Areas for each hotel are shown in Table 5.Also comparison of each hotel is illustrated
below.


In this analysis also, lower the area under the curve is better (since guest has relied on
five point likert scale from 1-Very Good to 5 – Very Bad).

Area Comparison
under the ITC, The TAJ Hyatt Oberoi Average
curve Sonar Bengal Regency Grand
(Unit2)
ITC The Sonar 10.45 0.00
TAJ Bengal 11.22 0.77 0.00
Hyatt Regency 14.10 3.65 2.88 0.00
Oberoi Grand 15.15 4.70 3.93 1.05 0.00
Average 12.68 2.23 1.46 -1.42 -2.47 0.00
Table 5 : Area under the curve for a Perceptual Map

Area under the curve for ITC sonar is 10.45 Unit 2, shows this hotel is most favorable
hotel in city. For comparison of ITC Sonar with other hotel is illustrated in Column
ITC,The sonar under comparison sub heading in Table 5 . Being at the second position
with minute difference of 0.77 unit2, Area under the curve of Taj Bengal was 11.22 unit 2.
whereas with large difference of 3.65 unit 2 and 4.70 unit2 with ITC sonar Hyatt Regency
and Oberoi Grand scores 14.10 unit2 and 15.15 Unit 2.


4.2. GAP between customer’s expectation and hotelier’s perception about
customer’s need

Guest, hotelier and IT 14 industry personnel are interviewed to understand their
perception. Guest, hotelier and IT industry are interviewed on seventeen parameter
(Annexure V: Questionnaire for Guest , Annexure VI: Questionnaire for Hotelier
,Annexure VII: Questionnaire for IT Industry). Those seventeen parameter are efficient
check In, Efficient check Out, Concierge, Room service, Dry Cleaning & Laundry,
Choice of Cuisine, Size of Room and Bathrooms, Cleanness, Internet Connectivity,
Business Centre & Conference facilities, Health club & Spa, Sports and Recreational
activity, Distance from Airport, City proximity, Environment & Ambiance, Brand Loyalty
and Value for Money. Guest and IT company is asked how important these parameter
for him/her. Similarly hoteliers are asked which parameter they think more important for
customer.

Both Guest and hotelier ranked their importance in 1 to 5 likert scale in which 1 is very
important whereas 5 is least important. Hence, Smaller the number shows more
important for particular attribute.

After collecting the data, Average for each attribute is calculated for all three set of
questionnaire .Difference between guest‟s expectation and hotelier perception shows
gap for each attribute. Positive Numerical value of these gaps shows hoteliers are
giving more importance to particular attribute compare to Guests or IT industry and vice-
versa. Now let us discuss GAP with Guests and IT industry individually

4.2.1. GAP Analysis with Guests
In this section of discussion, “GAP” means gap between Guest expectation and hotelier
perception about their (Guest) expectations. In this analysis, maximum GAP found with
attribute “Value for money” (Figure 4). Guests ranked “Value for money” as 1.19 whereas
hotelier ranked as 1.42 with a huge negative value (-0.24) of GAP (Table 6)

14
IT industry include IT & ITES (IT enabled Services) services.


Figure 4 : GAP between Guests expectation and Hoteliers Perception about Guest

Sl.No Parameter Average of Average of GAP (III)=
Guest Hoteliers ( I ) – (II)
(I) ( II )
1 Efficient check In 2.08 1.00 1.08
2 Efficient check Out 1.92 1.00 0.92
3 Concierge 2.19 2.14 0.05
4 Room service 1.42 1.57 -0.15
5 Dry Cleaning & Laundry 2.27 2.14 0.13
6 Choice of Cuisine 1.85 1.86 -0.01
7 Size of Room and Bathrooms 1.58 1.71 -0.14
8 Cleanness 1.12 1.14 -0.03
9 Internet Connectivity 2.38 1.14 1.24
10 Bus. Centre & Conf. Facilities 2.85 1.71 1.13
11 Health club & Spa 2.81 1.57 1.24
12 Sports and Recreational activity 3.15 2.43 0.73
13 Distance from Airport 2.19 2.29 -0.09
14 City proximity 2.08 1.43 0.65
15 Environment & Ambiance 1.46 1.57 -0.11
16 Brand Loyalty 2.12 2.14 -0.03
17 Value for Money 1.19 1.43 -0.24
Table 6 : GAP between guest’s expectation and Hoteliers Perception about Guest


Being at second position, GAP in Room service is – 0.14 units which is a large GAP. It
shows most of the consumer gets unsatisfied by the room service since important
given by hotelier is much lesser then customer expectation.

Some of the variable likes Environment & Ambiance, Size of Room and Bathrooms, City
proximity, Brand Loyalty and Distance from Airport are the attribute which either can not
be changed or there are several barriers while changing them. For new entrance, these
are the important attribute to focus on so that they can attract their target customer
easily. Refer Table 6 for the GAP for these attribute.

GAP with the attribute of “Choice of Cuisine” is another factor which is most vulnerable
attribute for a hotel industry since guest‟s expectation for this attribute is higher then
hotelier‟s perception for same attribute. Hence GAP in F & B15 needs to be filled by
the by Hotelier to minimize the guest’s complain.

4.2.2. GAP Analysis with IT & ITES industry

In this section of discussion, “GAP” means gap between IT company‟s16 perception and
hotelier‟s perception about their (IT companies‟) expectations. In this analysis,
maximum GAP found with attribute “Distance from Airport” (Figure 5). IT industry ranked
“Distance from Airport” as 1.67 whereas hotelier ranked as 2.28 with a huge negative
value (-0.62) of GAP (Table 7).It shows most of the business travelers are concern about
the distance from airport which is not given equally priority by hotelier.

GAP of room service again came at second rank similar as it was in “GAP analysis with
Guest”. This should again a focus point for hotelier to give more important to this
attribute to minimize the complain for IRD 17.

Being at the third position, Negative GAP for “dry cleaning and laundry” is more
business traveler 18 which may be a less focused attribute by the hotelier and they need
to focus on this. Detail of all seventeen GAPs can be referred in Table 7 and Figure 5

15
“Food and Beverage” is usually used as F&B in Hotel industry
16
IT stands for IT and ITES company
17
IRD stand for “In room drawing” which is usually used in hotel industry


Figure 5 : GAP between IT & ITES Company's expectation and Hoteliers Perception about Guest

Sl.No Parameter Average of Average of GAP ( III ) =
IT Industry Hoteliers (I) - (II)
(I) ( II )
1 Efficient check In 2.17 1.00 1.17
2 Efficient check Out 2.17 1.00 1.17
3 Concierge 1.83 2.14 -0.31
4 Room service 1.00 1.57 -0.57
5 Dry Cleaning & Laundry 1.67 2.14 -0.48
6 Choice of Cuisine 1.83 1.86 -0.02
7 Size of Room and Bathrooms 2.00 1.71 0.29
8 Cleanness 1.00 1.14 -0.14
9 Internet Connectivity 1.67 1.14 0.52
10 Bus. Centre & Conf. Facilities 2.50 1.71 0.79
11 Health club & Spa 3.67 1.57 2.10
12 Sports and Recreational activity 3.83 2.43 1.40
13 Distance from Airport 1.67 2.29 -0.62
14 City proximity 2.17 1.43 0.74
15 Environment & Ambiance 1.17 1.57 -0.40
16 Brand Loyalty 2.17 2.14 0.02
17 Value for Money 1.33 1.43 -0.10
Table 7 : GAP between IT & ITES Company's expectation and Hoteliers Perception about Guest

18
Business traveler is the word used for the guest coming for business purpose. But survey is conducted only in IT
and ITES industry


4.2.3. GAP Analysis Model for Hotel Industry

GAP in hotel industry can be illustrated by eight GAPs (Figure 6 and Table 8).Most of the
five star deluxe hotels in India are from a chain of hotels. Hence the illustrated model is
designed to focus GAP‟s in any one hotel from a hotel chain.

The difference between an individual hotel and a chain of hotel is, in chain of hotels
several factors are decided by their corporate office. And a particular hotel of that chain
cannot change those things unlike to individual hotels.

Some time Hoteliers may not understand the need of guest and they anticipate guest‟s
expectation wrongly. This creates dissatisfaction for guest which might be an important
cause for losing the market share. Customer generation is much more expensive rather
customer retention and hence wowing from guest is always mandatory.

With reference to the GAP Model for hotel industry ( Table 6), Different parameters have
been evaluated as discussed in section 4.2.1 and 4.2.2. In this model, all the seventeen
parameter have been plotted as a satisfaction parameter and that parameter have been
evaluated to find out the GAP. If Hotel industry can reduce these GAPS, They can
increase their market share.

GAP 1: GAP between Guest perception and management perception
about distance from Airport or City to hotel affects the hotel’s business

This GAP arises because of location of Hotels. While a guest is picked up at
the airport how much time will it take from him to reach to the gate of hotel .A
city like Tokyo or London where average speed of four wheeler is much higher
than same of India .And hence this parameter is not much effective. But a city
like Kolkata (India) where road maintenance and traffic jam is a huge problem
this parameter is very effective. Same case applied for a person if he/she wants
to come from their home or offices to restaurant of any hotel. They may select
those hotels which are near to their place. This GAP is named as Proximity
GAP (Table 8).


Figure 6 : GAP analysis Model for a Hotel from a Hotel Chain

GAP Number GAP Name
GAP 1 Proximity GAP
GAP 2 Welcome GAP
GAP 3 IRD GAP
GAP 4 F&B GAP
GAP 5 Standard GAP
GAP 6 Recreational GAP
GAP 7 Perception GAP
GAP 8 Expectation GAP
Table 8 : Name of GAPs for Hotel Industry


GAP 2: GAP between Guest perception and their expectation from
particular brand during Check in and checkout facilities.

“Check in” is first impression where as check out is last impression for a guest
in hotel. There is a saying “You will never get second chance to make a first
impression” .Importance on First impression is always important. Check in of a
particular guest gives an overall perception to the guest about hotel. If check in
is more than their expectation then even in case of any service failure later on
during his experience in hotel he/she can take it lightly and vice versa is also
true.

“Check out” is last impression and also this is last chance to do a service
recovery. If guest is happy during check out, it shows customer retention for
particular hotel will be more. This GAP is named as Welcome GAP ( Table 8)

particular brand during Room service.

During survey it is found that GAP in room service is negative with large
magnitude and hotelier needs to improve in this area to meet guest‟s
expectations (Table 6 and Table 7). In this area customer spend his maximum
time and for every moment they have expectation for good services. From
hotelier point-of-view several constrain are there. Like restaurant may be bit far
from room and since temperature of food is not as hot as it should be and
hence customer is not proper test. Similar kind of several problem arises in
room service which hoteliers are already aware but because of several
constrain they are not able to improve it. This GAP is named as IRD 19 GAP
(Table 8)

particular brand in restaurants.

There is GAP in restaurant with Guest‟s expectations and perception after
experience when they compare with the brand of hotel. For example ,ITC

19
IRD Stands for “In Room Drawing” which is commonly used in hotel industry


welcomgroup is known for Indianess .if a guest comes to restaurant if he/she
will not get the test of Indian food then that creates a GAP and causes un-
20
satisfaction. This GAP is named as F&B GAP (Table 8)

particular brand about environment and ambiance.

When guest go to the hotel they does not pay only for the services but also they
pay for environment and ambiance. For example if they goes to Oberoi Grand,
Kolkata they may want to feel the boutique experience. Similar every brand
name has their point of differentiation in environment and ambiance. This is an
experience which is applied everywhere in the hotel unlike previous GAPs
which is applied only in particular area. This GAP is named as standard GAP
(Table 8)

particular brand about sports and recreational activities.

Now a day, it is an added feature that most of the luxury hotel gives for Spa,
meditation, squash, sports and recreational activity. When guests choose a
particular hotel he/she perceive something from particular brand. There is a
GAP exist if customer expectation does not meet with their perception with
particular brand. This GAP is named as recreational GAP ( Table 8)

GAP 7: GAP between Guest perception and their expectation while they
compare each and every service with “Value of Money”

When guest experience all the service, they evaluate every parameter with
amount they spent. This GAP is a function of all previous GAPs as shown
below:

20
F&B stands for Food and Beverage which is commonly used in hotel industry


During survey it is found that this is the largest GAP (Table 6) if hotelier want to
minimize this GAP they need to minimize all previous GAPs. This GAP is
named as perception GAP (Table 8)

GAP 8: GAP between Guest expectations for “Value of Money” and their
expectation with the same.

After Calculating the value of money guest need to compare it with his
expectation. This GAP can be named as expectation GAP (Table 8). This GAP is
the function GAP 7.


4.2.4. FMEA for largest GAP area: Room Service

Negative GAP for room service is found the second largest GAP in both, GAP
with guests and GAP with IT firms. Largest GAP for Guest were the “Value for
money” Which is a function of all the six GAPs (Figure 6) and largest GAP for IT
firms is found the distance from airport. This deliver un-satisfaction in guests
and hence they complain most in room services.

Now Value for money will automatically increase if customer will be satisfied in
room service (Which is largest after “Value for money”) where as “Distance from
airport” cannot be changed for existing hotels and hence it is a need to
understand the usual complains , analysis of Complains and resolution for the
same in room services.

4.2.4.1. Usual Complains in Room Services:

Hoteliers are interviews to understand the problematic area in room services.
Sixteen attributes were extracted from this interview .Those sixteen attributes are
order taking, delivery time, preparation time, compliance with guest, specification,
menu knowledge, clearance, quality Of food & beverage, service skill, tone of
voice, listening skill, repeating and confirming the order, suggestive selling,
trolley Setup, warmth & courtesy, portion Size and feed back

4.2.4.2. Analysis of Complains
21
FMEA (Failure mode and effects analysis Table 9 ) has been done followed by
Parato22 graph ( Figure 7 and Table 10) for all sixteen attributes. For the FMEA a
ordinal scale of 1, 3 and 9 has been selected which is explained below:
For Severe – 1 means less severe and 9 means most severe

21
Failure modes are any errors or defects in a process, design, or item, especially those that affect the customer,
and can be potential or actual. (Wikipedia, 2008)
22
Parato is a graphical representation which is used to prioritize some of the important attributes among several
attributes


For Occurrences – 1 means frequency of occurrence is less and 9 means
frequency of occurrences is more.
For Detection – 1 means easily detectable and 9 means tough to detect.
All sixteen parameter is tabulated by understanding their degree of severity, frequency
of occurrences and possibility of detection in Table 9 and risk priority number (RPN) has
been calculated. This RPN is shorted in Table 10 and a Parato is drawn in Figure 7 to
prioritize some of the attribute on which hotelier can focus to increase customer
satisfaction.

Parameter Severe Occurrence Detection RPN23
(I) ( II) ( III ) (IV) = (I) x (II) x (III)
Order Taking 9 9 9 729
Menu Knowledge 9 1 9 81
Listening Skill 9 1 1 9
Tone of Voice 3 3 3 27
Suggestive Selling 3 1 3 9
Repeating and confirming the order 9 1 1 9
Compliance with Guest 9 9 1 81
specification
Trolley Setup 3 3 1 9
Preparation Time 9 9 3 243
Delivery Time 9 9 3 243
Clearance 9 3 1 27
Quality Of F & B 9 3 1 27
Service Skill 3 1 9 27
Warmth & Courtesy 9 1 1 9
Portion Size 3 1 1 3
Feed back 1 1 1 1
Table 9 : Calculation of Risk priority numbers (RPN) For Room Services

From the Parato Graph (Figure 7), It is identified that almost 20 percent of problem (20
% of number of attributes i.e. 16 = 3.2), Contribute 80 percent of total RPN ( Figure 7 and
Table 10).

23
RPN is a risk priority number which is a multiplication of degree of severe, frequency of occurrences and
possibility of detection in FMEA analysis.


Parameters RPN Percentage Cumulative Percentage

Order Taking 729 47.52% 47.52%
Delivery Time 243 15.84% 63.36%
Preparation Time 243 15.84% 79.20%
Compliance with Guest specification 81 5.28% 84.49%
Menu Knowledge 81 5.28% 89.77%
Clearance 27 1.76% 91.53%
Quality Of F & B 27 1.76% 93.29%
Service Skill 27 1.76% 95.05%
Tone of Voice 27 1.76% 96.81%
Listening Skill 9 0.59% 97.39%
Repeating and confirming the order 9 0.59% 97.98%
Suggestive Selling 9 0.59% 98.57%
Trolley Setup 9 0.59% 99.15%
Warmth & Courtesy 9 0.59% 99.74%
Portion Size 3 0.20% 99.93%
Feed back 1 0.07% 100.00%
Total 1534 100%
Table 10 : Arrangement of RPN in Descending Order

Figure 7 : Parato Graph for Complain in Room services


4.2.4.3. Resolution Of Complain
Hotelier can maximize the customer satisfaction by focusing on only three attributes
order taking, delivery time and preparation time. Order taking itself is combination of
several parameters like communication skill, listening skill, menu knowledge etc. Hence
hotelier should give proper training to order taker to minimize the error or customer
dissatisfaction in this area.

Delivery time which scores second most RPN, can be improved by putting more
resources to deliver the food to the guest. Also hotelier can think to minimizing distance
of room from their delivery center to minimize turn-around-time (TAT).

There are some Hands-on-time (HOT) which will always take to cook food. But still
hotelier can do a market research to know the latest technology for cooking which may
reduce the time.


4.3. Present Market Strategies of Hotel Industry in Kolkata

As discussed in earlier section, Kolkata is business hub and most of the traveler in city
is the business traveler. In Kolkata, Movement because of Business purpose pulls the
demand of room. Unlike a Tourist place usually seasonality for traveler does not vary. In
Kolkata, demand of room and banquets shows seasonality only because of
Marwadi’s24 weddings. Most of the Marwari‟s wedding usually happen in month of
November-December and May-June. This is a peak period for hotel industry in
Kolkata and Hotel industry generate good amount of revenue because of raised
demand. Also some of the events like medical conferences; cricket machetes etc.
raised the demand of hotels which is not seasonal. But these kinds of big events are
preplanned since long. And Hence hotelier keep ready them self to in cash this
opportunity.

Presently in luxury hotels, very less amount of people who pay room chargers from their
own pocket instead there organization pay for them and hence hotelier target the
different organizations to make their employee stay in particular hotels. Specifically
different company‟s has contract with one or few hotels in the city.

Presently most of the Luxury hotels25 in Kolkata are the chain of hotels and for customer
retention they have some loyalty program (member ship plan).After taking member ship
customer will get extra benefits out of that in whole chain of hotels. So that if one has
taken the member ship of one hotel chain they cannot move to another chain since for
him hotel where they have member ship will be more convenient.

26
Most of the budget class of hotel tries to attract the business traveler of public sectors
or small companies. Budget class of hotel targeted the employee of public sectors since
during travelling they do not get enough allowances to stay in luxury hotels. Also in
Kolkata leather firm is very active which does not pay enough allowances to middle
class employee to go in luxury hotels.

24
Mardwari is a community in India who usually belongs from a area called Marwad in Rajsthan
25
Luxury hotels stands for 5 star deluxe,5 star and 4 star hotels
26
Budget class of hotels means three star hotels


4.4. Prediction of Demand and supply in Kolkata in future

Kolkata is only business hub in eastern India and hence development in business in
east India will increase the demand of room in Kolkata. Kolkata port is also only port in
this part of country. Demand and supply of room may affected by several factor apart
form room demand by local business of Kolkata. People who usually go to the Assam
for Tea or timber business they usually take a night stay in Kolkata. Also export of tea
(Assam) is being done from Kolkata port. So Movement because of surrounding area
is an important parameter for the demand of room.

Also Fishery board and tourism department of west Bengal is developing different
tourism sites and bitches to attract the tourism (FHRAI, 2008-09) industry which may
increase the demand in future. Development of Henry Island (near to Bekhali) is a very
good example of an attempt to make it a tourist sport by fishery department of west
Bengal. Similar several developments are going on which may attract tourist in future.

Supply of Room:

Present supply of room available in eastern India is illustrated below:

Location Category wise number of rooms
Heritage 5 Star 5 Star 4 3 Star 2 Star 1 Approved Licensed Total
Deluxe Star Star
Kolkata 269 852 332 176 263 246 110 45 1080 3373
Puri / Bhubneshwar 34 0 59 285 327 32 0 12 1040 1789
Darjeeling 81 0 0 0 76 36 0 23 712 975
Siliguri 0 0 0 0 76 36 0 45 112 269
Digha 0 0 0 0 0 0 0 56 96 152
Guwahati 0 0 0 144 134 0 0 56 464 798
Patna 0 0 75 39 102 32 0 12 448 708
Ranchi 0 0 0 25 106 35 0 27 433 626
Shillong 0 0 0 40 49 0 0 45 272 406
Gangtok 25 0 0 46 63 0 0 87 240 461
Gaya / Bodhgaya 0 0 0 0 169 0 0 34 168 371
Total 409 852 0 755 1422 407 110 442 5065 9928
Source: MINISTRY OF TOURISM, 2008. Assessment of requirement of Hotel Room / Accommodation in Metro Cities and 50 major tourist cities in
India, p.41


In latest economic downturn Occupancy level, ARR and RevPAR (Revenue per

available room) of every city has fallen down in India but Kolkata is able to reach slight

growth of 1.7 % in ARR (Crisil, 2010). Showing Positive growth show there is need

of more and more number of rooms in the city.

Demand of Room:

Projected demand of room in Kolkata is 16919 by year 2011 under all categories of

hotels. Which can be further divided in different category like luxury hotel (3753 rooms),

Budget class hotel (6720 rooms), Classified hotels (10473 rooms) and others (6444

rooms) (Ministry Of Tourism, 2008).

By year 2011, expected number domestic travelers and foreign travelers are 5841090

and 1058840 respectively (Ministry Of Tourism, 2008) in Kolkata.

Projected demand of room in Kolkata is 35887 by year 2015 under all categories of

hotels. Which can be further divided in different category like luxury hotel (8218 rooms),

Budget class hotel (14028 rooms), Classified hotels (22246 rooms) and others (13643

rooms) (Ministry Of Tourism, 2008).

By year 2015, expected number domestic travelers and foreign travelers are 12073871

and 2339365 respectively (Ministry Of Tourism, 2008) in Kolkata.

A major reason for the growing demand for hotel rooms is the underlying boom in the

economy, particularly the growth in the IT and ITES industries. The overall growth

outlook appears buoyant and much of this growth will be driven by the BPO explosion,

IT, Telecom and energy sectors (Tuteja, 2009)


In Kolkata some of the project has been withdrawn like Marriot Courtyard Hotels to open

new hotel by 2009 (256 rooms), Intercontinental Hotels to open new hotel by 2008 (264

rooms), Hilton Group to open new hotel (2106 rooms), Bengal Ambuja to open new

hotel by 2008 (140 rooms) (Ministry Of Tourism, 2008). Also several other company

could not come here because of political environment like Tata Nano and Infosys shifted

from west Bengal. Now it can be expected from government to make an business

friendly environment to attract more hospitality company to meet hotel demands


5. Recommendation

Positioning:
Convenient location is an important attribute which is a point-of-differentiation for the

hotels in Kolkata. Therefore the new entrants should search for location in the

vicinity of both the dynamism of the business area and the hustle of the city. The

existing hotels which are not at convenient locations should provide full time free-of-

cost transportation facilities which could bridge the gap between the hotel and

various locations of the city.

Existing hotels should improve their service quality, food & beverage, and brand

name to capture more market share. They should also continuously upgrade

themselves to overcome the threat of latest technology from the new entrants.

Customer Satisfaction:
Hotelier should emphasize on improving room and restaurants services to retain

existing and attract new customers. Since hoteliers are not able to meet guests‟

expectations in the two areas mentioned above. Hoteliers should understand order

taking, delivery time and preparation time are most dominated complaint area which

should be improved for both room and restaurant services.

Hotelier should also think of minimizing their expenditure in some areas which

does not add values for customer satisfaction .It was found in some cases the

hoteliers overestimated customers expectations which actually erodes profitability of the

hotels (Figure 5, Figure 6, Table 6 Table 7). Those areas are “Efficient check in”,

“Efficient check out”, “Concierge”, “Room service” and “Dry Cleaning & Laundry” where


customer satisfaction will not decrease even by minimizing some degree of service

quality.

Strategies:
Demand for rooms in Kolkata is far above the supply level and hence possibility of new

entrants is very high in the coming years. Since all the premium brands of hotel industry

provide almost similar services so the major point-of-difference will be the price factor.

Therefore, Hoteliers will have to adopt better pricing strategy in near future.

Affordability should be induced by detaching few facilities from the original package.

With more number of hotels being lined up in the city, HR executives of existing

hotels should gear up to retain skilled labor. Since, during survey it was found that

huge numbers of hotel management students are switching their stream in mid way,

because of the notion that other fields are more attractive for them. Hotelier should be

also ready for the threat of the guest houses which is being developed by

different organizations (like Wipro has already developed Star categories of guest

houses in different cities).


6. Conclusion

This study focused on present and future marketing strategies and demand-supply gap
of luxury hotels in Kolkata, India. Another aspect of the project was to find out the
various gaps between guests‟ expectations Vis-à-vis hotelier perception about the
same.

A survey has been conducted on hoteliers, guests and IT industry personnel to collect
the data. Data has been interpreted by perceptual map, gap analysis and FMEA
(Failure mode and effects analysis).

It was found that most of the customers perceived ITC, The sonar as the best hotel in
the city (Kolkata, India). This study also revealed that there is a huge gap in customer
expectation and hotelier perception regarding several parameters. Room services and
restaurants are most dominating parameters from which majority of the complaints
arises in a hotel. This study also revealed the emergence of several potential threats to
the hotel industry which includes service apartment and guest houses.

During interview it is found that several hoteliers were not happy to share their
strategies for this interview.

This article will contribute for existing hoteliers to improve their marketing strategies. On
the other hand this will facilitate the new entrants to develop proper strategies against
different present and probable threats.


Annexure I: About ITC Ltd.

ITC is one of India's foremost private sector companies in India. It has a diversified

presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-

Business, Branded Apparel, Packaged Foods & Confectionery, Greeting Cards and

other FMCG products. While ITC is an outstanding market leader in its traditional

businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly

gaining market share even in its nascent businesses of Branded Apparel, Greeting

Cards and Packaged Foods & Confectionery.

ITC's diversified status originates from its corporate strategy aimed at creating multiple

drivers of growth anchored on its time-tested core competencies: unmatched

distribution reach, superior brand-building capabilities, effective supply chain

management and acknowledged service skills. Over time, the strategic forays into new

businesses are expected to garner a significant share of the emerging high-growth

markets in India.

ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is

one of the country's biggest foreign exchange earners (US $ 2 billion in the last

decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly

enhance its competitiveness by empowering Indian farmers through the power of the

Internet. ITC employs over 15,000 people at more than 60 locations across India. ITC is

ranked among India's most valuable companies by the 'Business Today' magazine. ITC

continuously endeavors to enhance its wealth generating capabilities in a global

environment to consistently reward more than 137916 shareholders, fulfill the


aspirations of its stakeholders and meet societal expectations. This over-arching vision

of the company is expressively captured in its corporate positioning statement:

"Enduring Value. For the nation. For the Shareholder."

ITC Limited: Mission

ITC Limited: Vision


Annexure II: About ITC WelcomGroup

ITC Limited entered the hotel business on October 18, 1975, with the opening of a hotel
in Chennai, which was rechristened Hotel Chola. ITC hotels currently own and operate
100 hotels in 75 destinations. Its restaurants Bukhara , Peshawari, Dakshin, DumPukht
and Kebabs & Kurries are well known cuisine brands today.

ITC-Welcomgroup has one of the most extensive art collections in India. A museum of
their collection is being planned in Kolkata.

The group today operates under several distinct brands:

ITC - Luxury Collection Hotels
WelcomHotel Sheraton Hotels
Fortune Hotels, which has 54 hotels with 4446 rooms in 41 cities across India.
WelcomHeritage Hotels

List of ITC Hotels by Brand

ITC Hotel Luxury Collection WelcomHotel / Sheraton properties
ITC Maurya, New Delhi Sheraton Chola, Chennai
ITC Mughal, Agra Sheraton Park Hotel & Towers, Chennai
ITC Maratha, Mumbai Sheraton Rajputana, Jaipur
ITC Grand Central, Mumbai Sheraton New Delhi, New Delhi
ITC Sonar, Kolkata WelcomHotel Rama International, Aurangabad
ITC Kakatiya, Hyderabad WelcomHotel Vadodara, Vadodara
ITC Windsor, Bangalore
ITC Royal gardenia, Bangalore


List of Fortune Hotels:

Fortune Global Select Gurgaon Fortune Park Galaxy Vapi
Fortune Select Palms Chennai Fortune Murali Park Vijaywada
Fortune Select Trinity Bangalore Fortune Park Klassik Ludhiana
Fortune Select Exotica Navi Mumbai Fortune Pandiyan Hotel Madhurai
Fortune Select Manohar Hyderabad Fortune Park Panchwati Kolkata
Fortune Select JP Cosmos Bengaluru Fortune Fences Tirupati Tirupati
Fortune Park Bella Casa Jaipur Fortune Resort Bay Island Port Blair
Fortune Landmark Ahmedabad Fortune Resort Sullivan Court Ooty
Fortune Landmark Indore Fortune Chariot Resort Mahabalipuram
Fortune Park Centre Point Jamshedpur Fortune Resort Central Darjeeling
Fortune Hotel The South Park Trivandrum Fortune Inn Riviera Jammu
Fortune Park Calicut Calicut Fortune Inn Jukaso Pune
Fortune Inn Sree Kanya Vishakapatnam

THE ITC WELCOMGROUP MISSION

To be recognized as the premier professional organization providing the finest tourism,
hospitality and travel related consumer services in the country and thereby contributing
to the achievement of the following Corporate and National priorities

CORPORATE

Generating Adequate economic surpluses to meet the expectations of all
stakeholders

NATIONAL

 Maximizing Foreign exchange earnings
 Employment Generation
 Development of Human Resources

SLOGAN: Nobody gives you India like we do


Annexure III: About ITC ,The Sonar (Kolkata,India)

ITC Sonar, Kolkata, a part of the “Luxury Collection”, epitomizes the beauty of Bengal.

Spread over 16 acres of prime property makes Sonar the ultimate business getaway.

Exemplifying this term, this is a place that has all the trappings of a business hotel,

along with the „feet-up-feel‟ of a resort. While offering travelers every possible modern

convenience, it simultaneously gives them the opportunity to break away from the

monotony of work and savor the varied pleasures of life .Designed by awarded

Architects Kerry Hill of Singapore, The Sonar represents the Symphony of Earth and

Water – of its 16 acres, over 4 acres comprise of water bodies, consisting of water lilies

and reflection pools. It is in route from the airport and a 10 minute drive from Sector V,

Salt Lake-silicon hub of Kolkata as well as the city„s shopping, entertainment, cultural

and business districts.

An array of award-winning culinary experiences range from the northwest frontier to

traditional Indian delicacies, continental grills, and an Irish pub.

Amidst the ambience of seclusion and luxury lies Kaya Kalp-The Spa, offering a

delightful retreat from the pressures of the modern world. The architecture of its indoor

and outdoor pavilions, spread over 13000 sq. ft., draws on local inspiration to blend

harmoniously with the natural environment. It is the largest tropical hotel spa in

Kolkata. The fully-equipped Wellness Centre features a Jacuzzi, sauna, steam room,

state-of-the-art gym, as well as a unique outdoor swimming pool. In addition, it is

also home to a beauty parlour, a salon, and a yoga room.


Eight meeting and conference rooms with state-of-the-art facilities including WI-FI and

outstanding services create an inspiring setting for grand international conferences, as

well as corporate and social events. Different restaurant at ITC sonar and their specialty

is explained below:-

Eden Pavilion: Eden Pavilion, the 24 -hour restaurant at ITC Sonar, Kolkata, offers a

delectable variety of buffet fare throughout the week, for lunch as well as dinner. The

spread has the flavor of our entire signature outlets packed into one. West View,

Gourmet Shop, Pan Asian (oriental), Dakshin, Dum Pukht, Peshawri and Maroush.

Peshawari:Serving authentic cuisine from the rugged North West Frontier (Indian

Barbeque), the restaurant recreates a rustic ambience where you tie on checked aprons

and are encouraged to eat with your fingers!

Dum Pukht: A celebration of the rich diversity of traditional Indian cuisines and the 200

year old culinary tradition of cooking food in sealed ‗deghs„. This Indian fine dine

restaurant with a show kitchen serves a mix of Awadhi, Luckhnawi and traditional Indian

cuisines.

Pan Asian: Pan Asian invites gourmands to a journey across the Pan Pacific belt. At

Pan Asian you can explore diverse culinary traditions: from the hearty fare of Mongolia

to the fiery taste of Malaysia, Korea, Indonesia and Thailand. And, the delicate flavours

of China and Japan. A food-lover„s foray into the subtle flavours that have created

famous culinary traditions such asJapanese, Chinese, Thai, Korean and Mongolian.


West View Bar & Grill: A distinctive medley of "Western Bar cum Grill" offering a

cornucopia of choicest wines along with the finest Single Malts, Cognacs and Cigars.

The novel outlet seeks to be a culinary journey for the discerning dinner, complete with,

the interactive charcoal grill with a widest selection of imported meats, crepe suzettes

cooked right on your table.

Dublin: The new bar code. A distinctive pub cum Discotheque representing the Gaelic

Raj Irish Pub and the Indian Colonial era offering the widest and finest choice of wines

and spirits.


Annexure IV: List of Company in Salt Lake

Sl.No.
Name of the applicant for Area Plot No of allotted
land allotted land
(acres)
1 Systron Electronics (P) Ltd 0.2965 ( J-5)
2 Delta Electro Polymer (P) Ltd 0.2687 (J1-8)
3 Dhanashree Electronics (P) Ltd 1.0749 (X1-16)
4 Biptronics 0.2687 (J1-16)
5 Jain Link (P) Ltd 0.2965 (J-2)
6 Simoco Telecommunication (South 4.2996 (X1-9,10,13,14)
Asia) Ltd
7 Stesalit Infotect Ltd 0.5 (J1-1)
8 Metalogic Systems 0.2356 J1-1
9 Institute of Engineering & 0.2525 (Y-12)
Management
0.2514 (Y-11)
0.2514 (Y-24)
0.94 (D-1)
10 Pekon Electronics Ltd 0.269 J1-9
11 Eldyne Electronics Ltd 0.2687 J1-13
12 Electron Combine 0.2514 Y-15
13 RDH Technologies (P) Ltd 0.344 F-1
14 RPG Netcom Ltd 1.0773 X1-4
14A Webel Bhavan 2.67 B-2

15 Swamina International (P) Ltd 0.2514 Y-20
16 The Supreme Industries Ltd 1 X1-1
17 Bengal Intelligent Parks (P) Ltd 5.0637 A2,M2,N2
18 SAMEER 0.6232 L-2
19 Plasto Chem (P) Ltd 0.2965 J-1
20 Cimsys Research (I) Pvt Ltd 0.2514 Y-13
21 Globsyn Tehnologies Ltd 2.1498 X1-11,12
22 Siemens Ltd 7.8614 G
23 ECE Technologies India Ltd 0.2514 Y-4
24 Controlla Electrotech (P) Ltd 0.2521 Y-10
25 Tata Consultancy Services 3.5158 B-1,C
26 Superintendence Co. of India (P) Ltd 0.2514 Y-23
27 Bansal Electronics 0.2687 J1-2

Vivek kumar

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (19)

Andere mochten auch

Andere mochten auch (20)

Ähnlich wie Vivek kumar

Ähnlich wie Vivek kumar (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Vivek kumar