HOSPITALITY: TRAVELING AND TOURISM

The hospitality industry is a broad category of fields within the service industry that includes
lodging, restaurants, event planning, theme parks, transportation, cruise line, and additional
fields within the tourism industry. The Indian tourism and hospitality industry has emerged as
one of the key industries driving growth of the services sector in India. Tourism in India has
registered significant growth in the recent years and the country has tremendous potential to
become a major global tourist destination.

The total market size of Indian tourism and hospitality sector stood at US$ 117.7 billion and is
expected to touch US$ 418.9 billion by 2022. The foreign direct investment (FDI) inflows in
hotel and tourism sector during April 2000 to July 2013 stood at US$ 6,754.49 million, as per the
data released by Department of Industrial Policy and Promotion.

India is expected to receive nearly half a million medical tourists by 2015, implying an annual
growth of 30 per cent. The country has received 43.06 lakh foreign tourists during the period
January-August 2013. India is perceived as one of the fastest growing medical tourism
destination. The number of medical tourists coming to India has registered a growth of 40 per
cent in the past six months. The inflow of medical tourists is expected to cross 45 lakh by 2015
from the current level of 25 lakh.

Facts and Figures of Indian Hospitality industry

 The Hospitality industry is the third-largest foreign exchange earner, accounting for
6.23% of India’s GDP and 8.78% of India’s total employment, according to a report by
the Planning Commission.
 Tourism in India is the largest service industry. The travel and tourism sector currently
employs 49 million people, or 1 in every 10 jobs, and this is projected to increase to 58
million, or 1 in every 9.6 jobs by 2020.
 Travel and tourism is a USD 32.7 billion business in India, according to industry
estimates; in addition, the hospitality sector is sized at USD 23 billion and is expected to
grow to US$ 36 billion by 2018.
  It is expected that the hospitality sector will witness an inflow of USD 12.17 billion in
investments over the next two years, according to market research company Technopak
Advisors.
 Number of domestic tourist visits in India during 2010 was 740.21 million as compared
to 668.80 million in 2009, with a growth rate of 18.8 %.
 Number of Indian national departures from India during 2010 was 12.99 million as
compared to 11.07 million in 2009, registering a growth rate of 17.4%.
 India has been ranked the "best country brand for value-for-money" in the Country Brand
Index (CBI) survey conducted by Future Brand, a leading global brand consultancy. India
also claimed the second place in CBI's "best country brand for history", as well as
appears among the top 5 in the best country brand for authenticity and art & culture, and
the fourth best new country for business.
 Most of the five-star hotels are witnessing an average room occupancy rate of over 80%.
 For every room constructed, 3-5 jobs are created. The World Travel and Tourism Council
has estimated that by 2010, tourism can support 25 million jobs ( 1 in every 15 ) in India
through 8% annual growth.
 The average duration of stay of a foreign tourist in India is one of the highest in the
world. On an average, it exceeds 27 days in the case of non-package tourist & is 14 days
in the case of package tourist.
 Online travel industry is growing at a CAGR of 125%. Generating revenues of around
$300-500 million, the size of this industry is around 2% of the entire travel industry,
which is estimated to be $42 billion. Growing at the current rate the online travel industry
in India is expected to become a $2 billion industry by 2008.

Challenges faced By Hospitality Sector in India

 Tourism ministry not equipped with executive powers to bring about sweeping

changes in the system

 Absence of an updated master plan for tourism to take into account a changing

global scenario

 Tourism considered a state subject, which leads to fragmented and piecemeal

approach to address the needs of the sector

 Absence of 'Infrastructure' status to hotel sector

 'Industry' status to tourism not granted by all states

 Tough lending norms by Indian banks

 Multiplicity of taxes; local governments unaware of the potential

 Hotel classification/rating system outdated

 Acute lack of value-for-money propositions

 Poor tourist infrastructure and on-ground support

 Terrorism
 7 P’S Related HOSPITALITY SECTOR

1) Product

It includes transportation system, arrangement of accommodation and other supplement

such as comfortable visit, tour and stay of a tourist, food, laundry, spa, medical and
ayurveda, gym, recreation facilities, sight scene. This services can be arranged by a single
agency also by bundling all services such as [Link] or [Link] or another
possibility is travel agent only transportation and other agency will offer package tour of
stay in hotel. Now a days agencies sell a complete tour package of all the service and
product under one deal hence tourists find it very convenient to deal with single agency.
But the tour manager has to ensure that there won’t be any service failure and delivering
all the services that were promised to customers.

2) Pricing
The pricing depends upon the category to which customer belongs, his mode of travel,
communication chosen and level of comfort or discomfort that is acceptable to him. The
price is also an exercise of matching demand and supply. Generally during peak seasons
like summer holiday, marriage season, religious festivals like Diwali when people rush to
take long vacations, family function and during 25 th December to 31st December the
charges/rent of staying at hotel are high, so the overall charge of package will be high,
during the slack season, the same package is available at vey less price. So proper yield
management is required to set the price in tourism sector. The pricing should be made
attractive to accommodate enough to delight customer.

3) Place
The distribution channel involved in tourism sector includes agents who book the ticket
for us and work on the margin. Sometimes customers can directly approach to the service
provider such as owner of hotel for booking and book the rooms as per requirement so in
this case there is direct interaction between customer and service provider.
4) Promotion
The promotion of tourism and hospitality service package is combined affair of many
agencies involved in rendering the service at different stage of tourism and hospitality.
The companies make combined arrangement for a joint promotional campaign along with
hotels, booking agents, tour operators, credit card companies, airlines, bus operators and
often railway agencies too. The campaigns can be promoted by the way of electronic
media, direct mails, outdoor media, print media and internet websites. “Malaysia truly
Asia”, “Visit Cape town before you Die”, “Amazing Australia” are some of the
campaigns developed by countries to attract tourists. Even Amitabh Bachchan is brand
ambassador of Gujarat Tourism. The promotion is undertaken to offer information to the
world in general and to the tourist in particular through advertisement and sports in order
to motivate them to visit these destinations and make purchase of their for their tour from
the operators advertised in the campaign.

5) People
This is the most important factor in promoting tourism and hospitality service as people
can either impress a customer so much that he will always prefer to comeback or he gets
put off never to return again. The service providers have to prepare and update their
people by the way of internal marketing of their services. The internal marketing involve
training people so that they can deal with people from different part of world. The people
at front of deals, who come in direct contact need to be trained into body language and
even understanding of different language to make contact and communicate with tourist.
In the same way, the back stage people need to understand of making the whole process a
memorable experience and one to cherish for the tourist. Today backstage people require
degree of MBA in Tourism to work with the professional chains like Mahindra Holidays
or make my trip.

6) Physical Evidence
The evidence can be offered by keeping accommodation neat and clean and full of
comforts as per the status of tourist. Further the physical evidence of transport sector can
 also be included over here. Proper hotel or resort with specious rooms and A/C,
television, Gym, food are the evidence related to hotel. Along with that well managed
office of dealer or hospitality service provider with better seating arrangement, parking,
sanitary facility, computer or laptop with internet facility, books and magazines related to
various tourist place are also part of physical evidence from service provider perspective.

7) Process
The new and latest innovations in the technology made it possible to virtually visit the
place of tourist attractions on web screens. It has become easy for tourist to see for
himself the kind of travelling facilities, hotel accommodation and the treatment etc., he
can expect from the tour operator. The availability of internet , the access of websites and
facility of mobile while on the move have made easier for both the service provider and
customers. The service provider can make sure that his technology adoption is done
keeping in view the customer profile and customer friendliness. The process of online
booking involve following steps:
1) Open Website of travel agent
2) Search for destination place
3) Select destination place
4) Check for availability of rooms and other facility during required dates
5) Book Ticket if available
6) Make online payment
7) Get the printout of ticket