This Issue - Icwai

presence in this segment. These include, Best Western,
Choice hotels, Bass Hotels, Park Plaza and Carlson
Hospitality.
● Room supply in the 5-Star segment has grown at
5% CAGR over the past decade while the 3 and 4 Star
categories have grown at 6% and 8% CAGR,
respectively, during the same period.
II. Heritage hotels
● Characterized by less capital expenditure and
greater affordability and include running hotels in
palaces, castles, forts, hunting lodges, etc.
● Further classified as Heritage Classic (hotels built
between 1920 and 1935), Heritage Grand (hotels built
prior to 1920) and Heritage (hotels built between 1935
and 1950).
III. Budget hotels
● Cater mainly to domestic travelers who favor
reasonably priced accommodations with limited
luxury.
● Characterized by special seasonal offers and good
services.
IV. Unclassified hotels
● Low-priced motels spread throughout the
country.
● A low-pricing policy is their only selling point.
● This segment accounts for about 19% of the
industry.
V. Resorts and Clubs
● Located at the outskirts of city—could be from
premium to budget category.
VI. Restaurants
● Food chains and outlets set up in India. They are
usually by international chains like Dominos,
Espresso, Pizza Hut and McDonalds.
Key players
Company
Indian Hotels
ITC Welcomgroup
EIH
Carlson
Inter Continental
Source : IBEF
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Type of properties
Luxury, mid-segment
and budget
Luxury, budget and
heritage hotels
Business hotels, leisure
hotels and cruises
Luxury, business hotels,
economy and cruises
Luxury, mid-segment
and business hotels
Brands
Taj, Gateway, Vivanta and
Ginger
ITC Hotel—Luxury
Collection, Welcom Hotel
—Sheraton, Fortune and
WelcomHeritage
Oberoi and Trident
Radisson Hotels and
Resorts, Park Plaza,
Country Inns & Suites,
Park Inn
Inter Continental, Crowne
Plaza, Holiday Inn, Holiday
Inn Express, Hotel
● In the Indian hospitality industry the major
players are Indian Hotels, EIH, ITC hotels, Hotel Leela
Ventures, Bharat Hotels and Asian Hotels, ITDC and
Orient Hotels Ltd.
● The booming industry has attracted many
international players as well. A number of global
players are already well established in India. These
include Hilton, Shangri-La, Radisson, Mariott,
Meridian, Sheraton, Hyatt, Holiday Inn, Inter
Continental and Crown Plaza.
● The country has been flooded by some of the
world’s leading hotel brands. New brands such as
Amanda, Satinwoods, Banana Tree, Hampton Inns,
Scandium by Hilt and Mandarin Oriental are planning
to enter the Indian hospitality industry in joint
ventures with domestic hotel majors.
International Hotel Brands
Brand No. of hotels Target date
Carlson 50 2012
Four Seasons 6 2012-13
Starwood 15 2012
Hyatt 10 2012-13
Marriott 24 2012
Wyndham 50 2011
Hilton 75 2015
Intercontinental 41 2012
Fairmont Raffles 15 2012-13
Accor 44 2012
Source : Business Standard
Latest trends
Investment in smaller cities
● Rising business and leisure travel to smaller cities
such as Udaipur, Thiruvananthapuram, Bhubaneswar,
Pune, Kochi and Chandigarh have increased
demand for quality hotel rooms in these cities.
Hospitality chains are expected to increase their
presence in smaller cities to leverage this opportunity.
There are plans for a suitable project mix (more
budget/business hotels compared to luxury hotels)
for these cities. For instance, Carlson has announced
its plans to set-up mid-segment hotels in Tier II and
Tier III cities.
Diversification into new segments
● Many hospitality chains that were earlier focused
only on the luxury segment are now diversifying into
new product segments, such as budget hotels and
serviced apartments, in order to reduce risks.
● IHCL has already launched budget hotels in
India, while Accor has announced plans to introduce
its budget hotel brand, Formule1, in the country.
The Management Accountant |September 2011 735