Semi Luxury Budget Hotel In Chandigarh Tourism Essay

The Indian hotel industry witnessed unprecedented growing during the Indian fiscal old ages 2003-08 due to the booming economic system, ensuing in an addition in concern and leisure travel and seeable growing in inbound every bit good as outward touristry. The addition in inward touristry during this stage can be attributed to lifting international trade flows and the entry of an increasing figure of international participants into India. Furthermore, in the last few old ages, concern travel to smaller metropoliss such as Chandigarh, Bhubaneswar, Pune, Jaipur, Mangalore and Kochi has increased as IT/ITES companies have expanded their operations. India has besides become a preferable tourer finish with a figure of smaller metropoliss such as Chandigarh, Jaipur, Udaipur, Thiruvananthapuram and Kochi witnessing increased foreign tourer reachings. Existing figure of hotels in these metropoliss are non plenty to run into the turning demand and several planetary every bit good as national hotel ironss plan to develop belongingss. Most of these belongingss are expected to be in the budget section, which has witnessed robust growing in India over the last few old ages, driven by the growing in domestic travel.

Indian cordial reception industry today is an ideal illustration of the economic ‘theory of demand-supply ‘ . Expensive room rates, surging existent estate monetary values and entry of foreign participants in India is inevitable in such a scenario. Booming economic system, increased foreign tourers would surely hike cordial reception industry in future. But contrary image of 20-30 per cent unoccupied suites reveal the fact of handiness of surrogate options that tourists prefer today. These options call for the hotel proprietors to reconsider the on-going enlargement of hotels across the India, eying at the immense inbound touristry travel. The popularity of these adjustments will probably to go forth high capacity hotels with low tenancy. Hotel proprietors need to gauge “ the existent demand for suites ” before they invest immense capital in development/expansion, otherwise it leads to over-supply of suites in future and hotel proprietors would hold to confront unoccupied suites.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

Overview of Hotel Industry in India

Overview about Hotels in Chandigarh

Chandigarh City: Tourism Business Potential

Demand & amp ; Supply Analysis of Hotel suites in the City:2010

Future scenario

Chapter 1


Significance & A ; Background of the research

Prior to puting in a proposed hotel undertaking, due diligence and thorough scrutiny is a pre-requisite in today ‘s competitory concern environment. Feasibility studies for the undertaking are provided by confer withing companies for the undermentioned intents:

Determining highest and best usage of a peculiar secret plan of land ;

Determining Return On Investment ( ROI ) for a prospective developer ;

Helping a developer in raising debt or pulling equity engagement ;

Obtaining a franchise or direction contract.

Historically feasibleness studies have been prepared by either accounting houses or existent estate consulting companies and are market surveies with fiscal projections. While they will let the investor to understand expected hard currency flows, they will traditionally non turn to the construct of fiscal feasibleness. A feasibleness study for a hotel must cover the undermentioned facets:

Past, nowadays and future demand and supply of hotels ;

Demand for other installations provided by a hotel like conference suites, eating houses, bars and recreational installations and urge the optimum development scheme ;

Estimate the likely operating income and disbursals for at least five old ages following the gap of the hotel.

The feasibleness survey must measure the local country by analysing the economic sciences of the city/region and analyse whether the proposed site is suited for hotel development. It must besides look at the market competition more significantly local market competition with respect to bing and proposed demand for hotels. The survey should besides find which market sections are likely to see growing. The analysis of past supply and demand besides gives an penetration into the current phase in the rhythm of hotel development, giving the booster an sentiment on whether there is likely to be favorable or unfavorable alterations in the local hotel market.

The feasibleness survey should besides urge appropriate installations, foregrounding the figure of guestrooms that the market can prolong with an indicant of the figure of F & A ; B mercantile establishments, run intoing infinite, retail infinite, recreational and parking installations that should be developed. While the feasibleness survey may foreground bing installations in comparable hotels within the local market, it should besides notice upon the installations that are non available and are required by the current market and what may be required in the hereafter. The competitory placement of the capable hotel in relation to the market should besides be assessed. The full procedure of hotel development can take a figure of old ages, so developers have to be careful that they do n’t construct a hotel which is suited for “ yesterday ‘s ” market.

A feasibleness survey should include an IRR ( Internal Rate of Return ) computation, which clarifies to the developer whether the undertaking is financially executable or non. Fiscal feasibleness is truly of import for the hotel proprietor to make up one’s mind whether to travel in for the proposed investing or non.

Therefore, the aims of my research are:

Aims of the research

To analyze the viability of a semi-luxury budget hotel in Chandigarh

To analyze the viability of market and sale volume related with semi-luxury budget hotel concern & A ; remark on the appropriate Numberss, types, and sizes of invitee suites and other comfortss which would outdo function the demands of the market.

To analyze the Financial Viability of a semi-luxury budget Hotel & A ; Beginnings to tap the same

1.2 Overview of Hotel Industry in India

Hotel Industry in India has witnessed enormous roar in recent old ages. Hotel Industry is inextricably linked to the touristry industry and the growing in the Indian touristry industry has fuelled the growing of Indian Hotel industry. The booming economic system and increased concern Opportunities in India have acted as a blessing for Indian hotel industry. The Arrival of low cost air hoses and the associated monetary value wars have given domestic tourers a host of options. The ‘Incredible India ‘ finish run and the late launched ‘Atithi Devo Bhavah ‘ ( ADB ) run have besides helped in the growing of domestic and international touristry and accordingly the hotel industry.

Harmonizing to a study, Hotel Industry in India presently has supply of 110,000 suites and there is a deficit of 150,000 suites fuelling hotel room rates across India. Harmonizing to estimations demand is traveling to transcend supply by at least 100 % over the following 2 old ages. The hereafter scenario of Indian hotel industry looks highly rose-colored. It is expected that the budget and semi-luxury hotel section will witness immense growing and enlargement while the luxury section will go on to execute highly good over the following few old ages. The booming economic system will increase the disbursement power and fuel the growing in touristry. The figure of families with one-year income greater than Rs 1 million is turning at a CAGR of 15 per cent station 2006-07, which will hike domestic inbound travel and lead to higher demand for hotel suites. Furthermore, the authorities ‘s determination to well upgrade 28 regional airdromes in smaller towns and denationalization and enlargement of Delhi and Mumbai airdrome will better the concern chances of hotel industry in India. Significant investing in touristry substructure is indispensable for Indian hotel industry to accomplish its possible. The upgrading of national main road linking assorted parts of India has opened new avenues for the development of budget hotels here. In order to increase the stock of hotel suites, the Federation of Hotel and Restaurant Associations of India suggested to the authorities that the floor country ration of the bing hotels should be increased. The proposal is, nevertheless, yet to be implemented.

In footings of international visitants, India is still an developing market with around 51.1 lakh Foreign Tourist Arrivals ( FTAs ) yearly ( against China ‘s over 500 hundred thousand ) . However, FTA is still one of the cardinal demand drivers for India ‘s premium hotels ( 55 % of FTA choose Premium Hotels ) . Apart from the popularity of Indian tourer finishs like Kerala, Goa, and Rajasthan among abroad leisure travelers, the outgrowth of India as one the fastest turning economic systems with important concern potency is expected to prolong growing in concern travel, traveling frontward.

In calendar 2009, around 51.1 lakh tourers visited India, which marked a 3.3 % diminution over the old twelvemonth. On the positive side though, following 13 back-to-back months of worsening or stagnating FTAs, volumes in December 2009 eventually re-entered the positive district, turning by 21 % over December 2008. Again, for the period January to August 2010, FTA volumes witnessed a healthy 9.7 % growing over the old twelvemonth. With frights of an H1N1 epidemic settling and the impact of the 2008 terrorist onslaught tapering off, the economic resurgence presently under manner and event specific attractive forces ( like the Cricket World Cup and the Formula a One races ) are expected to back up the uptrend in FTAs. This augurs good for the premium hotels, which are to a great extent dependent on foreign tourers.

This tendency of increasing tourers was besides witnessed globally, with traveler volumes bottoming out in Q4, 2009. As against a diminution of 10 % , 7 % and 2 % in international tourer volumes during Q1, Q2 and Q3 of calendar 2009 severally, Q4, 2009 reported a 2 % growing.

Frequently underrated, the 65 crore strong domestic traveler section is besides strongly feeding the current upturn in demand. In the past excessively, Indian hotels when faced with worsening FTAs have sought to pull in domestic travelers of both the concern and leisure assortment, offering big price reductions and attractive trades. Therefore, in 2003 for case, when the market was emerging from a downtrend, it was the domestic traveler who provided the initial push to the recoil. With hotel duties in India worsening during the recession, domestic finishs have one time once more became a feasible vacation option for the comparatively cost witting Indian traveler. Additionally, with the economic system turning about, Indian companies have besides eased the limitations on corporate travel. Domestic air hose travel in India grew by 7.8 % in calendar 2009 and once more by 21.7 % during the period January-July 2010.

Presently, both in footings of absolute investings in capital and growing in investings in the cordial reception industry, Indian ranks among the top 10 states globally. Bulk of the incremental supply in the Indian hotels industry is coming up in the premium section and from the stalls of international trade names. To a big extent, the high land and debt costs, besides the low Floor Space Index ( FSI ) , have prompted most developers to choose for premium hotels to accomplish viability. On the other manus, if every bit anticipated, the domestic middle-class traveler were to organize an of import portion of the future client base, ablactating them off from unbranded guesthouses will necessitate competitively priced hotels spread across the budget and economic system sections.

Travel Industry – Important Statisticss

– Harmonizing to the World Tourism and Travel Council, India ranks figure one in long term growing.

– Ministry of Tourism expects 10 million foreign tourers and 800 million domestic tourers in 2011

– This will make 15 million extra occupations by 2011. The part of the Travel & A ; Tourism economic system to employment is expected to raise from 30.5 million occupations in 2009 to 39.6 million occupations by 2018.

– Real number GDP growing for Travel & A ; Tourism economic system is expected to average 7.6 per centum per annum over the following 10 old ages

– Export net incomes from international visitants and touristry goods will turn ( nominal footings ) to Rs 2,750.2 Billion ( 4.4 % of entire ) in 2018

– The part of Travel & A ; Tourism to Gross Domestic Product is expected to remain the same at 6.1 % ( INR 28,599 Crores ) in 2008 to 6.1 % ( Rs 91,411 Crores ) by 2018.

Annual Foreign Tourist Arrivals ( All India informations for 2009-10 )

55 hundred thousand

Real GDP growing for Travel & A ; TourismA

economic system expected in the following twelvemonth

7.90 %

Annual forex Inflow in 2009-10

$ 11.96 billion

Growth in forex influx

( 3.00 % )

Domestic tourers in 2009-10

650 million

Table 1: Travel Industry – Important Statisticss

Foreign Tourist Arrivals in India

The Foreign Tourist Arrivals to India has been increasing at a CAGR of 7 % . In the recent old ages, the authorities of India has besides initiated the Incredible India Campaign, Athithi Devo Bhava etc to pull more and more of Foreign Tourists to India. With India hosting athleticss events like late concluded Common Wealth Games in Delhi and approaching ICC Cricket World Cup ( pan-India ) & A ; Formula-One races, the FTA figure is expected to traverse the 1 Crore in a twelvemonth grade in 2010-11. The demand for the foreign tourers is driven by the degree of growing in Global GDP, increased concern activities of other states with India, turning figure of tourer finishs, rise in trade and featuring events, selling attempts like “ Athithi Devo Bhava ” & amp ; “ Incredible India ” .

Figure 1: Number of Foreign Tourist Arrivals to India ( 1997-2010 )

India besides holds a great concern potency in Medical Tourism due to its low cost medical installations as compared to the developed states like US. With the growing of corporate infirmaries in India, there is easy entree to province of the art installations and engineering, day-and-night personal service and big pool of physicians, trained nurses and paramedical staff. Indian physicians are good known all over the universe for their first-class preparation and expertness as a major per centum of US and UK physicians is from India. In fact every 5th physician in the universe is an Indian ; hence patients from abroad do n’t waver to acquire intervention from Indian doctors.A A A

Easy handiness is besides a important factor. By an estimation, there are more than 850,000 patients on waiting lists in UK. Compared to waiting lists of up to 2 old ages for elected surgery in overstretched authorities wellness programs in Canada and UK, there is no waiting clip in India and there is easy and friendly entree to Indian physicians. Handiness of big pool of English talking staff gives India an border over other Asiatic rivals like Thailand and Malaysia.

Domestic touristry in India: Great concern potency

Frequently under-estimated, the domestic tourers are about 100 times the size of FTAs and keep a major portion of the flourishing touristry industry of India. Rising disposable incomes, escapade seeking, passing more clip in leisure and diversion are the factors pulling domestic tourers to assorted parts of the state. The several State/UTs have started with major advertisement and publicity activities to pull both domestic every bit good as FTAs to their several States/UTs. Domestic tourer reachings are the anchor of Indian Hotel Industry as the figure of Domestic Tourists is more than 100 times every bit compared to Foreign Tourists.

Figure 2: Number of All India domestic tourers to all States/UTs

Figure 2: Categorization of FTAs harmonizing to Purpose of Visit

Growth in leisure travelers is driven by lifting personal discretional income, germinating life style, and turning figure of multi earner households, weekend holiday civilization, and betterment in rail, air every bit good as route connectivity, diverse topography and rich cultural heritage. Drivers of domestic concern going are rise in trade and commercialism, increasing geographical spread of companies, turning MICE ( Meetings, Incentives, Conferences and Exhibitions ) civilization.

Players like Lemon Tree, Ginger have identified that there is famine of quality suites in the budget section. Entry of organized participants is expected to better the quality of offerings and bridge the broad spread between budget and upscale class.

In the following five old ages, the Indian hotel industry is expected to witness an acute deficit of room supply. The demand and supply instability will turn the market into a provider ‘s market and this will take to a dramatic rise in rates in most metropoliss. Companies will happen rates prohibitive for the mid degree concern traveler, coercing them to look for more cost-efficient options. The mid degree traveler constitutes a cardinal mark market for most luxury hotels in commercial finishs and this section besides exhibits relatively higher mean length of stay forms. In some clip to come, the macro economic factors and industry kineticss will show an optimal demand-supply balance and net incomes will be rationalized. Till such clip, budget hotels will be able to run at impressive tenancies, maximize outputs through proactive rate direction and construct a loyal client among niche markets like the non-negotiated commercial travelers, air hose STPC ( Stopover Paid by Carrier ) and extended stay. Post rationalisation, the rate accommodation factor will be relatively lower for hotels with budget orientation and these hotels are expected to show a flatter, but more stable, growing flight over a long term period.

While there has been much talk about record figure of foreign tourer reachings, really small has really been said or done about domestic touristry which has registered 40 percent one-year growing in the last three old ages. This is good intelligence, as income induced disbursement is likely to prolong itself for a longer period. Higher disposable incomes are besides expected to heighten the construct of going for leisure. At bing hotel rates across cardinal leisure finishs in India, travel to many far-east finishs is more economical than travel on domestic circuits. In such a scenario, a budget hotel offering comfy adjustment and satisfactory nutrient and drink options at low-cost monetary values has much to derive from the domestic travel market. In my sentiment, a hotel with budget orientation and budget trade name association is better suited to provide to this all important section. Furthermore, for any hotel, a greater dependence on domestic touristry besides means more certainty and stableness in footings of gross: inward touristry, doubtless, is strongly influenced by tendencies and developments, economic and otherwise, in the beginning states every bit good as around the universe in general. Dependence on foreign touristry can be a double-edged blade as travel determinations are based on planetary forms and events that happen elsewhere can hold serious impact on your public presentation. Developers must, nevertheless, maintain in head that the overall development cost, and subsequent operational costs, associated with a budget merchandise are far less than for a luxury merchandise. When the demand-supply instability state of affairs improves, which will better one time new hotels open, merely those hotels that are planned and conceptualized to provide to the ideal concern mix will be able to prolong themselves. While, based on recent public presentations and bing tendencies, there is a strong enticement to choose for luxury, budget developments, due to their built-in nature of operation, associated costs and flexibleness, are better suited to defy the following economic downswing as and when it takes topographic point.

What India needs today is extra supply in room stock list that will ease the immense supply instability. The existent demand is for merchandises that will offer value for money and which are customized to efficaciously provide to single travel demands. The demand of the hr is for developers to understand and entree the true potency of certain cardinal hotel markets, absorb the construct of budget adjustment, and integrate a good thought-out development scheme.

Average Rate Growth ( 2001/02-2007/08 )









-5.7 %

-7.0 %

19.1 %

3.7 %

15.1 %

11.7 %

29.1 %


-1.6 %

8.5 %

4.0 %

-7.8 %

14.4 %

2.0 %

10.9 %


-9.5 %

-4.9 %

10.9 %

-6.9 %

-6.6 %

5.4 %

6.4 %


-5.8 %

11.0 %

10.0 %

-4.2 %

-5.7 %

2.3 %

31.4 %


24.3 %

-4.8 %

6.9 %

-8.2 %

12.1 %

9.8 %

18.4 %


2.4 %

-0.8 %

15.4 %

1.6 %

-3.4 %

2.5 %

19.8 %


2.1 %

10.1 %

-1.9 %

11.2 %

15.2 %

2.2 %

28.7 %


-4.1 %

18.2 %

24.0 %

4.2 %

11.8 %

6.1 %

32.6 %

Table 2: Average Rate growing ( 2001-08 )

Beginning: HVS International Report 2008

The tabular array above provides the mean rate growing trends across cardinal metropoliss, foregrounding that, over the last 24 months, most metropoliss have witnessed impressive growing in mean rate, due to strong demand and non much add-on in supply. However, the possible to increase rates without displacing clients has about peaked. With new hotels opening in these metropoliss we expect to see a much-needed stage of rate consolidation. The demand-supply instability so presents an ideal chance and is a blessing for budget trade names looking at India.

Categorization of Hotels

The hotel industry in India can be divided into eight sections based on the norms set by the Ministry of Tourism.

They are 5-Star Deluxe, 5-Star, 4-Star, 3-Star, 2-Star, 1-Star, Heritage and Unclassified. However, the 3-star, 2-star, 1star and unclassified hotels in India are spread across the length and comprehensiveness of the state and are extremely fragmented in nature, whereas, the upscale, budget and heritage classs are extremely organized. The upscale class hotels are chiefly present in the tube and the tier 1 metropoliss and are now aiming the grade 2 metropoliss for enlargement.

The industry is characterized significantly by little unorganised participants, labor-intensive operations, seasonality, cyclicality, extremely capital intensive nature and extremely sensitive to the external factors like economic system, terrorist act and political position.

The demand for the hotel suites is driven by the rise in the figure of the domestic and good as the foreign tourers.

1.2 Overview of the Chandigarh hotel industry

The hotel industry in Chandigarh, which was stagnant for the past two decennaries, is now on a revival way. City hotels have recorded an addition in tenancy up to 20 per cent in the last two old ages. An increasing figure of concern travelers due to the approaching information engineering Parkss in Chandigarh, Panchkula and Mohali have helped in the revival of the hotel industry in Chandigarh. The turning corporate civilization in the part, cordial reception has become a portion of substructure. A There are about 30 authorities and private hotels in Chandigarh offering 900 suites. Chandigarh metropolis witnessed about 914742 Domestic travelers and 37967 Foreign Tourist Arrivals in 2009. The demand for suites seem to be well higher than supply of suites.

Chandigarh City: Location advantage

Picturesquely located at the foothills of Shivaliks, the Union district of Chandigarh serves as the capital of Punjab and Haryana. Known internationally for its architecture and urban planning, Chandigarh is home to legion architectural undertakings of Le Corbusier, Pierre Jeanneret, Matthew Nowicki, and Albert Mayer. Some of the many tourer attractive forces in the metropolis include the Famous Rock Garden, an international dolls museum and a figure of garden and Parks. The metropolis can besides be used as a base to do jaunts to nearby Kasauli, Chail, Solan and Shimla.

Chandigarh Administration along with prima infirmaries of the metropolis and the locality has decided to advance Chandigarh as a finish for Medical Tourism. Chandigarh has immense potency for Medical Tourism as the first-class environment and big green infinites give ample chances to patients to retrieve from their unwellnesss. State-of-the-art Medical installations are available in assorted Public and Private Hospitals. Thousands of wellness tourers are coming to Chandigarh to avail the Medicare of adept physicians from all over India and other parts of the Earth. Three major factors of growing of medical touristry in India are Cost, Quality and Availability.A The major benefit offered by India to abroad patients is important nest eggs compared to their domestic private health care. For illustration cost of a Facelift in USA is about $ 15,000 while same surgery costs $ 3000 in India. A knee joint replacing costs approx 12000 lbs in UK while it is done for about 3500 Pounds in India.A

Chandigarh has rare differentiation in India of holding two infirmaries with universe renownedA JCI accreditationA in its locality, Fortis Hospital, Mohali and Grewal oculus institute at Chandigarh. Govt. of India has announced a new class of `Medical Visa ‘ for the convenience of `Health Tourist ‘ . Indian Missions in assorted states may be contacted for inside informations, and process for obtaining medical visas.

Tourist Topographic points of Interest around Chandigarh: Tourism concern potency

Chandigarh is the gateway to Himachal Pradesh, an acknowledged tourer oasis

Shimla, merely 110 kilometers by route.

Kasauli, merely one hr thrust. It is a hill station non really far from the metropolis. If one is lucky, in clear conditions it offers a astonishing position of Chandigarh from the Himalayan Foothills. The foreign visitants will necessitate to show a valid passport to derive entryway.

Other Himachal hill Stationss such as Kullu and Manali, a gateway metropolis to Himachal Pradesh. A trip by route to Kullu takes about 12 H by coach or 6-7 hours by cab.

Dharamsala, place of the Dalai Lama and top Himachal hill station

One can see Pinjore Gardens that are within a scope of 15-20 kilometer from Chandigarh on the manner to Shimla.

World renowned topographic points of tourer involvement in Chandigarh

Rock Garden designed by Nek Chand. The park is unfastened daily from April to September between 9 ante meridiem to 1 p.m. and 3 to 7 p.m. Between October and March it is unfastened from 9 a.m. to 1 p.m. and 2 to 6 p.m.

Sukhna Lake: A Located in Sector 1, the Sukhna Lake is an unreal reservoir. A popular topographic point to hang out, one can anticipate to happen occupants of the metropolis jogging or sauntering along the Bankss. There is a walk-to way, a cafeteria, stores and a mini-amusement park and paddleboats. The Sukhna Lake was created in 1958 by damming the Sukhna Choe, a seasonal watercourse that flows down from the Shivaliks. Storks and Cranes make migratory Michigans at the lake. The lake, by the way, has Asia ‘s longest H2O channel for rowing and yachting.

Rose Garden: The metropolis houses the largest rose garden in Asia. It besides hosts one-year rose festival which is rather popular among local population.

The CapitolA Most of the capitol composite is fenced off due to tight security, the unfastened manus is accessible and from at that place you can see the chief edifices, albeit in the distance. If you want a closer expression at the Capitol, you need permission from the Tourist Bureau, in the ‘Deluxe Administration edifice ‘ in Sector 9. Please note the capitol and agency are merely unfastened on Weekdaies.

The High CourtA – The edifice is astonishing, and highly photogenic.

Pinjore GardensA – Pinjore Gardens, besides called Yadavindra Gardens, are 20 kilometers ( 12 myocardial infarction ) from Chandigarh on the Chandigarh Shimla route. Taxis and coachs ply on a regular basis between Pinjore and Chandigarh. Pinjore lies on the foothills of the lower Shivalik scopes. The absorbing gardens in the Mughal manner are one of the most popular picnic musca volitanss in the part. A mini menagerie, works baby’s room and Nipponese garden, every bit good historic castles and picnic lawns await tourers.

Museum and Art GalleryA – Located in Sector 10, the museum and the combined art gallery is an interesting topographic point to travel to. Artifacts range from the Harrapan Period relics to the pictures and coins from different countries and clip periods. Dodos of the local dinosaurs found in the part.

The Chandigarh Museum, which is merely following door, provides an interesting facet on how Chandigarh was founded. It begins with the rules on which Chandigarh was built, choice of the Architects, the design for the people etc.

Cactus Garden is the largest lush botanical garden of Asia. It is located at a distance of about 8 kilometers from the metropolis of gardens. Situated in the bosom of the metropolis of Panchkula, it covers a entire country of 7 estates. Cactus garden is known for its rare & A ; endangered species of Indian succulents. You can descry about 3500 different sorts of species over at that place. Chandigarh Cactus Garden was set up in the twelvemonth 1987. This alone garden consists of three green houses. It has been pulling more and more crowds every twelvemonth, dwelling non merely of tourers, but phytologists.

Not every topographic point in India can tout of the rich beauty that Chandigarh offers a tourer. A oasis for nature lovers, tourers from different parts of the state flock to see nature at its best.

LeisureA Valley: At Leisure Valley one can see a assortment of subjects of flowers and their agreements

Chhatbir Zoo

If there ‘s one animate being that you would desire to see, it is the Royal Bengal White Tiger. A bang sets down upon your spinal column when you take images standing truly near to the Tiger.A It has now developed into a zoological park of prominence. Visitors are taken to the tiger ‘s sanctuaries in the caged motor vehicle while the animate beings roam freely in their reserved countries. There are besides a big species of birds. Mondays are a vacation at this topographic point.

Hotel demand & A ; supply place: 2010

Figure 4: ARR & A ; Occupancy degree: Chandigarh Hotels 2001-10

Figure 5: Tourist Inflow to Chandigarh: 2001-10

Figure 6: Growth in Hotel suites in Chandigarh

Demand-Supply Analysis

As per Data 2009

Entire Number of Tourists in 2009


Avg. Number of Tourists daily


Number of Rooms Required ( 2:1 footing )


Annual growing rate of Demand

25-30 %

Entire Number of Rooms in Chandigarh


Annual growing rate of suites in Chandigarh

15-20 %

Table 3: Demand supply Analysis

Figure7: Demand Supply Gap of Hotel suites in Chandigarh

Hotel Undertakings in the Grapevine

The late signed Memorandum of Understanding for the much talked about international airdrome in Chandigarh has given a encouragement to the part ‘s hotel industry. Recognizing the possible, many international every bit good as national Hotel Chains have announce their programs to develop Hotels in Chandigarh. Choice Hotels, Berggruen Hotels Marriott Hotels International, Sarovar Hotel Group, International hotel concatenation Hampshire Hotels & A ; Resorts, Raddison, Hyatt Hotels & A ; Resorts, DLF and Oberoi Hotels & A ; Resorts have all shown involvement in puting up a hotel in Chandigarh, with many of them already started. Chandigarh already has two 5-star hotels viz. Taj and CITCO run Mountview.

Investing in Tourism by Chandigarh Administration as per 20 Year Plan

The undermentioned undertakings have been shortlisted by CITCO

Basic Tourism Infrastructure Undertakings

1. Puting up a system of coordination between Departments through a “ Mission Approach ”

2. Measuring the economic impact of touristry in Chandigarh through one-year studies and the usage of multipliers

3. Puting up constabularies outstations in the new construct “ Cultural/ Tourism Centre ”

4. Puting up a system for accreditisation of stores and transit

5. Making Tourist/ Cultural centre

Visitor bring forthing undertakings

6. Promoting traditional culinary art

7. Horse Race path

8. Amusement Park

9. Associating the rubber-necking

10. Conference centre to pull concern travelers

11. Developing the City Centre

12. Adventure touristry & A ; Wildlife Tourism

13. Attracting the Private Sector

Table 4: undertakings shortlisted by CITCO to advance touristry

Type of Tourists

1.4 major constituents of a feasibleness survey

a. Market Feasibility

Market Sections for Chandigarh Tourism

Market Section

Potential demand

Potential Solutions

Residents of Chandigarh

Diversion and Leisure appear to be the chief demands. However, Chandigarh occupants tend to complete their on the job yearss comparatively early and dark amusement demand is limited.

1. Multiplex film halls

2. Amusement Park

3. Night nutrient bazar semen amusement

4. Horse Rushing

Neighbour-ing States

1. Delhi

2. Haryana

3. Punjab

4. Himachal Pradesh


– Theodolite Stopover traffic to Shimla or Kullu/ Manali

– Short interruptions


– Diversion & A ; Leisure

– Shopping

– Business

– Meetings & A ; Conferences


– Diversion & A ; Leisure

– Shopping

– Business

– Meetings & A ; conferences

Himachal Pradesh

– Diversion & A ; Leisure

– Shopping

– Checkup

1. Theodolite traffic, specially households with little kids on their manner to Kulu/ Manali. These start later in the twenty-four hours from Delhi and the kids get restless after 4 to 5 hours. A good ground to halt would be an Amusement park.

2. Recreation & A ; leisure. See remarks above. None of the immediate provinces has developed good R & A ; L installations except perchance the Gurgaon and Faridabad territories surrounding Delhi.

3. Shopping. While Jalandhar and Ludhiana have now got good shopping installations, they are still behind the scope offered by Sector 17. If this is combined with R & A ; L, it makes a powerful attractive force.

4. Business. This is usually connected with Government.

5. Meetings and conferences. Chandigarh being the State Capital of Haryana and the Punjab every bit good as the Northern Region HQ for several trade organic structures, can fulfill this demand

6. Medical. Medical installations at the PGI are first-class. The new Fortis Hospital in Mohalli can besides lend to Chandigarh room tenancies

The Rest of India

Apart from theodolite to HP, and a really little market interested in architecture, the touristry demands from the remainder of India are non met by Chandigarh

No strong offer to pull this section

NRIs – Besides those of Punjab beginning

Chandigarh is the Gateway to the Punjab

NRI Marriages

NRI ‘s could be encouraged to expose their kids, many of whom are negative to India, to the modern metropolis beautiful – Chandigarh

B. Financial Feasibility

c. Beginnings of finance

1.5 Detailss of the Proposed Hotel



Car Park, Service Area







Lounge, Cafeteria, Service Area,


Shop, Back Office




Store, Service Area, Conference Area,


Pre-function Anteroom




Rooms & A ; Toilet







Rooms & A ; Toilet







Rooms & A ; Toilet







Rooms & A ; Toilet






Air conditioned room

Airport transportations

Audio ocular equipped

Baby attention

Banquet installations


Business Centre

Cable Television

Car parking

Doctor on call

Fax service

Fire precautions

Laundry installations

Money modifier


Photocopy services

Power back-up


Safe sedimentation

Travel desk


OHP presentations

Public reference systems – reading desk, tabular array, and lapel mikes

Exhibitions – design and executing

Business centre

Full communicating installations – National and international

Printing, stationary, delegate kits

Video coverage and picture taking

1.6 Problems in the growing of Hotels in India

The growing of Hotels in India is blocked by the three of import issues i.e. Built-up Area/FSI, Certificates/Licenses and Duties/Taxes ; emerging from the shadows of these issues will augment the growing of Hotels in India.

Built-up Area/Floor Space Index ( FSI ) A – The FSI determines the maximal allowable built-up country on a secret plan and it is a ratio between the entire built-up country and the secret plan country. Principles of town planning suggest that edifices with high FSI should be in the Centre and low FSI towards the fringe so that the metropolis spread is non higher and attach toing jobs of transit are easy resolved. However, most Indian metropoliss offer some of the universe ‘s poorest FSI ; on an mean, keeping the FSI between 1.33 and 3.75, though some have raised it to 5. Low unvarying FSI causes congestion and increases cost of substructure, conveyance, and fuel ingestion and adds to pollution. On the other manus Hong Kong and Shanghai have FSIs of 10 while US metropoliss like New York ( in Manhattan ) , have even higher FSI at over 20. The FSI in India is, therefore, unequal for builders to distribute their costs on the secret plan of land and keep net incomes. The low FSI in bend leads to many of the hotel undertakings going five-star or luxury hotels in order to do up for the expensive land ; A in consequence discouraging the growing of budget/economy hotels. Today, it is a well-accepted fact that domestic touristry will be the chief driver of the touristry industry in India in the old ages to come ; and domestic touristry needs the constitution of budget/economy hotels. A higher FSI will, nevertheless, necessitate adequate planning for parking every bit good as better public transit.

Certificates/LicensesA – Bing a province topic, hotels have to use for multiple licences and blessings through multiple authorities bureaus, get downing from permission to develop, to get down building to permission to open. A typical hotel may necessitate nearing upto 40 different bureaus at both the national and province degrees to obtain 70-110 licences depending upon which province it is located in, every bit good as the complexness of the development! In many provinces, regulations are unstable and regulations/statutes are unfastened to loose readings. This pushes the undertaking agenda back by 6-12 months and is damaging for new hotel development.

Furthermore, at each measure of this license acquisition procedure that is compounded by deficiency of transparence in the system there is a possible for farther hold, which makes conditions ripe for unethical concern patterns for parties with vested involvements. The clip holds make hotel development much more expensive – the entire undertaking costs are already amongst the highest in the universe due to high involvement rates – and besides frighten off many possible investors.A

Duties/TaxesA – Most states around the universe have a individual incorporate revenue enhancement construction, which adds to their attraction as planetary tourer finishs. However, touristry being a province topic in India, each province has its ain standards for luxury revenue enhancement, changing from 5 % to 20 % . Luxury revenue enhancement is supposed to hike the province ‘s gross ; nevertheless, in world it discourages people from making out more to quality topographic points because of the extortionate rates – thereby retarding growing of the cordial reception sector. Due to competition and off-seasons, the touristry industry is forced to offer grants ( to the tourer ) . However, the provinces continue to revenue enhancement the industry on rack rate, instead than the existent. Therefore, hotels in many provinces charge Luxury Tax on the Published Room Tariff as against the universally recognized pattern of existent duty charges. Luxury revenue enhancement on the rack rate increases the effectual rate of revenue enhancement to 25-30 % . In add-on to the luxury revenue enhancement, invitees pay important sum of revenue enhancements on Food and Beverages, and Alcoholic merchandises in the signifier of VAT, gross revenues and strike revenue enhancement ( in provinces where VAT is non yet in force ) . Again, there is no uniformity in the revenue enhancement system and fluctuations exist at province degrees in affairs like VAT, gross revenues revenue enhancement and excise duties1, which farther adds to the confusion in the head of the guests/travel agency.A

Chapter 2


Hotels are easy and steadily acquiring back on path with tenancy rates exceling 2009 degrees. Gross per available room has seen merely a modest addition, thanks mostly to higher tenancies. However, mean room rate ( ARR ) , is under force per unit area and is likely to remain that manner because of a rush in supplies.

There has decidedly been a huge betterment as concern assurance has returned though the market is non every bit strong as in late-2007 ( Vincent Hoogewijs[ 1 ]) . Average RevPar for premium section hotels in the six metropoliss ( Mumbai, Delhi, Kolkata, Pune, Bengaluru and Goa ) increased 6.9 % , from Rs 6,300 in January 2009 to Rs 6,700 in January 2010 ( Crisil Research[ 2 ]) .

Anjan Ghosh & A ; Subrata Ray ( Indian Hotels Industry Study: Slow but steady recovery underway[ 3 ]) negotiations about the benefits of increasing demand being moderated by the big room supply expected over the following two to three old ages. The study besides says that while the Indian Hotel Industry is presently on the way of tenancy led recovery, ARR growing rate still remains a challenge.

The coming old ages are expected to see a big quantum of new hotel supply come ining the Indian market ; a significant portion of these – Branded & A ; of International quality in merchandise & A ; service offerings. Indian Hotel operators/owners would necessitate to fix themselves for this approaching competition by bettering their operational efficiencies & A ; besides their merchandise and service offerings.

Rooms as a beginning of gross for a hotel ( others being Food & A ; Beverage, Salon, Boutiques, Gyms etc ) have increased from 2003-04 onwards, exclusive exclusion being 2008-09.

A research conducted by ECS ( March 2008 ) , reveals the current stage of Indian Hotel Industry as of unprecedented growing, thanks to the flourishing Indian economic system & A ; growing in Foreign Tourist Arrivals ( 10.4 % ) . The mismatch between demand & A ; supply for adjustment nevertheless, leads to higher tenancies & A ; rush in room rates. Medical Tourism, increasing family incomes, cheaper air hoses ( and other manners of conveyance ) are the drivers of growing.

CARE research negotiations about international Brands come ining the Indian Hotel Industry and booming to eat the larger portion of pie. It besides reveals that domestic travelers are 100 times in figure as compared to Foreign Tourist Arrivals and are the anchor of the Indian Hotel Industry. It expects about 20000 suites to be added in major 12 metropoliss ( Chandigarh being one of them ) over the following 2-3 old ages & A ; expects fringy rise in ARR & A ; Occupancy Levels.

Except 2008-09, the Indian Hotel Industry has been turning. The assurance in the Foreign Tourists is constructing once more while the figure of domestic travelers continues to lift uninterrupted.

Chapter 3


3.1 Research methodological analysis

a. Type of Research Design

B. Information demands

c. Data aggregation from secondary beginnings

d. Data aggregation from primary beginnings

e. Sampling techniques

Hotel room supply vs tourer influx

Hypothesis Testing

About Correlation Coefficient ( Small Sample )

One Tail Trial

The trial of hypothesis for the being of a additive relationship between two variables x and y involves the finding of sample correlativity coefficient r. This trial of additive relationship between ten and Y is the same for finding whether there is any important correlativity between them. For finding the correlativity, we start by speculating the population correlativity coefficient P equal to nothing. The population correlativity coefficient P measures the grade of association between two variables in a population of involvement. The nothing and alternate hypothesis are expressed as

Major Hypothesis

H0: x=y ( Negative correlativity exists between x and Y )

And H1: xa‰ Y ( Positive correlativity exists between x and Y )

The t-test statistic for proving the void hypothesis is given by:

T because n & lt ; 30

Degree of Significance, I± ( Alpha )

The degree of significance defines the likeliness of rejecting a void hypothesis when it is true i.e. it is the hazard a determination shaper takes of rejecting the void hypothesis when it is truly true.

I±= 0.05

The trial statistic for proving the void hypothesis is given by:


Where R = sample correlativity coefficient

Sr = standard mistake of correlativity coefficient

n = sample size

Decision regulation:

One-Tailed Trial

Reject H0 if tcal & gt ; tI± , n-2

Otherwise accept H0

Change in Occupancy Ratess


CAGR No. Of Suites


vitamin D


All India



2 %







15 %







155 %







106 %







67 %







61 %







68 %







67 %







60 %







4 %







14 %







83 %







50 %




New Delhi



6 %







1 %




Beginning: Annual Reports Ministry of Tourism, Govt. Of India

Using the Formula, R =

R = 0.526

The trial statistic would be,


tcal = 2.62

Since tcal = 2.62 & gt ; tI± , n-2 ( 2.160 ) , the void hypothesis is rejected. Hence there still exists a positive correlativity between tenancy rates and degree of competition in the Indian Hotel Industry and this may be accounted to the broad spread between demand and supply.

3.2 Aims of the Research

To analyze the viability of a semi-luxury budget hotel in Chandigarh

To analyze the viability of market and sale volume related with semi-luxury budget hotel concern & A ; remark on the appropriate Numberss, types, and sizes of invitee suites and other comfortss which would outdo function the demands of the market.

To analyze the Financial Viability of a semi-luxury budget Hotel & A ; Beginnings to tap the same

Chapter 4


4.1 Primary informations analysis

4.2 Secondary informations analysis

Chapter 5


Chapter 6


Chapter 7


Chapter 8