HOSPITALITY
INDUSTRY
Financial Accounting & Control Group Assignment on Financial
Statement Analysis
COMPANIES
Taj GVK Hotels
and Resorts
Ltd.
Mahindra
Holidays and
Resorts India
Ltd.
Part A: Industry Analysis
The hospitality sector in India is
estimated to be Rs. 1537 billion
in 2015.
Growth rate: 8%-10% annually
Market share of major players:
Taj Group 25%, Oberoi 17%, ITC
group 1.1%, Leela group 0.6%,
Others 0.5%
contributing 2% to GDP of India
Porter’s Five Forces of
competitive power
Industry
Rivalry:
High
The
likelihood
of new
entrants
is
moderate
.
.
Thus
Buyer
power is
high.
. Supplier
power is
assessed
as
moderate
overall
.
.
Threat of
Substitut
e: LOW
S.W.O.T Analysis of Indian
Hospitality Industry
WEAKNESS
Cost of land in india is high at 50% of
total project cost as against 15%
abroadeakness
Staff to room ratio of 3:1, this ratio is
1:1 for international hotel
Luxury tax and sales tax inflate the
hotel bill by over 30%.
Wide variety of hotels
International players in the market such
as Taj and Oberoi
Low manpower costs-high margins
STRENGTHS
SWO
OPPORTUNITIE T
THREATS
Diverse topography
The inbound tourists are a mere 0.49%
of the global figures
Heritage hotels.
Guest houses
Political turbulence, Insurgency in
Jammu Kashmir
Lack of training man power in the hotel
industry
high project costs
S
Policy Procurement
In
the Hotel Industry Sector, Foreign Direct
Investment (FDI) has been permitted up to
100% under the automatic route
Make in India
A
deduction of an amount equal to 100 % of
the profit and gain for the first 5 consecutive
years to an undertaking derived profit from the
business of a hotel located in the specified
district having a World Heritage Site. If such
hotel is constructed and has started
functioning before 31st March, 2013.