Hotel Project Report

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Project Report of The Grand Five Star Deluxe Hotel
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VISION: To be an organization which aims at leadership in the hospitality industry by understanding its guests, and designing and delivering products and services which enable it to exceed their expectations. To have a user-friendly technology enhancing value for our customers and helping our personnel by making information more accessible. To an organization which is committed to the environment, using natural products and recycling items, thus ensuring proper use of the diminishing natural resources. MISSION:
Our Guests We are committed to meeting and exceeding the expectations of our guests through our unremitting dedication to every aspect of service. Our People To be committed to the growth, development and welfare of our people upon whom we rely to make this happen. Our Society To work with the communities within which we operate in areas of improving their lives through leadership driven corporate social responsibility charter.
Our Shareholder
To deliver consistent value addition to our stakeholder
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Chapter 1 1.1 1.2 1.3 2 2.1 2.2 3 3.1 4 4.1 5 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 6 6.1 6.2 6.3 7 7.1 7.2 7.3 7.4 8 8.1 8.2 8.3 3 Particulars Introduction The Grand Five Star Deluxe Hotel Business Activities Overview of Hotel Industry Location & Operation Location of the Company Locational Advantage Background Background of Partners Services of Hotel General Guest Services Infrastructure Swimming Pool Fitness Room Business Room Banquet Hall & Convention Centre Conference Hall Rooms & Suites Restaurants & Bars Lounge Bars Kids Arena Layout Plans Industrial Scenario National Scenario Comparable Company Analysis Global Scenario Employment Opportunities Employment in Different Department in Industry Increasing Employment opportunities in Industry Projected Human Resource Requirement in Hotel Some of Career Opportunities in Hotel Industry Different Department in Hotel Functioning Department Support Department Key Control Department Page No. 6-9 6 7 9 10 10 10 11 11 12 12 13 13-17 13 13 14 14 14 15 15 15 16 18-22 18 21 22 23-24 24 24 24 24 25-28 25 26 27
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9 9.1 9.2 9.3 9.4 10 10.1 10.2 10.3 10.4 10.5 10.6 11 12 12.1 13 14 15 16 17 18 19 20 20.1 20.2 20.3 20.4 20.5 21 21.1 21.2 21.3 21.4 21.5 21.6 21.7 4 Market Study Past Supply & Present Demand Occupancy Rates Average Room Rates Government Measures Benefiting the project Domain Facts Foreign Direct Investment in Hotel Industry Reasons foe Low FDI in Hotel Industry Major Reasons to Invest in Hotel Industry Other Government Initiatives Government Open Sky Policies Tax Benefits in Hotel Industry Pattern of Financing in Corporate Hotels Public Involved in Hotel Industry Trends in Public/Private Partnerships Joint Venture Concept in Hotel Industry Hotel Brand Explosion in India Hotel Development Cost Marketing SWOT Analysis Growth Drivers in Hotel Industry Quality Control Key Players Oberoi Group of Hotels Leela Hotels Tarrif Rates of Different Hotels in Gurgaon Proximity Comparison in Gurgaon Comparison of Services Rendered in Hotels in Gurgaon Brief Of The Proposal Brief of the JV Agreement Income Generation Sheet Expense Sheet Cash Flow Profitability Projection Projected Balance Sheet CMA-Operating Statement 29-32 29 30 31 32 33-38 33 33 35 36 36 37 39 40-43 40 44 46 47 49 51 55 57 58-78 60 72 77 77 78 79-95 79 80 81 82 83 85 86
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21.8 21.9 21.10 21.11 21.12 CMA-Analysis of Balance Sheet (Liabilities side) CMA-Analysis of Balance Sheet (Assets side) Comparative Statement of CA & CL Turnover Method CMA- Financial Position 89 91 93 94 95
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CHAPTER 1
1.1 THE GRAND FIVE STAR DELUXE HOTEL:

The Grand Five Star Deluxe Hotel is a Joint Venture between Mr. Vijay Yadav (Land Owner) and the developer from USA. Land selected for the project is of 8 Acres. The Hotel offers 370 rooms.
There are many different types of ownership, from Condos, to Parking Slots, to Fractional unit ownership.
Prices during the month of December 2011

Unit type Parking Slot Fractional units Parking Slots Studio Fractional units Studio units 1 Bedroom unit 2 Bedrooms 2 bath Presidential Suites No. of units 60 590 60 370 20 6 2 sq. ft. 150 150 402 402 558 992 1340 Purchase Price in US $ 2,342 28,100 24,417 293,000 398,900 712,000 959,000 Price increase per year. Similar pro-rata increases Similar pro-rata increases Similar pro-rata increases $3,000 Similar pro-rata increases Similar pro-rata increases Similar pro-rata increases
1.2 BUSINESS ACTIVITIES:

The Grand Five Star Deluxe Hotel is an upscale, full service hotel, strategically located in upcoming business area of Gurgaon. The hotel will provide premium accommodation and
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efficient service with the fresh contemporary approach. With easy access to NH-3 Highway, the domestic & international airport and the metro line that now links with various parts of Delhi. The hotel is equipped with 370 well-appointed rooms comprising of one Bedroom, 2-bedroom and presidential suite. In Room Facilities: 24-hours Room Services. Tea/Coffee Maker. Satellite LCD TV. Electronic Safe. Hair Dryer. STD/ISD Direct Dial Facility. High Speed Wi-Fi & Broad band Connectivity Facility. Iron & Ironing Board. Daily Newspaper. Choice of Fruits. Mini Bar. Weighting measures.
Features of Hotel: Club Lounge Swimming Pools

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Fitness centre/Spa 24x7 Business Centre Beauty Salon Airport Transfers Travel Assistance 24-hours Currency Exchange Doctor on call In-house laundry Baby Sitting Facility Meeting & Conference Rooms Banquet Facilities Shopping Facility 24-hrs Front desk facility Speaker phones Shoe Shine Stand Voice Mailing Facility Cordless Phone Cable television Wedding Services Express Check in/ Checkout Facility Flat Screen TV Connecting Rooms Gift/News Stand Executives Floor Bottled Water Wheel Chair Access Bathroom amenities Wake up Service Jogging Track Game Rooms Child Programs Facility Smoke Detectors 24-hrs security facility Baggage hold Facility Coffee Shops Centralized Air-Conditioned Restaurants Multi line Telephones Complimentary Break Fast Package/Parcel Services
1.3 OVERVIEW OF HOTEL INDUSTRY:

Hospitality is all about offering warmth to someone at a strange or unfriendly place. It refers to process of receiving and entertaining a guest with Goodwill. Indian Hospitality has gained a level of acceptance world over. It has yet to go miles for recognition as a
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world leader of hospitality. Availability of qualified human resources and untapped geographical resources gives great prospectus to hotel Industry. The number of tourist coming in India is growing in last years. Likewise, internal tourism is another area with great potentials. Today Hotel Industry is one of the fastest growing Industry in India. It is expected to grow to 10% between 2015 to 2020. The thriving economy and increased business opportunities in India have acted as a boon for Indian hotel industry. The 'Incredible India' destination campaign and the recently launched 'Atithi Devo Bhavah' (ADB) campaign have also helped in the growth of domestic and international tourism and consequently the hotel industry. According to a report, Hotel Industry in India currently has supply of 110,000 rooms and there is a shortage of 150,000 rooms fuelling hotel room rates across India. According to estimates demand is going to exceed supply by at least 100% over the next 2 years. Five-star hotels in metro cities allot same room, more than once a day to different guests, receiving almost 24-hour rates from both guests against 6-8 hours usage. With demand-supply disparity, hotel rates in India are likely to rise by 25% annually The World Travel and Tourism Council, India, data says, India ranks 18th in business travel and will be among the top 5 in this decade. With such growth, sources estimate, demand is going to exceed supply by at least 100 per cent in coming years. Number of Hotels 2010
Hotel categories 5 star deluxe/5 star 4 Star 3 Star 2 Star 1 Star Heritage Uncategorized Total Source- FHRA
No. of Hotels 165 770 505 495 260 70 7,078 8,707
No. of Rooms 43,965 134 20 30,100 22,950 10,900 4,200 1,32,885
CHAPTER 2
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2.1 LOCATION OF THE HOTEL Administrative Office: Sec.71, Facing Sourthern Pheripery Road, Gurgaon
2.2 LOCATIONAL ADVANTAGE Gurgaon is considered as one of the fastest growing cities in India. The fast growing BPO, KPO, IT/ITES, Manufacturing and other industries in the city have made it mandatory for the city to come up with some state of the art accommodations for overnight visitors. Gurgaons proximity to the national capital Delhi and its proximity to both international and national airport have had a major impact on the growth of the city when it comes to acting as a host to a number of foreign conglomerates as well as domestic dignitaries. The Hotel stands just a few minutes from all the major destinations: Just 20 minutes away from I.G International Airport, Delhi. 25 minutes from Delhi Railway Station. 5 minutes from Iffco & Sushant Lok Metro Station. Many repudiated institutions like Shikshantar, MDI, The Shri Ram School, DPS Pathways, Heritage and GD Goenka are just 15 minutes away. The project stands at 10 kms from global companies like Steller Information System Ltd, HCL, etc. providing a high business to the project. The project stands just 25 kms from historical monuments like Humayun Tomb, Jantar Mantar, India Gate, Aksharadham Temple, Qutub Minar etc. facilitating the tourists. Advance means of transport & communication will be easily available at site.
CHAPTER 3
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3.1 BACKGROUND OF PARTNERS:
The parties of agreement are as under 1. Mr. Vijay Yadav (Shikohpur Developer). 2. USA Developer.
CHAPTER-4
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Sitting atop 8 acres of lush, fragrant garden the hotel offers 370 rooms.
4.1 General Guest Services:

24-hour Room Service. Signature gift and sundry shop. Guest-chosen daily newspaper delivery. Digital interactive television entertainment system. Business Phone services. Laundry and dry cleaning services. Complimentary shoeshine service. Limousine and rental car service. Car detailing. Secured & High speed elevators. Central satellite system and intercom system. Central Air conditioning. CCTV and 24 hrs security system. Gym, sauna, Jacuzzi, baby play area, party and meeting hall. Sport and activity center. Internet & Media lounge. High-Speed Internet access & Wi-Fi. Baggage Storage Concierge Desk Foreign Currency Exchange. Multi-lingual Staff. Express mail. Meeting Room Outdoor tented reception area. Wedding gazebo Terrace Steak House Pool bar & Grill. Ample car parking for residents and guests Large full building height central Atrium area. Shopping promenade. Sports and activity center. 5 restaurants and bars & coffee shops. Large lobby and corridors to give feeling of comfort and openness. Tennis Courts. Lounge with nightly live music.
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CHAPTER 5
5.1 Three Swimming Pools:

Swimming pools will provide not only a cool and relaxing swim after a busy working day, but will also be place for an informal drink or quick bite with friends or business partners or the place for a book or a moment of meditation.
5.2 Fitness Room:

The fitness room will meet the demands of the most demanding athlete and is equipped with a treadmill, bicycles and workout equipment. All guests will have free access.
5.3 Business Centers:

The business centre will provide a full range of office support services including fully wireless Internet and E-mail access. The conference facilities will be equipped with the latest technical equipment to satisfy the most demanding businessman.
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5.4 Banquet Hall & convention Centre
Our team will guarantee that every venue is organized in accordance with the most professional standards. The client may choose from a wide variety from cocktail, cold or warm buffet to a full menu supported by an international wine card.
5.5 Conference Hall

Conference Hall will be able to fit around 100 people and will be equipped with amenities such as flip charts, wireless internet, LCD projector, White Board, Basic Stationeries, etc
5.6 Rooms & Suites

The Hotel room will be of stylish, comfortable. Well furnished and airconditioned rooms with contemporary luxury and gracious services.
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5.7 Restaurants & Bars
The hotel will be having restaurant, a lounge and a coffee shop, which will be offering a choice of continental, Chinese and variety of food from Indian cuisine, with live piano, music. The bar will be stocked with best of spirit and wine where guests can spend their time gossiping and watching television.
5.8 Lounge Bars

The hotel will be having a music lounge equipped with the latest & a light system. The zeal to dance and enjoy will be the welcome thought.
5.9 Kids Arena

The Hotel will be having Kids arena for children to have fun and play.
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5.10 Layout Plans
5.10.1 Floor Plan Studio of 402 Sq. Ft
5.10.2 One Bedroom & One Bath Room of 558 Sq ft.
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5.10.3 Two Bedrooms & 2 Baths
5.10.4 Presidential Suites 3 Bedrooms 1340 Sq. ft
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CHAPTER 6
6.1 NATIONAL SCENARIO

India is the country with only a limited number of international brands and had hotels that were mainly concentrated in the major metros and predominantly in the luxury/first class positioning. Over the years, the hotel industry has undergone significant changes and has reinvented itself in a manner that we believe has benefited the industry as a whole, including all its constituents hotel guests, investors, employees and other stakeholders. Current Occupancy Situation of Hotel in Gurgaon and Delhi Hotel Imperial In Delhi-99.57% Hotel Trident Hilton Gurgaon- 98.30% Indian Hotel- 97% Tourism is presently the most important civil industry in the world. The hospitality industry is second only to the global oil industry in terms of turnover, and is, by far, the largest employer around the world. Ten percent of the world's work force is in the tourism industry, and 10 percent of the world's GNP comes from tourism. Foreign tourist arrivals to India increased from 5.13 million in FY09 to 5.5 million in FY10, thereby resulting in a increase of 7% YoY. . Foreign Tourists Arrivals (FTAs) during the period January-October 2010 were 4.32 million with a growth rate of 9.9 per cent. The tourism ministry has set a target of 10 million tourists by 2010. The World Tourism Organization has predicted that India will receive 25 million tourists by 2015. According to the latest Tourism Satellite Accounting (TSA) research, released by the World Travel and Tourism Council (WTTC), the demand for hospitality in India is expected to grow by 8.2 % between 2010 and 2019. This will place India at the third position in the world. India's hospitality sector is expected to be the second largest employer in the world. Capital investment in India's hospitality sector is expected to grow at 8.8 % between 2010 and 2019. The report forecasts India to get more capital investment in the hospitality sector and is projected to become the fifth fastest growing business destination from 2010 through 2020. The World Hospitality Council, figures indicate that the Indian hospitality demand is expected to grow at 8.8% from 2007-2016. According to the World Hospitality Council, revenue from foreigners to India is expected to grow to US$424 billion by 2015. Indians residing in India as well as abroad are expected to spend US$63 billion by 2015. As per the Hospitality Competitiveness Report 2009 by the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world's attractive destinations. It is ranked the 14th best destination for its natural resources and 24th for its cultural resources, with many World Heritage sites, both natural and cultural, rich fauna, and strong creative industries in the country. India
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also bagged 37th rank for its air transport network. The India hotel industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019. To encourage the hotel sector, the government in recent times, has taken some measures which will benefit the sector. In FY09, Rs.5.2 bn for development of hotel infrastructure was allocated. This figure is higher by Rs.970 m as compared what was allocated in the previous year. However, it is only 1% of the total government spending. RBI has allowed ECB upto US$ 100 m in January 2009, which would help in raising funds. The Centre and States are also working out a PPP (Public-Private-Partnership) model to increase hotel capacity. The hotel and tourism industry's contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2.17 billion from April 2000 to September 2010, according to the Department of Industrial Policy and Promotion (DIPP). The who's who of the world of international fund companies - Blackstone, Morgan Stanley, Walton Street Capital, Starwood Capital, Merrill Lynch, West bridge Capital, Lehman Brother are looking to invest in the hospitality sector. Around 500 million domestic tourists are projected to travel across India by 2010 compared to around 325 million in 2006 and growing at over 10% annually. India's hospitality sector is expected to see an estimated investment of US$11.41 billion in the next two years, and around 40 international hotel brands making their presence in the country by 2011, according to a report by Ma Foi Management Consultants. Moreover, the sector is expected to provide over 400,000 jobs. In India, the industry supports 48 million jobs, directly or indirectly or 8.27 per cent of total employment and accounts for 5.83 percent of the GDP, according to Department of Tourism & Hospitality estimates. According to an HVS International report average employee to room ratio is 1:8 in Indian hotels across all markets and drops to 1:5 for three star categories of hotels. The report also states that the hotel sector would need a fresh workforce of atleast 94,000 by 2014-15. India currently has over 200,000 hotel rooms spread across hotel categories and guesthouses and is still facing a shortfall of over 100,000 rooms (source: FHRAI). The country is witnessing an unprecedented growth in hotel constructions and will be adding almost 114,000 hotel guest rooms to its inventory over the next five years. (source: HVS) In the FHRAIs memorandum presented to the government recently, it is said that atleast 1,50,000 additional rooms are required to meet the target of 5 million foreign tourist arrivals. This entails an investment to the tune of over Rs.15,000 crore. Currently there are 1,05,000 hotel rooms in the three to five-star category in India. The annual growth rate of hotel rooms in India is 6%. Nearly 11 per cent of the hotel demand in the country is from long stay guests.
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To set up a 5-star deluxe hotel with 250-300 rooms will cost approximately Rs.300 crore, excluding the land cost. As per estimates by hospitality consultancy HVS International, around 150 hotel projects are in the works across the country, which are likely to add around 53,000 rooms over the next five years. There are about 1,285 approved budget hotels across the country with about 51,000 rooms apart from guesthouses, dharamshalas and devasthans in the unapproved sector. The footprints of the IT and ITES in Tier 2 cities like Indore, Jaipur, Agra, et al, have played a role in driving the demand for budget hotels in these cities. The tourism ministry has proposed a cash subsidy of Rs.2 lakh per room for one-star category and Rs.3 lakh per room for two and three star category hotels to facilitate their growth. According to Federation of Hotel and Restaurant Association of India (FHRAI), the country is short of 65,000 budget category rooms. Average Room Rate (ARR) of hotels in India is increasing at the rate of over 20%almost equal to that of hotels in developed countries such as Europe and the US. The growth in ARRs is direct fallout of the shortage of five-star accommodation in India and high demand generated by the booming economy. This shortage has stimulated investments in the hotel industry. 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 have estimated that by 2010, tourism can support 25 million jobs (1 in every 15) in India through 8% annual growth. For every rupee that goes into building a hotel, three more are spent on furnishing it. More than 27000 items go into a hotel including building material, chandeliers, glassware, furnishings, energy saving devices etc., and at present 90% of hotel accessories are indigenously produced in India. So the domestic accessories sector stands a good chance in the near future. 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. Wedding tourism is growing almost 100% on a year-on-year basis. Generally, the ratio of foreigners to Indians in an NRI wedding is 7:3. On an average, an NRI wedding organized in India costs Rs.50 lakh. On an average, 50-150 rooms are booked in a star category hotel. Cruise shipping is growing globally at the rate of 12-15% annually. In India the cruise market is in excess of 1,25,000 guests annually and will grow at over 10% annually. 22 Institutes of Hotel Management being operated as Centres of Excellence for providing hospitality manpower. The government plans to set up four Indian Institutes of Hotel Management in Uttaranchal, Jharkhand, Chhattisgarh and Haryana. To provide training in the area of tourism, the tourism ministry will also start 400 training programmes. Estimates indicate a need for about 15,000 more trained persons in the star category hotels, which includes about 2,700 managers, 2,500 supervisors and about 1,000 staff.
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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. Table below presents the nationwide occupancy and average rate performance. Year Ending 31st % March Occupancy Change 2005 57.20 2006 51.60 -9.80 2007 57.20 10.90 2008 64.80 13.30 2009 69.00 6.50 2010 71.50 3.60 2011 71.40 -0.01 2012 68.80 -3.60 2013 60.30 -12.40 2014 65.00 7.80 2015 68.00 4.60 CAGR 0.10%
Average Rate 3731 3467 3269 3569 4299 5444 7071 7989 7837 6426 6800
% Change -7.10 -5.70 9.20 20.50 26.60 29.90 13.00 -1.90 -18.00 5.80 5.5%
RevPAR 2134 1789 1870 2313 2966 3892 5049 5496 4726 4177 4624
% Change -16.20 4.50 23.70 28.30 31.20 29.70 8.90 -14.00 -11.60 10.70 5.70%
6.2 COMPARABLE COMPANY ANALYSIS

Premium Hotels
Company Enterprise Value Revenue
LTM Margin
LTM NFY NFY+1 LTM
EBITDA
NFY NFY+1 LTM
P/E
NFY NFY+1
Indian Hotels Co EIH Hotel Leelaventure Taj Hotels & Resorts Oriental Hotels Asian Hotels North Royal Orchid Hotels Hotels Advani & Res (India)
USD 2,599 1515 110 253 196 102 95 61
USD 552 190 97 51 50 115 27 11
16.2% 17.9% 29.5% 38.3% 26.4% 44.7% 24.2% 0.6%
4.71x 7.98x NM 4.93x 3.9x 0.88x 3.6x 5.40x
3.72x 5.28x 8.17x NA NA NA 2.95x NA
29.0x NM 38.7x 12.9x 14.9x 2.0x 14.7x NM
16.5x 19.4x 21.8x NA NA NA 10.2x NA
12.1x 15.1x 15.3x NA NA NA 7.0x NA
NM NM NM 27.7x 33.2x 2.8x 32.5x NM
NM 38.3x 31.6x NA NA NA 17.4x NA
23.3x 26.0x 20.3x NA NA NA 10.6x NA
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6.3 GLOBAL SCENARIO
Hospitality Industry being the largest service sector in the country, adds around 8.60 percent to the national GDP and 3.1 percent of total GDP. Foreign Tourist has increased by 7 percent as compared to previous years which will be giving an advantage to the project. Foreign Exchange earnings have witnessed to US$ 1.25 billion providing an economic benefit to the country Globally, hospitality industry is one of the largest service industries in terms of revenue generation and foreign exchange earnings, contributing over 9% to global GDP. It is also one of the largest employment generators in the world. An estimated 235 million people work directly or in related sectors, accounting for more than 8% of global employment. International hotels are deriving a big chunk of revenues from casinos and betting arenas. Margins in this segment are also higher. But for Indian hotel majors, setting up casinos and betting arenas is not allowed according to Indian laws. However, when domestic hotels are compared to international hotels then they are fairly competitive in terms of average room revenues.
For arriving at a Net Asset Value Setting up a 5 star hotel Add Deduct Net Asset Value (NAV) Divide NAV per share Compare with current market price = Rs 30-35 m* = Cash + investments = Debt Total No. of Shares = Rs x
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CHAPTER 7 Clocking revenues worth billions of dollars, hotel industry is dynamic and fast growing. The opportunities for career advancement in this sector, post-recession, are immense. The global demand for travel and tourism provides unprecedented opportunities going forward in this industry. As India is one of the new markets in the hospitality demand for trained manager will be on rise. An average staff turnover in a five star hotel is 24.14 percent. There is a requirement of about 15000 additional trained persons in the star category hotels in India, which includes about 2700 managers, about 2500 supervisors and about 1000 staff members. The requirement given for manager and supervisor categories which totals to 5200 and will be filled by 3 or 4 years diploma and degree holders. A single five star hotel could employ more than 400 employees. A total of 57508 people are employed to service about 36000 rooms in this category. On an average, there are approximately 176 employees per 100 rooms in these hotels. The employment pattern is the across geographic regions. The major employing functions are F&B Service, F&B Kitchen and Housekeeping. They, together, account for 56% of the total employment in these hotels.
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7.1 Employment in Different Department in industry
Five/Four Star Hotel One/Two & Three Star Other Hotels Management team 50 33 16 Front office 45 30 15 F&B service 128 85 41 F&B kitchen 105 70 34 House keeping 82 55 26 Accounts 40 27 13 Total 450 300 145
7.2 Increasing Employment Opportunities in Industry Employment Pattern and Forecast:Employees Intensity (Employees per 100 rooms) Employment 2002 Employment 2011 Employment 2016
5/4 Star Hotels 1-3 Star Hotels Smaller Hotels Total
174 122 58 NA
57000 52500 638000 747500
83000 63000 1405000 1551000
110400 83000 3261500 3454900

( fig in 000)
7.3 Projected Human Resource requirement in Hotels:Particulars Five Star Hotels 2010 76 2012 91 2018 104
2022 117
7.4 Some of the career opportunities in hotel industry are as follows.

The industry offers more career options than most: - No matter what kind of work and wherever aptitude lies there is a segment of the industry that can use talents. The work is varied: - Because hotels and restaurants are complete production, distribution and service units, and managers are involved in a broad array of activities. There are many opportunities to be creative:- Hotels and restaurants managers might design new products to meet there needs of their guests, produce training programme for employees, or implementing challenging advertising, sales promotion and marketing plans. Hospitality jobs are not nine- five jobs: - Hours are highly flexible in many positions.
CHAPTER 8
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The departments are classified on account of its function. They are as follows:-
8.1 Core Functioning Department

Food & beverage (F&D) Department:F & B deals mainly with food and beverages service allied activities. Different divisions are there in F & B like Restaurants, Specialty Restaurants, Coffee Shop (24 Hrs), Bar, Banquet, Room Services etc. Apart from that they have Utility services (Cleaning). Front Office Department:The front office is the command post for processing reservation, registering guests, settling guest account (cashiering), and checking out guests. Front desk agents also handle the distribution of guestroom keys and mail, messages or other information for guests. The most visible part of the front office area is of course the front desk. The front desk can be a counter or, in some luxury hotels, an actual desk where a guest can sit down and register. Housekeeping Department:The housekeeping department is another department in hospitality world. Housekeeping is responsible for cleaning the hotels guestrooms and public areas. This department has the largest staff, consisting of an assistant housekeeper, room inspectors, room attendants, a house person crew, linen room attendants and personnel in charge of employee uniforms. They may also have there laundry and valet services. Hotels with laundry and valet equipments may use it only for hotel linen and uniform and send guest clothing to an outside service where it can be handled with specialized equipments. Food Production Department:Food Production deals with the preparation of food items. It basically engaged in preparing those dish, which are ordered by the guest and afterwards is catered by the F&B department. Cuisine like Indian, Continental, Thai, Italian, Konkani (Costal Sea Food), South Indian, Chinese, Mexican, etc. Different chefs are appointed for the specialty cuisine.
8.2 Support Department (Cost Centre)

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Marketing & Selling Department:Sales and marketing has become one of the most vital functions of the hotel business and an integral part of modern hotel management. It includes packaging for selling, sales promotion, advertising and public relations. The marketing division is charged with the responsibility of keeping the rooms in the hotel occupied at the right price and with the right mix of guests. Engineering & Maintenance Department:The energy crisis throughout the world has given a great importance to the engineering department of a hotel. This department provides on the day-to-day basis the utility services, electricity, hot water, steams, air-conditioning and other services and is responsible for repairs and maintenance of the equipment, furniture and fixture in the hotel. The engineering department has an important role in satisfying the guestdemand and helping to maintain the profit level of hotel. The cleaning, up-keep, repair, replacement, installation and maintenance of property and its furnishing, machinery and equipment are the joint responsibilities of Engineering/ Maintenance and the Housekeeping Department. Finance, Accounting & Control Department:A hotels accounting department is responsible for keeping track of the many business transaction that occur in hotel. The accounting department does more than simply keep the books-financial management is perhaps a more appropriate description of what the accounting department does. Whereas the control department is concern with the cost control guidelines by way of reducing in investment, reduction in operating cost, control of food service costs, control of beverage cost, labour cost control etc. Safety & Security Department:The security guest, employees, personal property and the hotel itself is an overriding concern for todays hoteliers. In the past, most security precaution concentrated on the prevention of the theft from guests and the hotel. However, today such violent crimes as murder and rape have become a problem for some hotels. Unfortunately, crime rates in most majors cities are rising. Hence today security department also concentrate on these additional criminal activities too. Administrative Department:Top organizational members usually supervise the Administration Department in a hotel. This department is responsible for all the work connected with administration, personnel, manpower, employees welfare, medical health and security. Human Resource Department:26
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This department has newly taken step in hotel industry and within a short span of time it has become very important part of the organizations. It plays the role of facilitator between the bargain able cadre and non-bargain able cadre.
8.3
Key Control Department

Types Of Keys: Room Keys: Different keys are issued to guest for their rooms. Have a heavy key (key tab) discussion guest taking it away. Bells bay will take the key from the guest at the time of check out. Section Keys These keys will be issued to room alter dents. Will open doors of one section /floor. The will not open the double lock rooms. Room attendants will carry their key bundles, tied around so that they dont loose. Floor Master Key: Will open all rooms on the floor. Will not open double locked room. General Master Key: Will be used by Deputy House Keeper. Issued to night duty housekeepers also. Will be enabling to open only floor as the hotel expect the double locked room. Grand master key: Will open rooms of all room, even the double locked rooms. Will be issued to Executive General Manager and Duty Manager (extreme case must be taken in opening a double locked room i.e. only in case of emergency)
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CHAPTER 9 9.1 Past Supply and Present Demand A comparison between increase in supply and demand in 2010-11 as compared to 200910 for the major markets in India and two levels of positioning namely mid-market and luxury/first class. Figures has been calculated by using performance of each hotel in these market for 2009-10 & 2010-11 and then comparing the total of accommodated rooms for all hotels to the increase in supply in the market during the same period. Demand Supply Comparison (2009/10 2010/11)
Mid-Market 2010-11 Supply Bengaluru Chennai Delhi NCR Goa Hyderabad Jaipur Mumbai Ahmedaba d* Kolkata* Pune* 6.1% 9.9% 20.7% 4.3% 16.6% 14.6% 18.3% 23.7% 10.5% 30.8% Demand 16.5% 14.4% 30.3% 7.6% % 30.1% 11.8% 16.7% 18.0% 14.5% 23.3% Supply 21.3% 3.6% 34.0% 0.0% 9.0% 14.0% 25.4% 30.6% 3.7% 39.2% 2009-10 Demand 26.8% 4.1% 23.4% 5.2% 4.0% 33.1% 22.1% 16.0% 2.0% 31.0% Supply 16.5% 2.0% 7.1% 11.9% 27.6% 1.2% 16.1% 23.7% 10.5% 30.8% Luxury/ First class 2010-11 Demand 33.9% 15.0% 8.8% 14.3% 29.0% 6.0% 14.8% 18.0% 14.5% 23.3% Supply 42.5% 13.8% 15.0% 1.2% 10.5% 0.0% 4.2% 30.6% 3.7% 39.2% 2009-10 Demand 29.9% 1.5% 16.4% 6.7% 0.7% 2.0% 2.9 % 16.0% 2.0% 31.0%
The study also forecast the estimated demand for hotel rooms per annum assuming that past track in tourist traffic continues in future.
Category Classified Others Total All India Estimated Demand for Hotel Rooms 2011 & 2016 2011 342,053 240,680 582,733 2016 868,913 515,095 1,384,008
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9.2 Occupancy Rates The hotel sector benefits from both holiday and business travel. Holiday travel in India is generally seasonal in nature. Historically, over 60% of total tourist arrivals into the country is during the period between September-May. On the other hand, business travel is a factor of various factors.
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9.3 Average Room Rates There are three classes of rooms in a hotel i.e. business, leisure and luxury. It is important to understand that room rates are less elastic to a fall in price at the higher end of the segment (luxury) than at the lower end of the spectrum (business/leisure).Currently, the big hotels have average occupancies of 60%.
Nationwide performance Year Occupancy Rate % change Average Room Rate % change Revenue Per Room % change 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Source: HVS 31
71.5 71.4 68.8 60.3 65.0 68.0
3.6 -0.1 -3.6 -12.4 7.8 4.6
Rs 5,444 Rs 7,071 Rs 7,989 Rs 7,837 Rs 6,426 Rs 6,800
26.6 29.9 13.0 -1.9 -18.0 5.8
Rs 3,892 Rs 5,049 Rs 5,496 Rs 4,726 Rs 4,177 Rs 4,624
31.2 29.7 8.9 -14.0 -11.6 10.7
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9.4 Government Measures Benefiting the Project Various policy measures undertaken by the Ministry of Tourism and tax incentives have also aided growth of the hospitality industry; some of them include:

Allowance of 100% FDI in the hotel industry (including construction of hotels, resorts, and recreational facilities) through the automatic route Introduction of Medical Visa for tourists coming into the country for medical treatment Issuance of visa-on-arrival for tourists from select countries, which include Japan, New Zealand, and Finland Promotion of rural tourism by the Ministry of Tourism in collaboration with the United Nations Development Programme Elimination of customs duty for import of raw materials, equipment, liquor etc Capital subsidy programme for budget hotels Exemption of Fringe Benefit Tax on crches, employee sports, and guest house facilities Five-year income tax holidays for 2-4 star hotels established in specified districts having UNESCO-declared 'World Heritage Sites'.
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CHAPTER 10
10.1 FOREIGN DIRECT INVESTMENT IN HOTEL INDUSTRY

100 per cent FDI is permissible in the sector on the automatic route. The term hotels include restaurants, beach resorts, and other tourist complexes providing accommodation and/or catering and food facilities to tourists. Tourism related industry include travel agencies, tour operating agencies and tourist transport operating agencies, units providing facilities for cultural, adventure and wild life experience to tourists, surface, air and water transport facilities to tourists, leisure, entertainment, amusement, sports, and health units for tourists and Convention/Seminar units and organizations.
10.2 REASONS FOR LOW FDI IN FHOTEL INDUSTRY

The following are the some of the reasons for low foreign direct investment in this sector. They are: 10.2.1 Multitude of taxes Ours is the highest tax structure on tourism projects in the Asia Pacific region. Multitude of central and state taxes is the fundamental problem plaguing the tourism sector. Expenditure Tax of 10% is charged in hotels wherein room charges for any unit of residential accommodation are Rs.3000 or more per day while, simultaneously, States levy Luxury Tax ranging from 5% to 25% on the hotel tariff. Taking into account heavy administrative costs of collection of HET by Central Govt. and Luxury Tax by State Govt.s, the net benefit to the economy is considerably smaller and is not compatible with the loss in revenue accruing due to diversion of tourists to lesser-taxed estinations. The problem has got magnified due to increase in the threshold limit, which used to be Rs.2000 per day per individual to Rs.3000 per day during Union Budget 2002-03. With the removal of the words per individual, the benefits of raising the threshold limit were nullified and therefore benefits could not be passed on to tourists. The revenue stream that the Union Government shall have to forego on abolishing Expenditure Tax would not be substantial, and would be more than matched by the benefits that could accrue from the increased flow of tourists who are currently diverted to other less taxed destinations. There is no national wide tax policy there by some international hotel chains are hesitating to establish their subsidiaries in the India. 10.2.2 High Taxes One of the fundamental problems plaguing the Indian tourism sector is a multitude of Central and State level taxes, which lead to an increased cost to the tourists. A comparison of the Corporate Tax level in India, which affects the hospitality sector, in comparison with our neighbors, shows Indias poor competitive positioning.
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On the indirect taxes front also, India fairs poorly as compared to competing destinations. The following table and figure showcases tourism related major indirect taxes benchmarked across comparable locations.
Airport Related Cities/Taxes Kuala Lumpur Bangkok Hong Kong Singapore New Delhi Mumbai Lowest rates Highest rates 1.70% 1.26% 0.72% 0.94% 0.94% 0.90% 0.53% 7.66% Accomadation Related 4.76% 6.54% 2.91% 3.85% 16.67% 13.79% 0.25% 20.00% Food & Beverages Related 4.76% 6.54% 0.00% 3.85% 6.54% 19.03% 0.00% 20.00% Car Rentals Related 4.76% 6.54% 0.00% 4.38% 4.76% 4.76% 0.00% 33.22% Total Taxes 6.46% 7.86% 2.18% 4.98% 13.18% 13.90% 0.97% 24.25% Rank 7 8 2 3 19 21 1 52
10.2.3 Delay in FDI Approvals & Govt. Policies Huge delay in Foreign Direct Investment approvals in Hotel & Tourism sector. Due to delay in approvals and lack of guidelines in the tourism policy, the Alfred Fords proposed Himalayan Sky Village is pending since last three years. If it is approved it is one of the highest FDI in the country in tourism sector with US$ 300 million which also provides employment to around 3000 people. 10.2.4 Highest import duty on imported liquor used in hotels: Under the WTO Negotiations for Market Access under the Agreement of Agriculture (AOA), India had bound its tariffs at 100% for primary products, 150% for processed products (this is the relevant category for liquor) and 300% for edible oils, except for certain items (comprising about 119 tariff lines), which were historically bound at a lower level in the earlier negotiations. With the additional duties and sales tax levied by the State Governments the cost of alcoholic spirits sold in hotels to bonafide guests is exorbitant. The international precedence for liquor related levies also do not substantiate the current level of taxes. Rationalization of the tax on liquor is therefore important to make Indian hotels competitive internationally and enable them to extend facilities, considered important by tourists, on par with the hotels in competing destinations.
10.3 MAJOR REASONS TO INVEST IN HOTEL INDUSTRY

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Economic liberalization has given a new impetus to the hospitality industry. The Indian hospitality industry is growing at a rate of 15 percent annually. The current gap between supply and demand expected to widen further as the economy opens and grows. The government forecasts an additional requirement of 200,000 rooms by the turn of the century. The travel and hospitality industry continues to be the sector, which has largely profited from the fast growing economy of India. This has largely been due to the 3.9 m tourist arrivals in FY06 (15% growth) over the previous period. The compounded growth in tourist inflow over the last ten years (FY00-FY10) has been 8.2%, while in the last five years, growth stands at 9.1% per annum. This increase in the number of tourist arrivals in the country lifted the countrys standing in the world of tourist destinations. The country is ranked fourth among the worlds must see countries. The sector continues to face certain problems. The country continues to be marred by poor infrastructure facilities like poor road management, rail, air and sea connectivity. However, the present government in its endeavor has taken a few initiatives like opening of the partial sky policy. This allows private domestic airline operators to fly on the Indian skies. Some states continue to be in political uncertainties. As per the 2009 findings, the total number of approved rooms by the Government of India stands at around 99,000 (estimated). These rooms are further classified into various segments out of which, Five star and Five star deluxe hotels account for around 27% of the total capacity, three star hotels (22%), four star (8%), two star (9%), one star and Heritage hotels (2% each) and the rest is divided between unclassified and unapproved hotels. A rapidly growing middle class, the advent of corporate incentive travel and the multinational companies into India has boosted prospects for tourism. India's easy visa rules, public freedoms and its many attractions as an ancient civilization makes tourism development easier than in many other countries. The five star hotel segments have grown the fastest during the last five years at a CAGR of 12%. Further, this segment can be divided into 3 sub-segments Luxury, Business and Leisure. The growth in this segment indicates the genre of travelers coming into the country. Over the last few years the country has witnessed a large influx of business travelers in the country owing to relaxation of the governments stand on Foreign Direct Investments (FDI) for most of the sectors in the country. Many foreign companies have already tied up with prominent Indian companies for setting up new hotels, motels and holiday resorts. The entry of McDonalds, Pepsicos Kentucky Fried Chicken, Dominos and Pizza Hut has given an international glitz to the hospitality sector. It costs an average of US$50-80 million to set up five-star hotels with 300 rentable rooms in India. The gestation period is usually between three and four years.
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OTHER GOVERNMENT INITIATIVES

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Government has undertaken following initiatives to attract both inbound and outbound tourists: Incredible India -Under this program the Government promotes India through various integrated marketing programs. Atithie devo bhava (guests are equal to god) -Under this program the Government create awareness among Indian people who come in contact with the tourist. Various Infrastructure building initiatives Encourage religious tourism for instances promote various places in India as Buddhist abodes. Other projects are the Rs. 5,400 million National Highways Development Project, the 5,846 km Golden Quadrilateral and the 7,300 km north-south and eastwest corridors. Sagarmala project which intends to create a network of seaports, which will change the way people discover and experience real India. Eco-tourism - The government is considering various fiscal and policy measures to promote ecological and adventure tourism in the country including formulating uniform ecological guidelines to conserve nature and waiver of service tax charged on adventure tours. 924 Infrastructure projects worth Rs.1440.86 crore sanctioned during the 10th Plan. The government has already okayed plans to substantially upgrade 28 regional airports in smaller towns. The upgradation of national highways connecting various parts of India has opened up the way for the development of budget hotels in India.
10.5
GOVERNMENT OPEN SKY POLICIES

The Governments Open Skies policy, permission for domestic airlines to commence international flights, start-up of various low-cost carriers, and fleet expansion by domestic players has created a huge incentive for domestic travelers to explore far-off destinations within and outside India. The booming aviation business is bringing an ever increasing number of passengers to India, and pulling Indians out of their homes and into hotels. Moreover, the governments decision to substantially upgrade 28 regional airports in smaller towns and privatisation and expansion of Delhi and Mumbai airport will improve the business prospects of hotel industry in India. Government has taken several steps to boost travel and tourism which have benfited to hospitality industry in the country. These includes the abolishment of inland air travel tax by 15%. Hotel Industry- Worlds Largest Industry Share of world: % of Total(2010) GDP 11.0 Employment 8.0 Exports 7.9 Capital Investment 9.4
10.5.1 KEY THINGS BEFORE INVESTING INTO A HOTEL PROPOSAL

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1. What is the strategy and the capex plans of the company over the next 5-10 years? As mentioned earlier, hotels are capital intensive in nature having long gestation periods, which not only has a bearing on the free cash flows of hotels but also affects the return on capital employed (ROCE) for a period of time. So the bigger the capex plan, the more caution one should exercise. This criteria is favorable for established hotel chains. Economic cycles also determine earnings prospects (during a downturn, properties are cheaper and hotel chain generally tend to increase capacity). Moreover, in tough times like September 11, hotel stocks take a beating. It is at this time that the established players should be looked at, for when the concerns fade away; these will be the first ones to benefit from an economic upturn. A hotel chain should not be leveraged on any specific segment i.e. luxury or leisure. Though elasticity is lower at the premium end, when tourist flow is affected, this player could be the worst hit. Diversification reduces volatility in earnings, to an extent.
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10.6
TAX BENEFITS TO HOTEL INDUSTRY

10.6.1 Direct Taxes Section 80IA: Infrastructure status for the hotel industry All new hotel projects will be able to avail the benefit of deductions of 100 per cent with respect to profits and gains for a period of 10 years. This will lead to many new hotel projects being set up, with companies re-investing their profits in the hotel sector. Further, it will help in channelling huge investment about Rs 50,000 crore (Rs 500 billion) in the tourism sector in next 3-4 years and quickly bridge the shortfall of hotel accommodation. Section 80HHD: Deduction in respect of earnings in convertible foreign exchange Section 80 HHD gives tax exemption from the export profits to exporters. If this is granted to the hotel industry, it would help companies to reinvest profits for building additional capacity.
Section 32 Hotel buildings are considered as plants for the hotel industry as they are utilised for 24 hours. The industry is required to make heavy investments in renovation, upgradation and upkeep of the hotel buildings at all times to keep it in pristine condition. Section 32 of the IT Act should be amended to restore the depreciation rate to 20 per cent.
10.6.2 Service Taxes

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Hotels and other tourism related service providers who earn foreign exchange have been included as the 13th sector in the Service Export Promotion Council set up by the ministry of commerce, government of India. As such, they may be granted exemption to the extent of foreign exchange earned for the following services provided by the hotels, ie banquet rentals, rent-a-cab, dry cleaning services, health club or fitness centre services, beauty parlour services, internet cafe services, club/association service, business support services, business auxiliary services, management consultant services, renting of immovable property, etc. 10.6.3 Custom Duty The customs duty structure should be rationalised for hotels and restaurants in tune with the international practices, to enable the Indian service sector to compete with their international counterparts. This is specially so for import duty payable by small sized hotels and restaurants who do not earn substantial foreign exchange and therefore, are not eligible for any of the Export Promotion Capital Goods schemes. 10.6.4 Exise Duty Seeks excise duty exemption on supply of food preparations (as part of their food and beverage services) by hotels or restaurants to their by guest (staying in the relevant hotel). Also, hotels and restaurants with turnover less than Rs 1.50 crore (Rs 15 million) should be exemption from paying central excise duty on the products produced and consumed within the premises. 10.6.5 Interest subvention to employment intensive sectors The 2 per cent interest subvention extended to employment-intensive sectors like textiles, leather, marine and handicrafts as announced in the relief package announced by the government of India on December 8, 2008, should be definitely extended to the hotel sector as their employment generation capacity is much more than these sectors. 10.6.6 Luxury Tax Luxury tax varies widely across services and states. Also, in the most of sales it is charged on the published tariff by not considering the commissions paid to agents and discount offered to walk-in clients. So the industry seeks exemption of luxury tax on the room tariff less than Rs 2,500 and to charge a uniform rate of 4 per cent on the actual tariff where room rent is Rs 2,500 or more per day. 10.6.7 VAT/ Sales Tax & Other Taxes Vat/Sales tax on food & beverage are different for each state and it should be uniform over the country. It will help in many hotel projects coming up all over the country which leads to lowering hotel tariffs and generating employment. CHAPTER 11
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Although there are signs of a favorable comeback for the industry, lenders have not returned to the go-go days of 80% loan-to-value and easy construction financing. What we see today is debt financing for acquisition and refinance projects. While there are a few exceptions, construction financing is not projected to return in earnest for another three to four years. Loan-to-value ratios are between 50% and 75%, with the sweet spot between 60% and 65%. Lenders want equity to remain in properties and debt service coverage around 1.40x. Interest rates have fallen between 7% and 8%, although lower rates are available on lowerleverage projects. Borrowers need to be financially strong, with all sponsors willing to personally guarantee the loan. While money is available for hotel projects, there is a smaller pool of lenders. Banks have failed, lenders have distressed assets on their books, and even those with performing loans dont have room to do additional hospitality deals. 1. Low leverage We expect loan-to-value ratios to remain low as lenders continue to be selective with their underwriting. This will lead to a significant decline in supply growth in the short-term. On refinance projects, many owners will be required to contribute additional equity in order to meet loan-to-value requirements. If additional cash isnt available to do this, borrowers will need to take on additional equity partners or work to convince their lenders to extend the terms on existing loans. 2. No cash out Equity partners will need to be patient about getting money out of their hospitality investments. No longer can hotels be viewed as piggy banks. Owners need to get used to making money on the performance of the property rather than through its sale or refinance. 3. Strong borrower financials Borrowers will continue to need to have strong personal financials with ample liquidity and high net worth. Personal guarantees by all sponsors will remain a requirement. According to an April 2010 HVS Career Network survey, financial stability, good credit history, capital, access to equity and high net worth are critical borrower characteristics and ones we believe lenders will require in the future as well. 4. Higher interest rates With still much economic volatility and declining hotel values, lenders will continue to require a premium on hotel investments. Interest rates will remain in the 7%- to 8-plus % range, with lower rates available on low leverage (50% loan-to-value) deals. Projects with high cash equity; owners with hotel experience and a proven track record; a strong management team; risk strategies and policies; and a respected brand will have the best chance at securing competitive rates. 5. Fewer lenders There will continue to be a more limited number of banks and private lenders making hotel loans. Lenders are watching their existing hotel loans decline in value, others have loans on their books that will need to be refinanced during the next three to five years, and still others are preserving their capital for different uses. These factors will continue to limit the availability of debt financing in the hospitality sector. CHAPTER 12
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Public sector involvement in hotel projects is becoming increasingly common as the high cost of development and limitations on the availability of capital for new hotel investment limits the feasibility of conventional financing. The presence of a hotel property in a community may stimulate local economic activity by attracting new visitors and events as well as accommodating business travel in the region. As most communities desire the economic impact of group events and the spending of the visitors they attract, many are providing public subsidies to projects that are not feasible on a purely private basis. Public involvement in hotel development may be divided into two general categories: 1) Public/private partnerships, and 2) Public financings. In a public/private partnership, the hotel is typically owned and developed by the private partner, and public involvement takes the form of a public subsidy or bridging the gap between the cost of constructing and financing a hotel project and the combination of equity and loans a private developer is able to secure for the project. In the category of public financing, the sponsoring municipality issues tax-exempt debt to cover the cost of constructing and financing the hotel project, accessing the municipal bond market rather than conventional sources of hotel debt and equity. The net operating revenues of the hotel are pledged as the first source of funds for the repayment of the bonds. 12.1TRENDS IN PUBLIC/PRIVATE PARTNERSHIPS The amount of public support required to finance a hotel through a public/private partnership is dependent upon the gap between the capital cost of the project and the amount of debt and equity that can be raised in the capital markets. The financial feasibility of a hotel depends on several factors, including: Estimated net operating income Construction cost Interest rate levels Availability of equity Seasonality and volatility of the local hotel market Other factors that affect the allocation of investment risk and return
Comparison of Hotel Financing Approaches

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Issue Ownership Public/Private Partnerships A privately owned single purpose entity,typically a limited liability corporation ("LLC") holds title to the hotel. This owner is responsible for engaging the developer and operator. Public Financing A publicly controlled entity, that may be an agency of the sponsoring municipality or a not-for-profit corporation, holds title to the hotel. Through the ownership entity, the sponsoring municipality is responsible for engaging the hotel developer and operator. Various forms of non-profit ownership are possible under IRS rules, including a "63-20 corporation" under Section 115 of the IRS code or a 501(c)(3) under IRS Ruling 57-128. A hotel management company is engaged to operate the hotel under a Qualified Management Agreement ("QMA") that conforms to Internal Revenue Service regulations. The maximum length of a QMA is 15 years, which is shorter than the term of operating agreements for privately owned hotels. Compensation to the operator must be on a fixed fee basis rather than as a percentage of revenue or net operating income. Most publicly financed hotel deals have been managed by a major hotel brand company. Franchise agreements are less common because hotel brands are reluctant to agree to fixed franchise fees as is required in a QMA. Publicly owned hotels are all debt financed through the issuance of municipal bonds. Some of the bonds may be "non-recourse." That is, the revenues of the project are the only source of payment and credit for the bondholders. To be rated as investment grade, debt service coverage on nonrecourse debt must exceed 2.0 times debt service. Typically, net operating
Operation
A hotel management company is engaged to operate the hotel. It may be managed by a major hotel brand company (e.g. Marriott, Hilton, Hyatt or Starwood) or by a third party operator with a franchise agreement to brand the property. Compensation is typically based on a percentage of gross revenue, net operating income or both.
Financing
Privately owned hotels are financed with a mix of debt and equity. In the current markets, lenders will only provide debt for 50% to 60% of the project cost, and equity investors must provide the balance of funding. Typically the developer obtains a variable rate construction loan which is later taken out with a
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permanent Financing at the time hotel operations stabilize. Equity investment is obtained by selling stock in the LLC, and the development group may have a controlling interest in the LLC. In public/private partnerships a governmental entity may also provide an equity contribution to the project with little or no expectation of getting a cash return on that equity investment Interest rate levels on permanent debt may range from 8% to 10% in the current financial markets. Private equity investors may require from 10% to 15% cash return on equity. income is not sufficient to secure enough nonrecourse debt to pay for the project. Consequently, the sponsoring municipality may provide credit enhancement. This usually involves some form of pledge to pay debt service in the event that hotel revenues are insufficient. The development team may be required to hold some subordinated debt, but this debt is typically less than 10% of the total financing. In today's financial markets, nonrecourse debt carries interest rate levels of 7% to 7.5%. Interest rate levels on the credit enhanced debt depends on the credit of the sponsoring municipality. A AAA-rated municipality may achieve an interest rate level of 4.5 to 5.5%. Subordinated debt carries negotiated interest rate levels in the range of 9% to 12%. Consequently, the cost of funds for a publicly developed hotel are substantially less then from privately financed hotels. As in public/private partnership deals, public subsidies may take the form of land contributions, infrastructure and parking development, tax abatements, tax turn-backs, and cash subsidies. In addition, credit enhancing debt is a form of local public subsidy. Typically one objective of of a public financing is to reduce the level of public equity contribution as compared to a public/private partnership.
Cost of funds
Forms of Public Public subsidies may take the subsidiaries form of land contributions, infrastructure and parking development, tax abatements, tax turn backs, and cash subsidies.
Claim on
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The investors in the LLC
The sponsoring municipality owns the

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income & the asstes typically claim the residual project income from operations and the sale of the asset. Municipalities mass negotiate a share of project income in exchange for providing public subsidies. Developers often negotiate a "preferred return." residual project income from operations and the sale of the asset.
Public/private partnerships in hotel development are more frequently used in smaller projects in which a reasonable amount of public equity investment can make the difference between a feasible and infeasible project. For many smaller projects the potential benefit of new economic and fiscal impacts are modest and only justify a limited investment on the part of the sponsoring municipality. Public Private Partnerships in India In Hospitality Industry Emaar MGF has collaborated with Government of Uttranchal to Develop an International Standard Branded 5 Star Hotel and State of Art Convention Centre in Dehradun. Emaar MGF has tied up with Intercontinental Hotels Group for the management of the hotel and convention centre. The international standard up-market hotel comprising 200 guest rooms will be managed under the 'Holiday Inn' brand. The state-of-the art convention facility, with collapsible seating and hi tech projection facilities, will be spread over 35,000 sq ft. and will be designed to accommodate over 1,200 people.
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CHAPTER 13 Joint ventures are popping up everywhere in the hotel industry. The biggest players in the hotel industry are using the joint venture structure to seize opportunities for acquisitions and expansion. In recent months, Starwood Capital and Hersha Hospitality Management announced their joint venture to expand Hersha's hotel management platform, and Thayer Lodging Group and Jin Jiang Hotels formed a joint venture to acquire Interstate Hotels & Resorts. Joint Ventures Offer an Alternative to Traditional Financing - and Have Different Risks and Rewards. Using a joint venture model for hotel acquisitions offers the benefits of increased access to capital, sharing of risks and rewards with a partner, access to greater resources, such as specialized staff, technology and expanded relationships. Particularly in the current economic environment where traditional lenders are reluctant to invest new capital in the hotel business, a joint venture with partners already active and committed to the hotel business offers an alternative means of financing potential future business expansion. Hotel investors hoping to seize buying opportunities for prime assets may find that the only way they can finance the cost of acquisition is by bringing in joint venture partners. However, a joint venture also creates its own risks, and these risks are best be addressed by the parties at the time the joint venture is formed, rather than waiting until problems develop later. The Essence of a Joint Venture. A joint venture is, essentially, a partnership between two or more partners who intend to be active in the business. In many joint ventures, the parties intend that the partners will be co-equal in making key decisions for the joint venture, including such key decisions as when to contribute more capital to the joint venture, and when to buy or sell an asset. A joint venture is often created through the formation of a new entity, most often either a general partnership, limited partnership or limited liability company. The rights and obligations of the parties to the joint venture are governed by the partnership or limited liability company ("LLC") agreement entered into by the parties as investors in the partnership or LLC. Four Keys to Success in Hotel Joint Ventures Here are four of the most important ways that the internal risks of a joint venture can be assessed and minimized: 1. Know Your Partners - Do a thorough assessment of the relative financial strength of the partners, their past history with other business partners, their management style and philosophy, and the personal chemistry between the management of both partners. 2. Pick the Bus Driver - Pick the party or the person who is going to run the venture, and vest that entity or individual with the power and ability to get things done. As Peter Connolly advises, "Someone has to drive the bus, and that role has to be made clear at the outset or, when the negotiating process gets to the difficult points, nothing will get done." That obviously requires that the venture partners have a great deal of trust in the person or entity who holds the primary power in the
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venture, but without that, the joint venture will not be able to act decisively when it is necessary to make decisions and take actions. 3. Decide All the Important Issues in Advance and in Writing - Create a thorough partnership or LLC agreement that provides the full details of each party's specific obligations, with timelines for performance, as well as specific steps that can be taken by the aggrieved party when the other party fails to fulfill its obligations. The partnership or LLC agreement is what the parties have to protect them when things go wrong, and the more detail there is in the document, the easier, faster and cheaper it will be to resolve any problems if and when they arise or, if need be, unwind the joint venture if it is not possible to continue. 4. Deal with Conflicts of Interests Up Front- If there are inherent conflicts between ventures (i.e., a manager/owner conflict) get those out on the table at the beginning and resolve them or resolve the method for resolution before engaging in any serious negotiations. For this process to work, the partners have to understand and agree that they cannot have secrets from each other on matters that involve the venture. If there are issues that likely will cause parties to distrust each other's motivations, set up a process that forces conversation and resolution within a specified time period. 5. Joint Venture Hotel Projects in India: Maharaja Hotel Resort Limited: Maharaja Hotels Resort Limited has an ownership interest of 50% InterContinental Hotels Group, the world's top hotelier, signed a joint venture partnership with Duet India Hotels Group to develop its Holiday Inn Express brand in the Indian market.
CHAPTER 14
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In the year 2000, hospitality in India was primarily dominated by the domestic players, namely Taj Group of Hotels, Oberoi Hotels & Resorts, ITC Hotels, and the government owned ITDC (The India Tourism Development Corporation Ltd) Hotels, with only a handful of international brands having a token presence in the form of marketing alliances in India. Also, while some of today's home-grown hotel chains like Leela, Bharat Hotels, Sarovar and Asian Hotels were around at that time, they were for the most part single-asset owners. There was a perception that India was a tough place for foreign companies to do business in and that a strong local presence with excellent contacts was required to be able to penetrate this market. Additionally, several businesses and consequently most international brands were more focused on fast-growing markets in the Middle East and China, which offered more opportunities for growth at that time. The economic downturn, at the beginning of the decade, led to a paradigm shift among these businesses as they could no longer depend solely on the more mature economies and they started gauging the vast opportunities that a country like India had to offer. The fact that India was less impacted by the global downturns - one at the beginning of the decade and the other at the end of it - as compared to the rest of the world has emphatically proven the inherent strength of the Indian economy and its consumer base of over a billion people. As Indians travelled more frequently around the world, they experienced international hotel brands firsthand, as a result of which these brands enjoyed greater recognition and acceptance in India. Additionally, as international visitation to India increased, the foreign brands were better placed to attract these visitors due to their strong reservations networks around the world. With the continued growth in India's GDP, improvement in the per capita income, and increased aspirational spending, the Indian hospitality sector is expected to grow faster than most countries around the world. Most major hotel brands such as Starwood, Hilton, Marriott, Hyatt and Accor already have a growing presence in India and they have an even stronger pipeline. Additionally, the emergence of a branded budget and economy segment presents tremendous opportunities and will attract many new players to an India going forward. Key Game Changers: Entry of most major international brands

Changing perception of Indian markets as a lucrative opportunity among international brands Growth of the Indian middle class offering a large consumer base of more than 1 billion people Educated and well exposed Indian audiences, likely to accept global brands wholeheartedly Expected emergence of branded budget and economy hotels CHAPTER 15
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In the past ten years most commodity prices have gone up. Development costs have always been a challenge for anyone looking to build a hotel in India. The land cost has increasingly become a significant portion of the development cost for any project, accounting for 30-50% of the total development cost, while the same equates to about 15-20% internationally. The high density of development within Indian cities and the shortage of vacant land parcels suitable for hotels had led to aggressive bidding wars among prospective buyers and forced prices upwards. With the increased pace of construction activity around the world, especially in the Middle East and China, the price of construction material such as steel and concrete increased steeply in recent years. While this was offset by sourcing furniture and fixtures from China by several recent hotel projects, the additional concern regarding the quality of Chinese goods is one that now needs to be addressed. HVS observes that hotels built in India very often exceed the brand specifications that might exist for these brands internationally and that developers often tend to spend more money on their hotels than required. A typical mid-market business hotel in the US or Europe, thus, does not cost nearly as much to construct as it does in India. The lengthy cumbersome process of obtaining licenses and permits and construction delays serves to increase costs even more. Given the time and expense involved in working through all these issues and finally opening a hotel, developers who managed to do so were not interested in selling their hotels or asked for prices that were far in excess of replacement cost. As we look into the next ten years, we believe that as long as asking prices remain significantly higher than the replacement cost for the product, developers and investors will choose to build rather than buy. Positioning Luxury Upper Upscale Upscale Mid Market Budget Economy Typical Development Cost per Key (INR) 12,500,000 and above 8,500,000 to 12,500,000 6,000,000 to 8,500,000 3,500,000 to 5,500,000 2,500,000 to 3,500,000 2,500,000 and below
Key Game Changers: Likely rationalization of land costs, due to the recent economic conditions
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Increased import of material from global sources, as long as quality goods are available Expected rationalization of costs, with government intervention in relaxing the license process Expected rationalization of per key development costs, with entry of brands across all positioning
CHAPTER 16
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The 4 Ps of marketing are Product, Price, Place, and Promotion. Think of each of these as a variable which you control. The idea is to set these variables in such a way so that sales will take place. You cannot "make" a customer pull out her credit card, but you can certainly help her in coming to a decision by setting the "right" price, the retail location, the level of advertising and even product attributes such as color or perceived quality. You control everything but the customer herself. These variables are all interdependent. Taken together, they constitute a certain mix. PRODUCT: In the hospitality industry the service that the hotel provides and the other products that the hotel provides are the facilities the rooms the restaurants the hotel has It's fully refurbished guest rooms and highly personalized services, make you feel comfortable and cared for, miles away from home the product that the armadas is into is always to keep the guests happy who enter and leave their premises PRICE Price is not just the sticker price or the price invoiced. It goes deeper. the Ramada is one of the only 5 star hotels in Goa that has prices that even a common man can avail of on grand occasions they have a price tag which varies for different persons requirements may from any walk of life Ramada is a good price package that fits every ones budget due to which they do not face competition from other hotels PLACE: Exclusive international 5 star deluxe hotel located in Gurgaon with 370rooms PROMOTION: The year 2010 is a different story as the consumer is well educated, travelled, experienced and looks beyond the gloss of the brand to the value proposition and the actual delivery of brand promises. Thus, in the Year 2010, the marketing mantras are differentiation, consistency, customer satisfaction, delivery of brand promises and customer retention. Today, Brand 2010 has evolved from a one-way communication stream to a two-way one that is more flexible and accommodates the customer's needs and wants. Hence, Brand 2010 is a product of the External Stakeholder the needs and wants of the Customers accented by experience led, sustainable Brand Promises which now translates into the Purchase Decision of 2010. The state of economic flux wherein each dollar spent is being analyzed, renegotiated and then minimized, the marketing dilemma of marketing spend vs. incremental revenue assumes more importance. How do marketing resources of the Indian Hospitality sector continue to build their brand and market their product successfully? Consistent delivery of a superior and differentiated product experience that offers a greater perceived value will result in the acquisition and retention of customers. The pressure on consistent delivery of brand promises is further maintained by online customer feedback which impacts the attraction quotient of the product for other prospective customers. Customers in the coming decade will want to 'Find
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Even Before they seek' and the advent of social networking has given a new power to customers like none other before. Key Game Changers: Broadening of the playing field with entry of many domestic and international hotel chains Well educated, travelled and experienced customer base Evolution of the brand from a one-way communication stream to a two-way one that accommodates customer needs and experiences Consistent delivery of brand promises and customer experiences Marketing equations changing in favour of the customer with online channels like Web 2.0 and social networking
CHAPTER 17
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STRENGHT India has a rich cultural heritage. The "unity in diversity" tag attracts most tourists. Indian hotel industry is facing a mismatch between the demand and supply of rooms leading to higher room rates and occupancy levels. India's share in international tourism and hospitality market is expected to increase over the long-term. Manpower costs in the Indian hotel industry are one of the lowest in the world. This provides better margins for Indian hotel industry. India offers a readymade tourist destination with the resources it has. Thus the magnet to pull customers already exists and has potential grow. WEAKNESSES The lack of adequate recognition for the tourism industry has been hampering its growth prospects. Whatever steps are being taken by the government are implemented at a slower pace. High tax structure in the industry makes the industry worse off than its international equivalent. In India the expenditure tax, luxury tax and sales tax inflate the hotel bill by over 30%. The cost of land in India is high at 50% of total project cost as against 15% abroad. This acts as a major deterrent to the Indian hotel industry. The hotel industry in India is heavily staffed. This can be gauged from the facts that while Indian hotel companies have a staff to room ratio of 3:1, this ratio is 1:1 for international hotel companies. OPPURTUNITIES

Rising Income: While there has been much talk about record number of foreign tourist arrivals, very little has actually been said or done about domestic tourism, which, according to our estimates, has registered a 40% annual growth in the last three years. Per capita income grew by an impressive 8.9% in 2009, while Gross Domestic Savings touched an all time high of 33%. Open sky benefits: The opening up of the aviation industry in India brings exciting opportunities for the hotel industry (airlines transport around 80% of international tourists). Forign Trade Policy: Hotels and Restaurants are allowed to import duty free equipments and other items including liquor, against their foreign exchange earnings under the Served from India Scheme. New business opportunities: We believe that, over the next three to five years, the biggest surge in accommodation demand is expected to come from commercial zones
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that are being developed in metro suburbs and secondary markets. Mixed-use development projects that include retail and commercial space have also gained momentum in the last 24 months and will continue to be an attractive option. This provides a unique opportunity for hospitality projects. Also the new concept, which is going to gain importance, is that of budget hotels. Hotel Industry in India currently has supply of 110,000 rooms and there is a shortage of 150,000 rooms fueling hotel room rates across India. According to estimates demand is going to exceed supply by at least 100% over the next 2 years. It is forecasted to be the number 3 market in the world by 2015 for hospitality and tourism. Demand between the national and the inbound tourists can be easily managed due to difference in the period of holidays. For international tourists the peak season for arrival is between September to March when the climatic conditions are suitable where as the national tourist waits for school holidays, generally the summer months. In the long-term the hotel industry in India has latent potential for growth. This is because India is an ideal destination for tourists as it is the only country with the most diverse topography. For India, the inbound tourists are a mere 0.49% of the global figures. This number is expected to increase at a phenomenal rate thus pushing up the demand for the hotel industry. The share of convention or meetings tourism is miniscule in India in comparison to international standards, which accounts for over 20.0% of all international arrivals. International hospitality chains are expected to acquire local players to increase their presence in the country. Domestic and international players are expected to form strategic alliances and partnerships with regional players to expand in the country, reduce risk and optimize resources.
Below is the table representing new hotel opportunities across the country in next five years.
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Cities Agra Pune Bengaluru Chandigarh Chennai Delhi NCR Goa Hyderabad Jaipur Kolkata Mumbai Other Cities Total Existing 1,439 2,672 5,597 653 3,806 11,018 3,288 3,782 2,472 1,520 9,877 14,759 62,404 Supply 510 5,196 9,819 1,482 5,995 20,021 1,736 5,302 2,664 3,481 7,477 23,427 89,449 Proposed 35% 194% 175% 227% 158% 182% 53% 140% 108% 229% 76% 159% 143% Inc in Five yrs 41% 67% 65% 76% 72% 75% 41% 63% 77% 51% 60% 65% 67% Develop ment 11.8% 14.5% 16.9% 11.1% 24.1% 26.7% 18.2% 29.4% 8.2% 28.0% 42.5% 2.3% 18.0% Luxury 22.0% 31.7% 37.7% 22.1% 28.0% 31.4% 49.1% 28.3% 61.3% 37.2% 22.6% 28.7% 32.0% First Class 52.5% 34.1% 22.7% 54.7% 22.3% 25.4% 24.8% 18.2% 22.5% 34.9% 20.6% 47.5% 31.0% Mid-Market Budget Extended Stay 13.7% 19.7% 15.5% 12.1% 13.7% 13.9% 7.9% 20.0% 8.0% 0.0% 14.4% 20.5% 16.0%
THREATS Event risk: Dependency on foreign tourism can be a double-edged sword as travel decisions are based on global patterns and events that happen elsewhere can have serious impact the performance. Increasing competition: Global hospitality majors like the Four Seasons, Shangri-La and Aman Resorts are all making their entry into the Indian market. They are not the only ones who are turning their attention to India. The Hilton Group is deciding on a comeback and has tied up with the Oberoi Group. Two other groups - the Carlson Group and the Marriott chain are furiously hunting for new hotels in India's top cities. This will increase the competition for the existing Indian hotel majors. Lack Of Infrastructure: Indias poor domestic hospitality structure is leading to threat a losing foreign tourist to other competing countries. Like terrorist strike, riots, epidemics, political uncertainity, slowdown in reforms etc. Growing Land Cost: Land costs have become increasingly important for any project, accounting for around 30.0-50.0% of the total development cost, as opposed to to about 15.0-20.0% internationally. Regulatory Hurdles: Compliance with a number of regulations related to the preparation and sale of food and beverages, and various laws and regulations governing employee relationships. Hotel owners and operators need to obtain multiple licenses, permits and authorizations, including local land-use permits, building and zoning permits, environmental, and safety permits and liquor licenses. Customer expectation: With the emergence of India on global travel map, expectation of customer are arising, making companies focus on customer loyalty and repeat purchase. Image of the country: The competition from neighboring countries and negative perceptions about the Indian tourism product constrains the growth of tourism. The
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image of India as a country overrun by poverty, political instability, safety concerns and diseases also harms the tourism industry. Manual Bach End: The majority of the operations data in a hotel is filed in manual log books or is not tracked. Although most reputed chains have implemented IT systems for property management and reservations. Human Resource Development: The sector has been focusing on the development of white collar jobs as opposed to blue collar jobs, leading to a shortage of blue collar employees, which might pose various threats to the industry. Shortage of Skilled Labours: The lack of a quality workforce and low retention levels of good professionals at different skill levels is hampering the growth of the hospitality industry.
CHAPTER 18
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The hotel industry in India is going through an interesting phase. One of the major reasons for the increase in demand for hotel rooms in the country is the boom in the overall economy and high growth in sectors like information technology, telecom, retail and real estate. Rising stock market and new business opportunities are also attracting hordes of foreign investors and international corporate travellers to look for business opportunities in the country.
Development of new products Emergence of newer concepts and forms is also aiding growth in the industry. Bed and Breakfast is one such recent concept in the Indian market. To tap this potential, GoI is recognising spare rooms available with various home owners by classifying these facilities as the Incredible India Bed and Breakfast Establishments. These newer forms of tourism ecotourism, agritourism, cruise tourism are still at a nascent stage and they hold immense potential. Once adequate measures are taken, these forms of hospitality can drive strong growth in the industry. In line with these new concepts and taking into account the requirements of different types of travelers, hotel companies are offering customised and attractive accomdation packages. World-class medical facility
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The popularity of India as a major medical destination has also aided growth in the hotel industry in cities such as Delhi and Gurgaon. Many people from the developed countries come to India for the rejuvenation promised by yoga and Ayurvedic treatments. Furthermore, a nice blend of top-class medical expertise at attractive prices is enabling more Indian corporate hospitals to get patients from the developed nations. Most common treatments for which foreigners come to India are heart surgery, knee transplant, cosmetic surgery and dental care. Hosting of international events Events such as trade fairs, exhibitions, and sports events tend to bring about higher tourist movement mutuating growth in Hotel Industry. International events held in the country lead to higher inbound hospitality
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CHAPTER 19 Guest Feedback Program The best way to know how well the hotel is doing is to ask guests. The Grand Five Star Hotel will provide evaluation tool that our properties can easily administer to our guests, in order to have most effectively measure performance and engage in continuous quality improvement. Our guest feedback program will provide immediate results, so that hotel can take swift corrective action. Quality Control Services The Grand Five star Hotel will looks at operation of hotel from the guest perspective. It will follow the path of the guest from the first encounter via phone or website through the entire experience of their stay. The approach includes meaningful customer service decisions. Safety Audit The loss prevention specialists will be trained to evaluate a property for total loss prevention and assisting in the identification of hot spots on safety. We will provide our portfolio of hotels with complete training programs for hotel managers and line employees. In addition, we wil provide manuals and programs for the ongoing maintenance of the property safety program. Manager on Duty Program We will provide comprehensive, individualized "manager on duty programs," including policy manuals, procedures and reports. Employee Survey Program Positive employee morale translates into positive customer experiences. The Grand five star Deluxe Hotel survey tool will enable our hotels to gauge employee morale. This objective survey determines areas of opportunity, weakness and strength among the property-level workforce. It enables hotel general managers and executive staff to take constructive steps to ensure maximum productivity and customer service.
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CHAPTER 20 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, InterContinental 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 Four Seasons Starwood Hyatt Marriott Wyndham Hilton Intercontinental Fairmont Raffles Accor Source: Business Standard
50 6 15 10 24 50 75 41 15 44
2012 2012-13 2012 2012-13 2012 2011 2015 2012 2012-13 2012
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DELUXE FIVE STAR HOTELS Hotels The Oberoi Description
The Oberoi is a modern, luxury hotel, the best of its kind in India. Guests here can be assured of personal service and every 21st century convenience for a comfortable and relaxing stay. Oberoi Hotels have achieved different award in hospitality. Galaxy hotel is located in the commercial hub of Gurgaon in the National Capital Region, New Delhi. Placed conveniently off NH 8, Galaxy hotel is a half mall and half hotel, which offer a budget accommodation in Gurgaon, for business and leisure travelers. Well designed, Galaxy is among five star hotels in Gurgaon that is unique in concept and service. Hyatt Regency Delhi has 508 guest rooms that are tastefully decorated. The guest rooms at Hyatt Regency New Delhi have been divided into Presidential Suites, Executive Suites, Regency Deluxe Suites and Terrace Suites. As well as the Regency Club rooms, the Pool-facing rooms and the Hyatt guest rooms at the Hyatt Regency Hotel. Trident Hilton, is one of the topnotch hotels in India. It is situated in the National Capital Region and was voted as 'India's Leading Business Hotel for 2005' in London at World Travel Awards. The hotel is situated on 7 acres of land and is known for its long corridors, walkways, inner courtyards, pools, domes and fountains. Bristol Hotel offers 83 well equipped rooms. It is situated in commercial hub of Gurgaon. The Indian hotels Company and subsidiareies are collectively known as Taj Hotels Resorts and Places, recognised as one of the Asias largest and finest hotelcompany.Incorporated by the founder of Tat Group. Taj Hotels and Places comprises of 59 hotels and40 locations
Galaxy Hotel
Hyatt Regency
Trident Hilton, Gurgaon
The Bristol Hotel, Gurgaon
The Indian Hotels Comapany
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20.1 OBEROI GROUP OF HOTELS
The Oberoi Group, founded in 1934, operates 27 hotels and three cruisers in five countries under the luxury Oberoi and five-star Trident brands. The Group is also engaged in flight catering, airport restaurants, travel and tour services, car rentals, project management and corporate air charters. Oberoi Hotels & Resorts is synonymous the world over for providing the right blend of service, luxury and quiet efficiency. Internationally recognised for all-round excellence and unparalleled levels of service, Oberoi Hotels & Resorts has received innumerable awards and accolades. A distinctive feature of The Groups hotels is their highly motivated and well trained staff that provides the kind of attentive, personalised and warm service that is rare today. The Groups new luxury hotels have established a reputation for redefining the paradigm of luxury and excellence in service amongst leisure hotels around the world. Trident hotels are five-star hotels that have established a reputation for excellence andare acknowledged for offering quality and value. These hotels combine state of the art facilities with dependable service in a caring environment, making them the ideal choice for business and leisure travellers. Recognising the importance of quality training in hospitality management, The Oberoi Group Established The Oberoi Centre of Learning and Development in New Delhi in 1966. The Group is committed to employing the best environmental and ecological practices in technology, equipment and operational processes. The Oberoi Group also supports philanthropic activities that range from education to assistance for the mentally and physically challenged. The Group is also a keen contributor to the conservation of nature and of cultural heritage.
20.1.1Rai Bahadur Mohan Singh Oberoi Founder Chairman, EIH Limited (1898 - 2002) Early Life
Rai Bahadur Mohan Singh Oberoi was born on 15th August, 1898 in erstwhile undivided Punjab, which is now in Pakistan. He was only six months old when his father died. Success and fortune did not, therefore, come easily to him. Initiative, resourcefulness and hard work, combined with the capability to face and overcome the most overwhelming odds can best characterise this phenomenal entrepreneur. Mohan Singh completed his primary education in Rawalpindi and moved to Lahore for his Bachelor's degree. Shortly thereafter, to flee the ravages of a virulent plague, he went to seek his fortune in Shimla, the summer capital of British India. Arriving penniless, he found a job at a monthly salary of INR 50, as the front desk clerk at the Cecil Hotel. Today, The Oberoi Group owns the hotel The Oberoi Cecil where the young Mohan Singh found his metier. The diligence, enthusiasm and intelligence displayed by Mohan Singh impressed Mr. Grove, the manager of the hotel. A quick learner, Mohan Singh did not restrict his efforts to fulfilling the job description of a desk clerk but sought and shouldered additional responsibilities. A few years later, when a Mr. Clarke acquired a small hotel he asked Mr. Oberoi to assist him. It was here, at Clarkes Hotel, that Mohan Singh gained first hand experience in all aspects of operating a hotel.
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20.1.2 Budding Entrepreneur
In 1934, Mr. Oberoi acquired his first property, The Clarkes Hotel, from his mentor by mortgaging his wife's jewellery and all his assets. Four years later, he signed a lease to take over operations of the five hundred rooms Grand Hotel in Calcutta that was on sale following a cholera epidemic. With his customary confidence and sheer determination to succeed, he was able to convert this hotel into a highly profitable business venture. Over several years, Mr. Oberoi had purchased shares in Associated Hotels of India (AHI), which owned Cecil and Corstophans hotels in Shimla, Maidens and Imperial hotels in Delhi and a hotel each in Lahore, Murree, Rawalpindi and Peshawar. In 1943, Mr. Oberoi acquired controlling interest in AHI. He thus became the first Indian to run the country's largest and finest hotel chain. In the tumultuous years just prior to Indian independence, Mr. Oberoi met and intimately interacted with the would-be leaders of Free India, all of whom were, at one time or other, guests at his hotels.
20.1.3 International Pioneer

Having consolidated his early ventures, Mr. Oberoi became the first Indian hotelier to enter into an agreement with an internationally renowned hotel chain, to open the first modem, five-star hotel in the country. The Oberoi Inter Continental, in New Delhi opened in 1965.The I-Con, as it became popularly known, offered facilities that no other hotel in the country matched and was India's first luxury hotel. This achievement was enhanced with the opening of the 35-storey Oberoi Sheraton in Bombay, in 1973. Mr. Oberoi was the first Indian to work in association with international chains to woo international travellers to India. This led to a heavy influx of international travellers and foreign occupancy soared to an average of 85%. This enabled The Oberoi Hotels to significantly contribute to India's foreign exchange earnings. Another pioneering landmark was the establishment in 1966 of the prestigious Oberoi School of Hotel Management, recognised by the International Hotel Association in Paris. Considered India's premier institute, the school is now known as The Oberoi Centre of Learning and evelopment and continues to provide high quality professional training in hospitality management. Other notable firsts were the decision to employ women in his hotels and to establish a chain of ancillary industries producing and supplying items like consumables and stationery to ensure the highest quality. The Oberoi Group was also the first to start flight catering operations in India, in 1959. The Oberoi Flight Services, located in New Delhi, Mumbai, Cochin and Chennai, provide in-flight meals of international quality to reputed airlines. Mr. Oberoi realised that the hotel and hospitality business is greatly dependent on travel agents, a vital element in the distribution chain. Therefore, he decided to establish his own travel agency. Mercury Travels, part of The Oberoi Group, ranks amongst the leading travel agencies in India. With vision and imagination, Mr. Oberoi converted old and dilapidated palaces, historical monuments and buildings into magnificent hotels such as The Oberoi rand in Calcutta, the historic Mena House in Cairo and The Windsor in Australia. It was, in fact, in the face of severe opposition that the State Government of Victoria awarded Mr. Oberoi the lease of The Windsor, a heritage building in Melbourne. He personally supervised the Restoration of the
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hotel to its original grandeur and later acquired it. The Oberoi Cecil in Shimla, built in the early 20th century, reopened in April 1997 after extensive and meticulous renovation. 20.1.4 Awards and Honours In 1943, Mr. Oberoi was conferred the title of Rai Bahadur by the British Government in recognition of his services to the Crown. Thereafter, Mr. Oberoi won acclaim and received several national and international awards including admission to the Hall of Fame by the American Society of Travel Agents (ASTA) and Man of The World award by the International Hotel Association (IHA), New York. He was presented the Order of The Republic, First Class by the President of Egypt. He got an Honorary Doctorate of Business Administration from the International Management Centre, Buckingham, UK. Newsweek named him one of the Elite Winners of 1978. The PHDCCI Millennium award in 2000 was presented in recognition of his entrepreneurial and business success. In 2001, the Government of India accorded him the Padma Bhushan. 20.1.5 Globalisation of The Oberoi Group To place The Oberoi Group on the world map, Mr. Oberoi exported management expertise to Australia, Egypt and Singapore, where The Oberoi Group took charge of the management of existing luxury hotels. The success of Oberoi Hotels & Resorts overseas, in the face of global competition, greatly enhanced the image of The Group Today, Oberoi Hotels & Resorts in fudonesia, Egypt, Mauritius, Saudi Arabia and India add value and distinction to their host countries. 20.1.6 Mission & Vision Of Oberoi Group Of Hotels Our Guests We are committed to meeting and exceeding the expectations of our guests through our unremitting dedication to every aspect of service.
Our People
We are committed to the growth, development and welfare of our people upon whom we rely to make this happen.
Our Distinctiveness
Together, we shall continue the Oberoi tradition of pioneering in the hospitality industry, striving for unsurpassed excellence in high-potential locations all the way from the Middle East to Asia-Pacific.
Our Shareholders
As a result, we will create extraordinary value for our stakeholders.
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20.1.7 Vision Of Oberoi Group Of Hotels We see an organization which aims at leadership in the hospitality industry by understanding its guests, and designing and delivering products and services which enable it to exceed their Expectations. We will always demonstrate care for our customers through anticipation of their needs, attention to detail, distinctive excellence, warmth and concern. We see a lean, responsive organization where decision making is encouraged at each level and which accepts change. It is committed and responsive to its guests and other stakeholders. We see a multi-skilled workforce, which consists of team players who have pride of ownership, translating organizational vision into reality. We see a multi-skilled workforce, which consists of team players who have pride of ownership, translating organizational vision into reality. We see an organization where people are nurtured through permanent learning and skill improvement, and are respected, heard and encouraged to do their best. Oberoi is recognized as best practice for training and developing its people. We see a more multinational workforce which has been exposed to different cultures, problems and situations and can use its experiences to enrich the local employees whether in India or overseas. We see user-friendly technology enhancing value for our customers and helping our personnel by making information more accessible. We see an organization which is conscious of its role in the community, supporting social needs and ensuring employment from within the local community. We see an organization which is committed to the environment, using natural products and recycling items, thus ensuring proper use of diminishing natural resources.
20.1.8 DIFFERENT TYPES OF OBEROI HOTELS

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Business Hotels
Oberoi Hotels & Resorts is synonymous the world over with providing the right blend of luxury, warm service and quiet efficiency. Internationally recognised for all-round excellence and unparalleled levels of service, the business travellers acknowledge Oberoi Hotels & Resorts as amongst the finest. This was reaffirmed recently in Cond Nast Traveler, Business Travel Awards, a readers poll of business travellers, in which Oberoi Hotels & Resorts was rated the best hotel chain in the world (outside the United States). The Oberoi, New Delhi The Oberoi, Mumbai The Oberoi, Bangalore The Oberoi Grand, Kolkata
Leisure Hotels
Oberoi Hotels & Resorts is synonymous the world over with providing the right blend of luxury, warm service and quiet efficiency. Luxury as a unique, memorable and personal experience is core to the Oberoi philosophy. It encompasses every element of a guests stay at the Oberoi hotels that creatively combine breathtaking locations, luxurious environs and the best of modern amenities with personalised and warm service delivered with genuine care. The design and architecture of the hotels, is inspired by the historical style of the region. This coupled with luxurious interiors that replete with local arts and crafts, to menus that offer an extensive selection of local specialties and classical and folk dance and music performances. The Oberoi Amarvilas, Agra The Oberoi Rajvilas, Jaipur The Oberoi Udaivilas , Udaipur The Oberoi Vanyavilas, Ranthambhore Wildflower Hall, Shimla in the Himalayas The Oberoi Cecil, Shimla Mena House Oberoi, Cairo The Oberoi, Sahl Hasheesh,Red Sea,Egypt The Oberoi, Bali The Oberoi, Lombok The Oberoi, Mauritius
Cruises
Oberoi Hotels and Resorts offer unparalleled luxury cruise experiences, on the Nile and the Kerala Backwaters. The right blend of impeccable service, luxury and quiet efficiency, hallmarks of Oberoi Hotels & Resorts worldwide, make the stay onboard the Luxury Cruisers memorable. The Oberoi, Motor Vessel Vrinda, Kerala The Oberoi Philae, Nile Cruiser The Oberoi Zahra, Luxury Nile Cruiser
Spas
Oberoi Spas provide a serene and truly unforgettable experience of pure pampering and relaxation in exquisitely beautiful surroundings, using holistic therapies and massages which combine the very best of Eastern and Western practices. Expert in the use of Western & traditional Eastern techniques, only highly skilled and trained therapists are handpicked for our hotels and resorts. Oberoi Spa recipes feature only the finest natural ingredients, often local to the resort and the Oberoi Group are committed to remaining true to the Asian tradition of respect for the environment. The extraordinary levels of comfort and service that guests expect from Oberoi reach a peak in the Oberoi Spas, world-acclaimed pioneers of the tropical spa experience. PRODUCT PROFILE OF OBEROI GROUP OF HOTELS
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The group is committed to employing the best environmental and ecological practices in technology, equipment and operational processes. The Oberoi group also supports hilanthropic activities that range from education to assistance for the mentally and physically challenged. The group is also keen contributor to the conservation of nature and of cultural heritage.
20.1.9 SWOT ANALYSIS OF OBEROI & TRIDENT

Strengths Cost advantage Asset leverage Effective communication High R&D Innovation Online growth Loyal customers Market share leadership Strong management team Strong brand equity Weaknesses Bad communication Diseconomies to scale Over leveraged financial position Low R&D Low market share No online presence Not innovative Not diversified Poor supply chain Weak management team Weak real estate Opportunities Acquisitions Asset leverage Financial markets (raise money through debt, etc) Emerging markets and expansion abroad Innovation Online Product and services expansion Takeovers
Threats
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Competition Cheaper technology Economic slowdown External changes (government, politics, taxes, etc) Exchange rate fluctuations Lower cost competitors or imports Maturing categories, products, or services Price wars
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20.1.10 SHAREHOLDING PATTERN OF OBEROI GROUP OF HOTELS
(A) Shareholding of Promoter and Promoter Group
(1) Indian Individuals / Hindu Undivided Family Bodies Corporate Sub Total (2) Foreign Total shareholding of Promoter and Promoter Group (A) (1) Institutions Mutual Funds / UTI Financial Institutions / Banks Insurance Companies Foreign Institutional Investors Sub Total (2) Non-Institutions Bodies Corporate Individuals Individual shareholders holding nominal share capital up to Rs. 1 lakh Individual shareholders holding nominal share capital in excess of Rs. 1 lakh Any Others (Specify) Non Resident Indians Foreign Nationals Trusts Directors & their Relatives & Friends Sub Total Total Public shareholding (B) Total (A)+(B) (C) Shares held by Custodians and against which Depository Receipts have been issued-m Sub Total Total (A)+(B)+(C)
5 9 14
26,352,663 171,475,834 197,828,497
26,352,663 171,475,834 197,828,497
4.61 30.02 34.63
4.61 30.00 34.61
14
197,828,49 7 197,828,497 (B) Public Shareholding 943,912 933,446 72,923,139 11,888,521 86,689,018 211,220,849 905,587 908,106 72,923,139 11,881,502 86,618,334 211,181,248 -
34.63
34.61
11 43 9 50 113 1,816
0.17 0.16 12.77 2.08 15.18 36.98 -
0.17 0.16 12.76 2.08 15.17 36.95 -
85,820
65,354,595
51,613,214
11.44
11.43
48 853 836 6 10 1 88,537 88,650 88,664
9,023,049 1,120,376 1,056,302 38,953 24,686 435 286,718,869 373,407,887 571,236,384
8,972,019 917,417 892,731 24,686 272,683,898 359,302,232 557,130,729
1.58 0.20 0.18 0.01 50.19 65.37 100.00
1.58 0.20 0.18 0.01 50.16 65.33 99.94
2 88,666
333,030 571,569,414
332,655 557,463,384
0.06 100.00
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Balance Sheet of Oberoi Group Of Hotels (fig In Cr.)
Mar '11 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 114.31 114.31 0.00 0.00 2,241.24 232.25 2,587.80 823.97 0.00 823.97 3,411.77 Mar '11 12 mths 2,619.69 563.38 2,056.31 127.59 605.14 33.67 126.56 63.13 223.36 306.85 531.16 1,061.37 0.00 363.33 75.31 438.64 622.73 0.00 3,411.77
Mar '10 12 mths 78.59 78.59 0.00 0.00 1,103.25 235.25 1,417.09 1,174.54 85.00 1,259.54 2,676.63 Mar '10 12 mths 2,486.09 488.05 1,998.04 174.46 378.24 30.06 99.22 10.39 139.67 384.91 3.39 527.97 0.00 335.13 66.94 402.07 125.90 0.00 2,676.64
Mar '09 12 mths 78.59 78.59 0.00 0.00 1,100.79 238.25 1,417.63 1,019.33 0.00 1,019.33 2,436.96 Mar '09 12 mths 1,828.99 432.92 1,396.07 586.85 349.81 30.36 92.20 23.86 146.42 369.40 18.25 534.07 0.00 362.62 67.23 429.85 104.22 0.00 2,436.95
Mar '08 12 mths 78.59 78.59 0.00 0.00 985.39 241.25 1,305.23 800.87 12.00 812.87 2,118.10 Mar '08 12 mths 1,726.87 390.63 1,336.24 425.16 358.81 33.26 114.37 22.48 170.11 231.02 3.94 405.07 0.00 315.23 93.68 408.91 -3.84 1.73 2,118.10
Mar '07 12 mths 78.59 78.59 0.00 0.00 851.33 244.25 1,174.17 693.82 97.81 791.63 1,965.80 Mar '07 12 mths 1,497.64 369.11 1,128.53 375.83 411.81 30.34 101.27 44.59 176.20 416.18 5.98 598.36 0.00 272.04 285.25 557.29 41.07 8.55 1,965.79
Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets
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Profit & Loss of Oberoi Group Of Hotels
Mar '11 12 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 968.60 0.00 968.60 161.57 0.00 1,130.17 0.00 72.69 318.88 201.58 159.77 47.62 0.00 800.54 Mar '11 168.06 329.63 155.19 174.44 87.44 0.00 87.00 -3.89 83.11 18.57 64.54 800.54 0.00 51.44 7.14 5,715.69 1.13 45.00 41.21 Mar '10 12 mths 774.13 0.00 774.13 130.51 0.00 904.64 0.00 59.45 244.80 170.79 131.65 40.04 0.00 646.73 Mar '10 127.40 257.91 100.89 157.02 68.03 0.00 88.99 -0.30 88.69 31.46 57.23 646.73 0.00 47.15 7.62 3,929.54 1.46 60.00 30.08 Mar '09 12 mths 888.67 0.00 888.67 179.62 0.00 1,068.29 0.00 63.67 250.60 153.57 153.21 37.23 0.00 658.28 Mar '09 230.39 410.01 82.50 327.51 54.24 0.00 273.27 -0.50 272.77 102.32 170.44 658.28 0.00 47.15 7.89 3,929.54 4.34 60.00 30.01 Mar '08 12 mths 1,079.87 0.00 1,079.87 60.86 0.00 1,140.73 0.00 63.51 232.81 160.55 169.47 41.58 0.00 667.92 Mar '08 411.95 472.81 74.95 397.86 45.33 2.69 349.84 0.00 349.84 132.62 217.23 667.92 0.00 70.73 12.02 3,929.54 5.53 90.00 27.08
(fig in Cr.)
Mar '07 12 mths 938.97 0.00 938.97 98.84 0.00 1,037.81 0.00 53.29 196.46 142.21 157.73 44.49 0.00 594.18 Mar '07 344.79 443.63 98.08 345.55 42.69 6.40 296.46 -1.51 294.95 94.50 200.45 594.17 0.00 55.01 9.35 3,929.54 5.10 70.00 23.66
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Cash Flow of Oberoi Group Of Hotels
Mar '11 12 mths Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 87.00 84.24 -190.17 686.44 Mar '10 12 mths 88.99 54.93 -271.39 188.11 Mar '09 12 mths 273.26 143.69 -264.04 136.05 Mar '08 12 mths 349.84 241.19 -231.82 -33.52
(fig in Cr.)
Mar '07 12 mths 257.16 182.00 -252.31 56.41
580.51 13.77 594.28
-28.35 42.12 13.77
15.69 26.42 42.12
-24.15 50.57 26.42
-13.90 64.47 50.57
Key Financial Ratio of Oberoi Group Of Hotels

Mar '11 Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin (%) Profit Before Interest And Tax Margin (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Return On Capital Employed ( %) Return On Net Worth (%) Adjusted Return on Net Worth (%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds (%) Liquidity And Solvency Ratios 17.35 7.05 8.32 14.74 14.74 5.64 5.64 8.01 2.73 3.44 41.21 45.28 8.01 16.11 6.25 7.32 13.80 8.83 6.69 6.30 7.09 4.03 0.63 30.08 36.06 6.07 25.92 18.05 19.82 13.59 13.59 17.46 17.46 11.97 14.45 6.65 30.01 36.08 11.97 38.14 31.88 33.95 23.86 23.86 18.89 18.89 23.12 20.44 21.30 27.03 33.17 24.27 36.72 30.35 30.44 24.43 20.94 20.14 16.01 20.44 21.56 17.29 23.45 29.66 20.56 2.00 0.90 2.94 16.95 37.42 47.82 2.00 1.20 3.24 19.70 25.47 69.56 2.00 1.20 5.86 22.62 25.41 69.56 2.00 1.80 10.48 27.48 22.40 69.56 2.00 1.40 8.77 23.90 18.81 69.56 Mar '10 Mar '09 Mar '08 Mar '07
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Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital Profit & Loss Account Ratios Material Cost Composition Imported Composition of Raw Materials Consumed Selling Distribution Cost Composition Expenses as Composition of Total Sales Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio AdjustedCash Flow Times Earnings Per Share Book Value 90.76 38.54 27.74 65.24 4.89 Mar '11 1.13 41.21 95.70 43.72 -631.24 27.48 16.68 Mar '10 1.46 30.08 32.29 24.49 29.84 58.52 7.68 Mar '09 4.34 30.01 38.09 31.19 63.45 69.84 2.96 Mar '08 5.53 27.08 32.10 25.79 59.61 69.13 3.80 Mar '07 5.10 23.66 --4.62 49.50 --4.50 56.95 --5.07 56.36 --4.42 55.31 --4.23 56.05 70.33 8.58 70.33 0.37 0.31 0.37 --231.45 25.75 8.09 60.24 0.31 0.29 0.31 --58.54 -8.60 ---0.49 --42.22 -10.02 32.47 -0.58 0.63 ---1.28 32.80 10.06 5,589.10 0.80 0.55 0.63 -0.09 15.75 1.64 0.35 2.21 1.98 1.88 1.07 2.06 2.24 3.19 0.86 3.85 3.72 5.79 0.76 6.43 4.54 3.59 0.85 4.09 3.54 2.42 2.31 0.35 0.35 0.89 1.20 0.89 0.89 1.24 1.14 0.86 0.86 0.69 0.88 0.76 0.68 1.04 1.01 0.85 0.84
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20.2 LEELA HOTELS Incorporated in 1981 to set up and operate 5-star hotels, Hotel Leela Venture entered into a Collaboration with Penta Hotels, UK, which was subsequentl transferred to Kempinski hotels, European chain of 5-star deluxe hotels, owned by Lufthansa, the German airline. The Company entered into collaboration agreement with Penta Hotels Ltd. (Penta) for a period of 10 years for sales, marketing & technical know-how. Penta also agreed to provide full marketing support to the hotel including selling of the hotel by the 3 airline partners of Penta viz. Lufthansa, Swissair & British Airways. Hotel Leela Venture Ltd. has appointed Mr. V.L. Ganesh as the Chief Financial Officer of the Company with effect from November 01, 2006. 20.2.1 VISSIONS & MISSIONS OF LEELA GROUP OF HOTEL THE LEELA VISION Innovation Excellence Perfection The three pillars on which The Leela Group has built its reputation are Innovation, Excellence, and Perfection. They also represent the three faces of modern India. World class technology, great tradition enriched over the centuries and the obsessive desire to be hospitable to global travellers. THE LEELA MISSION To sustain and surpass excellence in service, ambience and performance hall marks that distinguishes The Leela Group. . The strategic locations, individuality, architectural aesthetics, lush greens and the intrinsic Indian culture holds true for every Leela property. Reflecting thereby 'The Essence of India'. Our focused operating philosophy is personalized service and comprehensive logistic support. We ensure that our esteemed clients, devote their time to the sole purpose of their stay - to conduct business and relax in the most conducive environment.
20.2.2 FINANCIALS OF LEELA HOTEL

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Balance Sheet of Hotel Leela Ventures
Mar '11 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 77.57 77.57 0.00 0.00 812.05 1,213.26 2,102.88 3,307.40 495.74 3,803.14 5,906.02 Mar '11 12 mths Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deferred Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 4,622.39 519.58 4,102.81 1,598.33 46.14 54.38 49.30 48.29 151.97 434.17 7.77 593.91 0.00 335.36 99.81 435.17 158.74 0.00 5,906.02 352.06 22.94 4,145.53 476.86 3,668.67 1,221.19 46.19 43.43 37.90 6.61 87.94 321.24 6.87 416.05 0.00 290.66 128.64 419.30 -3.25 0.00 4,932.80 231.76 21.91 3,833.45 398.46 3,434.99 934.54 46.24 41.96 31.51 20.01 93.48 301.42 10.38 405.28 0.00 280.74 150.77 431.51 -26.23 0.00 4,389.54 259.79 18.59 2,604.31 336.38 2,267.93 405.77 0.28 38.67 38.63 8.34 85.64 222.08 287.25 594.97 0.00 190.73 112.38 303.11 291.86 0.00 2,965.84 234.92 18.99 1,795.98 278.77 1,517.21 193.60 59.92 31.50 37.10 5.10 73.70 241.55 5.60 320.85 0.00 223.81 13.79 237.60 83.25 0.00 1,853.98 78.11 18.50 75.57 75.57 0.00 0.00 752.38 1,226.20 2,054.15 2,353.48 525.18 2,878.66 4,932.81 Mar '10 12 mths 75.56 75.56 0.00 0.00 626.77 1,237.69 1,940.02 1,818.63 630.89 2,449.52 4,389.54 Mar '09 12 mths 75.56 75.56 0.00 0.00 642.08 212.53 930.17 1,291.12 744.54 2,035.66 2,965.83 Mar '08 12 mths 74.06 74.06 0.00 0.00 610.85 216.28 901.19 591.72 361.07 952.79 1,853.98 Mar '07 12 mths Mar '10 12 mths Mar '09 12 mths
(fig in Cr.)
Mar '08 12 mths Mar '07 12 mths
Profit & Loss of Hotel Leela Ventures

73
(Fig in Cr.)
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Mar '11 12 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 22.37 44.46 121.43 51.34 103.65 13.91 0.00 357.16 Mar '11 12 mths Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 3,878.25 1.00 7.50 22.94 3,778.25 1.09 10.00 21.91 3,778.25 3.84 20.00 18.59 3,778.25 3.97 25.00 18.99 3,703.03 3.41 22.50 18.50 169.07 194.37 68.30 126.07 68.43 0.00 57.64 -1.04 56.60 18.75 38.88 334.80 0.00 5.82 0.94 21.43 43.95 100.53 43.17 74.73 11.89 0.00 295.70 Mar '10 12 mths 134.42 166.95 34.00 132.95 68.33 0.00 64.62 -3.99 60.63 19.63 41.02 274.27 0.00 7.56 1.26 20.23 44.69 94.77 39.87 77.84 13.24 0.00 290.64 Mar '09 12 mths 161.59 280.71 32.34 248.37 54.92 0.00 193.45 -2.82 190.63 45.65 144.98 270.40 0.00 15.11 2.57 21.50 41.40 88.49 45.14 68.17 12.48 0.00 277.18 Mar '08 12 mths 237.40 282.22 42.98 239.24 45.34 0.00 193.90 -1.56 192.34 73.18 150.12 255.67 0.00 18.89 3.21 17.87 26.97 57.02 33.09 49.11 6.64 0.00 190.70 Mar '07 12 mths 190.16 261.71 38.25 223.46 33.75 0.00 189.71 -0.19 189.52 63.27 126.43 172.83 0.00 16.66 2.50 526.23 0.00 526.23 25.30 0.00 551.53 430.12 0.00 430.12 32.53 0.00 462.65 452.23 0.00 452.23 119.12 0.00 571.35 514.58 0.00 514.58 44.82 0.00 559.40 380.86 0.00 380.86 71.55 0.00 452.41 Mar '10 12 mths Mar '09 12 mths Mar '08 12 mths Mar '07 12 mths
Cash Flow of Hotel Leela Ventures

74
(fig in Cr.)
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Mar '11 12 mths Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 57.62 68.80 -845.07 818.84 Mar '10 12 mths 64.64 88.93 -601.97 495.09 Mar '09 12 mths 193.45 267.93 -596.98 63.85 Mar '08 12 mths 223.30 117.70 -910.44 1077.56 Mar '07 12 mths 189.70 216.78 -124.49 -244.28
42.57 13.48 56.05
-17.95 31.43 13.48
-265.19 295.58 30.39
284.81 10.77 295.58
-151.99 162.69 10.70
Key Financials of Hotel Leela Ventures

Mar'11 Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin (%) Profit Before Interest And Tax Margin (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Return On Capital Employed (%) Return On Net Worth (%) Adjusted Return on Net Worth (%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds (%) Liquidity And Solvency Ratios Current Ratio Quick Ratio 75
Mar '10 2.00 0.20 3.56 11.38 16.46 -31.25 14.29 15.36 24.44 24.44 8.87 8.87 2.65 4.95 5.39 21.91 54.37 2.74 0.72 0.86
Mar '09 2.00 0.40 4.28 11.97 13.29 -35.73 18.60 23.58 35.71 35.71 25.28 25.28 7.23 20.64 21.34 18.59 51.35 7.34 0.80 0.82
Mar '08 2.00 0.50 6.28 13.62 14.49 -46.13 32.82 37.32 32.76 32.76 25.65 25.65 9.53 20.91 20.39 18.99 24.62 9.66 1.70 1.82
Mar '07 2.00 0.45 5.14 10.29 14.13 -49.92 38.88 41.06 27.34 27.34 31.43 31.43 10.85 18.45 11.12 18.50 24.34 11.07 1.10 1.02
2.00 0.15 4.36 13.57 17.11 -32.12 18.20 19.12 19.64 19.64 7.03 7.03 2.71 4.37 4.51 22.94 54.22 2.91 0.75 1.21
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Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital Profit & Loss Account Ratios Material Cost Composition Imported Composition of Raw Materials Consumed Selling Distribution Cost Composition Expenses as Composition of Total Sales Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio AdjustedCash Flow Times Earnings Per Share Book Value 4.28 3.90 2.21 4.28 2.86 2.57 47.63 12.07 47.63 0.11 0.11 0.11 --108.59 4.25 23.40 7.69 33.04 17.39 6.30 83.18 93.78 35.01 Mar '11 1.00 22.94 3.48 3.32 4.02 3.48 4.90 4.22 62.76 12.39 62.76 0.10 0.12 0.10 ---2.72 4.98 17.75 3.91 39.81 21.48 8.05 80.29 92.21 25.47 Mar '10 1.09 21.91 3.49 3.42 8.53 3.49 8.74 7.18 59.78 12.90 59.78 0.12 0.14 0.12 ---20.88 4.47 -3.36 61.18 12.19 8.84 88.21 91.37 11.96 Mar '09 3.84 18.59 2.84 2.79 7.38 2.84 7.16 5.55 76.78 13.59 76.78 0.20 0.19 0.20 --204.18 4.17 -2.30 63.01 14.72 11.30 84.91 88.48 10.62 Mar '08 3.97 18.99 1.39 1.34 5.89 1.39 5.53 5.19 74.47 12.36 74.47 0.21 0.23 0.21 --78.70 4.69 -2.43 67.58 15.15 11.96 74.86 82.58 8.66 Mar '07 3.41 18.50
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20.3 TARRIF RATES OF DIFFERENT HOTELS IN GURGAON
Room Type No. Of Rooms Deluxe Luxury Premier Room Deluxe Suite Premier Suite Presidential Suite Oberoi Hotel 202 30000.00 34000.00 38000.00 70000.00 150000.00 300000.00 Hyatt 508 15350.00 15350.00 18750.00 18750.00 26250.00 27250.00 Trident Hotel 136 19000.00 23000.00 26000.00 30000.00 48000.00 -Bristol Hotel 84 9999.00 --12999.00 25999.00 -The Leela 322 22500.00 24500.00 55000.00 80000.00 200000.00 Proposed Hotel 370 19500.00 ------
20.4 PROXIMITY COMPARISION WITH PROPOSED HOTEL

Locations International Airport New Delhi Railway Station From Nearest Metro Station Oberoi Hotel 12 kms 22 Kms 10Kms Hyatt 17 Kms 16 Kms 8 Kms Trident Hotel 16 kms 32 Kms 17 Kms Bristol Hotel 23 kms 33 Kms 8 kms The Leela 13 kms 26 Kms 17 kms Proposed Hotel 25 kms 28 Kms 3 kms
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20.5 COMPARISON OF SERVICES RENDERED IN HOTELS IN GURGAON
Oberoi Hotel NA NA NA NA NA NA Hyatt NA NA NA NA NA Trident Hotel NA NA NA NA NA NA NA NA Bristol Hotel NA NA NA NA NA NA NA NA NA NA NA NA The Leela NA NA NA NA Proposed Hotel NA NA NA Gym Spa Fitness center Baby Sitting Services Meeting & Board Rooms Lounge with Nightly Live Music Baby Play Area Internet Access Tennis Court Shopping Complex Pool Bar Banqueting Facilities Swimmimg Pools Visit to Taj Facility Welcome ammenities City Sight Seeing Tours Laundry Services Business Centres & services Parking Services Wheel Chair Facility Doctors on Call` Currency Exchange Facility Wedding Floor Space & Events Indian Restaurants Coffe shops Computer/ Laptop on hire Airline Reservation Services Beuty salon Services Secretarial services
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CHAPTER 21 21.1 BRIEF OF JV AGREEMENT (fig in lakhs)
Actual Value of Land Amt already paid Amount yet to be paid Total Realisable Value to US develpoer Cost of One Room No of rooms Area of One Room Stage 1: Construction will start when 70% of total rooms are sell out Less: Value paid to Land Owner is 60%of vale in JV agreement Net accumulated cash at First Stage Sell of next 30% of Rooms Less: Value paid to Land owner is 40% of value of Land in JV agreement Net accumulated cash at Second Stage Total Accumulated Cash to Developer Cost of Contruction of One Room Cost of Furniture & Interiors Total Cost of Construction Cash Accumulation Extra Benefits: Gold Card may be issued at 50% discount Gift of mercidies Car worth Rs.50Lacs 6000.00 400.00 5600.00 Fig in Lakhs 146.50 370.00 402.00 37943.50 18000.00 19943.50 16261.50 12000.00 4261.50 24205.00 40.20 64.32 38672.40 -14467.40
Sq. ft 259 i.e 60% of 300Cr 111 i.e 40% of 300 Cr
10000/sq ft 16000/Sq ft
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21.2 INCOME GENERATION SHEET:
(Rs. In Lacs)
Year 1 HOTEL CAPACITY In terms Of Rooms Rooms Ready to Use Occupancy Occupied No Of Rooms in a day Per Day per Room (Rs.) Per day Revenue Generation (Rs.) Per Month Revenue Generation (Rs.) Per Year Revenue Generation from Rooms (Rs.) 2015-16 370 370 40% 148 0.195 28.860 865.800 10389.60 Year 2 2016-17 370 370 40% 148 0.234 34.632 1038.960 12467.52 Year 3 2017-18 370 370 40% 148 0.281 41.558 1246.752 14961.02 Year 4 2018-19 370 370 40% 148 0.337 49.870 1496.102 17953.23 Year 5 2019-20 370 370 40% 148 0.404 59.844 1795.323 21543.87 Year 6 2020-21 370 370 40% 148 0.485 71.813 2154.387 25852.65 Year7 2021-22 370 370 40% 148 0.582 86.175 2585.265 31023.18 Year 8 2022-23 370 370 40% 148 0.699 103.411 3102.318 37227.82 Year 9 2023-24 370 370 40% 148 0.838 124.093 3722.782 44673.38 Year 10 2024-25 370 370 40% 148 1.006 148.911 4467.338 53608.05
21.3 EXPENSE SHEET :

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Grand Five Star Deluxe Hotel Project Report of The
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(Amoun in Lacs)
Year 1 2015-16 Net Services Provided Franchisee Fees Managemnt & Staff Salaries Daily Consumables Reserves for Maintainence Repais & Maintainance Insurance Exp Elecricity Exp License & Taxes Profit Before Tax Less: Tax @ 30% Profit After Tax Net Profit to Land Owner Net Profit to Developer 10389.6 1142.856 1038.96 519.48 415.584 1558.44 311.688 415.584 311.688 4675.32 1402.596 3272.724 1669.089 1603.635 Year 2 2016-17 12467.52 1371.427 1246.752 623.376 498.7008 1870.128 374.0256 498.7008 374.0256 5610.384 1683.115 3927.269 2002.907 1924.362 Year 3 2017-18 14961.02 1645.713 1496.102 748.0512 598.441 2244.154 448.8307 598.441 448.8307 6732.461 2019.738 4712.723 2403.489 2309.234 Year 4 2018-19 17953.23 1974.855 1795.323 897.6614 718.1292 2692.984 538.5969 718.1292 538.5969 8078.953 2423.686 5655.267 2884.186 2771.081 Year 5 2019-20 21543.87 2369.826 2154.387 1077.194 861.755 3231.581 646.3162 861.755 646.3162 9694.744 2908.423 6786.32 3461.023 3325.297 Year 6 2020-21 25852.65 2843.791 2585.265 1292.632 1034.106 3877.897 775.5795 1034.106 775.5795 11633.69 3490.108 8143.585 4153.228 3990.356 Year7 2021-22 31023.18 3412.55 3102.318 1551.159 1240.927 4653.477 930.6954 1240.927 930.6954 13960.43 4188.129 9772.302 4983.874 4788.428 Year 8 2022-23 37227.82 4095.06 3722.782 1861.391 1489.113 5584.172 1116.834 1489.113 1116.834 16752.52 5025.755 11726.76 5980.649 5746.113 Year 9 2023-24 44673.38 4914.072 4467.338 2233.669 1786.935 6701.007 1340.201 1786.935 1340.201 20103.02 6030.906 14072.11 7176.778 6895.336 Year 10 2024-25 53608.05 5896.886 5360.805 2680.403 2144.322 8041.208 1608.242 2144.322 1608.242 24123.62 7237.087 16886.54 8612.134 8274.403
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Grand Five Star Deluxe Hotel
Project Report of The
Gh
21.4 CASH FLOW
Year 1 FINANCIAL YEAR ENDED RECEIPT NET INCOME from summary SALES PROCEEDS PROMOTER CONTRIBUTION UNSECURED LOAN GROSS RECEIPT EXPENDITURE LAND CONSTRUCTION COST STAFF SALARIES FRANCHISE FEES CONSUMABLES ( soaps, shampoo, etc) REPAIRS & MAINTANANCE INSURANCE EXP ELECTRICITY EXPENSES LICENSE & TAXES REPAYMENT OF LOAN - PRINCIPAL REPAYMENT OF LOAN - INTEREST TOTAL EXPENDITURE NET CASH GENERATION ACCUMULATED CASH GENERATION 18000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 18000.00 19943.50 0.00 19336.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 19336.20 -19336.20 607.30 12000.00 19336.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 31336.20 -74.70 532.60 0.00 0.00 1038.96 1142.86 519.48 1974.02 311.69 415.58 311.69 0.00 0.00 5714.28 4675.32 5207.92 0.00 0.00 1246.75 1371.43 623.38 2368.83 374.03 498.70 374.03 0.00 0.00 6857.14 5610.38 10818.30 0.00 0.00 1496.10 1645.71 748.05 2842.59 448.83 598.44 448.83 0.00 0.00 8228.56 6732.46 17550.76 0.00 0.00 1795.32 1974.86 897.66 3411.11 538.60 718.13 538.60 0.00 0.00 9874.28 8078.95 25629.72 0.00 0.00 2154.39 2369.83 1077.19 4093.34 646.32 861.75 646.32 0.00 0.00 11849.13 9694.74 35324.46 0.00 0.00 2585.26 2843.79 1292.63 4912.00 775.58 1034.11 775.58 0.00 0.00 14218.96 11633.69 46958.15 0.00 0.00 3102.32 3412.55 1551.16 5894.40 930.70 1240.93 930.70 0.00 0.00 17062.75 13960.43 60918.58 0.00 0.00 3722.78 4095.06 1861.39 7073.28 1116.83 1489.11 1116.83 0.00 0.00 20475.30 16752.52 77671.10 0.00 0.00 4467.34 4914.07 2233.67 8487.94 1340.20 1786.94 1340.20 0.00 0.00 24570.36 20103.02 97774.12 0.00 37943.50 0.00 0.00 37943.50 0.00 0.00 0.00 0.00 0.00 0.00 16261.50 15000.00 0.00 31261.50 10389.60 0.00 0.00 0.00 10389.60 12467.52 0.00 0.00 0.00 12467.52 14961.02 0.00 0.00 0.00 14961.02 17953.23 0.00 0.00 0.00 17953.23 21543.87 0.00 0.00 0.00 21543.87 25852.65 0.00 0.00 0.00 25852.65 31023.18 0.00 0.00 0.00 31023.18 37227.82 0.00 0.00 0.00 37227.82 44673.38 0.00 0.00 0.00 44673.38 2012-13 2013-14 2014-15 Year 2 2015-16 Year 3 2016-17 Year 4 2017-18 Year 5 2018-19 Year 6 2019-20
(Amoun in Lacs))
Year7 2020-21 Year 8 2021-22 Year 9 2022-23 Year 10 2023-24
82
Gh
21.5 PROFITABILITY PROJECTION
Projection 2012-13 Production during the year (Quantity) % Utilization of installed capacity Sales 1. Gross Income from Summary 2. Sales Proceeds 3. Total Sales Cost of Production 1. Construction Cost 2. Land Cost 2.Franchisse Fees 3.Power & Fuel 4.Direct labour & wages 5.Consumable Stores 6.Repairs & Maintenance 7.Other expenses 8.Depreciation/ Development Rebate Reserve Total Cost of Production 9.Add opening stock-in-process & finished goods 10.Deduct closing stock-inprocess & finished goods Cost of Sales Gross Profit (B-D) 0.00 0.00 0.00 18000.00 0.00 0.00 18000.00 19943.50 0.00 0.00 0.00 19336.20 0.00 0.00 19336.20 -19336.20 0.00 0.00 0.00 31336.20 0.00 0.00 31336.20 -15074.70 1974.02 623.38 0.00 5714.28 0.00 0.00 5714.28 4675.32 2368.83 748.05 0.00 6857.14 0.00 0.00 6857.14 5610.38 2842.59 897.66 0.00 8228.56 0.00 0.00 8228.56 6732.46 3411.11 1077.19 0.00 9874.28 0.00 0.00 9874.28 8078.95 4093.34 1292.63 0.00 11849.13 0.00 0.00 11849.13 9694.74 4912.00 1551.16 0.00 14218.96 0.00 0.00 14218.96 11633.69 5894.40 1861.39 0.00 17062.75 0.00 0.00 17062.75 13960.43 7073.28 2233.67 0.00 20475.30 0.00 0.00 20475.30 16752.52 8487.94 2680.40 0.00 24570.36 0.00 0.00 24570.36 20103.02 0.00 18000.00 0.00 0.00 0.00 0.00 19336.20 0.00 0.00 0.00 0.00 0.00 19336.20 12000.00 0.00 0.00 0.00 0.00 0.00 0.00 1142.86 415.58 1038.96 519.48 0.00 0.00 1371.43 498.70 1246.75 623.38 0.00 0.00 1645.71 598.44 1496.10 748.05 0.00 0.00 1974.86 718.13 1795.32 897.66 0.00 0.00 2369.83 861.75 2154.39 1077.19 0.00 0.00 2843.79 1034.11 2585.26 1292.63 0.00 0.00 3412.55 1240.93 3102.32 1551.16 0.00 0.00 4095.06 1489.11 3722.78 1861.39 0.00 0.00 4914.07 1786.94 4467.34 2233.67 0.00 37943.50 37943.50 0.00 0.00 0.00 0.00 16261.50 16261.50 10389.60 0.00 10389.60 12467.52 0.00 12467.52 14961.02 0.00 14961.02 17953.23 0.00 17953.23 21543.87 0.00 21543.87 25852.65 0.00 25852.65 31023.18 0.00 31023.18 37227.82 0.00 37227.82 44673.38 0.00 44673.38 Projection 2013-14 Projection 2014-15 Projection 2015-16 Projection 2016-17 Projection 2017-18 Projection 2018-19 Projection 2019-20 Projection 2020-21
(Amoun in Lacs)
Projection 2021-22 Projection 2022-23 Projection 2023-24
83
Gh
Interest on 1. Term Loans 2. Working Capital 3. Other Loans if any Selling, General & Administrative Expenses Profit before Taxation {E-(F+G)} Provision for Taxes Net Profit (H-I) Depreciation added back Net Cash Accruals Repayment obligations 1. Towards Existing Term Loan 2. Towards Proposed Term Loan. Total Repayment Debt Service ratio (L:M) 0.00 0.00 0.00 0.00 19943.50 0.00 19943.50 0.00 19943.50 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 -19336.20 0.00 -19336.20 0.00 -19336.20 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 -15074.70 0.00 -15074.70 0.00 -15074.70 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 4675.32 0.00 4675.32 0.00 4675.32 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 5610.38 0.00 5610.38 0.00 5610.38 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 6732.46 0.00 6732.46 0.00 6732.46 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 8078.95 0.00 8078.95 0.00 8078.95 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 9694.74 0.00 9694.74 0.00 9694.74 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 11633.69 0.00 11633.69 0.00 11633.69 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 13960.43 0.00 13960.43 0.00 13960.43 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 16752.52 0.00 16752.52 0.00 16752.52 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00 0.00 0.00 20103.02 0.00 20103.02 0.00 20103.02 0.00 0.00 0.00 0.00 #DIV/0!
84
Gh
21.6 Projected Balance Sheet:
Projection 2012-13 A Liabilities 1. Equity Share Capital 2.Reserve & Surplus 3. Term loans 4.Bank Borrowings for Working Capital 5. Unsecured Loan 6. Sundry Creditors 7. Other liabilities (Installment Due within Next One Year) Total Liabilities B Assets 1. Gross Block 2.Depreciation 3. Net Block 4.Investment 5. Inventory 6. Sundry Debtors 7. Other Current Assets 8. Working Capital Margin 9. Cash & Bank Balances Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 19943.50 19943.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 607.30 607.30 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 532.60 532.60 0.00 0.00 0.00 0.00 0.00 0.00 532.60 0.00 4675.32 5207.92 0.00 0.00 0.00 0.00 0.00 0.00 5207.92 0.00 5610.38 10818.30 0.00 0.00 0.00 0.00 0.00 0.00 10818.30 0.00 6732.46 17550.76 0.00 0.00 0.00 0.00 0.00 0.00 17550.76 0.00 8078.95 25629.72 0.00 0.00 0.00 0.00 0.00 0.00 25629.72 0.00 9694.74 35324.46 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 60918.58 0.00 16752.52 77671.10 0.00 0.00 0.00 0.00 0.00 0.00 77671.10 0.00 20103.02 97774.12 0.00 19943.50 0.00 0.00 0.00 0.00 0.00 15000.00 15000.00 -9792.08 0.00 0.00 0.00 0.00 15000.00 -4181.70 0.00 0.00 0.00 0.00 15000.00 2550.76 0.00 0.00 0.00 0.00 15000.00 10629.72 0.00 0.00 0.00 0.00 15000.00 20324.46 0.00 0.00 0.00 0.00 15000.00 15000.00 31958.15 45918.58 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 15000.00 62671.10 0.00 0.00 0.00 0.00 15000.00 82774.12 0.00 0.00 0.00 0.00 Projection Projection 2013-14 2014-15 Projection 2015-16 Projection 2016-17 Projection Projection Projection 2017-18 2018-19 2019-20 2020-21
(Amoun in Lacs))
Projection Projection Projection 2021-22 2022-23 Projection 2023-24
607.30 -14467.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 19943.50
0.00 607.30
0.00 532.60
0.00 5207.92
0.00 10818.30
0.00 17550.76
0.00 25629.72
0.00 35324.46
0.00
0.00
0.00 77671.10
0.00 97774.12
46958.15 60918.58
35324.46 46958.15 0.00 0.00
11633.69 13960.43 46958.15 60918.58
85
Gh
21.7 CMA OPERATING STATEMENT :
(Amoun in Lacs)
Year 1
Sr. No.
Year 2 Projection 2015-16 10389.60 10389.60 0.00 0.00 10389.60 -36%
Year 3 Projection 2016-17 12467.52 12467.52 0.00 0.00 12467.52 20%
Year 4 Projection 2017-18 14961.02 14961.02 0.00 0.00 14961.02 20%
Year 5 Projection 2018-19 17953.23 17953.23 0.00 0.00 17953.23 20%
Year 6 Projection 2019-20 21543.87 21543.87 0.00 0.00 21543.87 20%
Year7 Projection 2020-21 25852.65 25852.65 0.00 0.00 25852.65 20%
Year 8 Projection 2021-22 31023.18 31023.18 0.00 0.00 31023.18 20%
Year 9 Projection 2022-23 37227.82 37227.82 0.00 0.00 37227.82 20%
Year 10 Projection 2023-24 44673.38 44673.38 0.00 0.00 44673.38 20%
Projection Particulars Gross Sales I) Gross Income ii) Sales Proceeds Less : Excise Duty Net Sales %age rise(+) or fall (-) in net sales Cost of Sales I)Raw Material (incl. stores and other items used in process of mfg.) a) Imported b) Indigeneous ii) Construction & Land Cost a) Construction Cost b) Land Cost iii) Power & Fuel iv) Direct labour (factory wages & labour) v) Other expenses vi) Depreciation (on assets for mfg.) vii) SUB-TOTAL viii) Add : Opening stock-inprocess 0.00 18000.00 0.00 18000.00 0.00 0.00 0.00 0.00 18000.00 0.00 2012-13 37943.50 0.00 37943.50 0.00 37943.50
Projection 2013-14 0.00 0.00 0.00 0.00 0.00 -100%
Projection 2014-15 16261.50 0.00 16261.50 0.00 16261.50 #DIV/0!
2 3 4 5
0.00
0.00 0.00 19336.20 19336.20 0.00 0.00 0.00 0.00 0.00 19336.20 0.00
0.00 0.00 31336.20 19336.20 12000.00 0.00 0.00 0.00 0.00 31336.20 0.00
0.00 0.00 0.00 0.00 0.00 415.58 2181.82 2493.50 0.00 5090.90 0.00
0.00 0.00 0.00 0.00 0.00 498.70 2618.18 2992.20 0.00 6109.08 0.00
0.00 0.00 0.00 0.00 0.00 598.44 3141.82 3590.65 0.00 7330.90 0.00
0.00 0.00 0.00 0.00 0.00 718.13 3770.18 4308.77 0.00 8797.08 0.00
0.00 0.00 0.00 0.00 0.00 861.75 4524.21 5170.53 0.00 10556.50 0.00
0.00 0.00 0.00 0.00 0.00 1034.11 5429.06 6204.64 0.00 12667.80 0.00
0.00 0.00 0.00 0.00 0.00 1240.93 6514.87 7445.56 0.00 15201.36 0.00 Project Report of The
0.00 0.00 0.00 0.00 0.00 1489.11 7817.84 8934.68 0.00 18241.63 0.00
0.00 0.00 0.00 0.00 0.00 1786.94 9381.41 10721.61 0.00 21889.96 0.00
86
Gh
Sub-Total ix) Deduct : Closing stock-inprocess x) Cost of Production xi) Add : Opening stock of finished goods Add: Purchase of finished goods Sub-Total xii) Deduct : Closing stock of finished goods xiii) SUB TOTAL (Total cost of sales) Selling, general and admns. Expenses (incl. depr. of assets which are not used for mfg.) SUB TOTAL Operating profit before interest Interest Operating profit after interest I) Add : Other non-operating income a) Duty draw-back etc. b) Others Sub Total (income) ii) Deduct other non-operating expenses a) Transfer to export business reserve b) Others Sub-Total (expenses) iii) Net of other non-operating income/expenses (net of 11(I) & (ii)) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 18000.00 0.00 18000.00 0.00 0.00 18000.00 0.00 18000.00 19336.20 0.00 19336.20 0.00 0.00 19336.20 0.00 19336.20 31336.20 0.00 31336.20 0.00 0.00 31336.20 0.00 31336.20 5090.90 0.00 5090.90 0.00 0.00 5090.90 0.00 5090.90 6109.08 0.00 6109.08 0.00 0.00 6109.08 0.00 6109.08 7330.90 0.00 7330.90 0.00 0.00 7330.90 0.00 7330.90 8797.08 0.00 8797.08 0.00 0.00 8797.08 0.00 8797.08 10556.50 0.00 10556.50 0.00 0.00 10556.50 0.00 10556.50 12667.80 0.00 12667.80 0.00 0.00 12667.80 0.00 12667.80 15201.36 0.00 15201.36 0.00 0.00 15201.36 0.00 15201.36 18241.63 0.00 18241.63 0.00 0.00 18241.63 0.00 18241.63 21889.96 0.00 21889.96 0.00 0.00 21889.96 0.00 21889.96
6 7 8 9 10 11
0.00 18000.00 19943.50 0.00 19943.50
0.00 19336.20 -19336.20 0.00 -19336.20
0.00 31336.20 -15074.70 0.00 -15074.70
623.38 5714.28 4675.32 0.00 4675.32
748.05 6857.14 5610.38 0.00 5610.38
897.66 8228.56 6732.46 0.00 6732.46
1077.19 9874.28 8078.95 0.00 8078.95
1292.63 11849.13 9694.74 0.00 9694.74
1551.16 14218.96 11633.69 0.00 11633.69
1861.39 17062.75 13960.43 0.00 13960.43
2233.67 20475.30 16752.52 0.00 16752.52
2680.40 24570.36 20103.02 0.00 20103.02
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00 Project Report of The
0.00
0.00
87
Gh
12 13 14 15
Profit before tax / loss Provision for taxation Net profit / loss a) equity dividend b) Dividend rate Retained profit Retained profit / Net profit (%)
19943.50 0.00 19943.50
-19336.20 0.00 -19336.20
-15074.70 0.00 -15074.70
4675.32 0.00 4675.32
5610.38 0.00 5610.38
6732.46 0.00 6732.46
8078.95 0.00 8078.95
9694.74 0.00 9694.74
11633.69 0.00 11633.69
13960.43 0.00 13960.43
16752.52 0.00 16752.52
20103.02 0.00 20103.02
16 17
19943.50 100%
-19336.20 100%
-15074.70 100%
4675.32 100%
5610.38 100%
6732.46 100%
8078.95 100%
9694.74 100%
11633.69 100%
13960.43 100%
16752.52 100%
20103.02 100%
88
Gh
21.8 CMA - ANALYSIS OF BALANCE SHEET : ( LIABILITIES SIDE )
Year 1 Sr. No. Particulars Projection 2012-13 CURRENT LIABILITIES Short-term borrowing from banks (incl. bill purchased / discounted & excess borrowing placed on repayment basis I) From applicant bank ii) From other banks iii) (of which BP and BD) TOTAL BANK BORROWINGS Short-term borrowing from others Sundry creditors (Trade) Advance payment from customers Provision for taxation Dividend payable Other statutory liabilities (due within one yr) Deposits / instalments of term loans / DPG / debentures (due within one year) Other current liabilities and provisions due within one year I) Inter-corporate deposits ii)Others 10 OTHER CURRENT LIABILITIES 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 425.58 0.00 311.82 0.00 602.46 0.00 1339.86 0.00 #REF! 0.00 #REF! 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Projection 2013-14 Projection 2014-15 Projection 2015-16 Year 2 Year 3 Projectio n 2016-17 Year 4 Projectio n 2017-18 Year 5 Projectio n 2018-19 Year 6 Projectio n 2019-20 Year7 Projection 2020-21 Year 8 Projection 2021-22
(Amoun in Lacs)
Year 9 Projection 2022-23 Year 10 Projection 2023-24
2 3 4 5 6 7
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
8 9
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
89
Gh
11 12 13 14 15 16 17 18 19 20 21 TOTAL CURRENT LIABILITIES Debentures (not maturing within one year) Redeemable preference share (redeemaable after one year) Term Loans (excl. installments payable within 1 yr.) Deferred Payment Credits (excl. installments due within 1 year) Term Deposits (repayable after 1 year) Other term liabilities - Unsecured Loans TOTAL TERM LIABILITIES TOTAL OUTSIDE LIABILITIES (10+17) NET WORTH Partners' capital Preference Share Capital (maturing after 12 yrs.) A) General reserve B) Development rebate reserve / Investment allowance reserve Other reserve (excluding provisions) Surplus / deficit in P&L a/c NET WORTH TOTAL LIABILITIES (18+24) 0.00 0.00 19943.50 0.00 0.00 0.00 19943.50 19943.50 0.00 0.00 607.30 0.00 0.00 0.00 607.30 607.30 15000.00 0.00 -14467.40 0.00 0.00 0.00 532.60 532.60 15000.00 0.00 -9792.08 0.00 0.00 0.00 5207.92 5207.92 15000.00 0.00 -4181.70 0.00 0.00 0.00 10818.30 10818.30 15000.00 0.00 2550.76 0.00 0.00 0.00 17550.76 17550.76 15000.00 0.00 10629.72 0.00 0.00 0.00 25629.72 25629.72 15000.00 0.00 20324.46 0.00 0.00 0.00 35324.46 35324.46 15000.00 0.00 31958.15 0.00 0.00 0.00 46958.15 46958.15 15000.00 0.00 45918.58 0.00 0.00 0.00 60918.58 60918.58 15000.00 0.00 62671.10 0.00 0.00 0.00 77671.10 77671.10 15000.00 0.00 82774.12 0.00 0.00 0.00 97774.12 97774.12 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
22 23 24 25
90
Gh
21.9 CMA - ANALYSIS OF BALANCE SHEET : ( ASSET SIDE) :
Sr. No. Particulars Projectio n 2012-13 CURRENT ASSETS 26 27 Cash & Bank Balances Investments (other than long term) i) Govt. & other trustee securities ii) Fixed Deposits with banks I) Receivables other than deferred & exposrts (incl. bill purchase / disc.) ii) Export receivables (incl.bills purchsed & discounted 29 30 Installment of deferred receivables Inventory I) Raw materials (incl. stores & other items used in the process of manufacturing a) Imported b) Indigenous ii) Stock-in-process iii) Finished Goods iv) Other consumables stores & spares 31 32 33 Advance to suppliers Advance payment of taxes Other current assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 19943.50 0.00 607.30 0.00 532.60 0.00 4675.32 0.00 5610.38 0.00 6732.46 0.00 8078.95 0.00 9694.74 0.00 11633.69 0.00 13960.43 0.00 16752.52 0.00 20103.02 0.00 Projectio n 2013-14 Year 1 Projectio n 2014-15 Year 2 Projectio n 2015-16 Year 3 Projectio n 2016-17 Year 4 Projectio n 2017-18 Year 5 Projectio n 2018-19 Year 6 Projectio n 2019-20 Year 7 Projection 2020-21 Year 8 Projection 2021-22
(Amoun in Lacs)
Year 9 Projection 2022-23 Year 10 Projection 2023-24
28
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 532.60
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5207.92
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10818.30
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 17550.76
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 25629.72
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 35324.46
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 46958.15
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 60918.58
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 77671.10
91
Gh
34 TOTAL CURRENT ASSETS FIXED ASSETS Gross block (land & building,machinery, work-inprogress Depreciation to date Net Block OTHER NON CURRENT ASSETS Investments / book-debts / advance deposits which are noncurrent assets i) a) Investments in subsidiaries/ affiliate b) Others ii) Advance to suppliers of capital goods iii) Deferred receivables (maturing after 1 year) Other non consuamable stores & spares Other non-current assets (int. suspense) TOTAL NON-CURRENT ASSETS Intangible assets (Goodwill patents, Pre-expenses, bad & doubtful debts) TOTAL ASSETS TANGIBLE NET WORTH NET WORKING CAPITAL CURRENT RATIO TOTAL OUTSIDE LIABILITIES/TNW 19943.50 607.30 532.60 5207.92 10818.30 17550.76 25629.72 35324.46 46958.15 60918.58 77671.10 97774.12 35 36 37 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
38
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
39 40 41
42 43 44 45 46 51
0.00 19943.50 19943.50 19943.50 #DIV/0! 0.00
0.00 607.30 607.30 607.30 #DIV/0! 0.00
0.00 532.60 532.60 532.60 #DIV/0! 0.00
0.00 5207.92 5207.92 5207.92 #DIV/0! 0.00
0.00 10818.30 10818.30 10818.30 #DIV/0! 0.00
0.00 17550.76 17550.76 17550.76 #DIV/0! 0.00
0.00 25629.72 25629.72 25629.72 #DIV/0! 0.00
0.00 35324.46 35324.46 35324.46 #DIV/0! 0.00
0.00 46958.15 46958.15 46958.15 #DIV/0! 0.00
0.00 60918.58 60918.58 60918.58 #DIV/0! 0.00
0.00 77671.10 77671.10 77671.10 #DIV/0! 0.00
0.00 97774.12 97774.12 97774.12 #DIV/0! 0.00
92
Gh
21.10 COMPARATIVE STATEMENT OF CA & CL
Year 1 Sr. No. 1 2 3 WORKING CAPITAL ASSESSMENT Total Current Assets Other CL (other than bank borrowing) WCG Minimum stipulated NWC (25% of WCG / 25% of total CA as the case may be) Actual / projected NWC Item 3 minus Item 4 Item 3 minus Item 5 MPBF (Item 6 or 7 whichever is lower) Excess borrowing representing shortfall in NWC (4-5) Projection 2012-13 19943.50 0.00 19943.50 Projection 2013-14 607.30 0.00 607.30 Projection 2014-15 532.60 0.00 532.60 Year 2 Projection 2015-16 5207.92 0.00 5207.92 Year 3 Projection 2016-17 10818.30 0.00 10818.30 Year 4 Projection 2017-18 17550.76 0.00 17550.76 Year 5 Projection 2018-19 25629.72 0.00 25629.72 Year 6 Projection 2019-20 35324.46 0.00 35324.46 Year7 Projection 2020-21 46958.15 0.00 46958.15 Year 8 Projection 2021-22 60918.58 0.00 60918.58
(Amoun in Lacs)
Year 9 Projection 2022-23 77671.10 0.00 77671.10 Year 10 Projection 2023-24 97774.12 0.00 97774.12
4 5 6 7 8
4985.88 19943.50 14957.63 0.00 0.00
151.83 607.30 455.48 0.00 0.00
133.15 532.60 399.45 0.00 0.00
1301.98 5207.92 3905.94 0.00 0.00
2704.58 10818.30 8113.73 0.00 0.00
4387.69 17550.76 13163.07 0.00 0.00
6407.43 25629.72 19222.29 0.00 0.00
8831.12 35324.46 26493.35 0.00 0.00
11739.54 46958.15 35218.62 0.00 0.00
15229.65 60918.58 45688.94 0.00 0.00
19417.78 77671.10 58253.33 0.00 0.00
24443.53 97774.12 73330.59 0.00 0.00
-14957.63
-455.48
-399.45
-3905.94
-8113.73
-13163.07
-19222.29
-26493.35
-35218.62
-45688.94
-58253.33
-73330.59
93
Gh
21.11 TURNOVER METHOD
(Amoun in Lacs)
Year 1 Sr. No. 1 2 3 4 6 7 WORKING CAPITAL ASSESSMENT Gross Sales 25% of gross sales 5% of gross sales Actual / projected NWC Item 2 minus Item 3 Item 2 minus Item 4 Permissible bank finance(Item 5 or 6,whichever is lower) Projectio n 2012-13 37943.50 9485.88 1897.18 19943.50 7588.70 10457.63 10457.63 Projectio n 2013-14 0.00 0.00 0.00 607.30 0.00 -607.30 Projectio n 2014-15 16261.50 4065.38 813.08 532.60 3252.30 3532.78 Year 2 Projectio n 2015-16 10389.60 2597.40 519.48 5207.92 2077.92 -2610.52 Year 3 Projectio n 2016-17 12467.52 3116.88 623.38 10818.30 2493.50 -7701.42 Year 4 Projectio n 2017-18 14961.02 3740.26 748.05 17550.76 2992.20 -13810.51 Year 5 Projectio n 2018-19 17953.23 4488.31 897.66 25629.72 3590.65 21141.41 21141.41 Year 6 Projectio n 2019-20 21543.87 5385.97 1077.19 35324.46 4308.77 -29938.49 Year7 Projectio n 2020-21 25852.65 6463.16 1292.63 46958.15 5170.53 40494.99 40494.99 Year 8 Projectio n 2021-22 31023.18 7755.79 1551.16 60918.58 6204.64 -53162.79 Year 9 Projection 2022-23 37227.82 9306.95 1861.39 77671.10 7445.56 -68364.15 Year 10 Projection 2023-24 44673.38 11168.34 2233.67 97774.12 8934.68 -86605.78
-607.30
3252.30
-2610.52
-7701.42
-13810.51
-29938.49
-53162.79
-68364.15
-86605.78
94
Gh
21.12 CMA - FINANCIAL POSITION
Year 1 Projection 2012-13 a) Paid up Capital : - Equity b) - Preference Share Tangible Net worth (Excl. rev. reserve & net of intangible assets) Investment in cos.(of which associated companies/ subsidiaries) Adjusted TNW Quasi Capital Capital Employed*(total funds employed) Net Block Net sales : Domestic Exports Total i) j) k) l) m) n) o) p) Other Income Depreciation Gross Profit/Loss Net profit/loss Cash Accruals (l+k) Net profit / Capital Employed (%) Current Assets Current Liabilities 0.00 0.00 0.00 Projection 2013-14 0.00 0.00 0.00 Projection 2014-15 15000.00 15000.00 0.00 Year 2 Projection 2015-16 15000.00 15000.00 0.00 Year 3 Projection 2016-17 15000.00 15000.00 0.00 Year 4 Projection 2017-18 15000.00 15000.00 0.00 Year 5 Projection 2018-19 15000.00 15000.00 0.00 Year 6 Projection 2019-20 15000.00 15000.00 0.00 Year7 Projection 2020-21 15000.00 15000.00 0.00
(Amoun in Lacs)
Year 8 Projection 2021-22 15000.00 15000.00 0.00 Year 9 Projection 2022-23 15000.00 15000.00 0.00 Year 10 Projection 2023-24 15000.00 15000.00 0.00
19943.50
607.30
532.60
5207.92
10818.30
17550.76
25629.72
35324.46
46958.15
60918.58
77671.10
97774.12
c)
0.00 19943.50
0.00 607.30
0.00 532.60
0.00 5207.92
0.00 10818.30
0.00 17550.76
0.00 25629.72
0.00 35324.46
0.00 46958.15
0.00 60918.58
0.00 77671.10
0.00 97774.12
d) e) f) g) h)
19943.50 0.00 0.00 37943.50 37943.50 0.00 0.00 19943.50 19943.50 19943.50 100.00% 19943.50 0.00
607.30 0.00 0.00 0.00 0.00 0.00 0.00 -19336.20 -19336.20 -19336.20 3183.96% 607.30 0.00
532.60 0.00 0.00 16261.50 16261.50 0.00 0.00 -15074.70 -15074.70 -15074.70 2830.40% 532.60 0.00
5207.92 0.00 10389.60 0.00 10389.60 0.00 0.00 4675.32 4675.32 4675.32 89.77% 5207.92 0.00
10818.30 0.00 12467.52 0.00 12467.52 0.00 0.00 5610.38 5610.38 5610.38 51.86% 10818.30 0.00
17550.76 0.00 14961.02 0.00 14961.02 0.00 0.00 6732.46 6732.46 6732.46 38.36% 17550.76 0.00
25629.72 0.00 17953.23 0.00 17953.23 0.00 0.00 8078.95 8078.95 8078.95 31.52% 25629.72 0.00
35324.46 0.00 21543.87 0.00 21543.87 0.00 0.00 9694.74 9694.74 9694.74 27.44% 35324.46 0.00
46958.15 0.00 25852.65 0.00 25852.65 0.00 0.00 11633.69 11633.69 11633.69 24.77% 46958.15 0.00
60918.58 0.00 31023.18 0.00 31023.18 0.00 0.00 13960.43 13960.43 13960.43 22.92% 60918.58 0.00
77671.10 0.00 37227.82 0.00 37227.82 0.00 0.00 16752.52 16752.52 16752.52 21.57% 77671.10 0.00
97774.12 0.00 44673.38 0.00 44673.38 0.00 0.00 20103.02 20103.02 20103.02 20.56% 97774.12 0.00
95
Gh
RATIOS : q) r) Current Ratio Debt/Equity : Total Term Liab./TNW s) t) Total Outside Liab./ TNW Profitability %: PAT/Net Sales DSCR a) Company as a whole b) For specific TL u) v) Interest Coverage Inventory + Receivables/ Sales Debt quasi equity ratio #DIV/0! 0.00% 0.00 #DIV/0! #DIV/0! 0.00 #DIV/0! 0.00% 0.00 #DIV/0! 0.00% 0.00 #DIV/0! 0.00% 0.00 #DIV/0! 0.00% 0.00 #DIV/0! 0.00% 0.00 #DIV/0! 0.00% 0.00 #DIV/0! 0.00% 0.00 #DIV/0! 0.00% 0.00 #DIV/0! 0.00% 0.00 #DIV/0! 0.00% 0.00 0.00 0.00 52.56% #DIV/0! 0.00 0.00 #DIV/0! #DIV/0! 0.00 0.00 -92.70% #DIV/0! 0.00 0.00 45.00% #DIV/0! 0.00 0.00 45.00% #DIV/0! 0.00 0.00 45.00% #DIV/0! 0.00 0.00 45.00% #DIV/0! 0.00 0.00 45.00% #DIV/0! 0.00 0.00 45.00% #DIV/0! 0.00 0.00 45.00% #DIV/0! 0.00 0.00 45.00% #DIV/0! 0.00 0.00 45.00% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
96

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Project Report of The Grand Five Star Deluxe Hotel

Project Report of The Grand Five Star Deluxe Hotel

Project Report of The Grand Five Star Deluxe Hotel

1.1 THE GRAND FIVE STAR DELUXE HOTEL:

Prices during the month of December 2011

1.2 BUSINESS ACTIVITIES:

Features of Hotel: Club Lounge Swimming Pools

1.3 OVERVIEW OF HOTEL INDUSTRY:

No. of Hotels 165 770 505 495 260 70 7,078 8,707

No. of Rooms 43,965 134 20 30,100 22,950 10,900 4,200 1,32,885

Project Report of The Grand Five Star Deluxe Hotel

Project Report of The Grand Five Star Deluxe Hotel

Project Report of The Grand Five Star Deluxe Hotel

4.1 General Guest Services:

Project Report of The Grand Five Star Deluxe Hotel

5.1 Three Swimming Pools:

5.2 Fitness Room:

5.3 Business Centers:

Project Report of The Grand Five Star Deluxe Hotel

5.5 Conference Hall

5.6 Rooms & Suites

Project Report of The Grand Five Star Deluxe Hotel

5.8 Lounge Bars

5.9 Kids Arena

Project Report of The Grand Five Star Deluxe Hotel

5.10.2 One Bedroom & One Bath Room of 558 Sq ft.

Project Report of The Grand Five Star Deluxe Hotel

5.10.4 Presidential Suites 3 Bedrooms 1340 Sq. ft

Project Report of The Grand Five Star Deluxe Hotel

6.1 NATIONAL SCENARIO

6.2 COMPARABLE COMPANY ANALYSIS

USD 2,599 1515 110 253 196 102 95 61

USD 552 190 97 51 50 115 27 11

16.2% 17.9% 29.5% 38.3% 26.4% 44.7% 24.2% 0.6%

4.71x 7.98x NM 4.93x 3.9x 0.88x 3.6x 5.40x

3.72x 5.28x 8.17x NA NA NA 2.95x NA

29.0x NM 38.7x 12.9x 14.9x 2.0x 14.7x NM

16.5x 19.4x 21.8x NA NA NA 10.2x NA

12.1x 15.1x 15.3x NA NA NA 7.0x NA

NM NM NM 27.7x 33.2x 2.8x 32.5x NM

NM 38.3x 31.6x NA NA NA 17.4x NA

23.3x 26.0x 20.3x NA NA NA 10.6x NA

Project Report of The Grand Five Star Deluxe Hotel

Project Report of The Grand Five Star Deluxe Hotel

Project Report of The Grand Five Star Deluxe Hotel

5/4 Star Hotels 1-3 Star Hotels Smaller Hotels Total

57000 52500 638000 747500

83000 63000 1405000 1551000

110400 83000 3261500 3454900

7.4 Some of the career opportunities in hotel industry are as follows.

8.1 Core Functioning Department

8.2 Support Department (Cost Centre)

Key Control Department

Project Report of The Grand Five Star Deluxe Hotel

Project Report of The Grand Five Star Deluxe Hotel

Project Report of The Grand Five Star Deluxe Hotel

Project Report of The Grand Five Star Deluxe Hotel

71.5 71.4 68.8 60.3 65.0 68.0

3.6 -0.1 -3.6 -12.4 7.8 4.6

Rs 5,444 Rs 7,071 Rs 7,989 Rs 7,837 Rs 6,426 Rs 6,800

26.6 29.9 13.0 -1.9 -18.0 5.8

Rs 3,892 Rs 5,049 Rs 5,496 Rs 4,726 Rs 4,177 Rs 4,624