For FY 2018, the hotel room inventory in India crossed the stellar mark of 2.5 million, mid-segment hotels were a major contributor to this number, indicating growth above the industry average. This change in trend is related to a shift in customer expectations. With a rising influence of millennial travelers, hotels must adapt their services according to the needs of the new customers. Millennial travelers are fond of open collaborative spaces; they need good speed internet; they are looking for an experience than a place to stay. Mid-segment hotels are not only perfect for their budget but also satisfy all such needs. Further appreciation of the American dollar, a rise in international tourists, and implementation of GST have fueled the growth of mid-segment hotels. The present thesis aims to analyze the current situation and recommends a set of smart guidelines that can be followed by any hotel chain or independent hotel to capture the market share of the mid-segment budget hotel industry. Following the establishment of key definitions in the literature review, key metrics such as ownership structure, marketing and operations capabilities are established. Further financial metrics such as occupancy rate, RevPAR, GOPPAR and ROCE were studied to get a better understanding of the market trends. To understand consumer’s perspectives on their preference and choosing criteria, a survey was conducted. Results highlighted that location, value for money and availability of the internet supersedes any other factor. Using these sets of metrics as a standard, three case studies of hotels in the mid-segment market with different backgrounds and histories were analyzed and discussed which led to the formation of the proposed smart guidelines. The combination of our analysis of case study and the survey result concluded that if a hotel chain aims to grow at a fast pace in mid-market segment, the following guideline recommended by the authors can be beneficial: Smart ownership (management/lease contracts), Smart services (outsourcing), Smart marketing (Creation of unique identity and own website), Smart building (target on brown field properties and incorporation of technology ex check in check out via app), smart location (easily accessible, near landmarks, safety) and smart finance (Smart Ownership structure with competitive ARR and robust marketing will lead to high RevPAR and high GOPPAR).
Nell'anno 2018 il numero delle camere d'albergo in India ha superato la cifra astronomica di 2,5 milioni; gli hotel del segmento medio hanno contribuito in modo significativo a questo numero, con una crescita superiore alla media del settore. Questo cambiamento di tendenza è legato a uno spostamento delle aspettative dei clienti. A seguito della crescente influenza dei millenianls, gli hotel devono adattare i loro servizi in base alle esigenze dei nuovi clienti. I millenianls amano gli spazi collaborativi aperti; hanno bisogno di una buona velocità di internet; cercano un'esperienza più che un posto dove stare. Gli hotel del segmento medio non solo sono perfetti per il loro budget, ma soddisfano anche tutte queste esigenze. L’ulteriore apprezzamento del dollaro USA, l’aumento dei turisti internazionali e l'implementazione di GST hanno alimentato la crescita degli hotel del segmento medio. La presente tesi si propone di analizzare la situazione attuale e raccomanda una serie di linee guida che possono essere seguite da qualsiasi catena alberghiera o hotel indipendente interessata ad acquisire una quota di mercato del settore alberghiero di fascia media. In seguito alla definizione della terminologia-chiave in letteratura, vengono evidenziate alcune metriche quali struttura della proprietà, capacità di marketing e operations. Ulteriori metriche finanziarie, come tasso di occupazione, RevPAR, GOPPAR e ROCE, sono state studiate per comprendere meglio le tendenze del mercato. Per comprendere la prospettiva del consumatore in merito alle proprie preferenze e alla scelta dei criteri, è stato condotto un sondaggio. I risultati hanno evidenziato che location, rapporto qualità-prezzo e disponibilità di Internet soppiantano qualsiasi altro fattore. Utilizzando questo set di metriche come standard, sono stati analizzati e discussi tre casi studio di hotel nel segmento di mercato medio con background e storia diversi, che hanno portato alla formazione delle linee guida proposte. La combinazione dell’analisi dei casi studio e del risultato del sondaggio ha portato alla conclusione che, se una catena alberghiera punta a crescere rapidamente nel segmento di mercato medio, possono essere utili le seguenti linee guida, raccomandate dagli autori: smart ownership (contratti di gestione/leasing) , smart services (esternalizzazione), smart marketing (creazione di un’identità unica e di un proprio sito Web), smart building (obiettivo di investimenti brownfield e uso della tecnologia per il check-in e il check-out tramite app), smart location (facilmente accessibile, vicino a punti di riferimento, sicura) e smart finance (struttura della proprietà con ARR competitivo e marketing robusto che porta a RevPAR e GOPPAR elevati).
Analysis of mid segment budget hotel industry : case study of India
MELUKOTE CHIKKARANGANATHA, SURAJ;KASHYAP, PALLAVI
2019/2020
Abstract
For FY 2018, the hotel room inventory in India crossed the stellar mark of 2.5 million, mid-segment hotels were a major contributor to this number, indicating growth above the industry average. This change in trend is related to a shift in customer expectations. With a rising influence of millennial travelers, hotels must adapt their services according to the needs of the new customers. Millennial travelers are fond of open collaborative spaces; they need good speed internet; they are looking for an experience than a place to stay. Mid-segment hotels are not only perfect for their budget but also satisfy all such needs. Further appreciation of the American dollar, a rise in international tourists, and implementation of GST have fueled the growth of mid-segment hotels. The present thesis aims to analyze the current situation and recommends a set of smart guidelines that can be followed by any hotel chain or independent hotel to capture the market share of the mid-segment budget hotel industry. Following the establishment of key definitions in the literature review, key metrics such as ownership structure, marketing and operations capabilities are established. Further financial metrics such as occupancy rate, RevPAR, GOPPAR and ROCE were studied to get a better understanding of the market trends. To understand consumer’s perspectives on their preference and choosing criteria, a survey was conducted. Results highlighted that location, value for money and availability of the internet supersedes any other factor. Using these sets of metrics as a standard, three case studies of hotels in the mid-segment market with different backgrounds and histories were analyzed and discussed which led to the formation of the proposed smart guidelines. The combination of our analysis of case study and the survey result concluded that if a hotel chain aims to grow at a fast pace in mid-market segment, the following guideline recommended by the authors can be beneficial: Smart ownership (management/lease contracts), Smart services (outsourcing), Smart marketing (Creation of unique identity and own website), Smart building (target on brown field properties and incorporation of technology ex check in check out via app), smart location (easily accessible, near landmarks, safety) and smart finance (Smart Ownership structure with competitive ARR and robust marketing will lead to high RevPAR and high GOPPAR).| File | Dimensione | Formato | |
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https://hdl.handle.net/10589/165277