tourism industry

Tourism

As per the Travel and Tourism 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 tourist 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 also bagged 37th rank for its air transport network. The India travel and tourism industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019.

Contribution to the economy

Combining unparalleled growth prospects and unlimited business potential, the industry is certainly on the foyer towards being a key player in the nation's changing face. Furthermore, banking on the government’s initiative of upgrading and expanding the country’s infrastructure like airports, national highways etc, the tourism and hospitality industry is bound to get a bounce in its growth.

The hotel and tourism industry’s contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2.1 billion from April 2000 to March 2010, according to the Department of Industrial Policy and Promotion (DIPP).

According to the Travel & Tourism Competitiveness Report 2009 brought out by the World Economic Forum, the contribution of travel and tourism to gross domestic product (GDP) is expected to be at US$ 187.3 billion by 2019. The report also states that real GDP growth for travel and tourism economy is expected to achieve an average of 7.7 per cent per annum over the next 10 years. Export earnings from international visitors and tourism goods are expected to generate US$ 51.4 billion (nominal terms) by 2019. Furthermore, the sector which accounted for 6.4 per cent of total employment in 2009 is estimated to rise to 7.2 per cent of total employment by 2019.

India’s hotel pipeline is the second largest in the Asia-Pacific region according to Jan Smits, Regional Managing Director, InterContinental Hotels Group (IHG) Asia Australasia. He added that the Indian hospitality industry is projected to grow at a rate of 8.8 per cent during 2007-16, placing India as the second-fastest growing tourism market in the world. Initiatives like massive investment in hotel infrastructure and open-sky policies made by the government are all aimed at propelling growth in the hospitality sector.

Sanjay Gupta, CMD, Neesa Leisure Ltd stated that the hotel and hospitality industries are among the biggest employment generators in the country.

According to industry data, India is expected to double the number of branded hotel rooms from 100,000 now in just three years. Leading the pack are global hotel chains, which will add over 300 hotel properties (an estimated 55,000 rooms) in the country by 2013, as per data compiled by companies.

Serious about online presence and social marketing
The travel industry is no laggard in online advertising. According a to a white paper from marketing services company travel puts more marketing budget toward digital than any other industry. Nearly seventy percent of US hoteliers responding to the study reported online was the marketing channel with the greatest return on investment, and the majority are using... marketing foundation that sets the tone and message for your property, our skilled designers and developmers leverage years of experience innovative ideas and comprehensive understanding of the hospitality industry to create effective websites for one industry, one client at a time. Additionally, we ensure that your site is search engine friendly to bolster the amount of traffic your site receives. your experince with doesnt end once your website is live. we view as on ongoing process by not only maintainingit, but enhancing it to ensure that your are receiving the best results possible. In addition to proactively fostering your site's progression, we provide you with a wealth of useful resources. It is our hope that these tools further your internet industry knowlege and instill practical skills to ensure the continued success fo your online marketing campaign.

Travel Industry

In an era where climate change and resource scarcity are becoming ever more prevalent, the travel industry must brace itself for some significant changes in travel patterns. For the eco-minded traveler, these changes are welcome, as they are leading us towards a more sustainable future. Small shifts are already occurring, with, for example, many travelers opting to vacation closer to home. Thus far, most changes that have taken place have been personal and voluntary. However, we are beginning to see indicators of a larger-scale trend. Case in point: Many U.S. airline companies are now charging for checked baggage, a move that could have seemingly been avoided if the cost was incorporated into a ticket price increase. However, an unforeseen benefit of excluding this tax from the published fare is that it educates the traveler not to pack as much, which in turn cuts fuel costs via improved airline fuel economy. After all, a lighter plane is one that burns less fuel, reducing the amount of greenhouse gas emissions released into the atmosphere. The baggage tax may be a blessing in disguise, although the extra cost for the consumer can sting temporarily. The idea of taxing individuals for their specific impact on natural resources and the environment is not a new concept. In many European countries, gasoline taxes account for over half the price at the pump. The net effect of decades of high gas prices has been an increased emphasis on public transportation, as well as the development of more efficient automobiles and stronger metro-area planning and development. A similar phenomenon is now occurring in the U.S. According to the American Public Transportation Association, Americans took 2.6 billion trips on all modes of public transportation in the first three months of 2008, a 3.3 percent increase, or almost 85 million more trips than in the same period last year. Dwindling resources and elevated energy prices are causing the travel industry to rethink the way we do business. No longer is sustainability a concern reserved for environmentalists, rather it is becoming a focus of any company interested in thriving during these challenging times. Fortunately, we have many great examples of industry leaders paving the way, including the stories below, which should serve as an inspiration to all of us! Happy reading and all the best,

4hoteliers

I deal with a lot of leaders that confuse delegation with empowerment. I am often told, “I don’t micro manage, I empower my employees.” However, when we start digging into specific situations, we often uncover the difference between delegation and empowerment. It is really not that difficult to ascertain the difference. Delegation is simply getting someone else to perform a specific task for you. “Tom, can you move these for pallets for me to make some room for a new shipment coming in tomorrow?”Empowerment sets a little higher expectation that encourages the employee to use their own creativity and innovation.“Tom, our warehouse is getting pretty full and we have a new shipment coming in. Can you figure a way to solve this problem for me?”In other words, just telling an employee what to do is not empowerment because it doesn’t allow him to use his own creativity. In fact, many times delegation can be construed as micro managing simply because the employee feels offended that he is given directions that are too specific. So…. If you even have the slightest thought that your employees may consider you a micro manager, try these tips and see if your empowerment skills improve.
Analyze your leadership model. Do you hold things close to the vest? Are you reluctant to share information? Are you afraid of giving up control? If you answered yes to any of these questions you have a challenge on your hands. Your answers may be very telling with regard to your skills as a leader. Remember, a leader is only as good as the people they surround themselves with.
Create a skills assessment inventory for every key employee. Supplement that exercise by creating a training and development matrix to improve the overall competency of the organization. Include yourself in the assessment. Communicate the purpose in a positive fashion to the employees.
Consider doing a 360 review that includes you as a leader or create an anonymous survey for employees to rate the entire management team, including you, and the company culture itself.
Utilize your skills assessment to make sure you have the right people in the right seats and identify future potential leadership.
Stop answering questions and start asking them. When an employee asks you what they should do, ask them what they think they should do.
Search for projects, issues or challenges that you would normally tackle and create a project team or empower an individual to solve the problem. Do this even if you think you have the answer.
Let your employees fail. The hardest thing to do is watch an employee make a mistake. But, unless the mistake is life threatening or is going to cost the company thousands of dollars, it is a better learning process if the employee learns from his own mistake.
Provide more than just skill training and product training. Create an employee development program for those employees that show potential for future stardom. This development program must be based on empowering these employees to make tough decisions. Intern programs are also effective as a platform for development.
Results happen in various ways. Remember, you may have a specific way of doing things but it may not be the only way. As long as the employee is getting the results expected, give them praise. Your way may not be the best or only way. Micro managing may make you feel in control but in reality you are only hurting yourself and the company. It only limits an employee’s ability to be innovative and creative. This can cost the company thousands of dollars because it is the creativity and innovation of your employees that maximize the profitability of your company.Leadership is About TrustThe easiest way to suppress discretionary energy, the energy given willingly – no matter what it takes, is a style of micro management that scrutinizes every decision an employee makes. It can kill their spirit. If any of your employees even joke about you being a micro manager…. Back off. Where there is smoke there is usually fire.Micro Management is a SymptomMicro Management is often just a symptom of ineffective planning, too much compassion and the inability to judge performance and develop bench strength. Developing a strategic plan for your company is a very effective way to address any or all of these challenges. I often tell my clients that the most valuable part of a strategic plan is the development process itself. Running a company with a shoot from the hip mentality often encourages micro management and does not allow employees to develop their skills and maximize their potential. One of the many warning signs is a high turnover rate. The reason is simple; good employees just won’t tolerate micro management and they will leave to find employment that will challenge them and help them grow.It’s About LeadershipSimply put, effective leaders don’t micro manage. In fact, they cringe at the thought of it. Why? Because they recognize that one of their primary responsibilities is the development of future leaders for the organization. You just can’t develop future leaders by micro managing.Micro managing can be an indication of the following:
Lack of trust in your employees. This is not good because it often leads to a lack of trust in you as a leader
Fear of lost control. This is often demonstrated by a parochial attitude about turf or position in the organization. This may also indicate a lack of self confidence and low self esteem.
Panic response to emergency and crisis. The micro manager often feels alone on an island and when a crisis hits they may panic and respond reactively without much thought, planning or discussion.Employee development, succession planning and bench strength are just three of the key principles for success. These become obvious once you start developing a strategic plan. Sales growth, profit growth, operational and service excellence are factors we all recognize easily because they can be easily measured. However, I submit to you that you can have the best sales plan, an excellent service and operational plan and if you ignore employee development through effective leadership your success will be limited. So, focus on the leadership skills of every manager in your company. Do an employee survey. Don’t be afraid of the word “micromanagement”. Discuss it with your managers, your employees and do an honest management self assessment. And….. if you don’t have a strategic plan, start right now. Call or e-mail me if you want help in putting your plan together. I can help make your strategic plan really work and the value you get from it will be easily recognized by bottom line growth.

Lodging Industry

Lower RevPAR Forecast Reflects Impact of Recession - PKF Hospitality Research has announced that it has lowered its 2008 forecast for a key hotel industry metric, revenue per available room or RevPAR, from up 4.5 percent to up a below-average 3.0 percent. The new RevPAR forecast appears in the firm’s recently released first quarter 2008 Hotel HorizonsSM report. The change was based on revised projections by Moody’s Economy.com, PKF-HR’s primary economic forecasting agency, which now is calling for a U.S. recession this year due to deteriorating economic fundamentals.Declining economic fundamentals, fueled by the turmoil in the capital markets and the escalating price of oil, portend a much weaker domestic economy for the months ahead, according to Economy.com. Its 2008 estimate of Real Personal Income Growth, a key measure of lodging industry performance, now is only 1.6 percent, down from an estimate of 2.6 percent as recently as the fourth quarter of last year. While this is certainly not good news for lodging industry participants, PKF-HR still believes that the typical U.S. hotel will enjoy increases in both revenues and profits, but at a more modest pace.“Our econometric forecasting model focuses on Real Personal Income and Total Employment as the primary indicators for lodging demand,” said Mark Woodworth, president of PKF Hospitality Research. “These economic measures are forecast to exhibit minimal growth during the first part of 2008, but start to climb back to their equilibrium levels during the latter months of the year. Accordingly, we are forecasting the demand for lodging accommodations to inch up 0.9 percent in 2008. This pace of demand growth is approximately half of the long-term annual average, but still represents a net gain in accommodated room nights for the year. When looking at 2008, we believe that U.S. hotel owners and operators will struggle to grow their revenues and profits, but market conditions will not be as damaging as we saw back in 1991 or 2001.”Woodworth noted that the 2008 first quarter is expected to be moderately positive for hotels, but added that lodging performance will deteriorate as the year progresses. He suggested that the downswing should be relatively short-lived, however, with a turnaround expected in the 2009 first quarter.Supply and DemandUnfortunately for U.S. hotels, the forecast of sluggish demand growth occurs during a period of increases, albeit modest ones, in lodging supply. In 2008, PKF-HR estimates that a net count of 115,000 new hotel rooms will become available. With the demand for hotel rooms lagging the supply of new inventory, the U.S. national average occupancy rate is expected to decline a full point, from 63.2 percent in 2007 to 62.2 percent in 2008.“The pipeline for hotel development has swelled in recent years to extremely high levels, but the high cost of building materials and disciplined lending has limited the number of projects that actually made it to the construction stage. The increase in supply we are observing in 2008 and into 2009 is related to hotels begun prior to the onset of more restrictive lending practices,” Woodworth said.Further tightening within the lending community, combined with the continued strength in commodity prices, will once again be a formidable hurdle for developers in most markets in 2008 and 2009. Therefore, looking down the road, PKF-HR is projecting a lull in new supply openings from 2010 through 2012. “Forecasts of economic recovery, plus a slowdown in the pace of new supply, will lead to increasing occupancy levels beyond 2009,” Woodworth explained.InflationDespite the increased competition and declining occupancy levels in 2008, PKF-HR is forecasting average daily room rates to rise above the expected rate of inflation. “After analyzing historic periods of economic recession and rising inflation, PKF-HR found that hotel managers have been able to pass along inflationary increases to their guests,” Woodworth observed. “Accordingly, we are forecasting room rates to rise 4.7 percent in 2008. This exceeds both the 2.7 percent projected pace of inflation for 2008, and the 3.5 percent long-term annual average change in room rates

Business Customer Service

Why do we call this area of business customer service? Is it a service to have customers wait in long queues at the counter or to dangle endlessly on the line while the phone never gets answered, or to be stranded forever in the voicemail Bermuda Triangle?Most companies really do believe they are customer focused, but the reality is not in what the companies think, but in what the customers think... and no one ever really asks them. There are too many stupid policies that favor only the business while ignoring the customer's needs.For example, go to any discount department store. Go to the dressing room to try on some clothing. Oops! Now you notice that a sign says only three garments allowed at one time. What a stupid policy. Why is this here? Because of shoplifting, of course. But only 3 percent of customers steal, so the store has just inconvenienced and alienated 97 percent of its patrons.This sort of "no-care attitude" has led me to conduct an intense three-year research study of poor customer service, which will be explored in my upcoming book, Lip Service: 50 Hysterical Stories of Horrible Customer Service.On the other hand, we always hear great things about great companies: Nordstrom, Lexus, L.L. Bean, Ritz-Carlton, Disney, Motorola, Cooker, Southwest, British Airways, among others. The answer to their success is simple, but we would rather talk about them than do anything ourselves.The No. 1 secret: non-stop training.All companies must find good people with good attitudes (the managers must have better attitudes), and reinforce those attitudes every day. The policies must always favor the customer.The No. 2 secret: have fun.Here is an example of a good policy at work. The 1990s buzzword "empowerment" means nothing by itself. It needs substance. Ritz-Carlton Hotels has a simple mission statement which reads: "We are ladies and gentlemen serving ladies and gentlemen." Each person always carries a little plastic card with them that has 20 sayings on it. Saying No. 9 reads: "Any employee who receives a guest complaint 'owns' the complaint." The sentiment alone is not good enough. The first-line employees have the authority to spend up to $2,000 to satisfy a customer, and the managers can spend up to $5,000. Not bad.Yes, simple training and empowerment together. Can your company do this every day?About Hal Becker www.halbecker.com Hal Becker is a nationally known expert on Sales, Customer Service, and Negotiating. He conducts seminars or consults to more than 140 organizations a year. His client list includes IBM, Disney, New York Life, Continental Airlines, Verizon, Terminix, AT&T, Pearle Vision, Cintas, and hundreds of other companies and associations.At the age of 22, he became the #1 salesperson among a national sales force of 11,000, for the Xerox Corporation. Six years later in 1983, he survived terminal cancer only months after launching Direct Opinions, one of America's first customer service telemarketing firms that facilitates more than two million calls per year with offices throughout the U.S.A. and Canada.In 1990, Hal sold Direct Opinions to devote time for consulting and presenting lectures around the world.Hal is the author of "Can I have 5 Minutes Of Your Time?" which is now in its 18th printing and is used by many corporations as their "Sales Bible." He has also authored two other best sellers "Lip Service," one of the nations foremost books on customer service, and "Get What You Want," a fun, upbeat and fresh approach to negotiating.He has been featured in publications including The Wall Street Journal, Inc Magazine, Nations Business and hundreds of newspapers and Radio/TV stations around the world, and is currently syndicated in over 45 newspapers and magazines.Hal has received the Toastmasters International Communication and Leadership Award. He is one of only eight people in the world to be given this honor.Inc. Magazine has voted Hal as one of the nation's top speakers in the Area of Sales and Customer Service. He is also a CSP, or Certified Speaking Professional, which is the highest earned designation presented by the National Speakers Association.After battling terminal cancer, Hal founded the Cancer Hotline, a non profit organization that provides support and assists cancer patients and their families. He donates proceeds of his books to this cause.

Indian Hospitality Industry in Transition

In this article we have tried to assimilate and share our thoughts on the micro and a macro level, changes which will become dominant issues for the Indian hospitality industry in the next three to five years.The hospitality industry is seeing good times, better than ever before. Hotels across all segments are reporting strong occupancies and average rate. A buoyant domestic economy, the aviation and real estate boom, initiatives to liberalize foreign investment and improve infrastructure and, perhaps, most importantly, efforts to communicate the Brand India message have contributed to strong demand conditions in most cities across the country, with the result that India is, today, one of the world’s fastest growing hotel markets. From a seven-eight brand hotel market a few years ago, India will be a 40-brand hotel market by 2010, redefining both the personality and structure of the hospitality industry as it stands today. Clearly, some very important changes will be required, at a micro and a macro level, and these adjustments will become dominant issues for the industry in the next three to five years. With the influx of international brands and global funds, the Indian hospitality sector will witness fundamental alterations in its organization and management and the industry’s impact will be felt in corporate boardrooms. One of the important areas of reorganization, that this article attempts to look at, is to do with the existing structure within most hotel companies operating in India. About 80% of the existing cumulative inventory in the market today is individually owned. The existing structures within these companies will have to pave way for leaner and more accountable systems. We feel that the current organizational structure in majority of Indian hotel companies is weak and top heavy. Such a structure cannot be sustained for long, in light of the changing face of the industry. The old paradigm of loyalty and experience will have to change, as companies can no longer afford to have people sitting in the corporate office with no work. Organizations will become more accountable to the environment.Matters relating to corporate governance, talent retention and strategic development will emerge as core issues in the coming years. Questions will be raised on the governance and profitability of hotel companies. Who are its promoters, what are their core competencies and what are their long-term plans? How efficient is the strategic and core operational group of the organization? Hotel companies will have to take a serious look at increasing the accountability of their top management and boards. Moreover, this sector has not paid due attention to a fundamental question, “Who are the leaders and where are they?” The leaders will be more accountable and visible to the public eye and will have to demonstrate a vibrant work environment in their respective organizations. The emergence of the new class of first-time entrepreneurs will be another new development. They will play a dominant role in changing the current equation in the country. This would throw open new opportunities and challenges to both existing and international players.The most fundamental change would arise from emergence of strong international competition, which would require domestic hotel chains and existing players to ’shape up’. Marriott, Hilton, Starwood, Accor, Golden Tulip, and Hyatt are among the companies that are planning to expand their presence in India. The regional offices of these companies will witness a more active and robust structure in place in the country. Accompanying the entry of new branded properties will be stiff competition for talent. According to our preliminary estimates, there are about 55,000-60,000 rooms presently under construction and this amount accounts for only 50% of the estimated demand of 100,000-125,000 rooms over a five-year horizon. At an average of 1.5 employees per room, there will be demand for 187,500 new jobs in operations and at the managerial level. Money will no longer be the only motivation; those seeking to make a career in hospitality will closely evaluate the hotel’s/company’s work environment and work culture and opportunities to learn and grow. We foresee some of the international companies having larger operations in India than several domestic players. Indian hospitality will see the rise of the Marketing and Finance functions. Both functions, we believe, will play the role of key drivers and will also be largely responsible for shaping the future of the companies. Senior-level Marketing and Finance executives will assume top leadership positions in the country. The role of General Manager would undergo a sharp shift, from its traditional mode of ‘managing things’ to a more focused approach on improving bottom line. The General Manager will play the role of Marketing Guru and wear new hats everyday. Moreover, the GM would no longer necessarily be someone with a background in hotel operations; he or she could emerge from non-operational areas of Marketing to Finance. The General Manager of tomorrow would be a sharper, more focused and agile animal.The Sales function would erode and merge with Marketing in the true sense! Current sales structures would need to be transformed and those heading this function would have to do serious thinking in order to attract and retain their people. Operational areas will see the emergence of ‘specialists’, from the kitchen to the bar, who would mostly be expatriate chefs, to cater to the better-informed, and more discerning, traveler of today. The Kitchen, the Back Office and other functional areas would become more demanding and difficult to manage. The average span of the worker right from GM to trainee will be time-bound; and this would change continuously, becoming a critical issue for Human Resource managers. Service issues will play a crucial role in the success of operations. The industry would provide a huge opportunity for expatriates to come and work in India. This in turn, would result in Indian managers gaining new training, as well as exposure to cultural changes on the shop floor. HVS Executive Search’ five years of industry experience has enabled us to assimilate crucial issues affecting employees working in this sector. We have tried to focus on two key issues, or areas, that we believe merit priority attention at this time: the Human Resource (HR) function and Compensation. HR: HR would be the single most important issue that would make or mar the organization of tomorrow. Intervention must be from the very top in order to get clear, visible time bound action. Talent scouting and retention would need a lot of emphasis, and HR would need to take direct responsibility for attracting talent from outside the industry. All non-operational areas would require constant attention. Internal attitudinal and behavioral training should be provided to the functional heads; and a dedicated effort must be made to understand, and attempt to meet, the needs and aspirations of a more demanding generation of employees. Compensation: Life is not the same! The booming Indian economy has led to many industries offering significantly better remuneration; the Indian hotel industry, too, will have to rework, or even overhaul, its compensation policies and practices. Unfortunately, many employers do not even have compensation experts to track the market reality. The functions of Operations and Sales need special attention, especially in view of scarce talent. Companies need to look at costs differently and add more purchasing power to the employee.Is it not ludicrous that the Head of a key department in one of India’s most respected hotel companies has a monthly salary less than that of a fresh recruit from a premier MBA school? How will the industry be more vibrant and competitive if the anomalies are so large? Unlike other industries we do not have any new supply as it is controlled and limited. It would indeed be paradoxical to have to pay a US Dollar salary to hire a Housekeeper because one could not retain the available talent! Incentives and bonus to employees could be made more transparent and flexible keeping in mind the interest of the employee.The opening of the retail sector would pose a serious threat to the industry by way of more demand for trained manpower. Moreover, an increasing demand for expatriates in the industry would force the Human Resources specialist to be aware of recent trends and compensation practices. To conclude, I would like to say that we, at HVS, are proud to be associated with and happy to witness the meteoric rise of the Indian hospitality industry. We will witness the steady emergence of this sector, which we expect will surge ahead of several other sectors in the coming years. There are ample opportunities within this industry, and this augurs well for the future.Natwar Nagar, Director with HVS International’s New Delhi office, has more than eight years of experience in the area of human resources. He spearheaded the HVS Executive Search division in India in the year 2001and is presently heading the division. Natwar has a strong background in head-hunting, together with an in-depth understanding into the working of both multinational corporations and domestic companies, operating across various industries in