Detailed Project Report (DPR) on 3 Star Hotel (200 Rooms)

3 STAR HOTEL (200 ROOMS)

[EIRI/EDPR/4675] J.C.: 2892XL

The hospitality industry in India has been scoring a moderate growth number in the past few years and has great potential to score an even greater number in the future. The nation which is rich in culture and diversity has been attracting a large number of tourists from all over the globe. India has also been recognized as a destination for spiritual tourism for international and domestic tourists. India is showing continuous growth in position moving from 65th in 2013 to 34th position in 2019 in the World Economic Forum's travel and tourism competitiveness index. 

On the other side, the consistently growing middle class, rising levels of disposable income, and increasing interest among millennials to travel in their home country are a few major reasons that are making the domestic travel industry a profitable one. To attract the millennials ventures like Airbnb, Oyo rooms have changed hospitality scenarios on a global level and are offering price-sensitive stays in most of the prime locations with flexible check-in and check-out options to attract the increasing number of travelers.

The hospitality and tourism industry has been witnessing a healthy growth number and accounted for 7.5% of the GDP. India is a part of the top 100 clubs on Ease of Doing Business (EoDB) and ranks 1st in the greenfield FDI ranking globally and to strengthen the cruise tourism sector, the Government of India (GoI) has selected Chennai, Goa, Kochi, Mangalore, and Mumbai ports to develop them as cruise tourism hubs. These terminals will have facilities like hospitality, retail, shopping, and restaurants.

COST ESTIMATION

Plant Capacity            200 Rooms  

Land & Building (4 Acres)    Rs. 57.45 Cr    

Plant & Machinery                    Rs. 31.96 Cr 

Working Capital for 2 Months    Rs. 6.54 Cr 

Total Capital Investment          Rs. 121.27 Cr 

Rate of Return                          16%

Break Even Point                      62%

CONTENTS

INTRODUCTION

THE GLOBAL HOTEL MARKET

HOSPITALITY INDUSTRY IN INDIA MARKET

GOVERNMENT INITIATIVES TO ATTRACT MORE TOURISM AND RISE IN TOURISM IS DRIVING THE MARKET

FACILITIES AND SERVICE REQUIRED FOR 3 START HOTEL CLASSIFICATION

GENERAL FACILITIES FOR 3 STAR HOTEL:

GUEST ROOM FACILITIES FOR 3 STAR HOTEL

REQUIRED BATHROOM FACILITIES FOR 3 STAR HOTEL

PUBLIC AREA FACILITIES FOR 3 STAR HOTEL

ROOM AND OTHER FACILITIES FOR THE DIFFERENTLY ABLED GUEST

FOOD AND BEVERAGE FACILITIES FOR 3 STAR CLASSIFICATION

REQUIRED KITCHEN FACILITIES FOR 3 STAR CLASSIFICATION

REQUIRED STAFF QUALIFICATIONS, SKILLS AND STAFF WELFARE FOR 3 STAR CLASSIFICATIONS

GUEST FACILITIES FOR 3 STAR CLASSIFICATION

SAFETY AND SECURITY FACILITIES FOR 3 STAR CLASSIFICATION

CATEGORISATION OF HOTELS IN INDIA

THE BASIC DIVISION IN INDIA ACCORDING TO THE LOCATION IS AS FOLLOWS:

HERITAGE HOTELS

LUXURY HOTELS

BUDGET HOTELS

RESORTS

IMPORTANT HOTEL GROUPS IN INDIA

LATEST DEVELOPMENTS

MARKET POSITION

OVERVIEW OF THE INDIAN ECONOMY

INDIA GDP FORECAST

KEY DEMOGRAPHIC TRENDS

KEY TRENDS IN TRAVEL AND TOURISM IN INDIA

THE TABLE BELOW HIGHLIGHTS THE INDIAN TRAVELLERS SPENDING AS PER CATEGORY OF LODGING FOR CY 2015, CY 2018 AND PROJECTED SPENDING IN CY 2021:

THE TABLE BELOW PROVIDES THE GROWTH IN COUNTRIES ELIGIBLE FOR E-VISA SINCE THE YEAR 2014

KEY DRIVERS OF DEMAND AND SUPPLY INFLUENCING THE HOTEL INDUSTRY

HOTEL INDUSTRY SUPPLY SCENARIO

CITY WISE HOTEL SECTOR SUPPLY OVERVIEW

ORGANIZED HOTEL SUPPLY BY MAJOR CITY (2018)

HOTEL INVENTORY SUPPLY BY KEY CITIES (‘000S)

ASSET PERFORMANCE THROUGH THE CYCLE

INCREASING REVPAR ON NEW HOTELS

INDIAN HOTEL SEGMENTATION

AS ON DECEMBER 31, 2018 THE EXISTING SUPPLY SEGMENTATION OF ORGANIZED HOTELS IS AS

THE FOLLOWING TABLE SETS FORTH THE COMPOSITION OF ORGANIZED SUPPLY (EXCLUDING AGGREGATORS) OF HOTEL ROOMS (000S) IN INDIA:

PRESENCE OF BRANDED HOTELS IN INDIA:

UPCOMING BRANDED HOTELS IN INDIA:

MARKET PERFORMANCE OF INDIAN HOTELS

PERFORMANCE OF SELECT GEOGRAPHICAL MARKETS IN INDIA

MARKET WISE OCCUPANCY AND ARR

INDIA HOTEL MARKET PERFORMANCE BY SEGMENTS

UPSCALE

UPPER UPSCALE

SUMMARY OF PERFORMANCE OF DIFFERENT SEGMENTS IN THE HOTEL SECTOR

REVPAR CAGR OF VARIOUS SEGMENTS IN HOTEL SECTOR FOR THE PERIOD 2013-18

COMPARISON OF OPERATING COSTS OF HOTELS ACROSS SEGMENTS

THE AVERAGE DEVELOPMENT COST PER KEY ACROSS DIFFERENT HOTEL SEGMENTS IS REPRODUCED BELOW:

BARRIERS TO ENTRY

DEVELOPMENT OF HOTELS IN INDIA FACES SEVERAL CHALLENGES, PRINCIPAL AMONG WHICH ARE:

COMPETITIVE LANDSCAPE

TABLE 1: LEADING LISTED HOTEL OWNERSHIP COMPANIES WITH MORE THAN 1,000 OWNED KEYS, LISTED IN ORDER OF OWNED KEYS (AS ON JUNE 30, 2021)

TABLE 2: AVERAGE KEYS ADDED ANNUALLY* (AS ON JUNE 30, 2021)

TABLE 3: OWNED HOTELS BY LOCATION (AS ON JUNE 30, 2021)

KEY REGULATIONS AND POLICIES IN INDIA

FOOD RELATED LEGISLATIONS

THE FOOD SAFETY AND STANDARDS ACT, 2006 (“FSS ACT”)

ENVIRONMENTAL LEGISLATIONS

OTHER APPLICABLE LAW

STATE LAWS

MUNICIPALITY LAWS

SHOPS AND ESTABLISHMENTS LEGISLATIONS IN VARIOUS STATES

AIRPORTS AUTHORITY OF INDIA ACT, 1994, AS AMENDED (“AAI ACT”)

EXCISE LAWS

INTELLECTUAL PROPERTY LAWS

FOREIGN INVESTMENT REGULATIONS

LABOUR LAW LEGISLATIONS

MACROECONOMIC OVERVIEW OF INDIA

INDIA GDP FORECAST

KEY CHARACTERISTICS OF INDIA’S HOSPITALITY INDUSTRY

INDUSTRY SIZE – CHAIN AFFILIATED HOTELS

TOP 10 CHAINS – NUMBER OF HOTELS

ROOMS SUPPLY - BY MARKETS

CHAIN COVERAGE OF STATE CAPITALS

CHAIN COVERAGE – STATE CAPITALS

THE LEISURE SECTOR

LEISURE SUPPLY – TOP 5 CHAINS

INTERNATIONAL PRESENCE

MAJOR DOMESTIC CHAINS - INTERNATIONAL PRESENCE AS AT SEP 21

OPERATING STRUCTURES

TOP 10 CHAINS – OPERATING STRUCTURES

FUTURE SUPPLY

SUPPLY (INVENTORY IN ‘000S)

PROJECTED SUPPLY GROWTH IS REFLECTED IN THE CHART BELOW: EXPECTED SUPPLY – ALL INDIA, ALL SEGMENTS

DEMAND

FUTURE DEMAND

DEMAND RECOVERY/GROWTH ESTIMATES – RELATIVE TO FY19 DEMAND

SUPPLY AND DEMAND CAGR

OVERVIEW OF SOME KEY IMPACT FACTORS

KEY DEMAND DRIVERS

DEMAND FOR HOTELS ARISES FOR VARIOUS PURPOSES, PRINCIPALLY:

MARKET PERFORMANCE ANALYSIS

ALL INDIA AND KEY MARKETS

QUARTERLY REVENUES – SELECT LISTED HOTEL COMPANIES

CHART 12 – MONTHLY OCCUPANCY AND ADR – JAN-19 TO JUL-21

HOTEL BRANDS IN THE SURVEY

DEVELOPMENT COST PER KEY WITHOUT LAND

DEVELOPMENT COST PER KEY BY MAJOR COST CATEGORIES

DEVELOPMENT COST PER SQUARE FOOT AND BUILT-UP AREA ANALYSIS

CONSTRUCTION TENURE

INTEREST DURING CONSTRUCTION

AVERAGE

PRINCIPLES OF PROJECT LAYOUT

PRINCIPLES OF PLANT LAYOUT

PLANT LOCATION FACTORS

PRIMARY FACTORS

1. RAW-MATERIAL SUPPLY:

2. MARKETS:

3. POWER AND FUEL SUPPLY:

4. WATER SUPPLY:

5. CLIMATE:

SPECIFIC FACTORS

6. TRANSPORTATION:

A. AVAILABILITY OF VARIOUS SERVICES AND PROJECTED RATES

7. WASTE DISPOSAL:

8. LABOR:

9. REGULATORY LAWS:

10. TAXES:

11. SITE CHARACTERISTICS:

12. COMMUNITY FACTORS:

13. VULNERABILITY TO WARTIME ATTACK:

14. FLOOD AND FIRE CONTROL:

EXPLANATION OF TERMS USED IN THE PROJECT REPORT

1. DEPRECIATION:

2. FIXED ASSETS:

3. WORKING CAPITAL:

4. BREAK-EVEN POINT:

5. OTHER FIXED EXPENSES:

6. MARGIN MONEY:

7. TERM LOANS:

8. TOTAL LOAD:

9. LAND AREA/MAN POWER RATIO:

ORGANIZATION CHART

PROJECT LAYOUT

CONSULTANT

LIST OF PLANT AND EQUIPMENT SUPPLIERS/MANUFACTURERS

AIR CONDITIONING & REFRIGERATION UNITS

LIST OF DOCUMENTS REQUIRED TO GET FOR LICENSES

OTHER LICENSES REQUIRED FOR THE SETUP:

SWOL ANALYSIS

STRENGTHS

OPPORTUNITIES

WEAKNESS

LIMITATIONS

APPROACH FOR PLANNING

POWER REQUIREMENT:

WATER REQUIREMENT AND CONSUMPTIONS PROPOSED PROJECT:-

CHARACTRISTICS OF TREATED WATER ARE AS FOLLOW:

SEWERAGE SYSTEMS:

TOTAL SEWAGE PRODUCED –

SEWAGE QUANTITY, TREATMENT, REUSE & DISPOSAL:

SOLID WASTE GENERATION:

ENERGY CONSERVATION MEASURES:

ENERGY CONSERVATION MEASURES & MANAGEMENT PLAN:

FOLLOWING MEASURES HAVE BEEN PROPOSED TO REDUCE ENERGY CONSUMPTION FOR ELECTRICAL INSTALLATION:

IMPLEMENTATION SCHEDULE

THE KEY FACTORS THAT WOULD FACILITATE SUCCESSFUL AND TIMELY PROJECT IMPLEMENTATION ARE

IMPLEMENTATION STRATEGY

IMPLEMENTATION SCHEDULE

PRE-PROJECT ACTIVITIES INCLUDE:

LOCATION OF THE PROJECT

HOTEL INDUSTRY IN COIMBATORE

TOP STAR HOTELS IN COIMBATORE

PROJECT IMPLEMENTATION SCHEDULE

PROJECT IMPLEMENTATION WILL TAKE A PERIOD OF 18 MONTHS

LAND & BUILDING

EQUIPMENTS & MACHINERY

APPENDIX – A:

01. PLANT ECONOMICS

02. LAND & BUILDING

03. PLANT AND MACHINERY

04. OTHER FIXED ASSESTS

05. FIXED CAPITAL

06. RAW MATERIAL

07. SALARY AND WAGES

08. UTILITIES AND OVERHEADS

09. TOTAL WORKING CAPITAL

10. TOTAL CAPITAL INVESTMENT

11. COST OF PRODUCTION

12. TURN OVER/ANNUM

13. BREAK EVEN POINT

14. RESOURCES FOR FINANCE

15. INSTALMENT PAYABLE IN 5 YEARS

16. DEPRECIATION CHART FOR 5 YEARS

17. PROFIT ANALYSIS FOR 5 YEARS

18. PROJECTED BALANCE SHEET FOR (5 YEARS)