Detailed Project Report (DPR) on 5 Star Hotels & Resort (48 Luxury Rooms)

5 STAR HOTELS & RESORT (48 LUXURY ROOMS)

[EIRI/EDPR/4610] J.C.: 2827XL

The hotel industry is an important component of tourism industry. Its foreign exchange earning capacity is also high. The irritation of economic reforms in this country gave a boost to the hotel industry. The demand for rooms in hotels by foreign businessmen has increased sharply. Understand, most Indian hotel chains are pushing ahead with their expansion plans. Perhaps the government should extend a few more sops to the total industry so that its capacity expands to keep up with the rising demand. The hotel industry deserves a few more sops because it is capital intensive, having a long gestation period, and the new tourist destination and circuits also take a long time. The hotel industry is linked to the progress of tourism industry. There is bright future of this project.

Hospitality Industry in India Market

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. 

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.

Less than three million foreign tourists visited India in 2020, a dip of around 75 per cent as compared to the previous year, due to travel restrictions imposed to control the coronavirus pandemic. "To incentivize stakeholders in the tourism industry, the guidelines for the scheme of Market Development Assistance (MDA) for providing financial support to stakeholders for the promotion of domestic tourism have been modified to enhance the scope and reach of the scheme, to provide maximum benefits to the stakeholders. In addition, promotional activities have been incorporated including online promotions and the extent of financial assistance permissible has been enhanced.

India’s hospitality sector is being driven by the increase in the number of hotel projects. India's Hospitality Industry ended in the current year with occupancy in the 59-61 percent range, up 15-17 percentage points (pp) from the previous year. However, average rates (ARR) recovered fully in the current year, being 37-39 percent higher than the previous year's levels. As a result, RevPAR in the current year increased by 89-91 percent over the previous year.

COST ESTIMATION

Plant Capacity                          48 Luxury Rooms  

Land & Building (4 Acres)    Rs. 19.00 Cr    

Plant & Machinery                    Rs. 10.65 Cr 

Working Capital for 3 Months    Rs. 5.70 Cr 

Total Capital Investment          Rs. 37.93 Cr 

Rate of Return                          23%

Break Even Point                      58%

CONTENTS

INTRODUCTION

HOSPITALITY INDUSTRY IN INDIA MARKET

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

HOSPITALITY INDUSTRY IN INDIA INDUSTRY OVERVIEW

FACILITIES AND SERVICE REQUIRED FOR 5 START HOTEL CLASSIFICATIONS:

GENERAL FACILITIES FOR 5 STAR HOTELS:

GUEST ROOM FACILITIES FOR 5 STAR HOTEL

REQUIRED BATHROOM FACILITIES FOR 5 STAR HOTEL

PUBLIC AREA FACILITIES FOR 5 STAR HOTEL

ROOM AND OTHER FACILITIES FOR THE DIFFERENTLY ABLED GUEST

FOOD AND BEVERAGE FACILITIES FOR 5 STAR CLASSIFICATION

REQUIRED KITCHEN FACILITIES FOR 5 STAR CLASSIFICATIONS

REQUIRED STAFF QUALIFICATIONS, SKILLS AND STAFF WELFARE FOR 5 STAR CLASSIFICATION

GUEST FACILITIES FOR 5 STAR CLASSIFICATIONS

SAFETY AND SECURITY FACILITIES FOR 5 STAR CLASSIFICATION

OTHER FACILITIES AND REQUIREMENTS

CATEGORIZATION OF HOTELS IN INDIA

HERITAGE HOTELS

LUXURY HOTELS

BUDGET HOTELS

RESORTS

IMPORTANT HOTEL GROUPS IN INDIA

MARKET POSITION

INDIA GDP FORECAST

KEY DEMOGRAPHIC TRENDS

KEY TRENDS IN TRAVEL AND TOURISM IN INDIA

HOTEL INDUSTRY SUPPLY SCENARIO

CITY WISE HOTEL SECTOR SUPPLY OVERVIEW

ASSET PERFORMANCE THROUGH THE CYCLE

INCREASING REVPAR ON NEW HOTELS

INDIAN HOTEL SEGMENTATION

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

COMPARISON OF OPERATING COSTS OF HOTELS ACROSS SEGMENTS

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

BARRIERS TO ENTRY

COMPETITIVE LANDSCAPE

LEADING LISTED HOTEL OWNERSHIP COMPANIES WITH MORE THAN 1,000 OWNED KEYS, LISTED IN ORDER OF OWNED KEYS (AS ON JUNE 30, 2019)

AVERAGE KEYS ADDED ANNUALLY* (AS ON JUNE 30, 2019)

OWNED HOTELS BY LOCATION (AS ON JUNE 30, 2019)

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

ALL-INDIA CHAIN-AFFILIATED INVENTORY AS AT SEPTEMBER 2021 IS ESTIMATED AT 157K ROOMS. INVENTORY BUILD-UP AND SEGMENTAL COMPOSITION OF SUPPLY, ARE REFLECTED IN TABLE BELOW:

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 (BASED ON HOTELS SIGNED AT DATE)

FUTURE SUPPLY

SUPPLY (INVENTORY IN ‘000S)

PROJECTED SUPPLY GROWTH IS REFLECTED IN THE CHART BELOW:

EXPECTED SUPPLY – ALL INDIA, ALL SEGMENTS (INVENTORY IN 000S)

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

PRINCIPLES OF PROJECT 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:

UTILITIES

POWER

WORKING

TOTAL MANPOWER AND PAYROLL

UTILITIES

PROJECT LAYOUT

LIST OF PLANT AND EQUIPMENT SUPPLIERS/MANUFACTURERS

AIR CONDITIONING & REFRIGERATION UNITS

CONSULTANT

PROJECT LOCATION:

ABOUT DISTRICT (MAHABALESHWAR)

ARTHER SEAT

ECHO POINT

VENNA LAKE

FALKLAND POINT

LINGMALA WATER FALL

BOMBAY POINT

KSHETRA MABALESHWAR

IN INDIA, BELOW ARE THE TOP TEN LUXURY HOTELS.

LIST OF DOCUMENTS REQUIRED TO GET FOR LICENSES

OTHER LICENSES REQUIRED FOR THE SETUP:

SWOL ANALYSIS

STRENGTHS

OPPORTUNITIES

WEAKNESS

LIMITATIONS

PPROACH FOR PLANNING

POWER REQUIREMENT:

WATER REQUIREMENT AND CONSUMPTIONS PROPOSED PROJECT:-

WATER CALCULATION AND WATER BALANCE

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:

PROJECT IMPLEMENTATION SCHEDULE

PROJECT IMPLEMENTATION WILL TAKE A PERIOD OF 18 MONTHS

FOLLOWING IS THE ENTRY NO. 3 OF SECTION “LAND & BUILDING” IN EXCEL SHEET

FOLLOWING IS THE ENTRY NO. 22 AND 23 OF SECTION “PLANT & MACHINERY” IN EXCEL SHEET

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)