RENAISSANCE HOTELS AND RESORTS INTERNATIONAL

BY GROUP --2

INTRODUCTION
Renaissance hotels and resorts international(RHI) is a subsidiary of the listed Singapore company . It is a hotel group operating in 11 cities across Asia-pacific with its base in Sydney , Australia. Renaissance India is now in expansion mode and eyeing Kerala market . Renaissance hotels includes both 5 star and 4 star hotel properties in its portfolio. Now this hospitality chain wants to explore Kochi market ,which is Kerala's commercial hub and gateway to Kerala.

IN INDIA
RHI with its intension of international expansion in Indian hospitality industry targeted Kochi for its expansion. RHI worked out joint venture with Chennai based Indian developer XS real properties. RHI is responsible for opening and operating the hotels under its management and brand. XS real properties uses its terrain , local market and network expertise to introduce new business in market Also supports RHI in understanding the local market , developing contacts and ensure secure entry for RHI in Indian market.

HOSPITALITY INDUSTRY IN INDIA

The hotel industry is a significant stake holder of the Indian tourism sector. Tourism is third largest earner of foreign exchange for the country Mainly benefited by countries extensively from the growth of the countries activities . The hospitality sector witnessed a trickle down effect of global economic crisis in 2008.

Hotel Categories

No. of Hotels

No. of Rooms
43965 13420 30100 22950 10900 4200 124187

5 Star deluxe/5 Star 165 4 Star 3 Star 2 Star 1 Star Heritage total 770 505 495 260 70 22

MAJOR PROBLEMS
The tourism sector is bringing growth to Indian economy but there are some problems associated with it: Supply is overwhelmed by demand . Hotels in India have a supply of 110000 rooms and shortage of 150000 rooms . Due to this hotel room rates are increasing. Revenue per available room (RevPAR) which has been on raise due to lack of room availability. The increase is alarming , the hotel room rents itself reached to 73 % increase compared to previous rates

The two challenges that clearly emerge for the industry are Managing demand Optimizing channel mix

Average Room Rate

RevPar

Occupancy levels

200 180 160 140

74% 72% 70% 68%

120
100 80 60 40 20 0 FY2006 FY2007 FY2008 FY2009 FY2010

66%
64% 62% 60% 58% 56% 54%

OPPORTUNITIES
India is the hot destination for hotel chains . Possibility of demand exceeding supply by atleast 100%. With supply and demand disparity room rates are most likely to increase 25% annually and occupancy to raise by 80%. Indian hotel industry is also adding up 60,000 rooms the meet the growing demand . Major MNC giants of the hotel industry are eying Indian market to earn their share of pie in the race . Indian hotel industry itself witness a tremendous grown in hotel industry as 281 new hotels are under development which will balance the demand and supply of rooms.

KERELA AND TOURISM

Kerala is situated on the tropical Malabar coast of southwestern India, one of the most popular tourist destinations in India. A Celestial Destination Where Tourists Dream With Open Eyes. Growing at a rate of 13.31% , the tourism is a major contributor of state economy. Kerala is the first India state to use information technology to promote tourism . Kerala positioned itself to assure tourists that rainy season is the best time for rejuvenation .

HOSPITALITY SECTOR PROBLEMS

Hotels in Kerala need to quickly absorb world class practices in terms of customer service and operational efficiencies . Shortage of hotel rooms in season . There is still need to improve connectivity; rail and road connections The lack of adequate infrastructure development.

The tourism traffic has been growing between 20-28 %

every year for the last four years and this rate of growth is expected to continue for the next few years.

 The constant boom and the resultant demand-supply mismatch has led to sharp increases in the average room rates and thus pushing up revenues of industry players . The tourism sector is expected to perform very well in futureand the industry offers an interesting investment opportunity for long-term investors. Most of the five-star hotels are seeing more than 80 % occupancy and some of the lesser-known five-star hotels are overbooked.

RECOMMENDATIONS
In order to meet the growing demand and number of visitors increasing its is definitely a market opportunity for renaissance India. Kerala is the right destination where RHI can step into with years and built a large network of hotels and maintain excellent work practices. With demand increasing and no of tourists visiting kerala it is the right destination and right market to capture .

THANK YOU