How to Start a Hotel (4 Star Hotel, Hospitality Industry) Detailed Project Report, Profile, Business Plan, Industry Trends, Market Research, Survey, Feasibility Study, Investment Opportunities, Cost and Revenue, Plant Economics, Working Capital Requirement, Plant Layout, Cost of Project, Projected Balance Sheets, Profitability Ratios, Break Even Analysis

 

One of the fastest growing sectors of the economy of our time is the hotel industry. The hotel industry alone is a multi-billion dollar and growing enterprise. It is exciting, never boring and offer unlimited opportunities. The hotel industry is diverse enough for people to work in different areas of interest and still be employed within the hotel industry. This trend is not just in India, but also globally.

Modern hotels provide refined services to their guests. The customers or guests are always right. This principle necessitated application of management principles in the hotel industry and the hotel professionals realized the instrumentality of marketing principles in managing the hotel industry.

Hotel is an establishment that provides lodging and usually meals and other services for travellers and other paying guests. It provides paid lodging, usually on a short-term basis. Hotels often provide a number of additional guest services such as a restaurant, laundry, a swimming pool or child care. Some hotels have conference services and meeting rooms and encourage groups to hold conventions, functions and meetings at their location. Hotels are found in almost all the cities. Hotels operate twenty four hours a day, seven days a week. The principal factor that determines the guest attitude towards a hotel is service although other amenities such as room, food and beverages are of equal importance a tangible determinants.

 

Few Indian Major Players are as under

·         18Th Step Resorts Pvt. Ltd.

·         Advani Hotels & Resorts (India) Ltd.

·         Adyar Gate Hotels Ltd.

·         Alankar Business Corpn. Pvt. Ltd.

·         Balaji Amines Ltd.

·         Bekal Resorts Devp. Corpn. Ltd.

·         Benares Hotels Ltd.

·         Best Eastern Hotels Ltd.

·         Bona Sera Hotels Ltd.

·         Budget Hotels Ltd.

·         Chalet Hotels Pvt. Ltd.

·         Express Resorts & Hotels Ltd.

·         Jungle Lodges & Resorts Ltd.

·         Mayank Hotels Ltd.

·         Neotech Solutions & Securities Ltd.

·         Oasis Hotels Ltd.

·         Om Metals Infraprojects Ltd.

·         Pai Vaibhav Hotels (India) Pvt. Ltd.

·         Prajay Engineers Syndicate Ltd.

·         Presidency Leisure Ltd.

·         Ras Resorts & Apart Hotels Ltd.

·         Sahara Hospitality Ltd.

 

 

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Table of Contents

 

 

1.       Project Location

1.1.    District Profile & Geotechnical Site Characterization

1.1.1.General Characteristics of the District

1.1.2.Location & Geographical Area

1.1.3.Topography

1.1.4.Administrative set up

1.1.5.Map

1.1.6.Industry at a Glance

1.1.7.Existing Micro & Small Enterprises in the District

1.1.8.Large & Medium Scale/Public Sector Undertakings

1.1.9.List of Large & Medium Scale/Public Sector Undertakings

1.1.10.       Potential for New MSMEs

2.       Introduction

3.       Development and Growth of Hotel Industry in India

3.1.    Hotel Industry in Medieval Period

3.2.    Mussafir Khanas and Sarais

3.3.    Emergence of Hotels in India

3.4.    Formation of Three Corporations and ITDC

4.       Importance of Hotels

5.       Hotel as a Service Provider in the Modern Day

6.       General Classification of Hotel Industry

6.1.    Classifications of Hotels

6.2.    Classification According to Facilities and Amenities

6.3.    On the Basis of Standards:

6.4.    On The Basis of Nature:

7.       Users of Hotel Industry

8.       Guidelines for Approval of Hotels

8.1.    Approval at Project Level:

8.2.    Apartment Hotel - Classification/Reclassification Guidelines

8.3.    Checklist for Star Hotels

9.       Market Survey

9.1.    Growth of Tourism and Hospitality in India

9.2.    Growth Drivers

9.3.    Foreign Investors

9.4.    Indian Hotel Industry Performance – Country Trends

10.   Major Hotel Groups in India

11.   Financials & Comparison of Major Indian Players/Companies

11.1.About Financial Statements of CMIE Database

11.2.Profits & Appropriations

11.3.Total Liabilities

11.4.Total Assets

11.5.Net Cash Flow from Operating Activities

11.6.Section – I

11.6.1.       Name of Company with Contact Details

11.6.2.       Name of Director(S)

11.6.3.       Plant Capacity

11.6.4.       Location of Plant

11.6.5.       Name of Raw Material(S) Consumed With Quantity & Cost

11.7.Section – II

11.7.1.       Assets

11.7.2.       Cash Flow

11.7.3.       Cost as % Ge of Sales

11.7.4.       Forex Transaction

11.7.5.       Growth in Assets & Liabilities

11.7.6.       Growth in Income & Expenditure

11.7.7.       Income & Expenditure

11.7.8.       Liabilities

11.7.9.       Liquidity Ratios

11.7.10.    Profitability Ratio

11.7.11.    Profits

11.7.12.    Return Ratios

11.7.13.    Structure of Assets & Liabilities (%)

11.7.14.    Working Capital & Turnover Ratios

12.   Online Booking System

12.1.Proposed Solution

12.2.Project Planning & Control

12.3.Documentation Standards:

12.4.Programming Standards:

12.5.Work Break Down Structure (WBS)

13.   Different Departments in Hotels

13.1.Core Functioning Department

13.2.Support Department (Cost Centres)

14.   Front Office Department

14.1.Front Office Functions

14.2.Front Office Organisation

14.3.Front Office Organisation Chart

14.4.Duties & Responsibilities of Front Office Staff

14.5.Front Office Desk Layout

14.6.Front Office Equipments and Furniture’s

15.   Organisational Structure of Housekeeping Department

15.1.Importance of Housekeeping

15.2.Functions of Housekeeping

16.   Duties and Responsibilities of Restaurant Staff

16.1.Food and Beverage Manager:

16.2.Assistant Food and Beverage Manager:

16.3.Restaurant Manager:

16.4.Bar Manager:

16.5.Other Staff Designations at Various Levels:

17.   Laundry Department

17.1.Process of Laundering

17.2.Layout of A Laundry

17.3.Laundry Procedures

18.   Safety and Security

18.1.Safety and Security Measures

18.2.Handling Security Threats

19.   Suppliers of Machinery & Equipments

19.1.Hotel Furniture Suppliers

20.   Suppliers of Raw Material

21.   Hotel, Machinery & Equipments Photographs

22.   Hotel Sample Layout

23.   Quotation of Plant, Machinery and Equipments from Supplier

 

PROJECT FINANCIALS

·         Project at a Glance

Annexure

·         Assumptions for Profitability workings ….…………………………………………....................... 1

·         Plant Economics…………………………………………………………………………….................... 2

·         Production Schedule……………………………………………………………………….................... 3

·         Land & Building…………………………………………………………………………….................... 4

§  Factory Land & Building

§  Site Development Expenses

·         Plant & Machinery………………………………………………………………………….................... 5

§  Indigenous Machineries

§  Other Machineries (Miscellaneous, Laboratory etc.)

·         Other Fixed Assets………………………………………………………………………….................... 6

§  Furniture & Fixtures

§  Pre-operative and Preliminary Expenses

§  Technical Knowhow

§  Provision of Contingencies

·         Working Capital Requirement Per Month………………………………………………................. 7

§  Raw Material

§  Packing Material

§  Lab & ETP Chemical Cost

§  Consumable Store

·         Overheads Required Per Month and Per Annum ……………………………………................. .8

§  Utilities & Overheads (Power, Water and Fuel Expenses etc.)

§  Royalty and Other Charges

§  Selling and Distribution Expenses

·         Salary and Wages ……………………………………………………………………………................. 9

·         Turnover Per Annum ………………………………………………………………………................ 10

·         Share Capital…………………………………………………………………………………................ 11

§  Equity Capital

§  Preference Share Capital

 

•        Annexure 1            ::        Cost of Project and Means of Finance

•        Annexure 2            ::        Profitability and Net Cash Accruals

§  Revenue/Income/Realisation

§  Expenses/Cost of Products/Services/Items

§  Gross Profit

§  Financial Charges    

§  Total Cost of Sales

§  Net Profit After Taxes

§  Net Cash Accruals

 

•        Annexure 3            ::        Assessment of Working Capital requirements

§  Current Assets

§  Gross Working Capital

§  Current Liabilities

§  Net Working Capital

§  Working Note for Calculation of Work-in-process

 

•        Annexure 4            ::        Sources and Disposition of Funds

•        Annexure 5            ::        Projected Balance Sheets

§  ROI (Average of Fixed Assets)

§  RONW (Average of Share Capital)

§  ROI (Average of Total Assets)

 

•        Annexure 6            ::        Profitability ratios

§  D.S.C.R

§  Earnings Per Share (EPS)

§  Debt Equity Ratio

 

•        Annexure 7            ::        Break-Even Analysis

§  Variable Cost & Expenses

§  Semi-Variable/Semi-Fixed Expenses

§  Profit Volume Ratio (PVR)

§  Fixed Expenses / Cost 

§  B.E.P

 

•        Annexure 8 to 11   ::        Sensitivity Analysis-Price/Volume

§  Resultant N.P.B.T

§  Resultant D.S.C.R

§  Resultant PV Ratio

§  Resultant DER

§  Resultant ROI

§  Resultant BEP

 

•        Annexure 12          ::        Shareholding Pattern and Stake Status

§  Equity Capital

§  Preference Share Capital

 

•        Annexure 13          ::        Quantitative Details-Output/Sales/Stocks

§  Determined Capacity P.A of Products/Services

§  Achievable Efficiency/Yield % of Products/Services/Items 

§  Net Usable Load/Capacity of Products/Services/Items   

§  Expected Sales/ Revenue/ Income of Products/ Services/ Items   

 

•        Annexure 14          ::        Product wise domestic Sales Realisation

•        Annexure 15          ::        Total Raw Material Cost

•        Annexure 16          ::        Raw Material Cost per unit

•        Annexure 17          ::        Total Lab & ETP Chemical Cost

•        Annexure 18          ::        Consumables, Store etc.

•        Annexure 19          ::        Packing Material Cost

•        Annexure 20          ::        Packing Material Cost Per Unit

•        Annexure 21          ::        Employees Expenses

•        Annexure 22          ::        Fuel Expenses

•        Annexure 23          ::        Power/Electricity Expenses

•        Annexure 24          ::        Royalty & Other Charges

•        Annexure 25          ::        Repairs & Maintenance Expenses

•        Annexure 26          ::        Other Manufacturing Expenses

•        Annexure 27          ::        Administration Expenses

•        Annexure 28          ::        Selling Expenses

•        Annexure 29          ::        Depreciation Charges – as per Books (Total)

•        Annexure 30          ::        Depreciation Charges – as per Books (P & M)

•        Annexure 31          ::        Depreciation Charges - as per IT Act WDV (Total)

•        Annexure 32          ::        Depreciation Charges - as per IT Act WDV (P & M)

•        Annexure 33          ::        Interest and Repayment - Term Loans

•        Annexure 34          ::        Tax on Profits

•        Annexure 35          ::        Projected Pay-Back Period And IRR