Role of Hospitality Services in Gujarat Tourism

“Role of Hospitality Services in Gujarat Tourism”

Mr. Chanduji Thakor Mr. Mitul M. Deliya Assistant Professor Assistant Professor VJKM Institute of Management S. K. College of Business and Computer Studies, Vadu(N.G) Management, Hem. North Gujarat E-mail ID - [email protected] University, Patan – 384 265 E-mail – [email protected], [email protected]

Abstract “Aavo Padharo”, words of welcome in the language of Gujarat because it is here that these words ring truly and the guest is 'God' and the people of Gujarat are gregariously friendly, inviting and will entice you to come again and again. The term “hospitality” meaning friendliness. Travel and tourism, hotels and restaurants constitute a major portion of the hospitality industry. The hospitality industry is fairly well developed in India. Hospitality services are playing an important role in the Indian Economy. This Industry is also facing many problems which must be considered very seriously. The present study covers the role of hotel services in Gujarat and the impact of tourism in India’s economic development. The present condition of this industry shows that India has got bright future, because of the tremendous developments taking place in this service industry. The guests invited for tours be treated in a real deluxe style as Indian tradition says “Guests God”. We should use the best hotel and the best transport available in the country.

1 Keywords :- Hospitality, Tourism, Employment Opportunity Introduction Sky is the limit for marketing services. During the past decade, services have increasingly assumed an important role in the Indian economy. Hotels are a major service industry in India. Their significance is undoubted. A number of international hotel chains have come to India, either independently or with a tie-up with an Indian partner. The Government of India’s tourism department has also realized their importance and started classifying them on the basis of the standard of their facilities. An effort is also being made to promote India through its tourist offices all over the world.

A man who leaves home to mend him and others is a philosopher; but he who goes from country to country, guided by the blind impulse of curiosity, is a vagabond. - Oliver Goldsmith Tourism has also become an instrument for sustainable human development including: • Poverty elimination. • Environmental regeneration. • Job creation.

In the Indian perspective, we find seventh five year plan as watershed in the development of tourism Industry. For the first time, the vast potential of tourism as a foreign exchange earner and generator of employment opportunities was recognized. Several policy initiatives were taken to develop the tourism sector. In the development of tourism, the public sector has made a significant contribution. Of late, the industry is equipped with a reasonable infrastructural base and is poised for a self sustained growth. The future growth of tourism is required to be designed on the basis of low-cost economy, higher level of productivity, efficiency in the use of infrastructure and sophisticated tourist

2 facilities. In the Eighth Five Year plan (1992-97), the special tourism areas had been selected, and during the Ninth Five year Plan (1997-2002), we looked forward to energizing the process of development, but the image problem was found to be complicating the task of professionals.

GLOBAL TOURISM STATUS According to WTO, in the year 2006 saw 842 million International tourist arrivals and tourism receipts were of the order of US $ 682 billion. The World Travel & Tourism Council (WTTC) for 2006 forecasts that Travel and Tourism will generate 234 million direct and indirect jobs worldwide, accounting for 8.7% of the global economy and contributing 10.3% of the global GDP. According to the same estimate, the global travel and tourism activity is expected to increase by 4.7% between 2007 and 2016. The World Travel and Tourism Council (WTTC) estimates a 4.5 per cent per annum increase in the total amount of travel and tourism economic activity between 2002 and 2012. This is largely attributed to a rise in overall global wealth and use of the Internet as a travel tool. Secondly luxury travel will increase drastically this year.

The WTTC report projects that by 2016 the total travel & tourism activity is expected to post a total demand of economic activity of US $ 12,118 billion. The world’s travel & tourism is expected to contribute US $ 2,969.4 billion in nominal terms (3.6% of total) by 2016. The travel & tourism economy contribution is expected to reach US $ 8.971.6 billion (10.9%) in the year 2016. By 2016, travel & tourism is expected to create 9% of total employment or one in every 11.1 jobs and is expected to get capital investment in both public & private sector by US $ 2,059.8 billion or 9.6% of the total global investment. The Government is expected to spend on travel & tourism US $ 480.9 billion or 4% of total government expenditure by 2016.

INDIA TOURISM

The year 2006 has been a highly successful year for India. For the fourth successive year, India witnessed a positive growth in foreign tourist arrivals, reaching a level of 4.43 million against 2.38 million during 2002. The growth rate of 13.04 % during 2006 was

3 achieved over 52005 and the share of India in world tourism is expected to be around 0.52%. Foreign exchange earnings has reached US$ 6569.34 in 2006 and marked an increase of 14.63 % over 2005 (US $ 5730.86). In absolute rupee terms, the increase in foreign exchange earnings during the year 2006 was Rs 4431.31 crores over 2005. Tourism is the third largest net earner of foreign exchange next to garments, gem and jewellery industry, recording earnings of US $6569.34million in 2006 (Rs 29603.56 crores). India’s share in the total global tourist arrivals and earnings remained quite insignificant at 0.52 % of the world arrivals and the percentage of share of tourism receipts for 2006 was 0.90 %. Foreign Tourist Arrivals to India (In million).

Year Arrivals % Change 2002 2.38 (-) 6.0 2003 2.73 (+) 14.3 2004 3.46 (+) 26.8 2005 3.92 (+) 13.2 2006* 4.43 (+) 13.0

Growth in 5 years i.e., 2006 over 2001: 86% Source: Ministry of Tourism.

The Tourism product consists of accommodation, recreation, restaurant, attraction, and Transportation. Accommodation is the prime factor for tourism product. In this accommodation, hotel captures the major place. For managing the hotel services, it is essential that we are also careful about the hotel accommodation facilities.

The Ministry of Tourism, Government of India also decided to bring the industry under one platform by spearheading the idea to form the Confederation of Indian Travel & Tourism Industry (CITTI). 2010 also was the year of major consolidation like Travel Services International being acquired by Yatra.com.

The scope of travel and tourism is truly immense: in the last six years, it has created 11 million jobs and has the potential to create another 37 million jobs (estimated by the

4 NSSO, Ministry of Tourism) of the 120 million projected requirement by 2020. India's full growth potential is yet to be realized, when we compare it with other major tourist destinations. For example, the hotel capacity in India is 95,000 rooms against 4.8 million in the US and 1.2 million in China.

Spiritual Tourism in India and Gujarat

Gujarat accounts for 6% of India’s GDP and the State Domestic Production (SDP) stands at around US $12 bn. “Aavo Padharo”, words of welcome in the language of Gujarat because it is here that these words ring truely and the guest is 'God' and the people of Gujarat are gregariously friendly, inviting and will entice you to come again and again. On behalf of everyone in Gujarat we extend towards you our very warm welcome. The main intention behind creating this website is to share the colors, the romance, the heritage, the insights as well as the mystique that entwines this Gujarati legend. It is an attempt to equip you with all the relevant information, tools and resources needed to make your journey enriching, uncomplicated and enjoyable. The Gujarati soul is embodied by its regular everyday people. We hope that to some extent, this website will also connect you with the warmth and celebratory spirit of its people.

Gujarat sends largest number of travelers to almost every corner of the world. But its strength to be host has not been fully utilized due to the lack of information highway. Gujarat Tourism offers colorful experience to its travelers packed with pleasant surprises - endowed with forests and deserts, hills and plains, sea and lakes, tribal hinterlands and special interest destinations with a strong rail, road and air network. Eight tourism hubs have been created, which are Ahmedabad Metro, Ahmedabad Rural (North Gujarat), Surat (South Gujarat), Vadodara (Central Gujarat), Rajkot, Junagadh & Jamnagar (Saurashtra) and Bhuj (Kutch), for convenience of tourists visiting Gujarat. These hubs are well equipped with the modern infrastructure, facilities and services in the areas of commerce, communication, connectivity, hospitality, transportation, medical facilities etc

5 Spiritual Tourism is the largest tourist sector in India: more than 70% of the domestic tourist movement is for the religious purposes and 20% of the revenue in tourism industry is generated by religious tourism (Cox and Kings 2008-09). A study by the Delhi based National Council for Applied Economic Research (NCAER) shows that the largest proportion of trips are religious, accounting for 50 percent, whereas leisure tour packages account for 28 per cent. In Gujarat Ahmadabad, Ambaji, Dwarka and Somnath are the major tourist destinations accounting for over 33% (47.41 lakhs) of the total tourist flow in the state. (TCGL 2006-07)

Tourist Flow at Major Religious Destination in Gujarat Source: GITCO Bollywood icon and Gujarat brand ambassador Amitabh Bachchan, who has promoted areas like Kutch and Dwarka, will lend his rich baritone and charismatic presence to attract tourists to some more picturesque spots in the state, including this pretty hill station.

Bachchan has so far promoted the Kutch region, Dwarka, Somnath and Gir National Park. These places have seen an increase in tourist arrivals, including a 30 percent rise in foreign travellers, "Gujarat's tourism has grown and now we stand on fifth spot among states in India, after Rajasthan, Kerala, Maharashtra and Goa. Tourist arrivals have increased over the years. In 2006-07, the figure stood at 1.27 lakh, which increased to 1.70 lakh in 2009-10. In 2010-11, nearly two lakh tourists arrived.

6 "Over the next two years, the Gujarat government will pump in Rs.650 crore towards developing tourism activities and promoting tourism infrastructure.

Increase approved quality accommodation units from the current level of about 100,000 rooms to at least 200,000 rooms by 2011, to meet the increasing demand. Set up hotels on the surplus land with Airport Authority of India near International Airports as per the international practices. TOURIST ARRIVAL PROJECTION FOR GUJARAT 2007-2008 2008-2009 2009-2010 DOMESTIC 350000 400000 500000 INTERNATIONAL 20000 23000 26000

Source: Press Information Bureau

TOURIST ARRIVAL PROJECTION FOR GUJARAT

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 DOMESTIC 350000 400000 500000 600000 700000 INTERNATIONAL 20000 23000 26000 30000 40000

Source: Press Information Bureau, Friday, April 11

Significance of the Study Hotel services play a vital role in Tourism. They are:

 Multi-faceted developments in the business environment.  Migration of rural population to the big towns and metropolitan regions.  Pilgrims are found visiting the scared places.  A reservoir for the foreign exchange flows.  Enrich peripheral service.  A strong advocacy in favor of employment orientation. Statement of the Problem Tourism plays a vital role in the development of our economy. It is the best possible solution to India’s economic development. It provides employment opportunity to the society. The objectives of tourism also coincide with the national objectives. Tourism has served the society for the past five decades and achieved its objectives in many ways.

7 Tourism is widely scattered, manned by people with poor managerial competence, working with limited resources. Further it suffers due to the poor services to the society and lack of promotional methods and absence of quality control. Keeping this fact in mind, an attempt is made to study the service of tourism in Gujarat.

Objectives of the Study The study has been made with the following set of objectives:  To know the significant role of Tourism in India’s GDP  To know the role played by the Hospitality services in Tourism.  To know the market segments and the financial performance of Hospitality.  To know the level of employment opportunities provided through Tourism.  Identify and develop tourist destinations and related activities.  Diversifications of tourism products in order to attract more tourists through a varied consumer choice.  Comprehensive development of pilgrimage centres as tourist destinations.  Create adequate facilities for budget tourists.  Creation of tourism infrastructure so as to preserve handicrafts, folk arts and culture of the state and thereby attract more tourists.

Research Design

The study covers the role of hotel services in Gujarat and the impact of tourism in India’s economic development. It also covers the contribution made by the tourism sector in foreign exchange earnings. To elaborate this study secondary data has been collected and analyzed. The secondary information was collected from the report of Tourism and Culture Department of Gujarat. Standard books, Journals, articles and websites were also referred to.

8 Analysis and Discussion The Share of Tourism in India’s GDP  In India, contrary to popular belief, it creates more jobs than the traditional industries of agriculture and automobiles and accounts for 5.9 per cent of GDP, making it the largest contributor after the oil and gas industry. And yet, the Indian travel and tourism industry is not a mainstream industry; its full potential is yet to be recognised by the government.  The service sector’s share has grown from 43.69% in 1990-91 to 51.16% in 1998- 99.  Within the service sector, the share of trade, hotels and restaurants increased from 12.52% in 1990-91 to 15.68% in 1998-99.  The Union financial Budget 2006-07 had allocated Rs.8.5 billion for Indian tourism sector in the tenth five year Plan. Having increased the service tax to 12% there is more expected revenue for the government.  Tourism yields substantial foreign exchange in India. It is turning into a volume game where a large number of participants are contributing to the revenue of the Industry. Segments such as hotels, tour operators, airlines, shipping, etc., are significant contributors to this revenue.  The share of travel and Tourism industry to the global GDP was 6.48% in the year 2007 with the value of $ 3,493.19 billion and industry demand contributed to 13.21% of global GDP in 2007.  According to the report by World Travel and Tourism council, India Currently ranks 18th in Business travel and will be among the top five nations by the end of 2010.

Market Segmentations of Hotels The marketing segments of hotel service s are classified into three groups (figure 1) They are as follows: 1. A common classification of hotel market segment is according to the purpose of visit by guests, i.e., Holiday-tourism oriented, business-traveller oriented, and conference oriented, or foreign versus domestic traffic oriented. These terms tend

9 to be equivocal as they relate to a particular type of traveller or customer irrespective of the market segment to which he belongs. For instance, a foreign tourist staying at luxury hotel may be on business on his company’s expense account. Similarly, a guest staying at a luxury hotel may be a businessman for whom the address and image of the hotel are important enough to justify the tariff. On the other, when he travels for pleasure or for social purpose, he may stay in the same luxury hotel or one with the lower tariff, depending on the purpose of the visit. 2. Customer traveling in groups comprises another segment, so do meeting and conference groups. Therefore, the hotel market segments correspond to the basic market packages in terms of spending power as also social classifications- upper/upper-middle/lower. 3. Special groups are important segment in India, namely, non-vegetarian or vegetarian. Vegetarian hotels may attract the same category of customers as for the non-vegetarian group, who would naturally evaluate and choose hotels according to the purpose of their visit and stay, consequently, the tariff are prepared to accept.

Figure 1: Classification of Hotel Market Segments

Marketing Segments

Independent Groups Special Guests Groups

Financial Position of Hospitality Services Table 1 reveals that the financial outlay was increased year after year, and at the same time the actual exceed the budget estimate.

10 Table 2 reveals that the turnover increased from 2006-07 to 2007-08 to 13% and also gross profit increased to 21%. The turnover of Hotel Division for 2007-08 is Rs. 41.43 crore compared to the turnover of Rs. 36.44 crore achieved during the year 2006-07 recording a growth during the 14%. The lodging, catering and bar sectors recorded significant growth during the 2007-08. The average occupancy level increased by 4% during the year. Table1: Financial outlay Year Budget Estimate (Rs. in cr.) Actual (Rs. in cr.) 2004-2005 30.35 31.29 2005-2006 32.42 37.04 2006-2007 46.04 63.57 2007-2008 45.25 51.53

Source: Tourism and Culture Department, Tourism Policy Note2008-2009 Table 2: Financial Performance Details 2006-07 2007-08 % Grwoth Turnover 51.70 58.40 13 Gross profit 7.84 9.20 21

Source: Tourism and Culture Department, Tourism Policy Note2008-2009 2007-2008 due to up gradation of major hotels. The occupancy levels of Gujarat Tourism Development Corporation hotels increased to 59% in 2007-08 from 50% in 2005-06 and 55% in 2006-07. The turnover of Boat houses also recorded significant growth at25 % due to introduction new modern boats at various Boat Houses. Employment Opportunities The tourism industry offers the following career and employment opportunities: 1. Air Transportation: Flight operations, ground operations, in/flight catering, office and sales 2. Ground Transportation: Bus, car rentals and railways 3. Water Transportation: Ship and Cruise liners 4. Tour Operations 5. Travel Agency 6. Food and Beverages 7. Hotels and Motels 11 8. Theme parks, clubs, journalism and recreation 9. Government Agencies: Tourist offices, tourism corporations, etc

The annual requirement of qualified personnel in the organized hotels sector is estimated at 29,000 in 2010, and this is expected to increase to 39,000 by the year 2020.

Gujarat Tourism will take steps and systematic attempts to tap the huge employment generation potential available in the Tourism sector. The Ministry of Tourism, government of India, has estimated that for every Rs. 10 lakh invested in Tourism, 47.5 jobs are created. The same amount, if invested in the manufacturing sector, can create only 12.6 called jobs. A sample survey by the world Tourism Council using methodology “Tourism satellite Account” concludes that jobs generated by Tourism could be rise from today’s 2.4% to 6.8% in ten years which means 80 lakh new jobs. Similarly, in respect of hotel industry, it is estimated that an investment of Rs. 10 lakh will give direct employment to 12 persons while five rooms in a five star hotel or an average give direct employment only to eight persons.

Gujarat Infrastructure Development Board (GIDB) has estimated the following investment potential for some of the key religious destination development projects in the states.

Religious Tourism Project Investment Potential Ambaji Area Development Rs. 400 Crore Dwaraka Area Development Rs. 500 Crore Koteshwar-Narayan Sarovar Area Development Rs. 500 Crore Champaner/Pavagadh Development Rs. 100 Crore Gujarat Government should celebrate “Gujarat Pavitra Yatradham Mahotsav” at very large scale to promote religious destinations. Government should bring motivating speakers and preachers of spirituality and wellness like Swami Ramdev, Shiv Khera, Deepak Chopra etc. to help in building a brand image of Gujarat as a delight for spiritual tourism seekers. They can accomplish this with their inspirational discourses, seminars, public appearances and other related efforts.

12 S W O T Analysis for Gujarat Tourism STRENGTH Wide range of Sea Coast of 1, 96,026 sq.km. Government support (in term of grants): both government of Gujarat as well as government of India sets aside annual grants for the development of tourism in the state. Wide network of Services under its fold – includes hotels, Tourist Information Bureaus, etc

WEAKNESS Low morale Lack of professionalism in the organization In-effective Promotions Low Awareness regarding its products, services as well as its investment opportunities in this sector has not been highlighted

OPPORTUNITIES Scope for investment in new ventures Joint ventures with private parties cashing in on excellent infrastructure facilities

THREATS Competition from other state tourism corporations Private parties assuming the role played by TCGL at this juncture

Conclusion Well-trained and experienced personnel are extremely important for ensuring delivery of high quality professional services to the guests, which is a major perquisite for success of the hospitality industry. Hospitality services are playing important role in Indian economy. During 2007-2008, the foreign exchange earnings and GDP of India have increased. For this increasing trend in GDP and foreign exchange Earnings in India, the

13 tourism also plays a vital role. Even then this service industry which is facing many problems must be considered very seriously to overcome it. The present condition of this industry shows that India has got bright future, because of the tremendous developments taking place in this service industry.

Suggestion: The following suggestions can be taken to improve the hospitality service in Gujarat. 1. Steps must be taken to improve the quality of workforce and the retention of the skilled employees. 2. Proper attention should be paid to increase the number of rooms and the steps must be taken to increase the image of India in the minds of foreigners. 3. While making location decisions, we need to take all precautions for the developments of an environmentally friendly location. 4. While designing the hotel buildings, a number of factors are taken into consideration. Since it is a permanent investment in which we find least scope for alteration, it is essential that the hotel designers keeps in the mind cost effectiveness and good returns for the investments in building a hotel. 5. The benefits of electronic revolution should be made available to the function rooms so that effective business conventions would benefit corporate houses. The development process should also take into account the safety measures so that in case of any mishap, the protective measures are taken immediately. 6. While managing restaurants and bars, it is significant that the cases of menu fatigue and the provision of good and safe are ensured to avoid cases of food poisoning. To be more specific, for restaurants it is found impact generating as this would affect the image of the hotel and its peripherals. 7. That hotel companies have to assign an overriding priority to innovate the peripheral services. 8. The more volatile a market is in terms of fluctuations in demand; the more important it is to work within a framework of agreed objectives. In order to provide an orderly and agreed basis on which to conduct its business in an ever changing market environment, any business has to plan its activities.

14 9. Some exciting new trends that will have a positive impact in the development of India tourism, over the next two years, are those of adventure and responsible tourism. India's pledge to sustainable tourism development has led to the industry waking up to the need for doing its bit of giving back to society through CSR and environment protection. 10. The Institute of Hotel Management, Catering & Nutrition which is working under the administrative control of the Central Government will be utilized to start new training courses so that the residents of Gujarat can get admission and manpower requirement of this sector is met 11. The Internet has also added a new dimension to the business of travel with websites being used as a primary source of information and booking. The way forward for India tourism would be to have a streamlined approach so that we can widen the scope of the industry.

References Ravi Shanker, “ Sales Promotion in Hotel Industry” , Indian Journal of Marketing, May- August, 1990, Vol XX, No. 9-12, pp. 2, 28-33 Thyne, M. and Laws, E. (eds) .Implication for Quality Management and Customer Satisfaction,) Tourism Geographies, 8 (4). pp. 429-430. ISSN 1461-6688 Anand, M.M., Tourism and Hotel industry in India, Prentice-Hall of India (p) Ltd., New Delhi, 1976. I.P.O., Indian Tourism Performance and Potential 1971-1991, "An Updated Study", 1986, p. viii. Naik, S.D. and Davies , N.V., "The Tourism industry ", "The Economic Scene, Vol IV, 7. Supplement , July 1979 , p. S-I 1. Indian Institute of Public Opinion, "Tourism - Need for Aggressive Marketing Strategy". Monthly Commentary on Indian Economic Conditions, Blue supplement , June 1994 Vol xxxv No. 11, p iii. Selvam. M., Tourism Industry in India, Himalaya Publishing House, Bombay,1989. Leela Shelly, Tourism Development In India, Arihant Publisher, Jaipur, 1991.

15 Pragathy Mohanty, Hotel industry and Tourism in India, Ashish Publishing House, New Delhi, 1992. Jha S M, Service Marketing, Himalaya Publishing House, New Delhi. Jha S M, Hotel Marketing, Himalaya Publishing House, New Delhi. Ravi Shankar, Service Marketing: The Indian Perspective, excel Books publishers, New Delhi. P srinivas Subbarao; Issues and constraints in manpower supply in Indian Hospitality Industry