Setting up a Skill development and Hospitality training centre at Siddhpur Tourism Government of Contents

Project Concept 3 Market Potential 4 Growth Drivers 6 Gujarat – Competitive Advantage 7 Project Information 9 - Location/ Size - Infrastructure Availability/ Connectivity - Raw Material/ Manpower - Key Players/ Machinery Suppliers - Key Considerations -Potential Collaboration Opportunities Project Financials 13 Approvals & Incentives 15 Key Department Contacts 17

Page 2 Project Concept

Hospitality Industry

The Hospitality industry is a broad category of fields within the service industry that includes lodging, event planning, theme parks, transportation, cruise line, and additional fields within the tourism industry. The hospitality industry is a multibillion-dollar industry that depends on the availability of leisure time and disposable income.

Hotel Management

Hotel management refers to managing the operations of a hotel, motel, resort, or other lodging- related establishment. Management of a hotel operation includes, but is not limited to management of hotel staff, business management, upkeep and sanitary standards of hotel facilities, guest satisfaction and customer service, marketing management, sales management, revenue management, financial accounting, purchasing, and other functions.

Similar projects in

State Institute of Hotel Management and Catering Technology, Thuvakudi, Tamil Nadu State Institute of Hotel Management, Indore, Madhya Pradesh State Institute of Hospitality Management, Kozhikode, Kerala State Institute of Hotel Management & Catering Technology, Pune, Maharashtra

Source https://en.wikipedia.org/wiki/Hotel_manager https://en.wikipedia.org/wiki/Hospitality_management_studies https://en.wikipedia.org/wiki/Hospitality_industry

Page 3 Market Potential

Tourism is not only a growth engine but also generates employment for diverse sections in the society

World - Total contribution of Travel & Tourism to GDP World - Total Domestic Expenditure (USD billion) (USD billion) CAGR: CAGR: 3.0% 3.0% 4,792 10,254 4,269 9,035 3,746 7,816 3,342 6,846

2011 2015 E 2020E 2025E 2011 2015 E 2020E 2025E

The total contribution of Travel & Tourism to GDP is forecasted to reach USD10,254 billion in 2025 and the domestic expenditure is expected to reach USD4,792 billion in 2025

India - Domestic Tourists (in million) India - International Tourists (in million)

CAGR: 2,775 CAGR: 13 8.0% 2,099 5.0% 10 1,422 8 6 865

2011 2015 2020E 2025E 2011 2015 2020E 2025E The number of domestic and international tourists is going to increase in the coming years and reach up till 2,775 million and 13 million in 2025.

Foreign Exchange Earnings from Tourism in India The Foreign Exchange Earnings (FEEs) (in million) from tourism in the country is expected to CAGR: grow and reach a CAGR of 5%. 5.0% 32,901 27,039 Government's e-visa facility, has led to a 21,177 16,564 huge growth in tourist arrivals to the country. The 'e-Tourist Visa' (eTV) scheme was launched for nationals of 43 countries. The government extended the 2011 2015 2020E 2025E scheme to 31 more countries.

Source http://incredibleindia.org/index.php/trade-nav/latest-news/1534-tourism-an-export-growth-engine-and-employment-generator-says- economic-survey-2011-12-15-march-2012 Page 4 Market Potential

Hospitality Management: Skill and Supply Gap Scenario (Gujarat)

Major Additional manpower Segments Skill Gaps Functions required In 2022-23 Adequate communication skills House Understanding guest's needs and Requirements and 7,888 Keeping servicing accordingly at Housekeeping Behavioural Skills including proper Guest Handling Adequate communication skills F&B Ability to manage customer complaints 4,057 Service Ability to interact with guests Star Ability to manage F&B Inventory Category F&B Knowledge on food costing Hotels 6,311 Kitchen Awareness on food calorific and nutritional values. Awareness about the local areas/site seeing/shopping areas and suggesting the same to guest based on their interest at Travel Desk Front Desk 1,803 Knowledge on various hotel offerings, procedures, etc. Proactively review occupancy and promote sales. Other 2,479 Cleanliness at Hotel premises and room House Daily Room Cleaning 33,807 Keeping Proper Personal Hygiene of Housekeeping Staff and waiters Ability to maintain a polite and cheerful appearance Ability to manage customer complaints F&B Ability to interact with guests 11,494 Service Ability to manage F&B Inventory Knowledge of all Cuisines Un- Ability to manage team of stewards / waiters classified Innovation in food Hotels F&B Ability to prepare different kinds of cuisine 5,409 Kitchen Maintain a clean kitchen environment Cleaning and handling vessels Ability to market the rooms/restaurant / Banquet / Conference rooms, including with institutions / Front Desk corporate etc. 11,494 Familiarity with the local region to guide guests/tourists Other 5409 Source GITCO Analysis

Page 5 Market Potential

Hospitality Management: Skill and Supply Gap Scenario (Gujarat)

Maintain a clean kitchen environment etc. F&B Interacting with the guest and explaining the 1,25,164 Service speciality of cuisines Knowledge of nutritional value and cost specific details Eating of food prepared by Chefs F&B Outlets Discipline at Work Place 88,078 Kitchen Ability to plan menu Ability to prepare different kinds of cuisine Front Ability to market the restaurant / Banquet / Conference 18,543 Desk rooms, including with institutions / corporate Total: 321,937

Source GITCO Analysis

Page 6 Growth Drivers

Rising affordability and increased affinity for leisure travel are driving 1 Rise in Income domestic tourism in India. Domestic expenditure on tourism is and Changing expected to rise due to the growing income of households. A number Demographics of niche offerings such as medical tourism and eco tourism are expected to create more demand.

2 Increasing Domestic expenditure on tourism has grown significantly; the market Spending on has reached USD96.7 billion in 2015 and shall be USD 332.4 billion Tourism in 2025, representing a CAGR of 6.3 per cent during 2008–15.

Campaigns such as Khushboo Gujarat Ki, Incredible India, Athithi 3 Devo Bhava were launched to harness the tourism industry’s potential. 100% FDI is allowed under the automatic route in tourism Policy Support and hospitality, subject to applicable regulations and laws. Tourism and hospitality had a cumulative FDI inflows of USD8.45 billion in FY15

The GoI has made concerted efforts to improve and upgrade 4 infrastructure facilities at important tourist destinations, thereby, Focus on improving accessibility to these hubs. The FY16 Union Budget improved allocated INR14.8 billion toward infrastructure development for infrastructure destination and circuits, domestic promotion and publicity including hospitality, overseas promotion and publicity including market development assistance, computerization and information technology and creation of land bank for hotels, etc.

Emerging Tourism and Hospitality Trends

The below trends will require personnel trained in a multi-faceted approach, in order to cater to tourists of all kinds. The SIHM at Siddhpur intends to prepare the local manpower for these emerging trends: • Camping Sites: Camping is a major source for both additional economic opportunities in remote areas as well as an instrument of conservation • Eco Tourism: Vast variety of flora and fauna in various states is a major factor behind their growing popularity as tourist destinations. • Luxury Tourism: The luxury travel market is projected to reach USD14.7 billion in 2015 and it was pegged to grow at 25 per cent on a year – on – year basis between 2013 and 2015 • Rural tourism: The aim is to develop interest in heritage and culture; and promote visits to village settings to experience and live a relaxed and healthy lifestyle.

Source https://www.tourmyindia.com/blog/tourism-holds-special-place-make-india-campaign http://www.makeinindia.com/sector/tourism-and-hospitality

Page 7 Gujarat - Competitive Advantage

The Gross Tourist Flow has been increasing for Gujarat

Gujarat Gross Tourist Flow (Number in millions) 38.3 CAGR: 32.7 28.8 13.6% 25.4 22.4 19.8 17 14.1 15.8 10.7 12.3

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Source: Tourist Flow Information System- Annual Report 2015-16

Gujarat has many tourist destinations and sacred Gujarat Gross Foreign Tourist Flow pilgrimages, which attracts both Indian and Foreign (Number in thousands) travelers. CAGR: 16.2% 309 The total flow of tourist is expected to record an increase over the years. This is attributed to the growing 228 245 prominence of the state as a major business hub. Vibrant Gujarat is a biennial investors' summit held by the in Gandhinagar, Gujarat, India. in The event is aimed at bringing together business leaders, investors, corporations, thought leaders, policy and opinion makers. The Gujarat Vibrant Summit 2015 attracted 25,000 delegates from 110 countries. 2013-14 2014-15 2015-16

Total contribution to GDP Total Investment (USD Billion) Employment (in million)

CAGR: 5.0% CAGR: 5.76% 4.00 CAGR: 11.0% 3.00 2.7% 15.63% 0.81 0.95

2014 2025P 2014 2025P 2014 2025P Source: Tourism Policy for state of Gujarat (2015-20)

Tourism in India accounts for 7.5 per cent of the GDP and is the third largest foreign exchange earner for the country. Gujarat is expected to contribute 5% to the total GDP by 2025. The business is expanding both in terms of turnover and boundaries and therefore contributions total investments by Gujarat are expected to increase. Today worldwide, one in eleven jobs may be ascribed to the tourism industry. Gujarat is expected to generate 3 million jobs by 2025.

Page 8 Gujarat - Competitive Advantage

Initiatives – Gujarat Tourism Policy 2015-2020

Grant of Industry status to First state to have accorded INDUSTRY STATUS to Tourism Tourism Sector Sector

Planning to develop wayside amenities at an interval of about Development of Wayside 75 km on selected major arterial roads to be progressively amenities extended to other major trunk roads The implementation of PPP projects in coordination with GIDB and as per the GR dated 2nd March 2015 for tourism projects, PPP in tourism which would be applicable to both Greenfield and Brownfield projects. Special incentives for adopting ICT and emphasis on Promotion of ‘Make in India’ promoting ICT-enabled technologies through mobile and ‘Digital India applications, social networking, big data analytics, blogs, virtual tourism Emphasis on active participation in GoI schemes like Participation in GoI Schemes Swadesh Darshan, PRASAD, HRIDAY, AMRUT, LRGP and other schemes

Tourism development needs multi-departmental coordination. Active Collaboration with the The State Government would actively collaborate with MoT, Central Government MoUD, MoC, MoEF, ASI and other GoI Ministries / Organizations

Annual Tourism Awards would be instituted for recognition of Excellence Awards excellence in tourism products and services as also for contribution to the growth of tourism in the State.

Institution of Tourist Police to suitably assist, facilitate and Tourist Police guide the Tourists as also to safeguard their interests.

List of AICTE approved Hotel Management institutions in Gujarat

State institute of Hotel Management, Siddhpur Asia Pacific Institute of Hotel Management, Ahmedabad Vivekanand Institute of Hotel & Tourism Management, Rajkot

Source http://www.gujarattourism.com/downloads/Tourism%20Policy%202015.pdf http://www.aicte-india.org/downloads/List_of_Approved_Institutes_2015-2016.pdf

Page 9 Project Information

Project Location

The State Institute of Hotel Management (SIHM) is located in Siddhpur, .

Latitude: 23° 55 0.12 N Longitude: 72° 22 59.88 E Project area: 5 acres

Siddhpur was identified as a strategic location to develop the SIHM since it has numerous historical sites. It can be developed as a tourism hub of Gujarat.

The SIHM building has being established with about 8395 Square Meters. Tourism Corporation of Gujarat Limited (TCGL) has spent about INR 230 Million against campus construction. The Campus includes the Institute building, Boys Hostel (occupancy: 120 student) and Girls Hostel (occupancy: 60 student).

SIHM has the State of the art Infrastructure facilities and is ready to commence academic session in academic year 2016-17.

The institute has received AICTE Approval and affiliation with GTU to conduct 4 Year Degree program – Bachelor of Hotel Management & Catering Technology (BHMCT).

Site images

Source http://sihm.org.in

Page 10 Project Information

Utility

Water Power

Water supply for industrial purposes in Patan district enjoys uninterrupted 24-hour the district can be obtained from three power supply due to the presence of many main sources: Gujarat Water Supply Power Sub Stations and Sewerage Board (GWSSB), The 220 KV power stations at Radhanpur, Irrigation Canals and Sardar Sarovar Janghral and Sankhari supply power Project (5 branch canals) throughout the district Patan and Sidhpur talukas have 132 KV substations

Connectivity

Rail Road

Siddhpur Railway Station (Western State Highway (S-41) connects Railways) Siddhpur to National Highway (NH - 27), which is ~30 kms away

Air Port

~115 kms from airport (domestic & ~300 kms from major port at Kandla international) at Ahmedabad ~280 kms from minor port at Bhavnagar

Existing Infrastructure/Facilities

Institute Building (8395 Square meters) Boys Hostel (occupancy: 120) and Girls Hostel (occupancy: 60) Approach road Furniture & fixtures Electricity connection Back-up power (450 kVA) Land to develop Sports Infrastructure (in the future)

Source http://www.globalgujarat.com/images/patan-district-profile.pdf http://dcmsme.gov.in/dips/DIP%20PATAN.pdf

Page 11 Project Information

Project Components Average Course Type Examples Duration of Course

Bachelors in Hospitality Management & Catering technology Bachelor’s Courses 3 - 4 years Bachelor in Hotel Management and Catering Technology (BHMCT)

Hotel Financial Management Foodservice Management Hospitality Marketing Hotel Real Estate Investments and Asset Management Certification Courses 3 – 6 months Front office management Housekeeping & Laundry Craft Certificate in Bakery & Confectionary Certificate in Carving (Fruit & Ice) Diploma Courses Diploma in Hospitality Management & Catering technology 1 year Masters in Hospitality Management & Catering Technology Post Graduate Courses Masters in Sustainable Tourism 2 years MBA in Hospitality & Tourist Management Estimated Manpower Requirement

Category Number of People required Faculty 20 Administrative Staff (Governing board, Admissions, Placements et al.) 15 Maintenance 30 Security 5 Key Players

ITC Hospitality Management Institute Institute of Hotel Management, Aurangabad Indus Hospitality Careers & Training The Oberoi Centre of Learning and Development Key considerations

AICTE Approvals are already in place. There are many small restaurants in the vicinity which have readily available manpower. Construction has been completed, and the institute is already operational. The Institute is quite popular in the state.

Page 12 Project Information

Potential Collaboration Opportunities

Taj Group 1 Leading hoteliers, Oberoi Group corporate houses, public Welcome Group sectors & private sectors Hyatt Group undertakings - Provide Radisson Hotels internship and career InterContinental Hotels Group opportunities for the SIHM Toran Hotels (Gujarat Tourism) Siddhpur students IRCTC

Institute of Hotel Management Ahmedabad (IHM) 2 Asia Pacific Institute, Ahmedabad (Asia Pacific) Hotel/ Hospitality DIMS Institute of Hotel Management, Ahmedabad (DIMS) Management institutes - Gujarat Institute of Hotel Management, Vadodara (GIHM)

Organize student exchange Jindal School of Hotel Management, Vadodara (JSHM) programs and faculty Anand Institute of Management Science, Anand (AIMS) training programs CZ Patel College of Business Management, Anand (CZP)

Lords Institute of Management, Surat (LIM)

Vivekananda Institute of Hotel and Tourism, Rajkot (VIHM)

Current Status of Project

The institute has received AICTE Approval and affiliation with GTU to conduct 4 Year Degree program – Bachelor of Hotel Management & Catering Technology (BHMCT). Course of Study:

Year 1 Year 2 Year 3 Year 4 • Foundation courses in • Advance Food • Food & Beverage • Industrial Training Food production, F&B Production, F&B Management & Report Service Service Control • Indian Heritage & • Application of • Food Safety • Principles of Culture Computers Management Systems Management & Organizations • Business Law & • Foundation course in • Accommodation & Behaviour Corporate Accommodation & Front Office Governance Front Office Operations • Financial Management Operations Management II • Environmental Sustainability • Business • Research Project Communication Design & Methodology • Entrepreneurship Development • Food Science & • Travel & Tourism Nutrition • Professional Elective • Facility Planning • Open Elective • Hospitality Marketing

Source http://sihm.org.in

Page 13 Project Financials

Estimated Project Cost and Means of Finance

Project cost: The estimated cost is INR 900 Million Project structure and Implementation: PPP Structure - Land procurement and basic campus construction by SIHM; Operation of institute by Private players Means of Finance: Majority of funds will be raised through debt finance from banks and financial institutions, a part of it will be financed through promoters’ equity.

Initial Capital Cost:

Cost parameters Total Cost (INR Million) Kitchens (5) 40.0 Larder 2.0 Bakery & Confectionary 9.0 Restaurant (Capacity: 100) 10.0 House Keeping Equipment 5.0 Guest Rooms (25 – Standard, Executive, Suites) 100.0 Industrial Laundry Equipment 10.0 Front Office Laboratory 1.0 Resource Center (Computer Lab & Library) 3.0 Classrooms (25) 2.5 Total Cost 182.5

Revenue Sources Estimated Yearly/ Number of Number of Total Capacity course fee Batches Years/ Revenue of each per student per year Courses (INR Million) course Course fees – Bachelors Courses 80,000 50 1 3 years 12.00 Course fees – Post Graduate 1,00,000 40 1 2 years 8.00 Courses Course fees – Certificate Courses 30,000 50 4 8 courses 48.00 Course fees – Diploma Courses 60,000 50 1 3 courses 9.00 Hostel fees 40,000 180 - - 7.20 Conveyance fee (Day Scholars) 7,000 420 - - 2.94 Annual Revenue 87.14

Expenses: Total Expense (INR Million) Salaries 4 Operation & Maintenance 7 Marketing 1 Annual Expenses 12 Source http://www.ihmbbs.org/upload/FEES%20STRUCTURE%20FOR%20THE%20ACADEMIC%20YEAR%202016-17(3).pdf http://mumbaicollege.com/fees.html

Page 14 Project Financials

For the proposed project, debt equity ratio of 3:1 is considered. On this basis, the means of finance proposed is as given below:

S. No Means of Finance Cost (INR million) 1 Promoters contribution 45.625 2 Term loan 136.875 Total means of finance 182.500

On the basis of profitability estimates, the breakeven point for the project is as follows:

Breakeven 3 – 4 years Interest rate assumption 18%

Project Structure Following is a schematic diagram showing possible development model of destination development through a Revenue sharing (PPP) model

Tourism Corporation of Project consultant Gujarat Limited

Government selects the The consultant undertakes private player through identifies the revenue competitive bidding sharing model between process and enters into TGCL and Operator an agreement to form a SPV assists with bid process Special Purpose Vehicle management and partner (SPV) selection process;

Private investor (O&M Operator) Activities of the operator

The O&M Operator will Invest in purchase of equipment like decide the courses and cutlery, computers, etc for training the run the institute students Class room equipment, AV equipment etc Run the courses and train the students

Page 15 Approvals / Incentives

Approvals Required

Some of the approvals already received are: 1. Allotment of land - Government order 2. Approval from Gram Panchayat for Building development and use 3. Certificate for Land Encumbrances from Sub-divisional Magistrate 4. Food Safety International (FSI) Certificate from Taluka Panchayat, Siddhpur 5. Approval and connection from Electricity Board i.e. UGVCL Approvals/clearance required Department to be approached and consulted Incorporation of company Registrar of companies Registration/Industrial license Secretariat if industrial assistance (SIA) for large and medium scale industries

Registration under state sales tax act Sales tax department and Central and State excise act Central and state excise department Hazardous waste import and export Ministry of environment, forest and climate change approval Exiting business Ministry of corporate affairs Approval from Government Eg: NSDC / DET / NCVT / GCVT / NCHMCT for Organization Certification and Trade Diploma Courses Approval for New Higher Education Eg: AICTE / NCHMCT Programme Approval from other authorities Eg: ACPC, FRC, DTE and GTU, Govt. of Gujarat

Incentives from Government of Gujarat Government of Gujarat has granted Industry status to Tourism sector thereby providing a great boost to the industry. The incentives under Tourism Policy for the State of Gujarat (2015-2020) shall be applicable to the eligible tourism units as mentioned in the next sections.

Capital Subsidy to the Eligible Tourism Units Eligible Capital Investment (excluding land cost) Admissible Maximum Limit Subsidy (INR crores) Investment upto INR.50 crore 15% 7.5 Investment above INR. 50 crore 15% 10

Additional Capital Subsidy of 5% for New Tourism Units • Owned and managed by women entrepreneurs (with minimum equity participation of 51% in the entity) • SC/ST categories to an additional 5% subsidy over and above the ‘Admissible Subsidy’.

Page 16 Approvals / Incentives

Incentives from Government of Gujarat

Support for Sustainable Tourism - • Assistance to eligible tourism units up to 75% of the cost of carrying out Energy Audit by a recognized institution/consultant, Water Harvesting / Conservation and Environment-friendly practices like Green Buildings, Solar and other Renewable Energy measures

Other Relevant Exemptions • Electricity Duty - 5 years from the date of commencement of commercial operation for New Tourism Units only.

Special Package for Mega Tourism Units The State Government shall duly promote and facilitate Mega Tourism Projects that have a large multiplier effect on the economy, leading to employment generation and inclusive growth in the State. Any type of Tourism Units qualifying criteria of Mega Tourism Units will be eligible. Following incentives would be offered to eligible Mega Tourism Units: 100% reimbursement of stamp duty and registration fee on sale/lease/transfer of land for the first transaction only. Reimbursement of stamp duty and registration fee would be done after the commencement of commercial operations. Capital subsidy of 15% of eligible capital investment (excluding the cost of the land) subject to a ceiling of INR200 million. Exemption from luxury and entertainment tax for a period of seven years from the date of commencement of commercial operations. Exemption in electricity duty would be for a period of five years from the date of commencement of commercial operations. Mega tourism units shall not be entitled to any interest subsidy.

Skill Development Reimbursement of 100% of Course Fees, up to a maximum of INR 10,000 per person for course duration of a fortnight or more Training to be imparted to Tourist Guides hailing from the local area with a monthly stipend of INR 5,000 to all the guides registered with CoT.

Page 17 Tourism Corporation of Gujarat Limited http://www.gujarattourism.com/

Department of Tourism, Gujarat http://www.gujarattourism.com/

Industries and Mines Department, Gujarat www.imd-gujarat.gov.in/

iNDEXTb - Industrial Extension Bureau www.indextb.com

This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope. It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.

Tourism Corporation of Gujarat Ltd, H. K. House, Opp: Bata Showroom, Ashram Road, Ahmedabad, Tel: +79 26578044/46/26589172 Fax: +79 26582183 E-mail: [email protected]