economic meltdown, impact and actions taken by the indian hospitality industry
TRANSCRIPT
![Page 1: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/1.jpg)
![Page 2: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/2.jpg)
Economic Melt Down
Impact and actions taken by the hotel industry
December 17, 2008IHM Pusa, New Delhi
www.lemontreehotels.com
![Page 3: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/3.jpg)
The Lemon Tree Hotel Company
• Lemon Tree Hotels: India’s fastest growing, upscale, full service, moderately priced hotel chain
• Red Fox Hotels: Economy hotel brand, under development
![Page 4: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/4.jpg)
Global Economic & Financial Indicators
GDP 2007
GDP forecast
2008
GDP forecast
2009
Interest rates
Budget balance
% of GDP 2008
% change in market Nov ’08
vs. Dec ’08
USA 3.2 1.4 -0.2 1.28 -4.6 -34.2
Japan 2.3 0.5 -0.1 0.77 4.0 -46.3
China 9.8 9.6 8.0 3.47 8.9 -72.8
Europe 2.2 1.1 -0.1 3.90 -0.4 -47.6
Russia 5.2 7.0 3.7 12.00 6.2 -67.9
India 8.2 6.3 6.1 7.29 -3.2 -55.5
Source: Economist intelligence unit, Swivel
![Page 5: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/5.jpg)
Source: HVS
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
2,000
4,000
6,000
8,000
10,000
Occ% '08 53.90% 57.20% 51.60% 57.20% 64.80% 69.00% 71.50% 71.40% 69.50% 64.20%
ARR '08 3,505 3,731 3,467 3,269 3,569 4,299 5,444 7,071 7,915 8,469
'99- '00 '00- '01 '01- '02 '02- '03 '03- '04 '04- '05 '05- '06 '06- '07 '07- '08 '08- '09
PokharanNuclear Tests
Economic Sanctions
Gujarat Earthquake
9/11
Afghanistan war
Kargil War
Iraq War
Global EconomicMelt-Down
Mumbai Terror Attacks
Occupancy & ARR Over The Past Decade
![Page 6: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/6.jpg)
Stock Price: International Hotel Companies
Source: Google finance
![Page 7: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/7.jpg)
Source: HDFC
Stock Price: Indian Hotel Companies
![Page 8: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/8.jpg)
Effective Management
Strategic Cash Management
Aggressive Cost Control
Innovative Distribution
Strategy
![Page 9: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/9.jpg)
Controlling Costs Is Critical To Bottom Line Success
![Page 10: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/10.jpg)
Balancing Distribution
Budget
Economy
Mid Market
Upscale
Upper Upscale
Luxury
Low engagement
High engagement
En
gag
em
en
t w
ith
th
e p
rod
uct
Online channels Legacy channels
![Page 11: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/11.jpg)
Purchase Influencers
Location
Brand/Flag
Services
Facilities/Amenities
Price
Static
Dynamic
Determinant(can’t be changed)
Static (can be changed)
Incremental
Filter/Stimulant
![Page 12: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/12.jpg)
Major Drivers: Indian Travel Market
Source: 11th Five Year Plan of the Indian Government
2006 2010
Railways Passengers 6.60 billion 8.00 billion
AirlinesDomestic 25.50 million 60.00 million
International 22.50 million 40.00 million
HotelsOutbound 7.50 million 60.00 million
Inbound 4.00 million 10.00 million
![Page 13: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/13.jpg)
Source: WTO
Tourist Arrivals (Million)
2005 2006 2007Change 06-07
World 806 846 898 6.10%
Europe 441 461 480 4.20%
Asia & Pacific 155 167 185 10.70%
America 134 136 142 4.30%
Middle East 39 41 46 13.20%
Africa 37 40 44 9.70%
Tourist Arrivals
![Page 14: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/14.jpg)
Infrastructure:Economic Growth Driver
Source: Swivel
China India RussiaMiddle East
Brazil US Japan EU
Airports 467 346 1,260 1,200 4,263 14,947 176 3,393
Railways (Km.) 75,438 63,221 87,157 23,198 29,295 226,612 23,474 236,436
Roadways (Km.) 1,870,661 3,383,344 871,000 1,068,480 1,751,868 6,430,366 1,183,000 5,269,163
![Page 15: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/15.jpg)
Source: Goldman Sachs
GDP Projections: 2050
US$ Billion
![Page 16: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/16.jpg)
Y Factor
Source: Indexmundi
![Page 17: Economic Meltdown, Impact And Actions Taken By The Indian Hospitality Industry](https://reader034.vdocuments.us/reader034/viewer/2022052621/558160ddd8b42ac7228b4dd4/html5/thumbnails/17.jpg)
0
5
10
15
20
25
30
35
40
45
50
2007 2008 2009 2010 2012 2013 2014
Pre Economic Melt Down Post Economic Melt Down
Forecasted Shift in REVPAR Trending