Contents
Author: Ravi
Date: 2019-01-10T10:41:21.292466+00:00

HOTEL INDUSTRY

1

August 2018

© THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

Disclaimer

Due care has been taken to avoid errors or omissions in this publication. In spite of this, er ors may
still persist. Any mistake, er or or discrepancy if noted, may be brought to the notice of the Institute,
which shal be taken care of in next edition.

The Institute shall not be responsible for any loss or damage resulting from any action taken on the
basis of the contents of this publication. To avoid any doubt, it is suggested that the reader should
cross-check the contents of this publication with original Government notifications.

This industry specific research report is for wide circulation among experts to receive valuable
suggestions and necessary supports for further improving the manuscript. Experts are encouraged to
email their suggestions and contribute any material which they think could value add the manuscript
to research@icsi.edu.

The Section 3, “Legal Framework” is indicative only.

Published by :

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Printed at: Indian Offset Press/August 2018
ii

PREFACE

In the liberalized economic policy regime, the corporate sector has been assigned a
major role as the driver of growth and development of the Indian economy. This has
resulted in a number of changes, especial y in the regulatory framework applicable to
specific industry sectors. As an economy is consist of different industries like agriculture,
service, engineering, manufacturing etc., it provides impetus to the economy i.e.

employment generation, production of goods and services, income distribution in the
whole economy.

With the intent to further enhance the competitiveness of India’s services sector and
to boost productivity with the creation of new employment opportunities, the Central

Government has focused attention on 12 sectors in the economy as ‘Champion Sectors’

i.e., IT & ITeS, Tourism and Hospitality, Financial, Accounting and Finance, Transport and

Logistics, Construction and Related Engineering, Communication, Education, Medical

Value Travel, Audio Visual, Legal and Environmental.

As part of its support to government’s policy initiatives, the Institute has started an
initiative by projecting Company Secretary as ‘Corporate Saviour’- a person who can
be relied upon by stakeholders i.e., Corporates, Promoters, Shareholders, Government
and Regulators.

With this basic objective, the institute has initiated the process of developing industry
specific knowledge through research, creating awareness among the members about
the contribution the Company Secretary can make in specific industry, capacity building
of members in the specific industry, securing recognitions for members in specific industry
sector, and sensitisation of regulatory authorities about the contribution the Company

Secretaries can make in specific industry.

For conducting the detailed analysis in a structured manner, a format is designed with
four sections, Section-I covering the industry profile, Section-II Business Scenario, Section-III
legal framework and Section-IV Contribution of Company Secretary in employment and
in practice. The research publications in all the industry sector are based on exploratory
research.

I wish to express my sincere thanks and gratitude to CS Ahalada Rao V, Vice-President, the

ICSI for his efforts in guiding and finalizing industry specific publications.

iii

I also appreciate Dr. Prasant Sarangi, Director (Research), the ICSI-Research Cell for doing
in-depth study of Hotel Industry and bringing out this research publication, under the
guidance of CS Sonia Baijal, Director, Professional Development, Prospective Planning
and Studies and Dr. S.K. Dixit, Mentor, Research Cel .

I am sure this research publication will prove to be of immense value to professionals,
corporates and researchers. The research is an ongoing process, and I welcome the
readers to give suggestions to make this research publication more comprehensive.

I wish all the readers a happy reading

New Delhi

CS Makarand Lele

Date : August 23, 2018

President

The Institute of Company Secretaries of India
iv

TABLE OF CONTENTS

Section Title of the Section / Sub Topics

Page Number

No.

1

Introduction

1

1.1 Introduction

1

1.2 The Hospitality Industry

2

2

Business Scenario

6

2.1 History

6

2.2 Business Scenario

7

2.3 Nature

19

2.4 Types of Hotel Industry

20

3

Legal Framework

29

3.1 Industry type

29

3.2 Applicable Laws

29

3.3 State Acts

34

4

Contribution of Company Secretary

36

4.1 Introduction

36

4.2 Role of Company Secretary in Employment

39

4.3 Role of Company Secretary in Practice

39

4.4 Suggestions to Ministry of Tourism (MOT) to boost

39

Indian Hotel Industry:

4.5 Conclusion

42

Bibliography

43

Revised Guidelines for Marketing Development

44

Assistance (MDA) Scheme

Served From Indian Scheme

53
v
vi

1

SECTION 1

INTRODUCTION

1.1 INTRODUCTION

With opening up of the Indian economy after 1991 and the adoption of globalization,
there has been a steep rise in the operational activities of various sectors that were
earlier dormant. One of the best examples of this is the hospitality industry. The sectors
in hospitality services include travel and tourism, and hotel industry. The other industries
included in this sector are food and service management, leisure, bars, night clubs,
amusement parks, motels, hostels, restaurants, self-catering accommodation, holiday
centers and travel agents. It has rapidly grown in training people for hospitality industry
the last 26 years and despite the recession in economy is determined to grow further.

The sector at present employs about 2.5 million people and provides support to other
industries, like hotels and restaurants, and educational establishments. One of the
major part of this sector is the hotel industry. The economy has grown and with it has
grown the personal wealth of people. This domestic success has created greater
need for more hotels, attract tourism.

India is a country with a long history, and many people visit the country for spiritual reasons,
bringing in visitors from all over the world. Additionally, the country has 32 national heritage
sites bringing in history buffs, and a wide variety of nature reserves and parks for those
looking for adventure. The variety of available sites have made India a popular choice for
many foreigners.

Other areas in the hospitality industry come from businesses that have been outsourced
here to India, because the wages are much cheaper over the last decade and a half
the mad rush to India for business opportunities has intensified and elevated room rates
and occupancy levels in hotel’s. Even budget hotels are charging USD 250 per day. This
successful growth story of ‘Hotel Industry in India’ is second only to that of China in the Asia

Pacific. This brings in business people who are meeting and working with the international
companies, thus strengthening the hotel industry.

The expanding activities of the hotel industry have turned it into a multimillion-dol ar
industry. Hotel industry consists of restaurants, lodging places, theme parks, event planning,

1

2

HOTEL INDUSTRY
etc. and includes activities such as facility maintenance and direct operations including
servers, porters, housekeepers, bartenders, kitchen keepers, etc. Such services that are
provided by the hotels constitute to be the subject matter of laws that regulate the hotel
industry. This study is specific to hotel industry only.

1.2 THE HOSPITALITY INDUSTRY

The hospitality industry is a large umbrel a industry that contains several different divisions
of businesses:

• Food and beverage Industry

• Air and land travel Industry

• Entertainment such as movies/theatre/sports Industry, and

• Tourism Industry and medical tourism

• Hotel Industry

The hospitality industry is usually one of the largest revenue producers for countries since it
deals with a variety of businesses. Hospitality usually focuses on extra money that people
have to spend on pleasurable things and leisure, though not always. Business conventions,
trainings, and meetings in different countries also affect the hospitality industry greatly.

Besides this domestic and international travellers also contribute to it.

The present analytical research broadly discusses the Indian Hotel Industry. The paragraphs
below shortly introduce the nature of other related industries as wel . However, a detailed
study of each of these industries is the subject matter of our extensive research, which are
is discussed below in a logical sequence.

• Food and Beverage Industry

India is among the largest producers of food grains globally. Fol owing figure-1 shows the
production of food grains (in million tonnes) in India by 2014. It can be seen from the
figure that the total increase is 34 MT with a CAGR of 2%.

It is increasingly becoming evident that only a vibrant food processing sector can lead
to increasing farm-gate prices and thus enhance income levels, reduce wastages and
increase employment opportunities. An average Indian spends about 50% of household
expenditure on food items, and the demand for processed/convenience food is also
constantly on the rise. As India has liberalized its overall policy regime with specific
incentives for a high priority food processing sector, a very conducive environment for
investments and exports in the sector has attracted lot of capital.

SECTION 1 – INTRODUCTION

3

The Indian food processing industry accounts for 32 per cent of the country’s total food
market. It is one of the largest industries in India, and is ranked fifth in terms of production,
consumption, export and expected growth. It contributes around 8.80 and 8.39 per cent
of Gross Value Added (GVA) in Manufacturing and Agriculture respectively. The Indian
gourmet food market is currently valued at US$ 1.3 billion and is growing at a Compound

Annual Growth Rate (CAGR) of 20 per cent. India’s organic food market is expected to
increase by three times by 2020.

The online food-ordering business in India is in its nascent stage, yet it is witnessing
exponential growth. With online food delivery players like FoodPanda, Zomato, TinyOwl
and Swiggy are building scale through partnerships, the organised food business has a
huge potential and a promising future. The online food delivery industry grew at 150 per
cent year-on-year with an estimated Gross Merchandise Value (GMV) of US$ 300 million
in 2016.

Indian is also a leading market for food related raw materials in the world. The following
table shows various items related to raw materials in food production with their global
ranking.

According to the data provided by the Department of Industrial Policies and Promotion

(DIPP), the food processing sector in India has received around US$ 7.54 billion worth
of Foreign Direct Investment (FDI) during the period April 2000 to March 2017. The

Confederation of Indian Industry (CI ) estimates that the food processing sectors have the
potential to attract as much as US$ 33 billion of investment over the next 10 years and also
to generate employment of nine million person-days.

• Air and Land Travel Industry

In 2018, airlines have the opportunity to take progressive steps towards defining the next
generation of air travel. Airlines are leaving behind a decade where losses surpassed
many-fold. Now, bolstered by low fuel prices, tighter capacity, new merchandizing
strategies, and industry consolidation, the sector is expected to post a consecutive run
of annual profits. Indian carriers should seize the opportunity of the upswing – and that
begins with investment in critical infrastructure and technology that has been lacking
behind because of recent industry pressures.

Many airlines are taking steps in the right direction. On the infrastructure side, large

Indian carriers are announcing significant airport investments and fleet expansions that
are critical to capitalize on rising travel demand. Carriers are also upgrading fleets with
sorely needed amenities to meet rising flyer expectations, including new seats, satellite

Wi-Fi service, larger overhead bins, and power for devices. A competitive aircraft leasing
market will likely continue to grant carriers easier access to attractive aircraft-financing,
enabling fleet growth and expansion in 2018.

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HOTEL INDUSTRY

Air traffic reform will likely continue to be a key infrastructure debate throughout the year,
with enormous implications for the industry. A confluence of emerging technologies can
unlock incredible solutions for airlines, specifically around main points, such as security
checkpoints, baggage systems, route optimization, helping consumers navigate busy
airports, and mitigating the impact of weather delays and equipment failure. Consider
the following scenario that showcases the potential impact technologies like the Internet
of Things (IoT), robotics, 3D printing, asset tracking, and smart workforces can have to
relieve pain points around aircraft malfunctions:

• In-air detection and notification: Mid-flight, an IoT connected aircraft part
recognizes it is not functioning properly. The aircraft sends a message to the
ground about the malfunctioning part for repair upon arrival.

• The on-demand supply chain: The part used in the repair will need to be replaced
upon landing, so before arrival, a 3D printer at the arrival airport receives a signal
to print the part.

• The connected, autonomous tarmac: The printed part must be delivered to the
arrival gate. An autonomous vehicle picks it up and makes a delivery.

• The connected employee: The mechanic uses heads-up display eyeglasses
to reference documents from the cloud. Using a bore scope connected to a
wireless tablet, the mechanic streams live video to a remote engineer allowing
the repair and inspection to benefit from the engineer’s authority.

Instead of this aircraft being taken out of service, frustrating travelers with delays, the aircraft
leaves on time for its next segment. This example not only demonstrates the synergistic
power of different technology platforms, it highlights the inextricable link between airline
operations and customer experience.

• Entertainment Industry

The Indian media industry has tremendous scope for growth in all the segments due to rising
income and evolving lifestyles. Media is consumed by audience across demographics
and various avenues, such as television, films, out of home (OOH), radio, animation and
visual effect (VFX), music, gaming, digital advertising, and print.

The Media & Entertainment industry is anticipated to grow at a Compound Annual Growth

Rate (CAGR) of 13.9 per cent during 2016-21 to reach US$ 37.55 billion. The industry
has provided employment to 3.5-4 million people, including both direct and indirect
employment as of 2017.

Advertising expenditure in India is expected to grow 13 per cent year-on-year to Rs 69,346
crore (US$ 10.71 billion) in 2018 and Rs 1.07 trillion (US$ 16.70 billion) by 2020. The Indian

SECTION 1 – INTRODUCTION

5
digital advertising industry is expected to grow at a CAGR of 32 per cent to reach Rs

18,986 crore (US$ 2.93 billion) by 2020. India’s digital revenues are expected to reach

US$394.22 million by 2021. India is the second largest television market in the world with

US$ 10.14 billion in revenue in 2017. The Indian film industry is expected to grow at a rate
of 11.9 per cent by 2020. India digital advertising market has reached Rs 8,202 crore

(US$ 1.27 billion) in 2017 and is forecasted to grow at a CAGR of 32 per cent to reach

Rs 18,986 crore (US$ 2.95 billion) by 2020. The Government of India has supported this
sector’s growth by taking various initiatives such as digitizing the cable distribution sector
to attract greater institutional funding, increasing Foreign Direct Investment (FDI) limit from

74 per cent to 100 per cent in cable and Direct-to-home (DTH) satellite platforms, and
granting industry status to the film industry for easy access to institutional finance.

• Tourism Industry

Tourism is a major engine of economic growth and an important source of employment

& foreign exchange earnings in many countries including India. It has great capacity
to create large-scale employment of diverse variety – from the most specialized to the
unskilled, and hence can play a major role in the creation of additional employment
opportunities. It can also play an important role in achieving growth with equity and
sustainability.

Tourism Industry in India is growing and it has vast potential for generating employment and
earning large amount of foreign exchange besides giving a fillip to the country’s overall
economic and social development. By 2030 it will be nearly two billion people, spending
just over $2 trillion, in all corners of the world. As per the report of UNWTO around two billion
people, experiencing new cultures are sharing new friends, creating new businesses. Two
billion people providing jobs and an income 400 million people globally. By 2030, travel

& tourism will be 11% of the world’s economy. Each and every person who travels will play
a part in this story of growth, adventure and experience.

SECTION-2

BUSINESS SCENARIO

2.1 HISTORY

A hotel is an establishment that provides lodging paid on a short-term basis. Facilities
provided may range from a basic bed and storage for clothing, to luxury features like en-
suite bathrooms. Larger hotels may provide additional guest facilities, such as a swimming
pool, business centre, childcare, conference facilities and social function services. The

Indian Hotel Industry Survey 2013-2014 reflects a positive change indicated by the key
operating statistics, which may be an early indicator towards the end of a downturn for
the Indian hotel industry. There are over 600 hotels and resorts in India that constitute the

“organized” or modern sector. Most of these hotels are in the larger cities and major tourist
or business destinations. India has several world class domestic hotel chains. Besides
several international chains have also established their presence through franchising
or entering into partnerships with Indian firms. These branded hotels are mostly in the
premium segment (5 star/5 star deluxe/heritage) and mid-range segments (4 star), which
cater to businessmen and leisure travelers. With the rise in tourism and business travel,
several international brands are exploring the possibility of entering or expanding even
further in India.

Hotel Industry as we know started in the 19th century with the development of major
cities, easier sea travel and coming up of railways. During Mogul rule, the forts and their
surroundings would cater to the needs of the travelers often in exchange for no more than
the story of their adventures during their travel or any news from other towns and villages
they passed by. In India, resting houses called dharamshallas were established on high
ways by kings and emperors of during the ancient and medieval periods. Movement of
people both political and pilgrimage stressed the need for better and improved facilities
to cater to the varied needs of the people coming from various classes of the society.

Most of modern hotels that sprouted were managed by European families. The Bombay
hotel was opened in 1799. The British brought modern hotels to Kolkata. The Oldest was

John Spence’s Hotel. Spence’s, the first ever hotel in Asia was opened up to the public in

1830. The credit for opening the first western style hotel under the name of British Hotel in

Bombay in 1840 goes to Pallonjee Pestonjee. Then came the ‘Auckland’ hotel by David

6

SECTION 2 – BUSINESS SCENARIO

7

Wilson in Calcutta in the year 1840-41 (‘The Great Eastern Hotel’ now officially called Lalit

Great ‘Eastern Hotel’) is a colonial era hotel in the Indian city of Kolkata (formerly Calcutta)

and Connemara Hotel in Madras (now Chennai) in the year 1870 by E. A. Oakshroff.

In 1971-72, a beautiful palace of Rajasthan was linked up to the Taj, the Lake Palace
in Udaipur, a marble dream, afloat lake pichola and the Rambagh palace, original y
created at the height of Rajput splendour in Jaipur. In 1903 the group, hired the best
architects and craftsmen and build the exquisitely beautiful Taj Mahal hotel in Bombay

(now Mumbai) with 220 rooms. Mohan Singh Oberoi took Carlton Hotel in Shimla on Lease
in 1927, renamed as Clarks hotel. He took a building in 1933 and built Grand Hotel in

Calcutta it.

The India Tourism Development Corporation (ITDC) was set up in 1966 as a corporation
under the Indian Companies Act of 1956, with the merger of Janpath Hotel India Ltd.

Three Welcome Group Hotels were commissioned between 1975 and 1977; these were
non-franchised hotels, inspired by the slogan “Be Indian, Buy Indian” and using Indian
expertise. Ultimately, however, these hotels adopted the Sheraton system in 1978 and
used the services of expatriates for the purposes of upgrading staff training and installing

Sheraton operating systems-all without a management contract. This gave the Welcome

Group a good start.

When India agreed to host the 1982 Asian Games, the Government of India granted
licenses for building hotels to the Taj Palace, Asian Hotels Hyatt Regency, India Tourism

Development Corporation – Lodhi Hotel, Samrat Hotel, Kanishka, Le Meridien, and Surya

Sofitel, with the stipulation that their new hotels had to be completed in time for the
games. India hosted the Commonwealth Games in 2010, at Delhi. It was India’s most
successful Commonwealth Games to date with Indian athletes winning 38 gold, 27 silver
and 36 bronze medals. This also added to the growth of hotel industry in India.

2.2 BUSINESS SCENARIO:

After registering GDP growth of over 7 per cent for the third year in succession in 2016-

17, the Indian economy is headed for somewhat slower growth, estimated to be 6.5
per cent in 201718, as per first Advance Estimates released by CSO. This is slightly
lower than the range of 6.5 per cent to 6.75 per cent being currently projected based
on recent developments. Even with this lower growth during 2017-18, GDP growth has
averaged 7.3 per cent for the period from 2014-15 to 2017-18, which is the highest
among the major economies of the world. That this growth has been achieved in
a milieu of lower inflation with improved current account balance and a notable
reduction in the fiscal deficit to GDP ratio makes it all the more creditable. In addition
to the introduction of GST, the year also witnessed significant steps being undertaken

8

HOTEL INDUSTRY
towards resolution of problems associated with non-performing assets of the banks,
further liberalization of FDI, etc., thereby strengthening the momentum of reforms.

After remaining in negative territory for a couple of years, growth of exports rebounded
into positive one during 2016-17 and strengthened further in 2017-18. There was an
augmentation in the spot levels of foreign exchange reserves close to US$ 414 billion,
as on 12th January 2018.

Table-1: Indian Economy Outlook

Years

2014-15

2015-16

2016-17

2017-18

GDP at Constant

10536984

11381002

12189854

12985363

Market price

(7.4)

(8.0)

(7.1)

(6.5)

(Growth %)

Gross saving (% of

33.1

32.3

NA

NA

GDP)

Gross Capital

34.4

33.3

NA

NA

Formation (%)

Per capita

86454

94130

103219

111783

National Income

WPI Inflation (%)

1.2

-3.7

1.7

2.9

CPI Combined

5.9

4.9

4.5

3.3

Inflation (%)

Foreign Exchange

341.6

360.2

370.0

409.4

Reserve (US $
billion)

Gross Fiscal Deficit

4.1

3.9

3.5

3.2

(% to GDP)

Revenue Deficit

2.9

2.5

2.1

1.9

Source: Compiled from Economic Survey, 2017-18

The derived graph-1 given below shows the overall economic indicator by considering
three variables like GDP, CPI combined inflation and Fiscal deficit. The CPI and fiscal
deficit are observed to be decreasing continuously which is a positive sign for the
country.

SECTION 2 – BUSINESS SCENARIO

9

Graph-1: GDP, CPI and Fiscal Deficit (in %)

Source: Economic Survey, 2017-18

Inflation in the country continued to moderate during 2017-18. Headline inflation as per

Consumer Price Index – Combined (CPI-C) declined to 3.3 per cent in 2017-18 (Apr-Dec)

from 4.8 per cent in the corresponding period of 2016-17. CPI inflation, which was below

3.0 per cent in the first quarter of 2017-18 mainly due to lower food inflation, especial y
pulses and vegetables, rose marginal y and stood at 3.0 per cent in the Q2 of 2017-

18. Food inflation in terms of the Consumer Food Price Index (CFPI) declined to 1.2 per
cent during 2017-18 (Apr-Dec) from 5.1 per cent in 2016-17 (Apr-Dec). CPI-based core

(non-food, non-fuel) inflation also declined to 4.5 per cent in 2017-18 (Apr-Dec) from

4.8 per cent in 2016-17 (Apr-Dec). Inflation for all the major subgroups of CPI-C, except
housing and fuel & light groups, declined in 2017-18 (Apr-Dec) over 2016-17 (Apr-Dec).

The decline was sharpest for food & beverages. Average inflation based on the Wholesale

Price Index (WPI) stood at 2.9 per cent in 2017-18 (Apr-Dec) as compared to 0.7 per
cent in 2016-17 (Apr-Dec). WPI inflation which remained subdued for several months
surged during February and March, 2017 due to sudden spurt in global crude oils prices.

Thereafter, with the moderation in the global crude prices, inflation also moderated in
the next four months till July, reaching a low of 0.9 per cent in June 2017. As oil prices
bounced back and moved upwards in the successive months, coupled with rising food
prices, inflation too rose and reached the level of 3.6 per cent in December 2017. WPI
based food inflation declined to 2.3 per cent in 2017-18 (Apr-Dec) from 6.3 per cent
in the corresponding period of 2016-17. WPI fuel & power inflation increased to 9.7 per
cent 2017-18 (Apr-Dec) from (-) 6.5 per cent in the corresponding period of the previous
year. WPI based core (non-food manufactured products) inflation stood at 2.6 per cent
in 2017-18 (Apr-Dec) as compared to -0.8 per cent in 2016-17 (Apr-Dec). The inflation

10

HOTEL INDUSTRY
of manufactured group, which has the weight of 64.2 per cent in the WPI basket, has
however, remained range-bound hovering around 2.6 per cent.

India’s foreign exchange reserves reached US$ 409.4 billion on December 29, 2017, with
a growth of 14.1 per cent on a YoY basis from end of December, 2016 and growth of 10.7
per cent from end-March 2017. The foreign exchange reserves were US$ 413.8 billion
on 12th January 2018. The foreign exchange reserves in nominal terms (including the
valuation effects) increased by US$ 30.3 billion during 2017 as compared to an increase
of US$ 11.8 billion during the same period of preceding year. The import cover of India’s
foreign exchange reserves increased to 11.1 months at end-September 2017. Exchange

Rate is 1.46 during 2017-18 (up to December 2017), the rupee generally traded with an
appreciating bias against the US dollar, barring intermittent depreciation in September
and October 2017. The rupee strengthened by 2.5 per cent to a level of Rs. 64.24 per US
dollar during December, 2017 from the level of Rs. 65.88 per US dollar during March 2017
on the back of significant capital flows. The appreciating trend vis-à-vis US$ has continued
in January so far. During 2017-18 (April-December), on an average, the rupee has also
appreciated against other major currencies but for the US dollar. The appreciation of the
rupee (in real effective exchange rate) indicates that India’s exports may have become
slightly less competitive. In the last few years, the value of Rupee has been relatively stable
vis-à-vis US$. The rupee depreciated by much higher levels between 2011-12 and 2013-

14 than between 2014-15 and 2016-17. Not only this, within the year fluctuations have
been much less.

(a) GDP:

With Gross Domestic Product (GDP) growth averaging 7.5 per cent in 2014-15 and 7.1
in 2016-17, India can be rated as among the best performing economies in the world
on this parameter. Although growth is expected to decline to 6.5 per cent in 2017-18,
bringing the 4-year average to 7.3 per cent, the broad story of India’s GDP growth to
be significantly higher than most economies of the world does not alter. The growth
is around 4 percentage points higher than global growth average of last 3 years and
nearly 3 percentage points more than the average growth achieved by emerging
market and developing economies (EMDE). Table-2 derived below highlights Gross

Value Added and GDP growth trends from 2014 to 2017-18.

Table-2: Annual Real GVA and GDP Growth (%)

GVA at Basic prices from

2014-15

2015-16

2016-17

2017-18

Agricultural, forestry and

-0.2

0.7

4.9

2.1

Fishing

Industry

7.5

8.8

5.6

4.4

SECTION 2 – BUSINESS SCENARIO

11

(a) Mining & quarrying

11.7

10.5

1.8

2.9

(b) Manufacturing

8.3

10.8

7.9

4.6

(c) Electricity, gas, water

7.1

5.0

7.2

7.5
supply & Other utility
services

(c) Construction

4.7

5.0

1.7

3.6

Services

9.7

9.7

7.7

8.3

(a) Hotel,

Trade,

9.0

10.5

7.8

8.7

Transport, Storage,

Communication &
services related to
broadcasting

(b) Financial, Real Estate

11.1

10.8

5.7

7.3
and
professional
services

(c) Public

8.1

6.9

11.3

9.4
administration,
defense and other
services

GVA at basic Prices

7.2

7.9

6.6

6.1

GDP at Market Prices

7.5

8.0

7.1

6.5

Source: Compiled from Economic Survey, 2017-18

The estimated growth in GVA for this sector during 2017-18 is placed at 7.3 percent as
compared to growth of 5.7 percent in 2016-17. The key indicators of this sector are the
growth of corporate sector, real estate sector and computer related activities which
are estimated using latest available information on listed companies for the first half of
financial year 2017-18. The combined growth in aggregate bank deposits and credits
as on 10 November 2017 was 8.4 per cent. The tables 3 and 4 derived below show the
contribution of financial, real estate and professional services estimated by first advance
estimates of gross value added by economic activities at basic price at 2011-12 and
current price, respectively.

12

HOTEL INDUSTRY

Table-3: First Advance Estimates of GVA at Basic Price by Economic Activities

(At 2011-12 prices) (Rs. crore)

Industry

2015-16

2016-17

2017-18

Percentage

(PE)

(Ist AE)

change over
previous year

2016- 2017-

17

18

1. Agriculture,

1,617,208

1,696,175

1,732,371

4.9

2.1
forestry & fishing

2. Mining &

324,740

330,485

339,972

1.8

2.9
quarrying

3. Manufacturing

1,872,115

2,019,227

2,112,345

7.9

4.6

4. Electricity, gas,

224,447

240,590

258,672

7.2

7.5
water supply

& other utility
services

5. Construction

879,782

894,668

927,085

1.7

3.6

6. Trade, hotels,

1,989,161

2,143,956

2,329,801

7.8

8.7
transport,
communication
and services
related to
broadcasting

7. Financial,

2,298,798

2,429,638

2,606,602

5.7

7.3
real estate &
professional
services

8. Public

1,284,263

1,430,002

1,564,473

11.3

9.4
administration,
defence and

Other Services

GVA at Basic Price 10,490,514 11,185,440 11,871,320

6.6

6.1

Source: Compiled from Economic Survey, 2017-18

All these demographic and economic indicators and more are enough to convenience
that the real estate sector is having an ample scope growth in the coming years.

SECTION 2 – BUSINESS SCENARIO

13

Table-4: First Advance Estimates of GVA at Basic Price by Economic Activities

(At current prices)

Industry

2015-16

2016-17

2017-18

Percentage
change over
previous year

2016- 2017-

17

18

1. Agriculture,

2,175,547

2,372,085

2,438,546

9.0

2.8
forestry & fishing

2. Mining &

296,253

301,921

341,843

1.9

13.2
quarrying

3. Manufacturing

2,064,820

2,257,413

2,422,101

9.3

7.3

4. Electricity, gas,

321,651

342,422

368,269

6.5

7.5
water supply

& other utility
services

5. Construction

1,006,403

1,041,343

1,109,608

3.5

6.6

6. Trade, hotels,

2,294,364

2,519,999

2,825,708

9.8

12.1
transport,
communication
and services
related to
broadcasting

7. Financial,

2,631,120

2,889,048

3,186,115

9.8

10.3
real estate &
professional
services

8. Public

1,668,486

1,945,683

2,205,463

16.6

13.4
administration,
defence and

Other Services

GVA at Basic Price 12,458,642 13,669,914 14,897,653

9.7

9.0

Source: Compiled from Economic Survey, 2017-18

Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in the year 2017-

18 is likely to attain a level of Rs.129.85 lakh crore, as against the Provisional Estimate of

GDP for the year 2016-17 of Rs. 121.90 lakh crore, released on 31st May 2017. The growth

14

HOTEL INDUSTRY
in GDP during 2017-18 is estimated at 6.5 per cent. With GDP at current prices in the year

2017-18 is likely to attain a level of Rs. 166.28 lakh crore, as against Rs. 151.84 lakh crore
in 2016-17 showing a growth rate of 9.5 per cent.

The table-5 derived below shows some important countries gross domestic product
calculated at purchasing power parity per capita calculated by the International

Monetary Fund and the World Bank. The purchasing power parity value of al final goods
and services produced within a country in a given year is calculated by dividing the
average (or mid-year population). It can be seen from the figures that, even though

India ranks at a higher side in the world, still its ranking is improving contentiously. This
could be considered as a positive sign due to backward linkages for the real estate
industry.

Table-5: List of Countries by GDP (PPP) Per Capita

Country

International

World Bank

Monetary fund

Singapore

87,855

87,856

Switzerland

59,561

62,882

United states

57,436

57,467

Australia

48,899

46,790

Germany

48,111

48,730

Canada

46,437

44,025

United Kingdom

42,481

42,609

France

42,314

41,466

Japan

41,275

41,470

South Korea

37,740

35,751

United Kingdom

42,609

New Zealand

37,294

39,059

Italy

38,161

36,833

India

6,616

6,572

Source-Compiled Data from IMF and World Bank, 2017

(b) GDP Nominal:

The nominal GDP are calculated at market or government exchange rates. The ranks of
some of the major countries of the world calculated by the International Monetary Fund
and the World Bank are figured in the table derived below. From the table, it can be

SECTION 2 – BUSINESS SCENARIO

15
seen that as per the ranking given both the organizations, India stands among the top 10
countries in the world.

Table-6: List of Countries by GDP (Nominal)

Country

International

World Bank

Monetary fund

Singapore

305,757

296,966

Switzerland

680,645

659,827

United states

19,362,129

18,569,100

Australia

1,390,150

1,204,616

Germany

3,651,871

3,466,757

Canada

1,640,385

1,529,760

United Kingdom

2,565,051

2,618,886

France

2,574,807

2,465,454

Japan

4,884,489

4,939,384

South Korea

1,529,743

1,411,246

United Kingdom

2,565,051

2,618,886

New Zealand

200,837

185,017

Italy

1,921,139

1,849,970

India

2,439,008

2,263,522

Source-Compiled Data from IMF and World Bank, 2017

(c) GDP Growth rate:

Some important countries are listed in the following table ranked by their real gross
domestic product growth rate. The real growth rate is calculated by considering the
values of all final goods and services produced within a country in a given year. From the
ranks of International Monetary Fund, it can be seen that India’s position is among top five
countries of the world.

Table-7: List of Countries by GDP Growth Rate (Nominal)

Country

International

Monetary fund

Singapore

2.00

Switzerland

1.30

United states

1.60

Australia

2.50

16

HOTEL INDUSTRY

Germany

2.05

Canada

1.40

United Kingdom

1.80

France

1.20

Japan

6.83

South Korea

2.80

United Kingdom

1.65

New Zealand

4.00

Italy

0.90

India

8.50

Source-Compiled Data from IMF and World Bank, 2017

(d) Per Capita Income

The real per capita income (measured in terms of per capita net national income
at constant (2011-12) prices shown in table-1 derived above is one of the important
indicators representing the welfare of the people of a country. It is expected to increase
from Rs. 77,803 in 2015-16 to Rs. 86,660 in 2017-18, growing at an annual average rate
of 5.5 per cent. In nominal terms it increased by an average of 9.0 per cent per annum
from Rs. 94,130 in 2015-16 to Rs. 111,782 in 2017-18.

The per capita net national income during 2017-18 is estimated to be Rs 111,782 showing
a rise of 8.3 per cent as compared to Rs. 103,219 during 2016-17 with a growth rate of

9.7 percent.

The per capita income in real terms (at 2011-12 prices) during 2017-18 is likely to attain a
level of Rs. 86660/- as compared to Rs. 82269/- for the year 2016-17. The growth rate in
per capita income is estimated at 5.3 per cent during 2017-18, as against 5.7 per cent
in the previous year.

(e) FDI Inflow:

Table-8 derived below shows FDI share of the top 10 service sectors, such as financial
and non-financial services falling under the Department of Industrial Policy & Promotion

(DIPP) services sector definition; as wel as telecommunications; trading; computer
hardware & software; construction; hotels & tourism; hospital & diagnostic centres;
consultancy services; sea transport; and information & broadcasting that can be
taken as the best estimate of services FDI. However, these could include some non-
service elements too. The share of these services is 56.6 per cent of the cumulative

FDI equity inflows during the period April 2000-October 2017 and 65.8 per cent of

SECTION 2 – BUSINESS SCENARIO

17

FDI equity inflows during 2017-18 (April-October). If the shares of another 5 services
or service-related sectors like retail trading, agriculture services, education, book-
printing and air transport are included, then the total share of FDI equity inflows to the
services sector would increase to 58.5 per cent and 69.6 per cent respectively for the
above two periods. In 2016-17, FDI equity inflows to the services sector (top 10 sectors
including construction) declined by 0.9 per cent to US$ 26.4 billion, though the overall

FDI equity inflows grew by 8.7 per cent. However, during 2017-18 (April-October), the

FDI equity inflows to these services sector grew by 15.0 per cent, as compared to 0.8
per cent growth in total FDI equity inflows, mainly due to higher FDI in two sectors, i.e.,

Telecommunications and Computer Software and Hardware.

Table-8: FDI Equity Inflow to the Service Sector

Sector

Value (in US$

Share

Growth Rate

Billion
in Total

(%)

%

2016-

2017-

Apr

2016- 2017-

17

18 (Apr

2000

17

18

– Oct)

to Oct

(Apr-

2017

Oct.)

1. Services Sector

8.7

3.4

17.6

26.0

-45.8

2. Construction

2.0

1.4

9.9

-57.5

22.0

3. Telecommunication

5.6

6.1

8.4

320.1

115.9

4. Computer Software and

3.7

3.3

7.8

-38.2

116.0

Hardware

5. Trading

2.3

1.6

4.4

-39.2

-1.2

6. Hotel and Tourism

0.9

0.6

3.0

-31.3

-4.1

7.

Information
and

1.5

0.5

2.0

-50.3

-48.9
broadcasting

8. Hospital and Diagnostic

0.7

0.6

1.4

0.7

6.9
centre

9. Consultancy Services

0.3

0.4

1.1

-49.5

137.6

10. See Transport

0.7

0.6

0.9

71.2

71.1

Top 10 Services (1 to 10)

26.4

18.4

56.6

-0.9

15.0

Top 15 services

27.2

19.5

58.5

-1.7

17.5

Total FDI

43.5

28.0

100.0

8.7

0.8

Source: Compiled from Economic Survey, 2017-18

18

HOTEL INDUSTRY

(f) Services Sector:

With a share of 55.2 per cent in India’s GVA, the services sector continued to be the key driver
of India’s economic growth, and is expected to contribute almost 72.5 per cent of GVA
growth in 2017-18. While the growth of this sector in 2017-18 is expected to be at 8.3 per
cent, the growth in services exports and net services were robust at 16.2 per cent and 14.6
per cent respectively in 2017-18. Out of the 32 States and Union Territories (UTs) for which data
are released for new base (2011-12 series) by CSO, the services sector is the dominant sector
contributing to more than half of the gross state value added (GSVA) in 15 states and UTs.

Among these 32 states and UTs, Delhi and Chandigarh are at the top with over 80 per cent
and Sikkim is at the bottom with 31.7 per cent in terms of services sector GVA share. In 2016-

17, FDI equity inflows to the services sector (top 10 sectors including construction) declined by

0.9 per cent to US$ 26.4 bil ion, though overall FDI equity inflows grew by 8.7 per cent. However,
during 2017-18 (April to October), the FDI equity inflows to these sectors grew by 15.0 per cent,
as compared to 0.8 per cent growth in total FDI equity inflows, mainly due to higher FDI in two
sectors, i.e., telecommunications, and computer software and hardware. India remained the
eighth largest exporter of commercial services in the world in 2016 (WTO, 2017) with a share
of 3.4 per cent, which is double the share of India’s merchandise exports in the world. India’s
services export growth returned to positive ter itory with 5.7 per cent growth in 2016-17 from
growth of (-) 2.4 per cent in 2015-16. Services exports recorded a robust growth of 16.2 per
cent during April-September 2017, with turnaround observed in some major sectors like travel
and software services. India’s service sector imports also exhibited a much higher growth of

17.4 per cent in April-September 2017. Net services receipts rose by 14.6 per cent during April-

September of 2017-18 as compared with 2016-17. Net surplus in services financed about 49
per cent of India’s merchandise trade deficit in 2017-18 and cushioned the current account
deficit.

In India, the tourism sector has been performing robustly with Foreign Tourist Arrivals

(FTAs) growing to 8.8 million in 2016. Foreign Exchange Earnings (FEEs) from tourism
grew at 8.8 per cent to US$ 22.9 billion in 2016. As per the provisional data of Ministry
of Tourism, FTAs during 2017 were 10.2 million with a growth of 15.6 per cent, while
the FEEs from tourism were US$ 27.7 billion with a growth of 20.8 per cent over 2016.

Outbound tourism has also picked up in recent years, with the number of departures
of Indian nationals from India growing by 7.3 per cent to 21.9 million during 2016 from

20.4 million in 2015. This is more than double of the foreign tourists’ arrivals in India.

Domestic tourist visits grew by 12.7 per cent to 1,614 million in 2016 from 1,432 million
in 2015. The detailed contribution of Indian hospitality Industry to the services sector is
derived in the table-9 given below.

SECTION 2 – BUSINESS SCENARIO

19

Table-9: Share and Growth of India’s Hospitality Industry in Services Sector

(GVA at basic prices)

Sector

Share

Growth (%)

(%)

2015-

2015-

2016-

2017-

16

16

17

18

Total Services

52.9

9.7

7.7

8.3

Trade, repair, hotels and restaurants

11.4

11.2

7.7

8.7

(a) Trade and repair services

10.4

10.9

--

--

(b) Hotels and restaurants

10.0

14.4

--

--

Transport, storage, communication

7.0

9.3

--

--

& services related to broadcasting

(a) Railways

0.8

7.0

--

--

(b) Road transport

3.2

6.7

--

--

(c) Air transport

0.2

16.8

--

--

Financial Services

5.8

6.8

5.7

7.3

Real Estate, ownership of dwelling & 15.3

12.5

--

--
professional services

Public administration and defence 13.4

6.9

11.3

9.4
and others

Construction

8.1

5.0

1.7

3.6

Total Services

71.0

9.1

6.9

7.7

Source: Compiled from Various studies.

2.3 NATURE:

There has been a continued change in the revenue composition over the past few years.

Although ARRs saw a marginal increase, the trend of declining revenues from the Rooms
division continued in 2013-14, falling from 52.2% in 2012-13 to 51.3% in 2013-14. The
contribution of Food and Beverage (F&B) revenue, on the other hand, has increased
marginally from 41.2% in 2012-13 to 41.9% in 2013-14 with rising contribution from

Banquets and Conferences. Additional y, Other revenue that includes laundry, gift shop,
business centre, health club and rentals also saw a slight growth from 6.6% in 2012-13 to

6.9% in 2013-14. The survey reveals that energy expenses on an All-India PAR basis have
increased by 13.2% in 2013-14 as compared to that in the previous year. Over the past

20

HOTEL INDUSTRY
five years, the energy cost on a PAR basis has grown at a CAGR of 10.5%. High energy
costs are a major concern especial y in cities such as Chennai and Pune where they are
a major factor in declining profitability of hotels. This year’s survey reveals that amongst
the use of various technological applications, the use of Energy Management Systems

(EMS) has witnessed the highest increase on an Al -India level, both in sourcing the energy

(renewable sources like solar) and water (tapping rainwater and using treated grey water).

The average number of employees per hotel has increased marginally from 95.1 in 2012-

13 to 95.8 in 2013-14. However, it is interesting to note that the increase has been at the
managerial and supervisory level. In fact, according to the survey results, the increase in
the number of employees at the supervisory and managerial levels has been growing at
a CAGR of 4.7% over the past five years, whereas the number of staff level employees
per hotel has increased at only 1.7%. The use of technology and increasing dependence
on online reservation systems is a fast emerging trend amongst hotels across the country.

Hotels are focusing more on online travel agents and third-party websites for advance
reservations due to the scale and reach of these channels. The use of property level
technology such as Intranet and Local Area Network (LAN), Yield Management Systems,

Property Management Systems, and Electronic Keycards is also increasing across hotel
segments. The use of cash as a payment method has been on a declining the past few
years. In 2013-14, the percentage of guests using cash as a payment method was 36.1%
as compared to 43.2% in 2009-10. This trend is in line with the countrywide trend of cash-
free transactions and increased usage of credit cards and electronic fund transfer, which
have become a norm across industries such as retail.

2.4 TYPES OF HOTEL INDUSTRY

The hotel industry is a mature industry marked by intense competition. Market share
increases typically come at the competitor‘s expense. Industry wide, most growth occurs
in the international, rather than in the domestic, arena.

Commonly, hotel industries are classified as:

Ø

Commercial Hotels – These cater mainly to business clients and usually offer room
service, coffee-shop, dining room, cocktail lounge, laundry and valet service as
wel as access to computers and fax services.

Ø

Airport Hotels – There are conveniently located near airports to provide any level
of service from just a clean room to room service; sometimes provide bus or
limousine service to the air lines as wel .

Ø

Conference Centers – There are designed to specifically provide meeting space
for groups; they provide all services and necessary equipments required to handle
conventions.

SECTION 2 – BUSINESS SCENARIO

21

Ø Economy Hotels- These hotels provide a limited service and are known for clean
rooms at low prices meeting just the basic needs of travelers.

Ø

Suite or Al -Suite Hotels- These are hotels which offer spacious layout and design.

Business people like the setting which provides space to work and entertain
people separate from the bedroom.

Ø

Residential Hotels- They are very popular. The typical residential hotel offers long-
term accommodations.

Ø Casino Hotels- There are often quite luxurious. Their main purpose is to support
the gambling operations. Casino hotels often offer top name entertainment and
excellent restaurants.

Ø Resort Hotels – These are the planned destination of guests, usually vacationers.

These beaches resorts are located at the or in the mountains away from main
cities. Resort hotels may offer any form of entertainment to keep their guests
happy and busy.

Few popular categories of Indian hotels are:

Ø Restaurants- A restaurant is a business which prepares and serves food and drinks to
customers in exchange for money, either paid before the meal, after the meal, or
with an open account. Traditional y, Indians tended to eat at home and eat Indian
cuisine. Those who ate outside the home often ate street foods from the enormous
number of street stal s and informal eateries that are a common sight across the
streets. Eating in a restaurant was reserved for special occasions. However, India
appears to be in the early stages of a significant transformation in the restaurant
sector. Indian consumers are eating out more frequently and younger generation
has shed the bias of their elders against international franchises and foreign foods.

With only an estimated 100,000 modern organized restaurants (20 or more seats,
waiting staff, menus) in India, there is plenty of room for growth in the industry. It is
estimated that Indians spend 8 to 10 percent of their food expenditure outside the
home in restaurants, cafeterias and other food establishments As per the 2013 India

Food Service report published by the National Restaurant Association of India, the
restaurant sector is valued at $48 bil ion and is expected to grow to $78 bil ion in
the next five years. In terms of market segments, Quick Service Restaurants (QSR)

and Casual Dine in formats account for 74 percent of the total market, while Cafés
make up 12 percent, and Fine Dining Pub Bars Clubs& Lounges (PBCL) comprise
the rest After struggling with supply chain issues for many years, major franchises
have developed a handful of suppliers in India who can meet quality requirements,
placing existing restaurants in a better position to expand and ease the way for new

22

HOTEL INDUSTRY
restaurants seeking to enter the market. While the number of casual dining, fast food
restaurants and coffee shops is growing, high tariffs and other trade restrictions tend
to limit the use of imported food products on restaurant menus. Imports are typical y
limited to specialty ingredients that are not available in India.

The level of competition within the restaurant industry is unprecedented. Success
in this environment requires brands to focus on a number of strategic imperatives
that will define the industry in 2018 and beyond:

ü Embrace the experience: In today’s competitive restaurant marketplace,
successful brands need to do much more than offer good food at a
reasonable price. They need to deliver a differentiated customer experience
along with their meals. But differentiation is not so simple. It requires restaurants
to execute on all dimensions of the customer experience: value, menu,
quality, and the right managers and employees to tie it all together.

ü Drive employee engagement: Many winning brands are discovering that
strategic employee engagement programmes are the foundation for
redefining and transforming the customer experience, driving brand loyalty,
and growing their market share. Engaged and motivated employees are
at the heart of positive restaurant experiences – from how customers are
greeted when they walk through the door, pick up a take-out order, or get
home delivery, to how quickly and well their food is prepared and served.

According to our recent customer experience survey, a staff of friendly,
hospitable employees was cited as the most important element needed
for a positive experience at a restaurant.

ü Dominate delivery: A swell of food delivery apps have permanently changed
consumers’ expectations of when and how they get their food. For some
brands, the shift to third-party digital distribution can translate to massive
exposure and order volume. For others, it represents a missed opportunity
to engage directly with their customers, understand their preferences, and
build better relationships not to mention lost revenue.

ü Compete with non-traditional players: The days of high volume foot traffic
at overcrowded mall food courts are mostly over. A rising penchant for
unique food experiences, authentic local menus, and convenience are
drawing customers away from traditional brick-and-mortar locations as they
explore alternatives such as pop-up food kitchens, food trucks, restaurants
in premium grocery stores, subscription-based meal kits, and even privately
hosted meals enabled by the sharing economy. Traditional players should
consider the risks of sticking with traditional strategies.

SECTION 2 – BUSINESS SCENARIO

23

ü Operational excellence and compliance: Many restaurants are realizing
the pressing need to augment store operations through better technology
enablement, which reinforces operational excellence and enhances
team member capabilities. Benefits include increased store performance,
enhanced “on-brand” guest experience, and stricter adherence to
regulatory requirements.

Ø The restaurant industry should anticipate the level of competition and innovation
to rise throughout 2018 as Wall Street continues to get more aggressive in the
sector. Private equity players and the broader investment community are no
longer keeping it safe with larger restaurant brands with proven track records.

They are increasingly paying attention to smaller restaurant players with bold,
innovative ideas around menu, technology, and supply chain. Deep pockets are
hunting for innovation and opportunity. This collision of capital investment and
new ideas will continue to drive unprecedented disruption throughout the industry.

Ø

Café/Bars- Cafés/bars in India are driven by many factors, such as favourable
demographics, rising income levels, the development of mid-sized cities and
the advent of international chains. A growing willingness, especial y among the
youth, to consume food and drink outside the home and increasing disposable
incomes are helping to fuel further growth. Cafés/bars are considered as perfect
places to socialize and hangout; hence, sales in this category are mainly driven
by the younger generation. The population segment aged 15 to 34 is the target
demographic that visits cafés/bars frequently. Young people also prefer to drink
on-site rather than take products away. Chained cafe culture is also growing in

India. They are likely to expand their numbers of outlets and also extend their
reach to medium- and small-sized cities. These expansion plans would al ow
café chains to leverage on the growing influence of the coffee culture in India.

Chained cafés, especially those in cities, are expected to provide value for money
food items on their menus to induce new consumers into trying their products.

Premium outlets are expected to spring up in major cities to tap into consumers
who are wishing to upgrade. Rising disposable incomes, a greater population of
younger people, growth of consumers in smaller towns and widening exposure
to a drinking and pub culture has propelled the growth of bars and pubs, as wel .

This growth was driven by an increasing number of Indian consumers partaking
in alcoholic drinks. Bars and pubs make a major proportion of from money from
drinks. Brew pubs featuring craft products are a new concept that is appearing in
different parts of the country and slowly gaining popularity among beer drinkers.

Table-10 derived below shows the figures of foreign tourist arrivals to India 2004 to 2016
from top 15 sources. Whereas table-11 highlights foreign exchange earned by India over
the last few years due to tourism activities.

24

HOTEL INDUSTRY

425

2016

1296939

941883

1380409

297418

317239

238707

265928

251313

293625

301961

163688

251313

227749

95417

111076

119663

161097

6715

189

2015

1213624

867601

1133879

299513

284306

230854

24314

207413

263101

272941

152238

206322

172419

88091

102993

115860

154720

5790
ia.

099

2014

Ind

1118983

942562

838860

301601

268485

246101

262026

239106

219516

239762

150731

181020

269832

91589

106870

121362

126416

7679
ntries

nt of

601
e
ou

2013

C

1085309

809444

524923

262345

255222

248379

252003

220283

218967

242649

143025

174712

259120

93951

112619

117136

113790

6967
rnm
e
ve
rc

o

745

G

2012

1039947

788170

487397

296983

256021

240674

254783

220015

202105

195853

131452

168952

177526

98743

109469

105141

125375

6577

15 Soup
urism,

222

To

2011

To

92404
m

980688

798249

463543

305853

259017

231423

240235

193525

192592

208196

119022

142218

144312

100889

108680

119131

6309

fro

692
ia

2010
nistry of

931292

759494

431962

266515

242372

225232

227720

168019

169647

179077

107487

119530

122048

94100

95587

76617

104374

5775
f Mi

s in Ind

699

2009
rts o

827140

769251

468899

239995

224069

196462

191616

124756

149074

135343

95328

100209

94945

77873

70485

67309

88785

5167
op
rrival

(1)

603
us Re
urist A

2008

804933

776530

541884

218805

222364

207802

204344

145352

146209

115794

97851

98093

91095

85766

82335

58065

78133

5282
rio

To
va
ign

504
m
re

2007

799062

796191

480240

204084

208214

204827

184195

145538

135925

112741

92908

88103

75543

93540

84583

50037

83037

5081
fro

167
iled

-10: Fo
p

2006

82574

62330

62203

79978

70407

46623

91552
le

696739

734240

484401

154813

176567

175345

156808

119292

109867

107286

4447
mo

Tab

: C

610
e

2005

611165

651803

456371

136400

157643

152258

120243

103082

96258

96276

68666

44897

56446

67642

49895

41978

77024

3918
urcSo

698

2004

526120

555907

477446

128711

135884

131824

116679

96851

81608

84390

60710

34100

47077

65561

47835

33442

53207

3456
f
s
n)

o
sh
ai
uth)

e
rie
ed

a
ny
reo
m
la
e
a
lia
ysia
p

(M

(So
nd
a
unto
nka
an
a
a
a
a
ila

N

C
ng
nad
nc
rm
a
e
pal
ustra
al
hin
ly
re
e
tal

USA

UK

Ba

Srila

C

Fra

G

Jap

A

M

Sing

C

Russia

Ita

Ko

Tha

N

To

SECTION 2 – BUSINESS SCENARIO

25

Table-11: Foreign Exchange Earnings from Tourism

Month

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Jan

1229

1505

2055

3272

3970

4698

4599

4530

5593

5777

8623

10785

11664

Feb

1294

1442

2050

3136

3793

4401

5496

4610

6646

7653

8502

10255

11510

March 1177

1199

1812

2985

3378

4144

4312

4160

5507

5522

7843

9545

10479

April

1102

1153

1368

2156

2850

3218

3740

3873

4518

5724

6745

7226

9179

May

947

1014

1134

1957

2350

2543

3153

3410

4358

5047

5562

6627

7936

June

906

1263

1364

2144

2566

2849

3538

3926

4751

5440

6485

7149

8366

July

1254

1489

1779

2556

2990

3436

4553

5042

5444

7116

8389

8620

10284

Aug

1127

1354

1552

2273

2698

3080

4041

4306

4620

5734

7260

8351

10385

Sept

1108

1264

1476

2135

2640

2594

3602

3852

4678

5748

6652

7811

9057

Oct

1111

1421

1906

2921

3355

3785

4234

4543

5219

7019

8154

8645

10041

Nov

1351

1585

2389

3560

3793

4533

5003

5361

6516

7941

9723

10663

11431

Dec

1588

1741

2589

4028

4642

5079

5023

6096

7039

8870 10549 11994

12988

TOTAL 14195 16429 21472 33123 39025 44360 51294 53700 64889 77591 94487 107671 123320

Source: Compiled from various Reports of Ministry of Tourism, Government of India.

Figure-2 derived below shows the pictorial representation of the foreign exchange earnings
earned by India from Tourism.

Figure-2: Foreign Exchange Earnings from Tourism

As per the latest World Tourism Barometer of the United Nation’s World Tourism

Organization (December, 2017 edition) international tourist arrivals reached a total

26

HOTEL INDUSTRY
of 1.2 billion in 2016, 46 million more than in the previous year, though the growth
rate of 3.9 per cent was lower than in 2015 (4.6 per cent). In India, the Tourism sector
has been performing wel with Foreign Tourist Arrivals (FTAs) growing at 9.7 per cent to

8.8 million and Foreign Exchange Earnings (FEEs) at 8.8 per cent to US$ 22.9 billion
in 2016. As per the provisional data of Ministry of Tourism, FTAs during 2017 were 10.2
million, with a growth of 15.6 per cent, while, the FEEs from tourism were US$ 27.7
billion, with a growth of 20.8 per cent over 2016.

Outbound tourism has also picked up in recent years, with the number of departures of

Indian nationals from India growing at 7.3 per cent during 2016 to 21.9 million from 20.4
million, in 2015. This is more than double the foreign tourist arrivals in India. Domestic tourist
visits grew by 12.7 per cent to 1,614 million in 2016 from 1,432 million in 2015. In terms
of number of domestic tourist visits, Tamil Nadu, Uttar Pradesh, Andhra Pradesh, Madhya

Pradesh, and Karnataka were the top 5 destination States, accounting for 61.3 per cent
of total number of tourist visits in 2016. Amongst centrally protected ticketed monuments,
for domestic visitors, Taj Mahal was the most visited monument in 2016 followed by Qutub

Minar and Red Fort, while for foreign visitors Taj Mahal was the most visited monument,
fol owed by Agra Fort and Qutub Minar.

Table-12: Growth in Net Sales of selected Services: Company-Based

Services

Net Sales

2015-16

2016-17

2017-18*

Transport Logistics

1.0

7.3

5.8

Shipping

-1.6

-18.7

4.75

Aviation

6.7

9.1

15.65

Retail Trading

23.0

19.5

17.0

Health services

15.4

12.8

10.65

Hotel and Restaurant

8.1

2.7

1.1

ITES

17.8

9.5

2.95

Software

11.2

7.2

3.85

Construction & Real Estate

7.6

-1.9

1.9

Source- Compiled from Economic Survey, 2017-18, * Average of Q1+Q2

SECTION 2 – BUSINESS SCENARIO

27

Graph-2 derived below shows figures of room availability in major Indian cities and
estimated rooms availability by the year 2021-22 as predicted by HVS research.

Source: HVS Research.

Business Transactions

A robust business management strategy is of the utmost importance for helping one to
optimize business results. Following are a few business strategies which are commonly
needed while involving oneself in this sector.

• Market Knowledge

In order to implement a successful revenue management strategy, one must clearly
understand his/her market which includes analysis on where demand comes from and
various different local factors that might affect seasonal demands, nature of customers
visiting to that place, competition that exists within the market, marketing strategies that
the competitors are implementing and so on.

For instance, many business customers enjoy a hotel that has close proximity to the
airport. Some may prefer viewing natural sights, etc.

• Segmentation and Price Optimization

Selling the right room to the right person at the right price is most important. This requires
adequate analysis on consumer segments. This, in turn, may help to generate customer
loyalty from those who appreciate the price consistency.

For example, some guests may prefer a ground floor room, later breakfast, or 24-hour
gym access. Providing these choices will make the guest feel like they’ve had a more
personalized stay.

28

HOTEL INDUSTRY

• Proper Coordination between the Departments

It is important to maintain close coordination between the various departments of the
hotel in order to ensure direction proper.

• Forecasting Strategies

Forecasting helps to anticipate future demand and revenue by enabling necessary
adjustments to be made whenever required. Within the hospitality industry, high-quality
forecasting relies on upkeep of accurate records, including occupancy, room rates
and revenue.

• Proper Branding of the USP

One of the most important requirements is to brand the USP in a fruitful way. The
branding strategy mostly depends on the nature of customers.

Corporate Actions

One of the recent mergers in the industry is the Louvre Hotels Group, the second largest
in the hospitality industry in Europe, bought a majority stake in Sarovar Hotels in India this

January, beating Wyndham Hotel Group in the race. The deal, estimated at $50 million

(Rs. 336 crore), makes the combined entity one of the biggest hotel chains in India in
terms of number of properties.

The basic activities involved in the corporate actions are:

§ Corporate and entity level transactions

§ Buy and sell side M&A advisory

§ Cross-border expansion including portfolios

§ Capital sourcing

§ Joint ventures

§ Company valuations

§ Business restructuring

SECTION-3

LEGAL FRAMEWORK

3.1 INDUSTRY TYPE

Hotel Industry is an integral part of services Industry. This industry goes hand in hand with a
few other important related industries, like tourism industry, food processing, aviation and
road transportation, entertainment industry.

3.2 APPLICABLE LAWS

General Laws

The majority of the legislations governing the hospitality and hotels industry can be divided
into three main sectors.

• The first head is the legislation for the construction and commissioning of hotels,
restaurants, guest houses and other establishments, and it includes the Foreign

Exchange Management Act, the industrial licensing policies, land laws and
various development control orders issued by the Central and state governments.

• The second head has legislation for the operation, maintenance and management
of establishments, food and hygiene standards. It also includes insurance laws,
fire safety, and weights and measures regulation. Further, various licenses, such as
liquor license, dance license, lodging-house license, eating-house license, police
permissions, a license under the Shops and Establishment Act, or a license under the

Food and Drug Administration Act granted on an annual basis.

• The third head has rules regarding taxation, employment and other contractual
relationships. This includes laws on income tax, service tax, expenditure tax, excise
duty, luxury tax, entertainment tax, as well as laws on employment matters like

Apprentice Act, ESI Act, etc.

Licenses Required

Following are a few important licenses required for the hotel industry as specified under
various acts.

29

30

HOTEL INDUSTRY

• Police License / Registration.

• License under Shops & Establishments Act.

• License under Prevention of Food Adulteration Act.

• Registration under the Luxury Tax Act.

• Registration under the Sales Tax Act.

• Registration under the Contract Labour Act.

• Registration under the Pollution Control Act.

• Registration under the Apprentices Act.

• Registration under the Provident Fund Act.

• Registration under the ESI Act.

• Entertainment License on Festival Occasions

• License for Chimney under the Smoke Nuisance Act.

• Registration under the Weights & Measures Act.

• Factory License for Laundry.

• Central Excise License for Bakery Products.

• Registration & Permits under the Motor Vehicle Act for Tourist Coaches / Taxies.

• Eating House License.

• Municipal Beer Bar License.

• License for storage of Diesel Oil.

• License for storage of Kerosene & Compressed Gas (LPG).

• Sign Board Directions, Neon Signs.

• License to deal in Foreign Exchange under FEMA.

• Cold Storage License, (if over 25 cubic ft.).

• License for Boiler & Generators and Mixers and Grinders.

• Bar License (Foreign Liquor).

• Mild Liquor License.

• Temporary License for Awnings & covering of Terrace during monsoon.

• Building Completion Certificate.

SECTION 3 – LEGAL FRAMEWORK

31

• Copy Right License for Playing of Music.

• Lodging House License

• Approval from the Department of Tourism, Government of India.

• Registration from GTDC for new projects under the Package Scheme of Incentives.

Specific Acts Applicable

Prevention of Food Adulteration Act

It is a Central Government Act and its main purposes are to:

• protect the public from poisonous and harmful foods;

• prevent the sale of substandard foods;

• protect the interests of the consumers by eliminating fraudulent practices.

Food Safety and Standards Act, 2006

The Act deals with the fol owing:

• Establishment of the Food Safety and Standards Authority of India, which lays
down scientific standards relating to articles of food;

• Regulates the manufacture, storage, distribution, sale and import of food articles;
and

• Ensures the availability of safe and wholesome food for human consumption and
for matters connected therewith or incidental thereto.

The Legal Metrology Act

This Act is a Central Government Act enacted to establish and enforce standards of
weights and measures, regulate trade and commerce in weights, measures and other
goods which are sold or distributed according to weight, measure or number.

The Apprentices Act

This Act has been enacted to provide to regulate and control of training of the apprentices
and for matters connected therewith. It is a Central Government Legislation

The Air (Prevention and Control of Pollution) Act, 1981

This Act as a Central Government Legislation has been enacted to provide for the
prevention, control and abatement of air pollution, for the establishment, with a view to
carrying out the aforesaid purposes of Boards, for conferring on and assigning to such

32

HOTEL INDUSTRY

Boards, the powers and functions relating thereto and for matters connected therewith.

The Water (Prevention and Control of Pol ution) Act, 1974

As a Central Government Legislation, this Act has been enacted to provide for the prevention
and control of water pol ution and for maintaining or restoring of wholesomeness of water
for the establishment, with a view to carrying out the purposes aforesaid of Boards for the
prevention and control of water pollution, for conferring on and assigning to such Boards,
the powers and functions relating thereto and for matters connected therewith.

Hotel Insurance Policies

Hotel insurance is specifically designed to meet the growing requirements of the hotel
industry. Some purposes of the act includes

• Customized hotel insurance can be arranged to cover all types of establishments.

Be it spas, ranches, guest houses, bed and breakfasts (B and Bs) or apartments,
hotel insurance caters to every kind of establishment.

• A standard hotel insurance policy includes protection against perils, such as
builder’s risk, fire and accidental damage, and natural calamities. Other types of
coverage, such as liquor liability are also a part of the policy’s casualty portion.

Goods and Services Tax

The GST slab on hotel room tariffs that widens the slab of 18 per cent to tariffs ranging
between Rs 2,500 and Rs 7,500. With the revision, the highest tax rate of 28 per cent is
assigned to tariffs of Rs 7,500 and above. The slabs for room tariffs, the tax rate for air-
conditioned restaurants, including restaurants in five-star hotels will have GST at 18 per
cent, effective from July 1, 2017. Hotels and lodges with a tariff below Rs 1,000 a day are
exempted from GST, while those with a room rate of Rs 1,000-2,500 are taxed at 12%,
those with a tariff of Rs 2,500-7,500 will attract 18% tax and those above Rs 7,500 will be
taxed at 28%. Earlier, threshold for the 28% slab was at room tariffs of Rs 5,000, but later it
was revised to Rs 7,500 by the GST Council.

Income Tax Act, 1961

It is tax on income imposed by Central Government. Residents in India are taxed on their
worldwide income. Non- residents are taxed on their Indian sources of income.

Value Added Tax (VAT)

Before GST, Sales tax / VAT is levied by states on the sale of goods within its territory. VAT is
levied on value added at each stage in the production and distribution process of goods

SECTION 3 – LEGAL FRAMEWORK

33
and services. All hotels that exceed the annual registration threshold have to be registered
for VAT. VAT is levied on hotel bills pertaining to lodging, food, telephone, tours, etc. After
the implementation of VAT, hotel tax was abolished and therefore hotels do not have to
be registered for hotel tax anymore. The rates of VAT differ from state to state. The general
rate of VAT applicable on food and beverages in a restaurant is 14.5 %.

CENVAT

Before GST, Duty imposed by Central Government on manufacture of goods, CENVAT is
imposed at 12 % with lower rates applicable in certain cases. Food preparations containing
fruits and vegetables falling under Chapter 20, which are prepared and served in a hotel,
restaurant or retail outlet, whether or not such food is consumed in such hotel, restaurant
or retail outlet is being fully exempted from basic excise duty with exception of the Bakery
and Confectionery items.

Service Tax

Before GST, under the recent service tax regime, al services are taxable unless exempt.

General rate of service tax is 12.36 % (Including EC and SHEC). Service tax on hotel
accommodation is payable at 7.42 %. Service tax on food and beverages is chargeable
at 4.94 % in restaurants with air-conditioning. Food served in hotel rooms from their air-
conditioned restaurants with liquor license will not attract service tax.

Luxury Tax

Under the current tax regime, every state has their individual Luxury Tax Acts. Though
previously it covered more categories of assessees, at present it covers only the hotels
as a taxable assessee. The tax is levied on luxuries provided in hotels, lodging houses,
clubs and inns, etc., including residential accommodation but it does not include the
supply of food, drinks or other services which are separately charged for under Service

Tax or other taxes.

Expenditure Tax

Expenditure tax, a tax col ected by Central Government in India is regulated by the

Expenditure Tax Act, 1987. This Act shal apply in relation to any chargeable expenditure
incurred in a hotel wherein the room charges for any unit of residential accommodation
at the time of incurring of such expenditure or incurred in a restaurant are one thousand
two hundred rupees or more per day per individual and where (a) a composite charge
is payable in respect of such unit and food, the room charges included therein shal be
determined in the prescribed manner; (b) (i) a composite charge is payable in respect of
such unit, food, drinks and other services, or any of them, and the case is not covered by
the provisions of sub-clause (a), or (ii) it appears to the Assessing Officer that the charges

34

HOTEL INDUSTRY
for such unit, food, drinks or other services are so arranged that the room charges are
understated and the other charges are overstated; and (2) incurred in a restaurant.

3.3 STATE ACTS

The State specific Shops and Establishments statutes

These legislations have been enacted to provide statutory obligation and rights to
employees and employers in the unorganized sector of employment, i.e., shops and
establishments.

• It is applicable to all persons employed in an establishment with or without wages,
except the members of the employer’s family.

• It is a state legislation and each state has framed its own rules for the Act. The

State Government can exempt, either permanently or for a specified period, any
establishments from all or any provisions of this Act.

• The Act provides for compulsory registration of shop/ establishment within 30
days of commencement of work and al communications of closure of an
establishment within 15 days from its closing.

• It also lays down the hours of work per day and week as wel as the guidelines for
spread-over, rest interval, opening and closing hours, closed days, national and
religious holidays, overtime work, etc.

Entertainment/Amusement Tax

In India, entertainment tax is levied on every financial transaction that is related to
entertainment such as movie tickets, major commercial shows and big private festivals.

Entertainment means any exhibition, performance, amusement, game, sport or race,

(including horse race) and cinematographic exhibitions. As per the Indian Constitution,
entertainment is included in List 2. This revenue is reserved primarily for the state
governments.

Following are some other forms of entertainment that are included in the purview of
entertainment taxes: amusement parks, video games, arcades, exhibitions, celebrity
stage shows, sports activities, bowling alleys and billiards/pool joints.

In India, state governments are primarily responsible for collecting the entertainment
taxes. However, the union government can also col ect these taxes on the basis of the
type of transaction.

The basic financial principle, which separates the entertainment taxes to be collected

SECTION 3 – LEGAL FRAMEWORK

35
by the union government and ones under the jurisdiction of the State Government is
mentioned in the Article 246 of the Indian Constitution.

Regulatory Agencies

The hotel industry is governed by few regulatory agencies. The brief functions of the
agencies are:

The Hotel and Restaurant Approval and Classification Committee (HRACC)

It inspects and assesses establishments based on the facilities and services offered. The

Department of Tourism grants star status based on how wel the establishment scores in
the HRACC report: 90 % = five-star deluxe; 80 % = five star; 75 % = four star; 65 % = three
star; 55 % = two star; and 50 % = one star.

The Department of Tourism

The department of tourism acts as a nodal agency in the operations of the hotel industry.

Some important functions are:

• Approval of Hotels at Project Stage and Classification & Reclassification of Hotels.

• Guidelines for Classification of Heritage Hotels.

• Time Share Resorts (TSR).

• Stand Alone Restaurants.

• Guidelines for apartment hotels.

• Guidelines for approval of Guest Houses.

• Hospitality Development and Promotion Board.

• Implementing a transparent system for the effective monitoring of hotel projects.

• Ensuring timely accrual of approvals / clearances / NOCs by the multiple agencies
and facilitate the implementation of hotel projects.

• Expeditious clearances wil enable completion of hotel projects in time leading to
enhancement of room availability for the tourists.

SECTION-4

CONTRIBUTION OF COMPANY SECRETARY

4.1 INTRODUCTION

In the light of economic developments in recent years stakeholders of companies,
particularly in the services sector, are increasingly concerned with the conduct of
the affairs of the company and therefore it is essential that best practice is adhered
to at all times and evidence is available to demonstrate the same. The requirement
for higher standards in Tourism Industry can be further evidenced by the introduction
of the Ministry of Tourism and other Global regulatory bodies a series of corporate
governance codes including fitness and probity standards for certain pre-approval
control ed functions or persons who perform controlled functions. Controlled functions
include “ensuring, controlling or monitoring compliance by a regulated service provider
with its relevant obligations”. Therefore the Company Secretaries in employment role
may be presented as per the following diagram:

Fig-3: Role of a Company Secretary

While the monitoring of compliance in the services sector has traditionally been outsourced
with the introduction of these new standards there is more caution in the provision of such

36

SECTION 4 – CONTRIBUTION OF COMPANY SECRETARY

37
services which are more likely in the future to be laid at the feet of the company secretary.

It is true to say that the role of the company secretary also includes keeping the Board
informed of new legislation and how it applies to them. With this increased focus on
corporate governance, the role of the company secretary has been extended such that
the secretary is now seen as the guardian of the company’s compliance with legislative
requirements and best practices.

As far as hospitality industry and particularly hotel Industry is concerned a Company

Secretary primarily has to perform the following role:

Governance and Regulatory Compliance:

• Review al corporate governance arrangements or developments which might
impact the Board.

• Ensure that the Board is fully briefed on all governance matters.

• Provide advice and guidance to the Board on al matters of governance, statutory
requirements, laws, regulations risk, compliance, duties and responsibilities.

• Monitor changes in relevant legislation and advise the Board

• Ensure that board and management remains compliant with applicable
standards of corporate governance and has the necessary infrastructure to
support the governance rationale and governance framework.

• Develop and oversee the systems that ensure, the company complies with all
applicable codes, in addition to its legal and statutory requirements.

• Manage and compile content of the governance report of the Annual Report

• Ensure implementation of board deliverables as agreed with the shareholders.

Board and Committee Administrative Support:

• Convene meetings in compliance with regulatory requirements, including notice
of meetings, agendas preparing meeting packs, dissemination of information,
coordinating attendance at meetings and minutes taking, etc.

• Ensure company policies are kept current and approved, and that company
members are aware of their implications.

• Deal with correspondence, collating information and writing reports, ensure
decisions made and actions from meetings are communicated to the relevant
company stakeholders.

38

HOTEL INDUSTRY

• Positively support the implementation of all decisions of the Board, Committee

Members, and the CEO.

Hotel Records and Policy Maintenance:

• Oversee the storage, maintenance, and retrieval of corporate documents to
ensure secure access and safe-keeping.

• Review meeting materials prior to presentation, and ensure compliance with the
company’s document retention policy.

• Establish and maintain relationships with key stakeholders, Board, Committee

Members, external regulators and advisors.

• Communicate and engage relevant stakeholders on directions and decisions
taken by the business.

• Policy and charter maintenance, compilation and implementation.

In the hotel Industry, Management of Human Resources is very important. A Company

Secretary may become the guiding force in Human Resources Management like
advising on Industrial and Labour Laws; manpower planning and development;
performance appraisal; Remuneration Strategies following the applicable laws of
land; Audit of the HR function; Office Management, Work Studies and Performance
standards; Maintaining Industrial relations; Preparation of Project Reports and Attaining

Cultural Integration.

In exercise of the powers conferred by section 410 of the Companies Act, 2013, the

Central Government hereby constitutes the National Company Law Appel ate Tribunal
for hearing appeals against the orders of the National Company Law Tribunal with effect
from the 1st day of June, 2016. Establishment of NCLT/NCLAT shal offer various following
opportunities to Practicing Company Secretaries as they have been authorized to appear
before the Tribunal/ Appellate tribunal:

• Compromise and arrangement,

• Sick companies,

• Winding up, (only notified sections)

• Reduction of capital, etc.

• Act as company representative in all other related matters.

Likewise now-a-days the Practicing Company Secretaries are taking a lead role as

Counsel of various Corporates to appear before the other Quasi-judicial Bodies such

SECTION 4 – CONTRIBUTION OF COMPANY SECRETARY

39
as Competition Commission of India, Securities Appel ate Tribunal, Registrar of

Companies, Consumer Forums, Telecom Disputes Settlement and Appellate Tribunal

Tax Tribunals, etc.

4.2 ROLE OF COMPANY SECRETARY IN EMPLOYMENT

Advisory Service

Performs independent reviews across various verticals of compliance viz. statutory,
regulatory, product, legal, HR, administration etc., and submits a quarterly/periodic report
to the management for review.

Compliance

Develop, maintain and refresh the company’s compliance programme/ framework to
ensure all key risks are objectively assessed & dealt with.

Procedural

Identify risks for the company and prepare of mitigation plan for risks pertaining to non-
compliance of Indian regulations, licensing requirements and Code of Ethics violations.

Representation

Take on legal department projects related to contracts, contract management &
commercial transactions.

4.3 ROLE OF COMPANY SECRETARY IN PRACTICE

• Preparing case for Arbitration and representation before arbitrators

• Consultation on behalf of companies at NCLT

• Consultation as an expert in providing training to employees

• Consultation in market development assistance scheme (Annexure-I: Guidelines
for the scheme of market development assistance for promotion of domestic
tourism

• Consultation in certification of the industry (Format attached in Annexure-II)

• Any other such consultancies that are required from time to time

4.4 SUGGESTIONS TO MINISTRY OF TOURISM (MOT) TO BOOST INDIAN HOTEL

INDUSTRY:

1. To Take Support and expertise from the Professionals like Company Secretaries to
design Ling Term Planning and Legal Compliances.

40

HOTEL INDUSTRY

2. To provide for effective marketing and advertisement of India as a global tourist
destination through promotional campaigns that project India as a whole and
not merely a combination of states.

3. Proper transportation facilities: Families in different strata need facilities like
bus, cars, and trains to approach their favorite destinations. Major distances
are covered by trains or planes. Sufficient transport facilities exist and additional
facilities can be made for the same based on requirements. India’s transportation
system is also in need of a serious overhaul. Although cars and trucks traverse

India’s roads, laws for operating vehicles are widely ignored. Often the result is pure
chaos, as cars, trucks, bicycles and rickshaws drive into opposing traffic rules and
ignore traffic lights to get where they need to go. Fatal car and truck accidents
are not uncommon. For a tourist visiting India, the experience of traveling along

India’s lawless roadways can induce cardiac arrest. While India also has an
extensive railway system, due to overcrowding and poor maintenance, this
mode of transportation is not in any way better. Trains are frequently so crowded
that people sit on the roofs of moving trains or hang out the windows. While a
rare breed of adventurous tourist may find traveling on India’s trains exciting, the
majority of tourists find using India’s railways highly inconvenient. India needs to
enforce its traffic laws and reduce railway overcrowding so that visiting tourists will
have an easier time traveling from place to place.

4. Proper accommodation facility: While an international tourist is in India he/she
needs to be provided with good quality accommodation at reasonable prices in
nearby localities of tourist spots.

5. The educational nature of heritage sites should not be forgotten. Theatres showing
educational videos about the heritage site and its history should be available and
cost should be included in tour costs.

6. Food and restaurants: Food and restaurants are required at tourist sites. The
restaurants should be able to serve a variety of global cuisines to suit all tastes
and also have stress for local food. Restaurants should be able to supply mineral
water to the health conscious tourists of the day.

7. Adequate and hygienic toilet, bathroom and urinal facilities are required at
heritage sites. These facilities also need maintenance and cleanliness.

8. Primary Health Care: Every tourist spot should be equipped with a primary
healthcare centre to provide first aid and amenities to minimize stress and fatigue
relief.

9. Handicraft and local crafts sales facilities: A tour is probably a time when the
tourist is brought close to local handicrafts and local craftsmen. Adequate space

SECTION 4 – CONTRIBUTION OF COMPANY SECRETARY

41
for having shops to sell Indian handicrafts, garments and traditional items must be
provided.

10. Amusement Parks and secondary entertainment facilities: Now-a-days the tourists
want to enjoy more and that too by spending least of their time. This opportunity
can be availed by the ministry of tourism by building good amusement parks and
shopping complexes near the famous tourist spots. It will not only promote tourism
but also lead to employment generation for a large number of people.

11. Bank and ATM facilities: Most tourist locations require Bank and ATM facilities.

Nationalized banks can be directed to provide ATM facilities nearby heritage/
tourist sites.

12. Persons performing unclean acts can be fined for such purposes. Indian tourism
department should frame surveillance and penal code that should authorize
the specific persons at respective tourist spots to impose and collect penalties
and fines from those who are damaging the tourist spots or creating an unclean
environment.

13. Incentive to explore the heritage: The government of India is recommended to
design such tourism packages which cover a large number of tourist spots at
discounted prices .It will provide an incentive to the tourists to visit more tourist
places in a single visit to India. It will help in flourishing the tourism industry.

14. Another issue with an adverse effect on India’s tourism is its widespread
environmental pollution. Air quality throughout India is notoriously bad, since there
are no curbs on emissions and law enforcement to prevent gross polluters. Most
days, the air in big cities such as Mumbai has a red tinge to it, causing watery
eyes and cough. Respiratory infections are common, especially among sensitive
individuals or those with allergies. Additionally, air pollution is beginning to show its
effects on prominent tourist landmarks, such as Agra’s Taj Mahal. In recent years,
toxic air has damaged the ancient marble of the monument, jeopardizing its
beauty and requiring significant repair. Measures should therefore be initiated
for strict enforcement of provisions of Environmental Protection Act and the latest
amendments made therein.

15. As India’s population is growing, forests are being cleared to make room for more
housing and development. The destruction of these forests leads to a loss of
habitat for many of India’s famed fauna, such as Bengal tigers, Asian elephants
and Indian ring neck parrots. If India does not make greater efforts to reduce
this loss of habitat, tourists searching for safari like encounters with the animals
made famous in Rudyard Kipling’s “Jungle Book” will be out of luck. India needs to
preserve ecotourism by protecting its forests and the animals that inhabit them.

16. India’s government should be cognizant of the different types of tourists that
may want to visit the country ecotourists, history buffs or those seeking meditative
retreats. India should take advantage of the West’s intrigue with Indian culture,

42

HOTEL INDUSTRY
including yoga, ayurvedic medicine, Hinduism and meditation, and market itself
accordingly.

17. Coastal development: Development of coastlines and management of
water resources will give a new impetus to tourism, tremendous boost to the
development of flora and fauna and multiply our domestic and export income
through sea food, fisheries and a variety of flora .This can be done with the expert
guidance of consultants, hoteliers, industrialists and businessman.

18. Single window facility should be provided for booking rooms in city hotels and other
tourism related services the government should improve & change the image of

Kashmir val ey: Germany was the first country to change the caution notice to its
citizens against travelling to Kashmir. They also went on to state that “foreigners were
not a target for militants in Indian-held Kashmir”. The government should urge other
countries to change their travel advisories and market Kashmir as an adventure
tourism destination.

19. More efforts have to be laid in by the Government of India to provide adequate
safety of foreign tourists, especially for the female visitors.

20. Similar entry fees at tourist spots: It is a common practice in India to charge
much higher entry fees at major tourist spots from foreign tourists in comparison
to Indians. Although it is major revenue generating source for the government of

India still the price discrimination if not abolished should be minimized.

21. Development of North-east states: Efforts should be made for promotion of
heritage of north-eastern states of India which have a great potential to attract
foreign tourists because of the rich natural beauty.

22. VoA scheme: In an attempt to push inbound arrivals in India the government should
extend VoA (Visa on Arrival) scheme to more and more nations. India currently
issues VoA to 14 countries viz: Japan, Indonesia, The Philippines, Cambodia, Laos,

Vietnam., Singapore, Myanmar, Finland, New Zealand, Luxembourg, France,

Germany and Russia.

4.5 CONCLUSION

The hotel industry has made a special place in the world of hospitality. India is the most
diverse place in world as it has different kaleidoscope of landscapes, spectacular hilly
sites, varied cultures and festivals. Hotels in India are an old tradition, and the demand for
travel and tourism in India is expected to increase annually by 8.5%. It also accounts for
about 11% of total population. The government of India has taken and is taking various
initiatives to strengthen the industry. Indian hotel industry is one of the fastest growing
and important sector revenue wise as well as employment-wise. Company Secretary

Profession is having a wide role to perform in the sector. However, the need of the hour is
to implement industry-specific act and regulators to monitor and boost the industry on an
international scale.

BIBLIOGRAPHY

43

BIBLIOGRAPHY

• Government of India, Economic Survey 2017-18, Ministry of Finance.

• Sharma, Sonal, (2016), “Impact of Growth of Hospitality Industry on Indian

Economy”, International Journal of Commerce and Management Research,

Vol.2, No-3, pp. 148-151.

• Federation of Hotels and Restaurant Associations of India, Indian Hotel Industry

Survey 2011-12, RH&RA India, New Delhi.

• Federation of Hotels and Restaurant Associations of India, Indian Hotel Industry

Survey 2015-16, RH&RA India, New Delhi.

• Horwath HTL, Hotel Review Report-2017, India, www.horwathhtl.com

• Bagri, S.C. (2015), “Marketing Environment of Indian Hotel Industry”, Researchgate,.

• Government of India, Annual Report 2017-18, Incredible India, Ministry of Tourism.

• Government of India, Annual Report 2015-16, Ministry of Tourism.

• Government of India, Annual Report 2016-17, Ministry of Tourism.

• Kumar, Kuldip, (2015), “Growth Drivers and Challenges in Indian Hotel Industry”,

World Wide journal of Multidisciplinary Research and development, Vol-1, No-6.

• Confederation of Indian Industry, Hospitality Insight: From the Indian CEO’s Desk,

2012.

• HVS Research, Hotels in India: Trends and Opportunities, 2017, www.HVS.com

• Government of India, India Tourism Statistics, 2017, Research Division, Ministry of

Tourism.

• Sufi, Tahir, (2015), “Indian Hotel Industry: Past, Present and Future”, Journal of Hotel
management, Researchgate.

• Deloitte, 2018 Travel and Hospitality Industry Outlook.

44

HOTEL INDUSTRY

F.No. 5 (30)/2006-MDA

Revised w.e.f. 01.04.2017 Government of India Ministry of Tourism

(OM Division)

REVISED GUIDELINES FOR MARKETING DEVELOPMENT ASSISTANCE

(MDA) SCHEME

1. Objective:

The Marketing Development Assistance Scheme (MDA), administered by the Ministry of

Tourism, Government of India, provides financial support to tourism service providers,
i.e. hoteliers, travel agents, tour operators, tourist transport operators for undertaking the
fol owing tourism promotional activities abroad:

These activities may include sales tours, participation in travel fairs/exhibitions and
road shows.

Tourism Departments of all States and Union Territories (UTs) are also eligible for benefits
under Scheme for participation in travel fairs / exhibitions and road shows held overseas.

The main objective of the MDA scheme is to promote marketing of brand “Incredible

India” – in the established markets as wel as in the emerging markets.

2. Eligibility Criteria:

(i) The Tourism Service Providers must be approved by the Ministry of Tourism, Govt. of

India. In the case of the state of Jammu & Kashmir and states in the North Eastern

Region (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland,

Sikkim and Tripura) the Tourism Service Providers must be approved by the State

Tourism Department.

(ii) Financial support under the Scheme would be available to companies with
foreign exchange earnings up to a maximum of Rs. 15.00 crore (Rupees Fifteen

Crore only) during the preceding financial year. In respect of tourism service
providers from the state of Jammu & Kashmir and States in the North Eastern

Region, the service providers not having any foreign exchange earnings but with
a total turnover of up to Rs. 20 crore (Rupees Twenty Crore) would also be eligible.

(iii) Tourism Service Providers must show a cumulative increase of 5% in Foreign

Exchange Earnings (FEE) during a three year period, to be eligible for financial
support under the MDA scheme i.e. at the end of year 3, there must be a
cumulative increase of 5% in FEE over the base year. For this purpose, the base
year will be taken as the financial year preceding the year when the promotional

ANNEXURE

45
activity is undertaken. The clause wil be made effective from the financial year

2015-16 and tourism service providers will need to show a cumulative increase
of 5% in FEE at the end of year 3 over the base year 2014-15 (actual financial
year 2017-18) and so forth. In the case of Tourism Service Providers in Jammu

& Kashmir and the North Eastern Region, there must be a cumulative increase of

5% in foreign exchange earnings or total turnover of the agency during the three
year period.

(iv) Financial support under the MDA Scheme will be provided to tourism service
providers including States/UT Administrations for participation in a total of 02

(two) events (covering sales tours, travel fairs/exhibitions and road shows) in one
financial year.

(v) The tour to single country or a group of countries should be for a minimum of two-
night stay abroad excluding journey period.

(vi) Assistance is permissible to one regular employee/Director/ partner/ proprietor of
the company.

(vii) In order to avail the benefit of reimbursement of air fare under the MDA Scheme,
al tourism service providers / officials of Tourism Departments of States / UTs may
travel only by Air India, to stations directly connected by Air India.

For travel to stations not directly connected by Air India, but which are directly
connected by other airlines, travel by other airlines would be permissible on the
lowest available fare. The claimant agency would have to provide certificate
with regard to lowest available fare issued by the concerned airlines or the
ticket issuing agencies.

For travel to stations not directly connected by any air services with stations in India,
if travel on the shortest route available is undertaken through a station connected
by Air India, reimbursement of air fare would only be made for travel by Air India
on that sector.

(viii) In order to take benefit of reimbursement it is mandatory to take prior approval
from Ministry of tourism as detailed at clause 3(ii) of these guidelines.

(ix) The agency should not have got any assistance from any Government agency
for the promotional activity abroad.

(x) Details of financial assistance availed during the last three years from any

Government agency & the Ministry of Tourism.

(xi) The claim must be submitted within 30 days of return to India.

46

HOTEL INDUSTRY

(xii) Claim form received after 30 days of return to India or wherein the deficiencies
in the claim as intimated are not fully completed within 30 days of the date of
information/documents sought, would not be entertained and would be rejected.

However, in the cases of prior approval, the concerned agency would have
to ascertain that the prior approval of the Ministry has been received by them
before pursuing on the promotional activity abroad.

3. Pattern of Funding

(i) The Ministry of Tourism, Government of India gives maximum grant of Rs.2.50
lakh to the Tourism Service Providers for promotional activities abroad by way of
reimbursement towards air fare, participation fee, hotel accommodation as well
as to the State Governments/UT Administrations.

(ii) To avail the reimbursement from the Ministry of Tourism, the Tourism Service

Providers would have to request to the Ministry of Tourism for prior approval
at least 21 days in advance before going abroad for promotional activity
through the email mda-tourism@nic.in Ministry of Tourism would respond
within the 07 working days. The Tourism Service Providers wil have to provide
the following details along with the documents given at Clause 4 (a) of the
guidelines for obtaining the prior approval:-

(a) Name and contact details of the applicant company.

(b) Name of person undertaking the promotional tour.

(c) Category under which the promotional activity is proposed to be undertaken.

(d) Name of event proposed to be participated in.

(e) Dates / Country(ies) of visit of the proposed tour.

(iii) Financial support for undertaking sales tours, participation in travel fairs/exhibitions
and Road Shows organized overseas is provided as fol ows:-

(a) 90% of economy class air fare from India to any other country and/or by air/
euro rail from one country to another country abroad.

(b) 90% of cost of built up/ furnished stal , electricity, water charges and
participation fee, etc. at travel fairs/exhibitions.

(c) Hotel Room expenses for a maximum of 5 nights, with an upper limit of

Rs.8000/- per night.

Subject to an overall upper ceiling of Rs.2.50 lakh per case.

ANNEXURE

47

4. Documents:

(a) Documents required for obtaining prior approval:

(i) Self-certified copy of proof of approval of the company by Ministry of Tourism
or by the State Government i n the case of Jammu & Kashmir and the North

Eastern States (copy of approval letter needs to be attached).

(ii) Declaration with official seal, date and on letter head of the company to
the effect that the claimant is not under any investigation and/or has not
been charged/prosecuted/debarred/ blacklisted by the Ministry of Tourism,

Govt. of India or any other Government agency.

(iii) Certificate of foreign exchange earnings during the preceding financial
year, clearly indicating the percentage increase in foreign exchange
earnings in the preceding year as compared to the earlier financial year,
duly certified by Chartered Accountant. In the case of service providers
from Jammu & Kashmir and the North Eastern States, certificate as above
or of total turnover and % increase in total turnover, duly certified by the

Chartered Accountant.

(b) Documents required while claims are forwarded to the Ministry:

(i) Declaration with official seal, date and on letter head of the company
stating that no financial assistance has been claimed/received for the said
promotional activity from any Government Department/agency including
the Ministry of Tourism.

(ii) Air ticket(s) for journeys performed along with Boarding Pass(es) for each
sector along with the copy of passport showing exit/entry dates.

(iii) Bank advices/statement of accounts/receipts, etc., in evidence of payments
made for air tickets / booth / hotel accommodation, as the case may be,
for which reimbursement is being claimed.

(iv) A comprehensive Tour Report and achievements during the tour undertaken.

5. Formats:

(i) Application Form for obtaining Prior Approval under MDA Scheme for Sales Tours/

Participation in Travel Fairs & exhibitions/Road Shows is at Annexure-I.

(ii) Format for claim form for MDA for Sales Tours/Participation in Travel Fairs &
exhibitions/Road Shows is at Annexure-II.

48

HOTEL INDUSTRY

(iii) Format for declaration from the Agency that the Company is not under
investigation/ charged/ prosecuted/ debarred/blacklisted by the Ministry of

Tourism, Government of India or any other Government Agency is at Annexure-

I I.

(iv) Format for declaration from the agency that they have not claimed/received any
financial assistance for this sales tour / participation in this travel fair/exhibition / this
road show (as applicable) from any Government Department/agency including
the Ministry of Tourism is at Annexure-IV.

Annexure-I

Application Form for Obtaining Prior Approval for Marketing Development Assistance
for Sales Tours/Participation in Travel Fairs & Exhibitions / Road Shows

1

Name of the firm with full address

2

Name and designation of the person going abroad

3

Certificate regarding approval of the Agency/Firm by No. & Date:

Ministry of Tourism OR State Tourism Dept. in the case of

Jammu & Kashmir and North Eastern States (Attach a
copy of approval letter) (not applicable in the case of Valid up to :

Tourism Departments of States/UTs).

4

Certificate of Foreign Exchange Earnings during the
preceding financial year, duly certified by Chartered

Accountant. In the case of service providers from Jammu

& Kashmir and the North Eastern States, certificate as
above or of total turnover, duly certified by the Chartered

Accountant. (not applicable in the case of Tourism

Departments of States/UTs). (Membership Number to be
indicated in the CA Certificate)

5

Name of the travel fair/exhibition/road show and the
countries along with the dates/duration of visit abroad

6

Date of departure from India

7

Date of arrival in India

8

Details of the financial assistance availed earlier under
the MDA Scheme:

ANNEXURE

49

a) Name of countries visited and exhibitions/ road
shows participated

b) Name of the Persons

c) Dates

d) MDA amount received

Signature

& Designation with stamp

Place:

Date:

Annexure II

Declaration

( To be furnished on official letterhead of the company)

1. I solemnly declare that the particulars given in my application are correct. I
bound myself and the company accountable and responsible for any incorrect
information given in the above statement and shall immediately refund amount
received on the basis of wrong information provided in the above statement.

2. I hereby declare that the company / agency M/s …………………………….

(name and city to be given) is not under investigation/ charged/ prosecuted/

Debarred/ blacklisted by the Ministry of Tourism, Government of India or any other

Government Agency.

Signature ___________________

Name ___________________

Designation _________________

Place:

Date:

Office Seal of Company

50

HOTEL INDUSTRY

Annexure III

Declaration

( To be furnished on official letterhead of the company)

1. I solemnly declare that the particulars given in my application are correct. I
bound myself and the company accountable and responsible for any
incorrect information given in the above statement and shall immediately
refund amount received on the basis of wrong information provided in the
above statement.

2. I hereby declare that I have not claimed/received any financial assistance for
this Sales Tour / Participation in this Travel Fair/Exhibition / this Road Show (as
applicable) from any Government Department/agency including the Ministry
of Tourism.

Signature ___________________

Name ___________________

Designation _________________

Place:

Date:

Office Seal of Company

Annexure-IV

Claim Form for Marketing Development Assistance for Sales Tours / Participation in Travel

Fairs & exhibitions / Road Shows

1

Name of the firm with full address

2

Name and designation of the Person who travel ed
abroad

3

Category under which claim is submitted (i.e. Sales

Tour or Travel Fair/Exhibition or Road Shows

4

Whether prior approval regarding the tour was
conveyed by the Ministry of Tourism (Copy of the
same to be enclosed.)

5

Details of Number of proposal(s) already submitted
in the same financial year

ANNEXURE

51

6

Details of the financial assistance availed earlier
under the MDA Scheme separately for:

a) Sales Tour &

b) Participation in fair/exhibition/road show

(Please furnish details of the sales tours/fairs and
exhibitions/ road shows, countries visited, name of
the person who went abroad and the amount of
financial assistance received in each case)

7

Name of the Country(ies) / Sectors visited for the Sales

Tour.

8

Name of the Travel Fair/ Exhibition/Road Show
participated in and the countries along with the dates/
duration of stay abroad

9

Date of departure from India

10

Date of return to India

11

Sector-wise details of journeys undertaken:

(i) Airline on which travelled

(ii) Flight Number

(iii) Class in which travelled

(iv) Ticket Number

(Air ticket with boarding pass for each sector travel ed
to be submitted)

12 Actual expenditure incurred on return airfare by
economy excursion class

(a)

(Please attach receipt/document in evidence of
payment made for the air ticket)

If travel was undertaken by any other class

(Business/First, etc.), economy excursion class fare for
sectors/countries visited to be indicated.

52

HOTEL INDUSTRY

(b)

Actual expenditure incurred on stal , decoration,
water, electricity and participation fee (in case of
participation in travel fair/ exhibition/road show)

(Please attach original voucher/ bank advice/receipt,
etc. evidencing payment made).

(c)

Actual expenditure on hotel accommodation

(Please attach original voucher/ bank advice/receipt,
etc. evidencing payment made.)

14

Total expenditure incurred i.e. 13 (a) + (b) + (c)

15

Amount being claimed

Signature ___________________

Name ___________________

Designation _________________

Date _________________

ANNEXURE

53

Served From Indian Scheme

CERTIFICATE OF CHARTERED ACCOUNTANT (CA) COST AND WORKS ACCOUNTANT

(ICWA)/COMPANY SECRETARY (CS)

I hereby confirm that I have examined prescribed registers and also relevant records
of M/s ............................................ ..................... having IEC number..........................

for period ..................... of the current financial year 2008-09 (as per the frequency of
application, please specify the month/quarter/half year/annum) and hereby certify that:

(i) Following documents/records have been furnished by applicant individual/firm/
company and have been examined and verified by me/us namely:-

Bil s, Invoices, Forward Inward Remittance Certificates (FIRCs), Bank Realization

Certificates, Certificate from international credit card companies, and evidences
of foreign exchange earnings as well as the connected books of accounts.

(ii) Relevant accounting and financial register(s) as prescribed under different Acts
and Rules made there under have been maintained and authenticated under
my/our seal and signature.

(iii) Information given by applicant in ANF 3H including details on Services rendered

From India as per Appendix 10 of HBP v1 (with relevant Sr. No. and description) is
true and correct.

(iv) Services for which benefits is claimed does not include ineligible services and
remittances as listed under Para 3.18.1 of HBP v1.

(v) It has been ensured that information furnished is true and correct in all respects; no
part of it is false or misleading and no relevant information has been concealed
or withheld;

(vi) Neither I, nor any of my/our partners is a partner, director, or an employee of
above-named entity, its Group companies or its associated concerns;

Place:

Signature of CA/ICWA/CS:

Date:

Name of the Signatory:

Address:

Membership No.

Email Address:

54

HOTEL INDUSTRY

(vii) Certificate of Foreign Exchange Earned by Supply of Service from India to (outside

India or In India) is as under :

Certificate of Foreign Exchange Earned by Supply of Service from India to

(outside India or In India)

For the period ................ (as per the frequency of application, please specify
the month/quarter/half year/annum of the current financial year 2008-09)

Sl.

Category of Service Provider

Sl. No. of

Foreign

No.

Appendix 10

Exchange

(within each

Earned (Rs)

category)

1

Para 9.53 (i)

i)

…

2

Para 9.53 (ii)

i)

ii)

…

3

Para 9.53 (iii)

i)

…

4

Para 9.53 (iv) for Category 4(i ) of Sr. No i)

5 of ANF 3B
ii)

…

5

Para 9.53 (iv) for Category 4(i), 4(i i), i)

4(iv) of Sr. No. 5 of ANF 3B
ii)

…

6*

Para 9.53 (iv)* for Category 4(ii) of Sr. i)

No. 5 of ANF 3B
ii)

…

7*

Para 9.53 (iv) for Category 4(i), 4(i i), i)

4(iv) of Sr. No. 5 of ANF 3B
ii)

…

Total Foreign Exchange Earned by Supply of Service from

India to (outside India or In India) (Rs)

*Earnings in Indian Rupees that are otherwise treated as deemed to be
realized in free foreign exchange by RBI - See Para 9.53(iv) of FTP.

ANNEXURE

55

(vii) I fully understand that any statement made in this certificate, if proved incorrect
or false, will render me liable to face any penal action or other consequences as
may be prescribed in law or otherwise warranted.

Place:

Signature of CA/ICWA/CS:

Date:

Name of the Signatory:

Address:

Membership No.

Email Address:

56

HOTEL INDUSTRY

Document Outline

- Contents

- Hotel Industry

Table of Contents

- Contents

- Hotel Industry