DEVELOPMENT OF 5-STAR HOTEL / RESORT AT SAPUTARA, GUJARAT

Transcription

1 TOURISM CORPORATION OF GUJARAT LIMITED () (A GOVERNMENT OF GUJARAT UNDERTAKING) Block No. 16, 4th Floor, Udyog Bhavan, Sector 11, Gandhinagar, Gujarat Phone: , , Fax: Website: RFP: VOLUME II PROJECT INFORMATION MEMORANDUM (PIM) DEVELOPMENT OF 5-STAR HOTEL / RESORT AT SAPUTARA, GUJARAT OCTOBER, 2017 Gujarat Tourism Opportunity Limited (A Project Development Company jointly promoted by Government of Gujarat & IL&FS Group) , Haveli Arcade, Sector 11, Gandhinagar, Gujarat

2 Table of Contents Executive Summary 4 1 INTRODUCTION Need for the Study Objectives of the Study Constraints and Limitations Approach and Methodology 7 2 SECTOR PROFILE An Overview of the State Gujarat General Overview Economic Overview Tourism Overview Growth of Tourism in Gujarat Tourism Scenario in the State Key Tourist Circuits of Gujarat Trend in Tourist Arrival SWOT Analysis of Gujarat as Tourist Destination South- Gujarat Circuit Introduction Connectivity Dang District Demography Economy Tourism Resources An Overview of Saputara Introduction Connectivity Tourism Resources SWOT Analysis of Saputara as Tourist Destination 17 3 HOTEL INDUSTRY AN OVERVIEW & MARKET ANALYSIS Hotel & Hotel Industry An Introduction Classification of Hotels On the basis of Standard On the basis of Location By Ownership Hotel Industry in India Background Present Scenario of Hotel Industry in India Trends in the Industry Hotel Industry in Gujarat Challenges faced by Hotel Industry in Gujarat Hotel Industry Market Analysis in Saputara Hospitality Demand Drivers Existing Supply 24 4 SITE ANALYSIS Site Location and Description Land Ownership Site Topography and Vegetation Site Access and Connectivity 30 Page2

3 4.5 Proximity to Key Areas Existing Infrastructure 31 5 DEMAND ASSESSMENT AND PROJECT CONFIGURATION Tourist Arrival Demand- Supply Scenario Recommended Project Components Site Development Options Area Programme Activities other than Rooms Mandatory Development Obligations 36 6 FINANCIAL ANALYSIS Introduction Capital Cost Estimates Offsite Infrastructure requirement Site Preparation & Development Building Construction Furniture & Furnishing Machinery & Equipment Operational Cost Estimation Assumptions for Financial Analysis Construction Period Concession / Lease Period Phasing of Capital Cost O & M Cost Assumptions Financing & Taxation Assumptions Sources of Finance Project Revenue Assumptions Results of Financial Analysis Recommendations 41 Page3

4 Executive Summary Data Available 1 Site Location Land admeasuring 12,000 sq.m. is located near the northern side of the town, on the hilltop overlooking the valley on North side on, as described in the PIM (Volume-II). Saputara is about 160 kilometers (km) from Surat and about 260 km from Mumbai. The Maharashtra State border is 4 km from Saputara. It is strategically located on the road connecting Surat to Nashik. The nearest railway station on the main Delhi-Mumbai line is Valsad (about 125 km from Saputara). Valsad is also a major railway station where almost all the trains including the Shatabdi Express stops. 2 Area of the Site About Sq. Mt 3 Land Ownership & Current Status 4 Tourist Arrival in Saputara Proposal & Assumptions 1 Proposed Project Components is the owner of the site; and currently, there are some dilapidated and some underused structures on the site. Annual Tourist arrival is about 5.4 Lakhs, out of which May, June and October are peak months. In the rest of the months demand is pre-dominantly from the weekend travelers. The selected Concessionaire shall develop the following facilities: Star category hotel / resort 2. Minimum 60 keys / rooms & 2 suites 3. Reception, Multi-cuisine restaurant cum coffee shop 4. Provision of car parking to be made as per / Local Building Bye-Laws 5. All Other common / support / required facilities such as internal roads, street lights, water harvesting system, solid waste disposal, storm water drainage system, main sewer line, water supply including storage tank(s), transformer, Page4

5 electrical substation, green areas etc. as per applicable Building Bye-laws/ any other relevant guidelines issued by GoI/ GoG 2 Capital Cost Assumptions CPWD DSR 2013 rates and Quotations 3 Concession Period 35 years including Construction Period of 2 years 4 Concession Structure DBFOT 5 Occupancy Assumption Starting with 30% increasing 3% every year, stabilize at 60% 6 Room Rent Assumption & O & M Cost Assumption 7 Rate of Interest for Debt 12% 8 Debt Equity Ratio 60:40 Rs. 5000/ Night initially, increasing at 5% per annum O & M Costs increase at 5% per annum 9 Debt Repayment 10 years- with moratorium of 3 years Results 1 Capital Cost Rs. 36,65,00,000 (Rupees thirty six crore sixty five lakhs only) 2 Average DSCR Project IRR 13.71% 4 Equity IRR 14.38% *The Project IRR and Equity IRR have been worked assuming Annual Premium as Rs. 50,00,000/-. Page5

6 1 INTRODUCTION Tourism Corporation of Gujarat Limited, Government of Gujarat is mandated to undertake activities related to promotion of Tourism in the state of Gujarat and to develop Tourism Infrastructure in the state. Tourism as an economic activity is vital for any country as it does not only provide economic opportunities to the local population of the Tourist sites, but it also opens the market for Local Industry to sell the goods outside the traditional catchment area; and it also helps in overall development of the region because it enables exchange of ideas and understanding of culture. Gujarat is thought as a leading state in utilizing the strength of the private enterprise in Infrastructure Development and Economic Progress. The State Government s vision is to enhance service delivery by utilizing strength of the private enterprise. Tourism Corporation of Gujarat Limited () has been established for creation of Tourism Infrastructure in the state., in partnership with Infrastructure Leasing and Financial Services (IL & FS) has established Gujarat Tourism Opportunities Limited (GUJTOP); as a specialized entity providing advisory support for development of Tourism Infrastructure in the state, especially on Public Private Partnership mode. 1.1 Need for the Study is exploring options for developing the land parcel it has at Saputara for promoting Tourism in the area. is also desirous of taking up the project on PPP mode. This Techno-economic feasibility study is taken up to check the Technical and Commercial Viability of the Project from the Investor s perspective. 1.2 Objectives of the Study The study aims to fulfill the following objectives: 1. To understand the site context and tourism potential of the site 2. To undertake SWOT analysis of the Tourism Development on the site 3. To suggest the optimum product mix for the site based on the Demand Assessment 4. To derive broad area allocation of the activities on the site 5. To estimate approximate cost estimation based on block cost model 6. To establish Financial Viability of the project 7. To undertake Risk Assessment and prepare Risk Allocation Matrix 1.3 Constraints and Limitations The following are the constraints to the study: Page6

7 1. The study would rely on the secondary information on Arrival of Tourists; at the National, State and Regional Level 2. The study would rely on the information provided by the operators on the availability of rooms, occupancy rates and tariffs; 3. The availability of Infrastructure services to the site is taken based on the observations of the town, and secondary data. The feasibility study would be undertaken assuming these factors as given. 1.4 Approach and Methodology The following methodology has been adopted to meet the above-mentioned objectives of the study: Top-down Approach Bottom- Up Approach Tourist Arrival Data- National, State & Regional Level Regional Connectivity, Existing and Potential Tourism Circuits Location of the Site, Infrastructure Availability Profiling of the existing facilitiescomplementing and competing activities Based on the Demand Assessment so arrived at, the Technical and Commercial Viability of the Project would be assessed. Page7

8 2 SECTOR PROFILE 2.1 An Overview of the State Gujarat General Overview Gujarat is the seventh largest state with 1,96,024 sq. km area covering for 6 % of the total geographical area, located on the North west coast of the country is known for its incredible diversity due to its geographic and strategic location. Gujarat borders with Rajasthan to the Northeast, Maharashtra and Union Territories of Daman & Diu and Dadra & Nagar Haveli to the south, Madhya Pradesh to the east, and 1600 km long coastline along the Arabian Sea to the southwest and the Pakistani province of Sindh on the Northwest. Gujarat, with a coastline of 1600 km is well connected to all the major portbased trade routes, such as USA, Canada, Europe, Australia, China, Japan, Korea Gulf & African countries and other major trade cities of the world by air route. The State has a forest area of 11.05% with 4 National Parks and 21 Wild-life Sanctuaries Economic Overview Gujarat has a strong Economy with the SDP rising at an average growth rate of 10.1% since 2005 to 2013, more than the national average. The state achieved an annual growth rate of 9.51% during the 11th plan ( ). Gujarat ranked 1st in India for Economic freedom among states Economic freedom of the states of India 2013; and is one of the principle states to secure the Foreign Direct Investments in the country (FDI equity inflows USD 9.5 billion outstanding investments USD billion) Tourism Overview Gujarat boasts of over 3,500 years of history, natural and cultural delights, fairs and festivals, beaches, temples, holy sites coupled with the warmth of its people. It offers wide array of activities for Tourists based on their interest. The World Heritage Committee (WHC) of UNESCO, announced the Walled City of Ahmedabad as World Heritage City, recognizing the value of the walled city s unique heritage. More than 600 years old, Walled City of Ahmedabad was founded by Ahmed Shah is India s first city to be declared as the World Heritage City. The 5.5 km walled city area with approximate population of four lakh living in century old wooden residences in around 600 pols or neighborhoods is regarded as living heritage and lauded the peaceful co-existence of dominant Hindu, Islamic and Jain communities in Page8

9 the Walled City area. Besides it architectural marvels of wooden havelis, the city was the epicenter of non-violent freedom struggle that led to country s independence from colonial rulers in In terms of Architectural Heritage, the famous "Rani Ki Vav" at Patan is an intricately constructed 11 th century step well, which is a UNESCO world heritage site. The minute and exquisite carvings on this vav is one of the finest specimens of its kind, offering similarities with the famous Patan s Patola (clothing for women with exquisite weaving patterns resembling the stone carvings). There are other beautiful places also such as Adalaj ni Vav, Sarkhej Roja, Jama Masjid to name a few. The "Champaner-Pavagadh archaeological park", located in Panchmahal District is a UNESCO World Heritage Site. The heritage site is studded with forts with bastions starting from the hills of Pavagadh, and extending into the city of Champaner. Navratri, especially in Gujarat, is celebrated with a panache and fervor, representing the rich Cultural Heritage not seen anywhere in India. Similarly, the Kite Festival is also a one-of-its-kind festival that is celebrated with an unparalleled passion. The insights into Harappan Civilization can be seen in Lothal, near Ahmedabad. Gujarat is the land of the Mahatma and Sardar Patel, and along with them many more freedom fighters have left their footprints on the sands of time, infusing the qualities of tolerance, brotherhood, non-violence and patriotism into Indians. Gujarat has dry deciduous forests, majestic grasslands, marine ecosystems, wetlands and rich moist deciduous forests; which may be a dream destination for those who quest for nature and wild life. The rare Asiatic Lions in the Gir reserve, the Wild Ass in the Rann of Kutchh, Indian bustards in bird reserves, four horned Antelope and Black Buck are among many animals and birds protected in the State s four national parks and 21 sanctuaries. The Whale Shark breed on the coasts of Gujarat and Okha, small coastal town in Jamnagar district is famous for not only the Krishna Temple Bet Dwarka but for the large marine mammal dugong. This Saurashtra coast of Okha is known for the world largest dugong recorded till date that was 4.06 meters long and weighed 1016 kgs. Another first to Gujarat is India s first Marine National Park at the Gulf of Kutchh In terms of Handloom & Textiles, Gujarat boasts of Patan s Patola, Jamnagar s Bandhani (Tie n Dye), Ajrakh print (Block printing practiced in Kutch); which can be seen being made by the artisans in the villages by the art enthusiasts. Page9

10 For Handicraft lovers, there are traditional centers where the Beadwork, terra-cotta work, Blue-pottery, woodcarving, silverwork, etc. throughout the state. For the Religiously inclined, Gujarat offers ancient temples of Shiva, Shakti and Narayan- at Somnath, Ambaji and Dwarka respectively. Pavagarh has temples for the Jainism faith and also Mahakali temple. For Parsi population, the sacred Iranshaw Fire Temple at Udvada is the place of pilgrimage. There are several fairs and festivals being celebrated round the year, like Navratri Mahotsav, Uttrayan, Modhera sun temple festival, Kutch utsav, Bhavnath Fair, International Kite Festival, Sharadotsav and Rann Utsav apart from mahashivratri melas, etc Growth of Tourism in Gujarat Number of Tourist arrivals in Gujarat is experiencing a strong growth with the Gujarat Tourism Sector Performing better than the country average. The gross flow during the year was approximately million. The growth in international tourist arrivals as a CAGR of 14.74% since 2005 in Gujarat can be attributed to the growing prominence of the state as a major business hub. Domestic Tourism Primarily led by tourists from within the state countries - 77% followed by tourist arrivals from other Indian states which stands at - 21% 2.2 Tourism Scenario in the State Key Tourist Circuits of Gujarat The Key Tourist sites of Gujarat can be divided broadly into Five Tourist Circuits- The North Gujarat Circuit, Central Gujarat Circuit, South Gujarat Circuit, Kutch Circuit and Saurashtra Circuit. Nort h Kutc hh Central Gujarat Circuit Source: Google Earth Imagery Saurashtra Circuit Sout h Page10

11 2.2.2 Trend in Tourist Arrival Tourist Arrival in Gujarat over the period Tourist Arrival in Gujarat Foreigners NRIs From Other states From Gujarat Source: data collected by GITCO As we can see from the chart above, the overall growth in number of tourists in Gujarat has been 57%. Hence, it can be said that the share of Saputara in Gujarat s tourism growth is considerably high. This is also evident from the fact that there has been some new tourist facilities that has come up in Saputara in last five years; and it is still growing. Tourist Arrival in Saputara Let us look at the trend of Tourist Arrival in Saputara. The feedback from the existing operators is that Saputara is only serving as a Weekend Destination; and that it has a great potential to be developed as a MICE destination, which is not fully explored yet. Saputara is a unique destination since it is the only hill station in Gujarat, and it is well integrated with the Nashik-Shirdi tourist circuit of Maharashtra. People from Gujarat visiting Nashik & Shirdi prefer to stay for the night at Saputara, and descend to Nashik in the morning. Page11

12 Tourist Arrival in Saputara Foreigners NRI from Abroad Other Indian States Within Gujarat Source: Data collected by GITCO As we can see from the chart above, there are about 5.4 lac tourists that visit the hill station every year, out of which about 63% are from within the state; and 37% are from other states. Based on the on ground interaction with the hotel operators, the bulk of these tourists from outside the states is from Maharashtra; as the place is very near to the Maharashtra border. There are very few NRIs who visit Saputara and almost nil Foreign Tourists in last Five years SWOT Analysis of Gujarat as Tourist Destination Strengths -Long & unexplored Coast Line -Rare Wildlife species like Asiatic Lions, Wild Ass, etc - Rich Textile and Handicraft Culture -Favourable Business Environment -Efficient Road Network Opportunities -New Tourism Policy of the state is offering several incentives for creation of Infrastructure -Viability Gap Funding is available for Tourism Infrastructure projects -Number of Foreign Tourists visiting India is increasing consistently, Gujarat can reposition itself as the preferred destination banking on its image as a safe and tourist friendly place Weaknesses -Lack of Quality Tourism and Hospitality Infrastructure -Prohibition on Liquor SWOT Analysis of Gujarat as Tourist Destination -Only one International Airport; and Limited flight connectivity for Domestic Networks -Lack of trained staff for Hospitality Industry Threats - The expectations of the domestic tourists are increasing ; and if commensurate investments are not made in Infrastructure, the number of domestic tourists may also decline Page12

13 2.3 South- Gujarat Circuit Introduction The South Gujarat is formed by Surat, Navsari, the Dang, Valsad and a newly formed Tapi district (carved out from Surat in year 2007), is also known as Deccan Gujarat or Dakshin Gujarat and is one of the wettest region of India. Valsad District was formed out of Surat in 1966; and later in 1997; Navsari district was carved out of Valsad. Surat is the major urban center of the region. The western region of this division is the coastal region and the eastern parts are mostly the hilly parts with the Saputara range in the Dang District Connectivity Connectivity plays a major role in the growth of Tourism related activities in a region. Gujarat as a whole is at a disadvantageous position because of having a single International Airport. The connectivity to South Gujarat is comparatively better than the rest of the Gujarat; however, it is lacking in the Air Connectivity, since there is no international airport in South Gujarat. Surat has regional connectivity with Delhi and Mumbai is a nearby Airport. In terms of Road and Rail Transport, South Gujarat has an edge because all the trains between Delhi and Mumbai - the Political and Financial Capitals of the country, respectively, pass through South Gujarat Region. 2.4 Dang District Dang district is one of the 33 districts of Gujarat. It is bound by Navsari district to the West; Tapi district of Gujarat and Nadurbar district of Maharashtra on North; Dhule district of Maharashtra on East; and Nashik district of Maharashtra to the South. The district's administrative capital is Ahwa; and the most famous tourist destination is Saputara. The district covers 1,766 square kilometers. Dang was known as Dakaranya or Dandak during the period of Ramayana, and this is why its folksongs are filled with stories of Ram and Sita. Pandavas are also believed to have roamed and stayed in the Dang. Even today one can find a cave in Pandava village near Dang. Page13

14 2.4.1 Demography Development of 5-Star Hotel / Resort at Saputara, Gujarat 2017 As per the 2011 census, Dang district had a population of 2,26,769 persons. Most of the population of the district is Tribal Economy The land of the district is fertile and rocky. The color of the soil is either red or black. Maize, Rice, Groundnuts, Nagli (raggi), Euphorbia, etc. are the major cultivation of this land. Wheat, Black Gram, Urad, etc are also grown in this soil. Agriculture, Animal husbandry and Forest Produce collection are the three major economic activities here. There are about 100 small-scale units doing Agro-processing and related activities. The average land holding per family is about 1.5 Hectare. However, Dangs is one of the 250 poorest districts of India Tourism Resources Dang is a high rainfall area- here the annual rainfall is more than 3000 mm. 59% of the area is under forests. Saputara, also known as abode of serpents is a hill station on a plateau of the sahyadri range of mountains. Near Saputara, around 60 km away is the hathgarh fort, which was built by Maratha Warrior Shivaji Maharaj. Purna Wildlife Sanctuary and Vansda National park are the places that offer wildlife excursions, offering sighting of Leopards, Hyena, Jungle Cat, Macaques and Barking Deer. Gira Falls and Girmal Falls are the places to relax, unwind and enjoy the beauty of the nature. Dang Darbar is a three-day annual cultural extravaganza coinciding with the Holi festivities. The festival is celebrated in the Dang district, located in the Saputara Hills of India. A conspicuous festival of Dang tribe, inhabitants of wooded region Saputara, the Dang Darbar is celebrated just few days before Holi. Gujarat s beautiful hill station turns bride-like during the monsoon season. The heartening fresh green shades make the hill look bejewelled. Forests, hills and valleys beckon with an irresistible charm. Trekking in the ravishing wild trails or boating in the serene lake. The invigorating surroundings form the delightful settings for the exhibitions, interactive games, cultural programs, competitions, fun contests, flash mobs, floating balloons, cartoon characters, and much more activities organized as part of the Monsoon Festival. Page14

15 2.5 An Overview of Saputara Introduction This hill station is on a plateau in the Dang forest area of Western Ghats (Sahyadri) range at an altitude of about 1,000 meters. Saputara means the 'Abode of Serpents' and a snake image on the banks of the river Sarpagana is worshiped by the Adivasis on Holi. Saputara has been developed as a planned hill resort with amenities like hotels, parks, swimming pools, boat club, theaters, ropeways and a museum. Saputara is about 160 kilometers (km) from Surat and about 260 km from Mumbai. The Maharashtra State border is 4 km from Saputara. It is strategically located on the road connecting Surat to Nashik. The nearest railway station on the main Delhi-Mumbai line is Valsad (about 125 km from Saputara). Excursions from Saputara can be made to the wild life sanctuary in the Mahal Bardipara forest, 60 km. and to Gira Waterfalls 52 km away Connectivity Saputara is strategically located on the road connecting Surat to Nashik. The nearest railway station on the main Delhi-Mumbai line is Valsad. Valsad is also a major railway station where almost all the trains including the Shatabdi Express stop. Page15

16 2.5.3 Tourism Resources Saputara is a small and quiet town. There are sunset and sunrise points on different plateaus; which can be assessed in a vehicle or on foot also. On one of the plateaus has a ropeway connection to the Sunset Point. There is a small place called Artist Village, which has several paintings and tribal artifacts on display and for sale. One can go to the Vansda National Park, with prior permission from the Chief Wildlife Warden or Divisional Forest Officer (DFO). Purna Wildlife Sanctuary is situated at Mahal, 77 km north of Saputara. Boating facility is available on the Saputara Lake; and is one of the principle tourist attractions of Saputara. Gira Falls is an excursion option 52 km from Saputara, which can be visited during and after monsoon season. There are three gardens in Saputara- namely the Rose Garden, Step Garden and the Lake Garden. There are certain shops that sell the Tribal Artifacts. The mountains have the potential for development of trekking sites; which is not discovered yet. Entry to Saputara Hill Station Valley view from the Site C Type Quarters on the site Water Supply Connection and Motor on site Page16

17 Overhead Water tank in one of the dilapidated structures on site Dilapidated structures on the site D type structures on site D type structures on site SWOT Analysis of Saputara as Tourist Destination Strengths -Location on Surat- Nashik road -Only Hill station of Gujarat -Beautiful Valley view, Sunrise and Sunsets Weaknesses -Prohibition on Liquor; and competition from Khandala, Lonawala and Mahabaleshwar -Lack of Activities for tourists -Haphazard growth of Hotels SWOT analysis of Saputara as a Tourist Destination Opportunities -The destination has potential for development of MICE tourism from corporates of Surat, Mumbai, etc -The tribal culture has lots to offer to the tourists, which can be further developed Threats -If the local population is not gainfully employed in Tourism related activities, it can turn hostile to Tourism related activities Page17

18 3 HOTEL INDUSTRY AN OVERVIEW & MARKET ANALYSIS 3.1 Hotel & Hotel Industry An Introduction Hotels are an important component of the tourism product. They contribute in the overall tourism experience through the standards of facilities and services offered by them. 3.2 Classification of Hotels On the basis of Standard The Ministry of Tourism has constituted a committee called Hotels and Restaurants Approval and Classification Committee (HRACC). According to the standards prescribed, there are two broad types of Hotels. The Star Category Hotels and the Heritage Category Hotels. Both the categories can be further classified as follows: Star Category: One star Two star Three star Four star Five star and Five star deluxe Heritage Category: Heritage Grand Heritage Classic and Heritage Basic On the basis of Location On the basis of their location, the Hotels can be classified in the following categories: 1. CITY/DOWNTOWN/COMMERCIAL HOTEL: These hotels are located in the heart of the city. These hotels are more expensive than the suburban hotels. Businessmen and high-income tourists patronize these hotels. These hotels are centrally located and at a convenient distance from markets, railway station, airport, etc. 2. SUBURBAN HOTELS: These hotels are located in the suburb of cities, moderately priced and are of mostly medium, large or small size. Normally low budget tourists patronize these hotels. The tourists, who do not want to stay in the heart of city, as they want to be away from hustle and bustle of city, prefer these hotels. Usually writers, poets, low budget tourists etc prefer to stay at suburban hotels. Page18

19 3. AIRPORT HOTELS: These are Hotels located near the Airports, especially international airports. Airport Hotels are popular because of their proximity to major travel centers. Airport Hotels vary widely in size and level of services. Typical target market includes business clientele, airline passengers with overnight travel layovers or canceled flights and airline personnel. Hotel owned courtesy vans often transport guests between the hotel and the airport. 4. MOTELS: Motels are also called Motor Hotels or transit hotel and are located alongside the highways. Motels are normally economical and they provide comfortable bedrooms that motorists prefer to stay on their way for a night rest. Motels have facilities of proper motor garage to service a car and a filling station to refill vehicles, parking area for motor vehicles etc. They also have road maps, dormitory for drivers. These days Motels also provide various indoor and outdoor facilities like Video parlor, Billiards, Table tennis, Cyber café, Library etc. 5. RESORT HOTELS: A resort located in the tourist interest places like hills, forests, beaches, on an island, or in some other exotic location away from crowded residential areas. The recreational facilities and breathtaking scenery typical of most resorts. Most resort hotels provide extensive food and beverage, valet and room services, sightseeing to vacationers. Many resorts also provide special activities, indoor and outdoor games for guests such as dancing, golf, tennis, horse riding, nature hikes, skiing and swimming, health club, steam sauna bath, spas etc. A more leisurely, relaxed atmosphere distinguishes most resort hotels from other types of hotels. 6. ROTELS: The hotels that rotate on wheels are called rotels. It is also called motel on wheels. Best example of rotel in India is Palace on wheels. It is a luxurious train, fully air-conditioned, well-furnished with attached restaurant and bar. The fare is inclusive of train ticket, food, alcoholic beverages and sightseeing. The train starts from Delhi and covers the tourist interest places of Rajasthan and Uttar Pradesh including Taj Mahal, Agra, Mathura. In Japan Rotels are parked in the parking slot in the late evening and during day the rotel is towed away. 7. FLOATELS: The hotels that float on water are called floatels. The best examples of floatels in India are Houseboats in Kashmir Dal Lake. These are luxurious suites consisting of drawing room, dining room, bedroom, sitting room, balcony, kitchen, bathroom etc. These days luxury ships are becoming popular for travelling. The guests are offered cabins to stay. These float on seawater and these have all facilities of five star hotels. 8. BOATELS: These are luxury boats/yachts, which can ferry people from one place to another. The best example of yachts are in Mediterranean or Page19

20 Caribbean, they can ferry guest through canal-based narrow boat or Broadbased cabin cruiser By Ownership The Hotels can also be classified on the basis of ownership. 1. TIME SHARE: This is a new concept in India but is picking up very fast. This is also known as Vacation Ownership or Holiday Ownership concept. These properties are in resort areas like hills, beaches, forests etc. Timeshare involves individuals who purchase the ownership of accommodation for a specific week or weeks. The price of the property will depend on the week one tends to buy. The guest can choose a peak season, semi peak season or a lean season. 2. The owner pays a fixed price for certain number of years say 20 to 30 years and has a right to stay at the hotel during rented week. The guest is also required to pay an annual contribution towards the maintenance of apartment and public areas, electricity, gas, water, safety, insurance etc. The owner can also rent out the unit through management. The owner can also exchange their resort with any other resort either directly owned by the company or through contract signed with any other company/management by paying a nominal fee. Best examples of Timeshare Hotels in India are Mahindra Holidays, Country Club Holidays, Sterling Holiday Resorts, etc. 3. CONDOMINIUM HOTELS: These are quite similar to Time-share. These units are developed on joint ownership basis. Each owner purchases and has full right of an unit he has purchased and shares the cost common to the complex, such as taxes, insurance, maintenance and upkeep of public areas including swimming pool, health club, parking, security, air conditioning, heating, cable, broad band etc. Each owner can occupy or sell his unit independently but is required to follow the rules and regulations laid by the management. 4. In some cases the management can help the owner in renting out the property. They take the full responsibility of the owner s unit s safety and also pay to the owner a major portion of the rent earned from renting out. The management earns a major portion by renting out conference hall and from catering. Usually the management requests the owner to rent out in case of major conferences. 5. CHAIN HOTELS: A chain is usually classified as operating under a management contract or as a franchise or referral group. Chains usually make certain rules regarding standards, rules, policies, procedures of affiliation etc. In general, the more centralized the organization the stronger the control over the individual property. Some chains own affiliated properties, but many do not. Some chains have strong control Page20

21 over the architecture, management and standards of affiliated properties. Other chains only concentrate on advertising, marketing, purchasing. 6. INDEPENDENT HOTELS: Independent hotels do not have ownership or management affiliation with other properties. They have no relationship to other hotels regarding policies, procedures, financial obligations, management, accounting etc. These may be registered as sole proprietorship or a private limited company. The owner may decide the standard, type of clientele, the tariff etc. He may tie up with travel agencies to sell his property against commission. 7. MANAGEMENT CONTRACT: Management companies are organizations that operate properties owned by others. Individual persons, partnerships or private limited companies may own those other hotels. The individual hotel, under construction, may contract with a professional hotel management company to operate the proposed property. These contracts are normally on a long-term basis. Some management companies, when feel that they must have a hotel in a particular location then they approach prospective individuals to build a hotel and operate under their managements contract. 8. The management contract can even be signed before the construction starts. After paying the management fees, operating expenses, the owners keep the balance cash for paying their debts, taxes etc. and the balance is their net profit. The Management companies only take over the management of the company, whereas the franchising companies provide the financial assistance, advertising, central reservation facilities, marketing etc. 9. FRANCHISE: Franchise is a system in which the franchise owner grants another the right or privilege to merchandise a product or service for a specified return. Franchise Agreement is an agreement under which the owner operates as a member of the chain, utilizing the brand image, name, goodwill and obtaining for a certain fee some services of marketing and operating nature support from resources of a large organization, advertising, sales promotion, technical and financial help etc. The bestknown franchising companies are Holiday Inn, Choice International, Quality Hotels & Inns etc. 10. REFERRAL GROUPS: referral Groups consists of independent hotels, which have grouped together for some common purpose. Though the properties in the referral group may be different from each other but there is sufficient consistency in the quality of service to satisfy guest expectations. The member hotels recommend guests to other member hotels. Best Western International, one of the largest hotel chains is the best example of referral groups. The referral groups also extend benefit of more extensive reservation and expanded advertising through pooled resources. Page21

22 3.3 Hotel Industry in India Background Hospitality in India is a complex sector. There are several types of options available for a visitor for accommodation. In religious places there is large number of Dharmshalas (Religious type Guest House) that offers cheap accommodation with minimal pricing. The standards are typically very low, but are improving. Near transportation hubs you have budget hotels, which provide cheap accommodation to traders and small businessmen. In tourist places, there are large numbers of small facilities, which are usually organized by co-operatives that control the pricing strategies. Indian weddings are always a family affair, where large numbers of people gather at a place; and these weddings are a big driver for hospitality Present Scenario of Hotel Industry in India The Indian hospitality industry has emerged as one of the key industries driving growth of the services sector in India. The fortunes of the hospitality industry have always been linked to the prospects of the tourism industry and tourism is the foremost demand driver of the industry. The Indian hospitality industry has recorded healthy growth fueled by robust inflow of foreign tourists as well as increased tourist movement within the country and it has become one of the leading players in the global industry Trends in the Industry The Indian hotel industry is highly fragmented with a large number of small and unorganized players accounting for a lion's share. The major players in the organized segment include Indian Hotels Company Ltd, Hotel Leela Venture Ltd, EIH Ltd, ITC Hotels and ITDC. However, the times are changing, and there are some clear trends with regard to Hotel Industry. 1. Budget Hotels / No frills Hotels are emerging as the next trigger for development. Examples of Budget Hotels are Ginger, Lemon Tree, Red Fox Hotels, etc. These Hotels offer smart basic services at an affordable price. 2. Apps for Web and Mobile Based Booking: As with all other sectors the online and mobile based booking is emerging in Hotels also. There are multiple aggregators who may be useful in providing booking to a hotel operator- such as Make My Trip, Yatra, Cleartrip, Goibibo, Ixigo, OYO Rooms etc. Many of these sites also make bulk deal with the hotel to take or pay bulk of the rooms to get discounted pricing which they offer to the customers, in an effort to strengthen the brand loyalty from the customers. Page22

23 3. Aggregators: There are other sites that compare the results from all these sites to provide cheapest booking options to the customers- these are sites like Trivago, etc. Google has emerged as the main search engine for any need of the customer; also provides booking options. The Hotels focusing on the middle class travelers may gain by providing booking based on these platforms. 3.4 Hotel Industry in Gujarat The Tourism Infrastructure in the state is on a developing mode. It is a very recent trend that the Tourists have started visiting lesser-known destinations in Gujarat; and presumably, a principle reason for this growth is the sustained marketing by Tourism Department through the Khushboo Gujarat Ki campaign and the Vibrant Gujarat summits, which brings lot of international guests to Gujarat. According to a recent study by an apex industry body, Associated Chambers of Commerce and Industry of India (Assocham); the state "has emerged on top with a lion's share of about 29 per cent amid 20 major states attracting combined investments worth over Rs one lakh crore in the sector as of financial year " 1. Of the over Rs 1 lakh crore that India's tourism and hotel sector attracted in , Gujarat alone fetched outstanding investments worth over Rs 34,800 crore Challenges faced by Hotel Industry in Gujarat One of the principle issues with the Hotel Industry in Gujarat is that of Manpower. The skilled Manpower for manning the hotels is rare; and the culture of customer service has not been imbibed yet. Further, compared to other states, Gujarat is at a disadvantageous position because of prohibition of liquor in the state. The small tourism centers like Mount Abu, Diu and Daman are the thriving because of this reason. Almost one third of the trips are social trips; where the accommodation is at the place of relatives, friends, etc. Further, a large population of Gujarat is following one sect or the other; and when they travel, the accommodation is usually at the special facilities, which is often run on non-commercial basis. For example, the Swaminarayan Sect and Jainism have temples all around Gujarat; and usually they have lodging and boarding facilities where the guests are entertained. 1 India Tourism Industry: The way forward by Assocham Page23

24 3.5 Hotel Industry Market Analysis in Saputara The Government of Gujarat s tourism promotion activities like Monsoon Festival are highly successful; and in recent times the middle class population of Gujarat have started exploring Saputara. The Hotel Industry in Saputara is also on a rise Hospitality Demand Drivers The hospitality demand of Saputara can be attributed to the following: Tourists visiting Nashik and Shirdi prefer to have a night-stay at Saputara on the way, especially if they are passing through at evening time. Saputara is also emerging as an attractive destination-wedding site in South Gujarat, especially with the affluent class of Surat. The Monsoon festival at Saputara is drawing crowds to Saputara For people from Nashik, Surat, Mumbai etc, Saputara is an exciting weekend getaway, which is accessible and affordable at once. Recently, many of the corporates have started conducting the Conferences and Seminars at Saputara Existing Supply A site visit to the hotels in the Hill Station revealed that there are about 800 rooms available with major accommodation service providers. There could be other corporate or other group specific facilities available, which were difficult to cover in the survey because of their relative obscure information. Details of the same are provide below: Page24

25 Details of major Hotels at Saputara: Sr. No. Name of the Facility Number of Rooms Capacity (No of Persons in a room) AC / Non- AC Tariff Occupancy 1 Hotel Aakar Lords 60 2 AC (All 30-40% in Off Season Inn meal Package) 2 Shilpi Hill resort 7 2 Non-AC % 72 2 AC % 3 Hotel lake view 55 2 AC Rooms in Weekdays, Full in Weekends 4 Hotel purohit 32 2 Non-AC 1500 in season, 800 in nonseason 1-2 Rooms in weekdays rooms max in weekends 5 Star Holiday Home 2 2 AC Rooms blocked for bank of India 6 2 Non-AC Hotel Vaishali 10 2 AC 1200 (off season) 18 2 Non-AC 800 (off season) 7 Hotel Hill Top 24 2 Non-AC rooms in weekdays, full in 8 4 Non-AC 500 weekend 6 5 Non-AC Jain Dharmshala 13 4 AC Non-AC Dormitory 5000 Page25

26 Sr. No. Name of the Facility Number of Rooms Capacity (No of Persons in a room) Development of 5-Star Hotel / Resort at Saputara, Gujarat 2017 AC / Non- AC Tariff Occupancy 27 4 Non-AC Sid Archie Hotel 18 2 AC 1600 (off) Rarely gets full (peak) 12 2 Non AC 1200 (off) (peak) 10 Hill View Hotel 11 2 AC 1500 (off) (peak) 15 2 Non-AC 1000 (off) (peak) 11 Hotel Gokul 21 2 Non-AC White Feather 46 2 AC -not decided yet New property Toran Resort 13 Hotel Sejal Inn 29 2 AC 4000 w/o food 30-40% in weekdays, full in weekends with food 14 Hotel Amantran 8 4 AC Non-AC Non-AC 100/Person Full in Weekends & Diwali 15 Hotel Patang Lords 43 2 AC 5000 (weekdays) 50% Page26

27 Sr. No. Name of the Facility Number of Rooms Capacity (No of Persons in a room) Development of 5-Star Hotel / Resort at Saputara, Gujarat 2017 AC / Non- AC Tariff Occupancy (weekends) 16 Vaity Resort 10 2 AC 4090/ rooms in Weekdays; Full in 30 2 Non-AC 3590/4490 Weekends 17 Hotel Chitrakoot 28 2 AC Non-AC Rs for child 18 Hotel Hare Krishna 10 2 Non-AC 19 Hotel Anando 14 2 AC rooms in weekdays, full in Weekend 8 2 Non-AC Hotel Shavshanti 25 2 AC tax (off) tax (season) 70-80% Full on Saturday 17 2 Non-AC tax (off) tax (season) 21 Hotel Patang Under Construction Lords 22 Hotel Toran 12 2 AC 900/ Non-AC 1300/1700 C type 4 3 Non-AC 1500/1800 Surya Cottage 2 3 AC 1800/2500 Page27

28 Sr. No. Name of the Facility Number of Rooms Capacity (No of Persons in a room) AC / Non- AC Tariff Surya Cottage 2 2 AC 1300/1700 Sahyadri Cottage /1000 DLX Sahyadri Cottage /900 ORD Executive Deluxe 21 2 AC 2500 Room Family Deluxe 3 2 AC 4000 Room Suit Room 2 2 AC 5500 Conference Room 8 Hr per day Extra bed 750 Occupancy Page28

29 4 SITE ANALYSIS 4.1 Site Location and Description The site is located on the north side of Saputara, overlooking the valley. The site would be visible from the road when one approaches Saputara from Gujarat side. Proposed Site The total area of the site is approximately 12,000 Sq. Mt. There are existing cottages of Gujarat Tourism on the site; and some of the dilapidated structures are also present on the site. The site has approach road on the southern side, and the site is at a lower level than the Road. 4.2 Land Ownership The land is within ownership and possession of Tourism Corporation of Gujarat Limited. 4.3 Site Topography and Vegetation Approximate gradient is 30 degrees. The altitude of the site ranges from 890 meters at Road level to 872 meters at valley level. Beyond the site, the slope of the valley is very steep (43-47%). Page29

30 4.4 Site Access and Connectivity The table below describes the site surroundings. Site Surroundings North The site overlooks the valley on North side, and the mountain slope beyond the site is about 45%, which goes up to the Road below (Main Road leading to Saputara). East On the Northeastern side, there is a guesthouse belonging to GNFC. South The approach road to the site is on the south side; and beyond the road on the top of mountain is the Toran Hotel and Circuit House. West On the Western side, there do exist D type cottages of Gujarat Tourism. The site offers beautiful view of the valley; and it also has a number of big trees on the periphery. 4.5 Proximity to Key Areas The site is hardly within 500 meters from the Saputara circle on the entry point to Saputara. The other Toran facilities are also in the vicinity. Page30

31 4.6 Existing Infrastructure The bidder will be required to apply for required capacity/ load of water / power connection based on the proposed project. The site being within city there is no apparent difficulty in obtaining water and power connections. The bidders are free to demolished the existing buildings within site, if the need arise, before commencement of any kind of development on site. Page31

32 5 DEMAND ASSESSMENT AND PROJECT CONFIGURATION In this chapter we shall compare the demand for tourism facilities versus the supply at present in Saputara; and based on the understanding of the place, site and overall tourism scenario we shall propose the project configuration for the proposed site. 5.1 Tourist Arrival As we have seen in the earlier section, about 5.4 lakhs tourists visit Saputara every year. In absence of any seasonal data of tourist arrival at the location, the yearly data has been interpolated based on the number of visitors to Toran property (Gujarat tourism s property) at Saputara for the last year. We can assume that the flow of tourists to Saputara follows the same pattern. Month Wise Tourist Arrival at Toran saputara April 2014 May 2014 June 2014 Augu July st Sept emb er 2014 Octo ber 2014 Nove mbe r 2014 Dece mbe r 2014 Janu ary 2015 Febr uary 2015 Marc h 2015 No of Tourists Percentage 7.45% %7.79%7.55%9.96%9.26%7.67%7.31%5.69%5.70% As it can be seen from the above chart, the peak tourist season is month of May, followed by month of October. The fact could be easily explained since most of the Tourists are domestic tourists. In the month of May, the schools are closed because of summer vacation; and around Diwali the schools are closed for Diwali vacation. Further, the peak tourist flow is about 12%. Hence, a 15% of the annual tourist arrival can be taken as the total demand for rooms. Most of the Domestic Tourists in this region choose to travel with family; i.e. the group size is usually 3 to 4. Hence to arrive at number of rooms required, the peak tourist s number can be divided by 3; and then by 8 (weekend days) to arrive at demand for number of rooms. Page32

33 So, in case of Saputara, since 4.5 lac tourists visit every year, and 15% is the peak traffic, 67,500 people in a month may be the peak demand. Divide it by group size of 3; then we get rooms in a month. In the peak season too, if we assume that 80% of the tourists visit in weekend (Saturday and Sunday); and 20% during weekdays; then we get rooms in weekend. Divide this by 8 to get the demand for rooms in a weekend day. Hence, the total demand is 2,250 rooms. 5.2 Demand- Supply Scenario Based on the earlier sections, we know that Saputara has about 800 rooms and the peak demand may be 2250 rooms. So, the demand is higher than the supply. However, the feedback from the Hotel Operators is that the demand is only for the weekend only through-out the year; while during the vacations, it is for the entire month; and that the efforts should be made to make it a year round tourist destination. To make this happen, there would be additional components required which can add to the kind of activities that the tourists can undertake- activities such as MICE; which can provide occupancy during weekdays also. 5.3 Recommended Project Components Based on the visit to the site, survey of the hotels in the area, and from the interaction with locals, it is understood that the following issues are important from the Tourism perspective for Saputara: There is very low demand during weekdays; and MICE tourism needs to be promoted at Saputara Adventure sites needs to be increased - such as trekking sites, bungee jumping, etc. The site available has a very unique view and half of the site is already being used as tourist cottages. Further, the patch of land available is not very large; and it is on the edge of the valley; hence it would not be possible to develop a large facility here. However, at the same time, the cottages that exist are outdated and they are not fully utilizing the potential of the site. It is therefore, proposed that the site may be re-developed as a high end Tourist resort/ hotel with 5 star facilities. Page33