1. Presentation
on
Budget 2011
(Service Sector - Hotel Industry)

2. Introduction
• What is Budget?
• What is Service Sector?
• What Service Sector includes?

3. Introduction
• What is Hotel Sector?
• What does it includes?
• Categorization of hotels in India:-
Heritage
Luxury
Budget
Resorts

4. Types Of Hotels
• Historic hotels
• Unusual hotels
• Treehouse hotels
• Bunker hotels
• Shoe hotels

5. Cave hotels
Capsule hotels
Garden hotels
Underwater hotels

6. Important Hotel group in India
• ITC Maurya Delhi
• ITC Maratha Mumbai
• Fort Radisson of Radisson group in Kolkata
• Radisson Jass Hotel Simla
• The Taj Westend, Banglore
• Taj Coromandel, Chennai

8. Careers in Hotel sector
• The hospitality industry is a "high overhead" low gross margin industry. That
means that cost containment is a huge part of the equation.
• The most common career path in hospitality is a work from the ground up path.
Start by learning operations and/or sales line positions and then work into
supervisor/manager roles. You can make a decent living if you are one of two
things:
A) Good at closing sales, or
B) Good at being efficient and getting the most productivity out of your time.
• Other jobs that can turn into careers are:
Sales - career path = Director of Sales or GM
Catering - career path = Catering Manger/Catering Sales
Front (and sometimes Back) Office Manager - career path: GM

9. Impact of Budget 2010 on Hotel Industry
• Foreign tourism decreased by 2.5% year to year,
around 5.1 million. Room rates for the five-star hotels
in Mumbai were down by 38% and In Delhi by 44%.
Hence reducing Revenue per Available Room.
• Growth rate increased by 7% in tourism due to
Common Wealth Games by in second half 2010.
Gradually increasing Hotel industry due to lower
service tax rates.

10. Impact of Budget 2010 on Hotel
Industry (Contd…)
• The improvement in FTAs is a positive sign for the
hotel industry as they dominate the demand in the
five-star category covering over 60%
• Section 35AD of the Income tax Act, which provides
for deduction in respect of expenditure of capital
nature has been amended in regards to hotels.
Improve direct tax liability.

11. Impact of budget 2011 on Hotel Industry
• Acc. to FDI policy, 100% Foreign Investment is allowed
by Govt. in hotel industry.
• Due to infrastructure development, development of roads,
railways & airports has grown & will grow more.
• Increase in tax exemption limit from Rs 160,000 to Rs
180,000 for individual tax payers.
• Lowering of qualifying age of senior citizen from 65 to
60.

12. Impact of budget 2011 on Hotel Industry
(Contd…)
• Increase of service tax by Rs 50 on domestic air travel and Rs 100 on
international air travel & Rs 250 overseas journeys by economy class.
• hotel rooms of over Rs 1,000 per day and AC restaurants serving
liquor under the service tax net, amounting to an additional tax of 5%
and 3% respectively.
• A consumer will be forced to pay about 25-30% taxes on the total bill
value. Given the high rate of food inflation, there will be no choice but
to pass on the burden of the increased taxes on consumers
• Focus on increasing GDP growth to 9%.

13. Case Study ( Taj Hotel )

14. Case facts and case details
• History
• Facilities provided
• Competitors
• Impact of budget 2011

15. Impact of Budget 2011 on Taj Hotel
• Indian Hotels stand alone in 3rd quarter revenues were
10.8% , while income for Taj Mahal palace, Mumbai ,
was at 15% yearly.
• The occupancy rate stood at 64% in FY 2009, while
Average room rates have recorded at steady growth
at 7%.
• PAT weighed down by higher tax rate but lower
interest cost helped cushioned the decline to an
extent.

16. Impact of Budget 2011 on Taj Hotel
(Contd.)
• High inflation in 2010 – increase in RM. Opening of
new Taj Falaknuma palace, in Hyderabad – increase
in expenses in marketing & advertisement.
• Decrease in profit by 4.6%. But after construction-
increase in profits upto 29%.
• Thus overall 2011 performance of Taj Hotels were up
to margin.

17. Conclusion
• The budget shows a negative impact on Indian
Hotels as the increase in service tax affected
Indian hotels at large, which lead in decrease
in growth of hotel industry.

18. Bibliography
• Available information from www.moneycontrol.com
on 12th March, 2011.
• Source of Case study available from
www.indiaedunews.com on 14th March, 2011.
• Images & other information available from
www.economictimes.com on 14th March, 2011.

19. Thank You