A strategic management presentation on the "EAST INDIA HOTELS"

1. EAST INDIA
HOTELS
Group D10
Gabriela D’cunha –
14052
Genevieve Nora Dias –
14053
Jovita Francy Dcosta –
14056
Manisha Kumari – 14058
Mario Allen Clement –
1

2. CONTENT
East India Hotels
Associates and Subsidiaries
Mission
Business Plan
External Analysis & Internal Analysis
SWOT Analysis
SWOT Matrix
Porter Five Force
Strategies over the Last 5 Years
Competitive & Future Positioning
Future Predictions – Crisil and Analysis
2

3. EAST INDIA HOTELS
EIH Limited is a public limited company.
Operates hotels and cruisers in five countries.
Under the luxury ‘Oberoi’ and five-star ‘Trident’
brands.
Also engaged in :
 Flight catering.
 Airport restaurants.
 Travel and tour services.
 Car rentals.
 Project management.
 Corporate air charters.
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4. Business Hotels Leisure Hotels Cruises 5 Star Hotels
The Oberoi, New
Delhi
The Oberoi
Amarvilas The Oberoi
Vrinda
Agra
The Oberoi Rajvilas Chennai
The Oberoi,
Mumbai
The Oberoi
Udaivilas The Oberoi
Philae
Bhubaneshw
ar
The Oberoi
Vanyavilas Gurgaon
The Oberoi,
Bangalore
Wild Flower Hall,
Shimla The Oberoi
Zahra
Jaipur
The Oberoi Cecil,
Shimla Mumbai (2)
The Oberoi Grand,
Kolkata
Mena House Oberoi Udaipur
The Oberoi Sahl
Hasheesh Cochin
The Oberoi,
The Oberoi, Bali
4

5. ASSOCIATES AND
SUBSIDIARIES
EIH Flight Services Limited
EIH Holdings Ltd
EIH Flight Catering Services
Limited
Oberoi Turtle Bay Limited
EIHH Corporation Limited,
EIH Investments NV,
EIH Management Services BV,
PT Widja Putra Karya,
PT WakaOberoi Indonesia
Company Associates :
 EIH Associated Hotels Limited
 L&T Bangalore Airport Hotel
Limited
 Golden Jubilee Hotels Limited
 Oberoi Mauritius Limited.
Company Subsidiaries :
Mercury Car Rentals Limited
Mashobra Resort Limited
Oberoi Kerala Hotels and Resorts
Limited
5

6. MISSION
Our Shareholders -
As a result, we will create
extraordinary value for our
shareholders.
Our Distinctiveness -
Together, we shall continue the Oberoi tradition of pioneering in the
hospitality industry, Striving for unsurpassed excellence in high-
potential locations all the way from the Middle East to the Asia-Pacific.
Our People -
We are committed to the
growth, development and
welfare of our people upon
whom we rely to make this
happen.
Our Guests -
We are committed to meeting and
exceeding the expectations of our
guests through our unremitting
dedication to every aspect of
service.
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7. Mahindra Holidays
and Resorts India
36%
East India Hotel
30%
ITDC
31%
Leela Hotels
3%
Share Price
7

8. • Trident
• Oberoi
• Reliance
Key activities
• Housekeeping & Hospitality
• Flight catering
• Airport restaurants, Travel &
tour services
• Car rentals
Key partners
Cost structure
• High fixed costs
• High variable costs
Key resources
• Learning & development
• Employee engagement
• Training to employees
BUSINESS PLAN
8

9. Customer segments
• Niche segment
• Tourist & Coastal areas
Channels
• Newspapers
• Company Website
Revenue streams
• Restaurants
• Rooms
• Halls
Value proposition
• Unique offering
• Customer expectations
Customer relationship
• Good service
• Complimentary
services
9

10. EXTERNAL
ANALYSISOpportunities
Increase room occupancy
Use of energy efficient
equipment’s
Smart marketing and sales
strategies
Opening luxury properties
Threats
Seasonal Demand
Competition
Government/Authority
INTERNAL
ANALYSISStrengths
Asset light model
Effective
communication
Innovation
Loyal customers
Diversified
portfolio
Strong
Weakness
High rental cost
Over leveraged financial
position
Little target
Poor record keeping
Domestic market force
Lack of Low cost lifestyle
brand
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11. Strengths
One of the India’s oldest hotel
Cost control
Tie ups
Loyal Customers
Dedicated staff
Innovation
Opportunities:
Opening Luxury properties
Partnership with Reliance
Increase room occupancy
Use of energy efficient
equipment’s
Smart marketing and sales
strategies
Weakness:
Failure in Investing in Real
estate.
Huge-Debt from building
Threat
Approval from environment
authority
Seasonal demand
SWOT
SWOT ANALYSIS
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12. SWOT MATRIX
STRENGTHS
 Cost advantage
 Asset light model
 Loyal customers
 Diversified
portfolio
WEAKNESS
 Lack of Low cost lifestyle
brand
 High rental cost
 Little target
 Poor record keeping
OPPORTUNITIES
 Growth in tourism
 Occupancy rate is
growing
 Higher collaboration
 Entry into new markets
SO Strategy
High-expected growth
rate is a good
opportunity to open new
hotels in the luxury
sector for foreigners.
WO Strategy
Opening lower budgets hotels in
tier 2 and tier 3 cities which can
also help focus on middle class
segments, also acquiring low
budget hotels as collaboration
opportunity is high.
THREATS
 Higher training cost
 Increasing competition
 Political Turbulence
 Supplier switching cost
ST Strategy
Can utilize the strength
of having loyal
customers by delighting
them with good offers
which will increase their
customer satisfaction
WT Strategy
The quality and availability of
supplier services and equipment
is essential to the hotel, the hotel
is also labor intensive. Staff are
strongly influenced by the quality
of the service provided. Hence
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13. PORTER FIVE FORCE
New Entries-Moderate
 Low cost switching
 Industry is capital
intensive
 Legal and financial
complexities
Power of supplier-Moderate
 There are no substitutes.
 Customers are
fragmented
 Quality of the service
provided
Power of buyers- High
 Low cost switching
 Price-sensitive
 Offering discounts
Threat of Substitutes-
Moderate
 Brand loyalty of
customers
Rivalry-High
 Offer same service at cheaper rates
 Intense competition
13

14. STRATEGIES IN
DEPTH
Faces a direct completion form its competitors
 Taj hotel
 Hyatt Grand
 LeMeridien
 Raddisson
 Hotel Marriott Hotel
Marketing strategy's - is to communicate the unique
set of services
Direct the focus of their guests to the issues
 Quality
 Value for the money
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15. 4 P’S OF MARKETING
Product/Service
 High-quality facilities
 Exemplary personal service
 Differentiated from competition
 Personalized service for corporate
traveler
Price
 Pricing strategy has been
consistent
 To provide added value
 Reasonable rate
 Against devaluing their
servicesPlace
 Service information is provided to
the guest:
 Personal selling
 Direct marketing
 Advertising and the Internet.
 Delivery channels include:
 Travel agents
 International reservations
Promotion
 Focus on mass
communication
 Via print ads:
 Trade publications
 The Internet
 Direct mail campaigns
 Personal selling
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16. 16
COMPETITIVE &
FUTURE
POSITIONING

17. FUTURE
PREDICTIONS
Expect strong recovery in demand with rebound in
economy
Business segment contributes larger proportion of
total revenue
Around 60% of rooms directly
44% of rooms are located in business destinations
Sound balance sheet remains key positive for future
expansion
reduced its debt drastically through asset sale
The company also has a strategic partner, Reliance
Industries
Capturing long term potential; maintain BUY
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18. Profit and loss statement
Rs. Crore
(Year-end March) FY 14 FY15 FY 16E FY 17E
Total operating income 1539.1 1623.7 1737.4 1888.5
Raw material Expenses 218 227 227 246
Employee expenses 410 422 434 472
Other Exp 585 633 678 737
Total operating expenditure 1213.1 1282.7 1338.6 1455.0
EBITDA 326.0 341.0 398.8 433.5
Depreciation 134.9 134.5 141.6 152.2
Interest 52.7 50.4 43.9 36.3
Other income 38.7 39.1 40.3 41.6
PBT 177.1 195.2 253.6 286.6
Others (8.0) 5.6 4.9 15.3
ICICI ANALYSIS OF
EIH
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19. 19

20. 20
CRISIL OPINION
 Aggregate RevPARs across 12 Indian destinations
increased.
 Room demand is estimated to have grown by 10 per
cent.
 Foreign tourist arrivals increased by 7 %to 7.5 million
in 2014
 North American and Western European countries.
 Room additions increased by 8 per cent y-o-y in
2014-15.
 Demand in both business and leisure destinations
(2014-2015)

21. CHARACTERISTICS
OF THE INDUSTRY
21
66
76
66
62 60
56 57 56 57 60
74 70
80
85
77
59
54 52 50
55 50
67
76
75
Jan feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
%Demand
Seasonal Demand (2014)
Business Destination Leisure Destination

22. HOTEL
PERFORMANCES
 The foreign tourist arrivals (FTAs) grew by 9.2 % (y-o-y)
 “Electronic Travel Authorization” enabled “Travel visa-
on-arrival”.
 44 countries as against earlier TVoA scheme for 12
countries.
 Premium segment hotels located across 12 key
destinations in India.
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0%
20%
40%
60%
80% Occupancy Rate
0
2000
4000
6000
8000
10000
Average Rooms Rented/Per
Day (Rs)
2014/2015

23. 23
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