1.1.

INTRODUCTION

The Hotel industry is one of the oldest commercial endeavours in the world.

It has a long colourful history beginning with missions. Inns and lodges are

evolving into the hospitality industry. We know today with Hotel metal grand

resorts and finally the formation of the eminently successful Hotel groups or chains

across the country.

The hospitality industry began as a growth of travel in the conduct of trade.

In 3000 BC, Sumerian traders who travelled from one region of Mesopotamian

kingdom to another to sell their gains needed shelter, food and drink and

enterprising persons arranged ways to meet these needs. A mid the rise and fall of

enterprises in Mesopotamia, Elina, Egypt and later on in other parts of the world,

trade routes expanded and hospitality establishments flourished.

The first inns go back to the sixth century BC and where the product of the

urge to travel, spurred by the invention of the “wheel”. The earliest inns were

ventures by husbands and wife teams who provided large halls for travellers to

make their own beds. They also provide stabling facilities, modest wholesome food

and thirst quenchers like win and port. The hosts’ wife or his winch provided

entertainments and recreation. These conditions prevailed for several hundred

years. The advent of the industrial revolution in England brought ideas and

progress in the business of inns keeping. The development of railways and

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steamships made travelling more prominent. The industrial revolution also

changed travel from social or government travel to business travel. There was a

need for quick and clean services. The lead in Hotel keeping was taken by the

emerging nations of Europe especially Switzerland. It was in Europe that the birth

of an organized Hotel industry took place in the shape of Chalets and small Hotels,

which provided a variety of services and were mainly patronized by the aristocracy

of the day.

The growth of the modern Hotel industry took place in USA, beginning with

the opening of city Hotel in Newyork in 1971. This eventually led to great

competition between different citizens and resulted in frenzied Hotel building

activity. Some of the finest Hotels of USA were built in this area. But the real

boom in Hotel building came in the early twentieth century.

1.2. STATEMENT OF THE PROBLEM

Hotel business is one of the leading businesses in our district and in the

study area Tenkasi. Though the existing Hotels run profitability, there is lack of

interest among the local public to start Hotel business. It is a profitable business as

well as there are many problems faced by the owners while running the business.

To study deeply about the problems in hotel business in the stud area the

researchers selected the topic “A study on hotel industry in Tenkasi taluk”.

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1.3. OBJECTIVES OF THE STUDY

The important objectives are

1. To know about the history and types of hotels industry in India.

2. To know and analyze the problems faced by hotel industries in the study

area.

3. To analyze the satisfaction of hotel owners towards the business.

1.4. METHODOLOGY

The study is confined with both primary and secondary data. The primary

data is collected through a well structured interview schedule. The secondary data

have been mainly collected from the books, journals, magazines, and also from the

internet.

1.5. SAMPLING DESIGN

In order to study the hotel industries in Tenkasi taluk 25 hotel owners are

randomly selected using convenient sampling method in and around Tenkasi.

1.6. HISTORY OF HOTEL INDUSTRY

India is recognized as a land of friendly atmosphere and hospitality at globe.

People offer all possible help to the Travellers. Guest is god in the typical Indian

tradition. In India, the concept of shelter for Travellers is not new. The historical

records are replete with references of Viharas, Dharmasalas, Sarais and

Musafirkhans. These establishments provided a home to all way farers, be they

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pilgrims, scholars, adventures or merchants. The shelter under various names has

always been a part of India’s culture as a valuable institution providing a vital

service. The ancient Buddhist monks were probably the first to institutionalize the

concept of a shelter in India.

Travellers visited India, the ancient land of civilization, culture, dance,

drama and music and hospitality through the centuries from foreign countries.

Fahien a Chinese Traveller visited India during 359 – 424 A.D. Hieun Tsang a

Chinese Traveller visited India in 626 – 645 A.D. and Marco polo, an Italian

Traveller visited India in 1271 A.D. no good Hotels existed in early times. Hence

the Travellers are provided with food and accommodation mostly by the hospitable

locales. The great philanthropists Akbar, Jahangir and Shajahan of the Muslim

dynasty, offered the best possible facilities to the Travellers.

However the development of means of transport in seventeenth century was

mainly responsible for establishing inns and travels in the principal cities of India.

During the British rule the saris were transformed in to western style Hotels for the

foreign visitors and affluent Indians as well as Indian style Hotels for upper and

middle class Indians particularly in important cities of India like Mumbai and

Calcutta.

Pallonjee Pestonjee is credited with establishing the first western style Hotel,

in Mumbai, the British Hotel, in Mumbai in 1840. The Hotel industry then grew

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rapidly and by the end of nineteenth century there were a number of Hotels in

India.

In 1902 there was a significant event in the history of Hotel business when

the Indian Hotel company was incorporated on April 1, 1902 in Mumbai with an

authorized capital of Rupees thirty lakhs. In 1904, J.N. Tata opened the Taj Hotel

in Mumbai. There after a number of other Hotels were opened such as Ajantha,

New woodland grand Hotel, Associated Hotels of India Ltd., Oberoi Hotels, Cecil

Hotel and wild flower hall.

Later on, the Government of India realized that there was acute shortage of

Hotel accommodation and a decision was taken to build Hotels in the public sector,

where ever necessary. The first result of this decision was the construction of

Ashoka Hotel in 1956 to accommodate delegates to UNESCO international

conference in New Delhi. The Hotel was constructed in a record time of less than

one year due to personal interest taken by the late Prime Minister, Jawaharlal

Nehru.

1.7. TYPES OF HOTELS

There are various types of Hotels catering to the demands of tourists. The

Size, architectural features and the facilities and amenities provided differ from

one establishment to another. Following are the main types of Hotels.

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1. International Hotels

International Hotels are luxury Hotels and are classified on the basis of

internationally accepted system of classification. The Hotels are placed in various

star categories. There are five such categories ranging from five to one star

depending upon the facilities and services provided. Various facilities provided

include well appointed reception and information counter, banquet halls,

conference facilities etc. there are also a number of shops, travel agency, foreign

exchange and safe deposit facilities, Restaurant facilities, bars and banqueting are

an integral part of the business of a Hotel.

2. Resort Hotels

These Hotels are located near the sea, mountain and other areas abounding

in natural beauty. The type of services and amenities located in resort property

include recreation facilities such as swimming pool, golf course, tennis courts,

skiing, boating, surfacing and other various indoor sports. Other important

amenities include coffee shops, restaurants, conference rooms, lounge, shopping

arcade and entertainment.

3. Commercial Hotels

The commercial Hotels direct their appeal primarily to the individual

Traveller. As the Hotel caters primarily to the people who are visiting a place for

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commerce and business, these are located in important commercial and industrial

centres of large towns and cities.

4. Residential Hotels

These Hotels can be described as apartment houses complete with Hotel

service. These Hotels operate exclusively under the European plan where no meals

are provided to the guests.

5. Floating Hotels

These Hotels are located on the surface of the water. All the facilities and

services of old luxury ships have been converted into floating Hotels and are

providing very popular among tourists.

1.8. PROBLEMS OF HOTEL INDUSTRY

The important problems of Hotel industry as given and explained below as

follows:

1. Labour problem

Non availability of killed labour poses a problem to most of the Hoteliers in

the city. The unskilled workers are appointed and given through training in their

respective fields. But most of them leave their job as soon as the training is over.

2. Shortage of skilled employees

One of the greatest challenges plaguing the Hotel industry is the

unavailability of quality workforce in different skill levels.

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3. Shortage of rooms

The Hotel industry is facing heavy shortage of rooms. It is estimated that the

current requirement is of 200 rooms. Though the new investment plan would add

200 rooms by the following years, the shortage will still persist.

4. Intense competition

The industry is witnessing heighted competition with the arrival of new

players, new products and new systems. The competition from neighboring hotels

is one of the major problems faced by the hotel industry in the study area.

5. Customer expectations

The customers’ expectations are rising and needs are changing or flexible.

So the hotel industries must focus on customer loyalty to make them to visit the

hotels repeatedly.

6. Manual back-end

Though most reputed chains have IT enabled systems for property

management, reservation etc., almost all the data which actually make the

company work are filled in manual log books or re simply not tracked.

7. Human resource development

Some of the services required in the Hotel industries are highly personalized,

and no amount of automation can substitute for personal service providers. India is

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focusing more on white collar jobs than blue collar jobs. The shortage of blue-

collar employees will pose various threats to the industry.

8. Loan problem

There are a number of other considerations to be taken into account in

making Hotel loans. Many of these considerations are applicable to any

commercial real estate loan. For example, the lender should consider strong

affirmative and negative covenants and balancing provisions requiring the

borrower to maintain certain loan to value ratios over the life of the loan as

measured at annual or other specified intervals.

The lender may also wish to consider arbitration or judicial reference of any

disputes arising under the loan – provisions which will effectively avoid jury trials

and give the lender the prospect of a final binding decision in a matter of months

rather years.

Loan participations have additional considerations, particularly for the lead

lender. Unlike traditional real estate loans, the lead lender will have to make more

decision that is associated with the operating business of the Hotel if the Hotel if

the lender is forced to take the property back.

The above explained are some of the major important problems faced by the

hotel industries and by the hotel owners in the study area.

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1.9. ANALYSIS AND INTERPRETATION

1.9.1. Age – wise classification of the respondents

The age of a person is an important factor which decides the occupation of a

person. So the respondents are classified on the basis of the age and presented in

the below table.

Table: 1

Age-wise classification of respondents

Sl. No. Age No of Respondents Percentage

1 Below 35 4 16

2 35 – 50 13 52

3 Above 50 8 24

Total 25 100

Source: Primary Data

The above table shows that 4 (16 percent) of the respondents comes under

the age group up to 35 years, 13 (52 percent) of them come under the age group of

35 – 50 years and the remaining 8 (24 percent) of them comes under the age group

of above 50 years.

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1.9.2. Education - wise classification of the respondents

Education is one of the important factors considered for the study. The

following table shows that the classification of respondents on the basis of

education.

Table: 2

Education - wise classification of the respondents

Sl. No Educational qualification No. of respondents Percentage

1 Up to HSC 2 8

2 Graduates 13 52

3 Post graduates 6 24

4 Others 4 16

Total 25 100

Source: Primary data

It is inferred from the above table that 2 (8 percent) of the respondents are

qualified up to HSC, 13 (52 percent) of them are graduates, 6(24 percent) of the

respondents are post graduates and the remaining 4(16 percent) of the respondents

having the qualifications such as technical diploma, degree etc.

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1.9.3. Type of Hotel business

The hotel business is carried on partnership and sole proprietorship basis.

The following table shows the classification of the owners on the basis of the type

of business run by them.

Table: 3

Type of Hotel business

Sl. No. Type No. of respondents Percentage

1 Partnership 3 12

2 Sole proprietorship 22 88

Total 50 100

Source: Primary Data

The above table shows that majority 3(12 percent) of the respondents are

running hotel business as partnership business and the remaining 22 (88 percent) of

them are running their business as a sole proprietorship business

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1.9.4. Type of Capital invested in Hotel business

The capital invested in the business are owned as well as borrowed from

various sources. The following table shows the classification of the owners on the

basis of the type of capital invested in the Hotel business.

Table: 4

Type of capital invested in Hotel business

Sl. No. Type of capital No. of respondents Percentage

1 Owned 6 24

2 Borrowed 19 76

Total 25 100

Source: Primary Data

The above table shows that majority 19(76 percent) of the respondents

invested borrowed money in their business from banks and financial institutions

and the remaining 6 (24 percent) of the respondents invested their own money in

their Hotel business.

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1.9.5. Years engaged in Hotel business

The respondents are engaged in the hotel business for many years. The

following table depicts the classification of the respondents on the above basis.

Table: 5

Years engaged in Hotel business

Sl. No. Years No. of respondents Percentage

1 Up to 5 years 6 24

2 6 – 10 years 12 48

3 Above 10 years 7 28

Total 25 100

Source: Primary data

The table shows that 6(24 percent) of the respondents are engaged in up to 5

years, 12(48 percent) of them are doing the business for 6 – 10 years and the

remaining 7(28 percent) of them are engaged in the business for above 10 years.

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1.9.6. Classification on the basis of number of employees in the Hotel

There are many workers working in each and every hotels. The following

table shows the classification on the basis of number of employees working in the

Hotels.

Table: 5

Number of employees in the Hotel

Sl. No. Number of employees No. of respondents Percentage

1 Up to 10 14 56

2 11 – 20 8 32

3 Above 20 3 12

Total 25 100

Source: Primary Data

The above table shows that majority 14(56 percent) of the owners say that

there are up to 10 employees working in their Hotels, 8(32percent) of them say that

11 – 20 workers working in their Hotels and the remaining 3(12 percent) of the

owners say that above 20 employees are working in their Hotels.

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1.9.7. Reason for engaged in Hotel business

There are many reasons the respondents engaged in this hotel business. The

following table shows the classification on the basis of the reason for engaged in

Hotel business.

Table: 6

Reason for engaged in Hotel business

Sl. No. Reasons No. of respondents Percentage

1 Employment 9 36

2 Earnings 1 4

3 Traditional 12 48

4 Others 3 12

Total 25 100

Source: Primary Data

The above table shows that 9(36 percent) of the owners engaged in this

business for the reason of employment, 1(4 percent) for the reason of earnings,

12(48 percent) of them engaged in this business for the reason of traditional and

the remaining 3(12 percent) of them engaged in this business for other reason.

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1.9.8. Problems faced by Hotel owners

The following table indicates the problems faced by the Hotel owners. The

ranks assigned by the respondents are presented in the table

Table : 7

Ranking Table

Sl. No. Reasons Rank

1 Due to customers VII

2 Financial problems II

3 Location V

4 Labour problems III

5 Competition I

6 Shortage of rooms IV

7 Shortage of skilled employees VI

Source: Primary Data

It is inferred from the above table the competition scores high and holds the

first rank in the problems faced by the Hotel owners, the financial problems holds

the second rank and the labour problems holds the third rank respectively.

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1.9.9. Monthly income from hotel business

The following table shows that the classification of respondents on the basis

of the monthly income earned by them in their business.

Table 4.6

Monthly income classification of the respondents

Sl. No Monthly income No. of respondents Percentage

1 Up to 20,000 2 8

2 20001 – 40000 18 72

3 Above 40000 3 12

Total 25 100

Source: Primary data

It is inferred from the above table that 2 (8 percent) of the respondents are

earning up to Rs.20,000 per month, 18(72 percent) of them are earning Rs.20001 –

40000 and the remaining 3(12 percent) of the respondents are earning above Rs.

40000 per month from the hotel business.

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1.9.10. Level of satisfaction of the owners in Hotel business

The level of satisfaction of the respondents towards the hotel business is also

analyzed and presented in the following table.

Level of satisfaction

Sl. No. Options No. of respondents Percentage

1 Highly satisfied 16 32

2 Average 7 14

3 Low 2 4

Total 25 100

Source: Primary Data

The above table shows that 16(32 percent) of the owners are highly satisfied

in this business, 7(14 percent) of the owner’s satisfaction level is average or

medium and the remaining 2(4 percent) of the respondents are having low level of

satisfaction in this business.

1.10. FINDINGS OF THE STUDY

The important findings of the study are:

 The researcher find out that 13(52 percent) of the hotel owners comes under

the age group of 35 – 50 years.

 Most 13 (52 percent) of the hotel owners are graduates.

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  Majority 43(86 percent) of the owners running their business as a sole

proprietorship business.

 From the total 25 respondents 19(76 percent) of them invested borrowed

money for their business.

 12(48 percent) of the hotel owners are engaged in the hotel business for 6 –

10 years

 Majority 14(56 percent) of the owners say that up to 10 workers working in

their Hotels.

 Most 12 (48 percent) of the owners engaged in this business for the reason

of traditional business.

 The competition holds the first rank, financial and labour problems hold the

second and third rank respectively in the problems faced by the Hotel

owners while engaged in this business.

 From the total respondents 18(72 percent) of the respondents are earning

Rs.20001 – 40000 from the hotel business.

 Majority 16(32 percent) of the owners are highly satisfied in hotel business.

1.11. SUGGESTIONS

The important suggestions given by the researcher to improve the Hotel

business are given and explained below as follows.

1. The hotels must keep the surroundings and the utensils clean and tidy.

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2. The owners and the workers treat the customers with a smile and hence they

like to visit the same hotels in future.

3. Proper advertisements must given to give information related to the hotels

4. The foods supplied in the Hotels are checked by the government staffs

periodically and the price of them also checked to know if the foods offered

in the hotels are healthy to the people.

5. The Hotels also take steps to keep the toilets and rooms clean and the Hotel

employees must treat the customers in good manner.

1.12. Conclusion

The Hotels in the study area are also not popular and the owners will take

essential steps to reach the people by giving proper advertisements, the owners

must take steps to keep the toilets and rooms clean and the Hotel employees must

treat the customers in good manner to get more customers and for the development

of hotel industry in the study area.

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