Feasibility Report on Hotel

A hotel is a business that offers accommodation, food, as well as other amenities to paying customers such as tourists or other guests.


Feasibility Report on Hotel is as follow.

A hotel is a well-managed establishment that provides overnight accommodation for different people primarily on a short-term basis in exchange for monetary figures. A hotel is mainly for the traveling population that faces difficulties satisfying their overnight accommodations while traveling to different places. Different varieties of hotels target a specific section of the population which serves as the base for their marketing strategies, pricing criteria, and services.

The hotel industry is part of the service or the hospitality industry that fundamentally and solely deals with lodging or overnight guest accommodations. The definition of the ‘hotel industry’ is not only limited to just hotels, there are several maintained establishments that provide overnight accommodations and other services like hotels, but may not specifically fall into the category of a ‘hotel’. Motels, Botels, Inns, serviced apartments, hostels, guest houses, road-houses, Bed and Breakfasts (B&B) among many others constitute the hotel industry but do not necessarily fall into the definition of a ‘hotel’.

Feasibility Report Sample

Market Strategy

The hotel industry has revenue per available room (RevPAR), average daily rate (ADR), and occupancy rates as its key performance indicators which help determine the success rate of the industry. The implementation of the Goods & Services Tax (GST) in 2018, however, turned out to be unfavorable towards hotel owners by reducing their profit margins. The GST collaborated all the taxes and reduced the business transaction cost for the customers which harmed the hotels.

In 2019, the Indian hotel industry was estimated to reach the value of 11,920 INR by 2023, along with RevPAR of $12,400 per annum and a compound annual growth rate (CAGR) of 13% during the period of 2018-2023. However, these estimations were defenestrated with the outbreak of the COVID-19 pandemic which limited the population to their respective homes and the majority of people were either unable or unwilling to travel. During the crucial profitable months of April and May, the occupancy rates of all the hotels were way below 5%, with a primary use by the health professionals for the COVID treatment. Even after the relaxations of the national lockdown, the increment in the occupancy rate was anything but a successful revival. A permanent shut down of almost 8% unorganized hotels during the lockdown, was also estimated.

In the Post-COVID era, The RevPAR witnessed a decline of almost 48% in 2020 but is, however, expected to make a recovery by 2021 or 2022 with the adoption of a new dynamic, domestic tourism, and Government-aided schemes, and significant packages. The organized sector of the hotel industry is expected to grow further due to the elimination of many competitions in the market because of the pandemic.

The major brands and companies in the current hotel market scenario are IHCL, Chalet Hotels, ITC Ltd., Radisson Hotels Pvt. Ltd., Intercontinental hotels group Pvt. Ltd., Wyndham, Lemon tree Hotels Ltd., EIH Associated Hotels Ltd., and Bharat Hotels Ltd.

While the IHCL and ITC hotels showcased a rapid revival, Chalet and Lemon Tree Hotels Ltd. also recovered rapidly post-COVID. Choice Hotels India with its currently operating 32 hotels is also looking forward to opening 11 more new ones in India. Tamara Hotels has also planned to upscale their room count from the present number of 300 to 1,000 by 2025 and a potential investment of 350 crore INR in Tamil Nadu and Kerala by 2022 is also expected.

Domestic vacations and individual domestic and organized hotels witnessed a primary recovery as people were much more comfortable with domestic travel and stay rather than traveling nationally or internationally. Therefore, the local staycations, B&Bs, workations, and business hotels made sure to follow the COVID norms and guidelines along with the meaningful adoption of Artificial Intelligence (AI) and Data technology and saw an early rise in their businesses after the pandemic.