An Introduction to Hospitality Industry

The hospitality industry is a part of a larger enterprise known as travel and tourism industry.
Tourism is a basic & most desirable human activity deserving the praise & encouragement of all
people & all governments. It is an industry concerned with attracting people to a destination,
transporting them there, housing, feeding and entertaining them upon arrival & returning them
to their homes. A quarter of a century ago, travel was the privilege of a few rich, affluent &
adventurous people. Today with the rise in standard of living along with fast technological
revolution in the transportation industry, overseas holidays are within the reach of middle &
working class. Travel today is sold like any normal consumer product through retail outlets,
wholesalers & even through departmental stores of many countries.
Modern tourism is all about mass travel growth, concords, supersonic flights, cruise ship travel
etc. Toll free telephone service males it easy & convenient for potential tourists to call for
information reservations. Computerized reservation system facilitates the answering of inquiries
& booking of airlines tickets. Tour car rentals, hotels & automatic ticketing machines are
facilitating dispensing airline tickets covering each segment of the passengers itinerary at the
applicable fare. More and more people are able to travel great distances in comparatively less
time. Travel has become relatively inexpensive.
TOURISM
Definition:
The word, tourism is related to tour which is derived from the Latin word Tornos. Tornos
means a tool for describing a circle or turners wheel.
Tourism comprises the activities of persons travelling to and staying in places outside their
usual environment for not more than one consecutive year for leisure, business and other
purposes.
It is the movement of people from their normal place of residence & work for a period of
not less than 24 hours and not more than 1 year. (according to W.T.O.)
The sum of phenomenon and relationship arising from the travel as it does not lead to
permanent residence and is not connected to any earning activity. (by Henniker & Kroff)
Tourism covers the social activity of those who travel for a period of 24 hours or more in a
country other than the one the person usually lives in (The league of nations in 1937)
Tourism is a temporary, short term movement of people to destinations outside the places
where they normally live and work and their activities during their stay at these
destinations, including day visit & excursion. (By tourism society of Britain)
A tour represents an attempt be a traveler to discover something about a place he visits.
An excursionist is any person travelling for pleasure for a period of less than 24 hours in
outside his normal place of residence and not undertaking any gainful occupation in that place.
A transit visitor is any person travelling in a country during a period of less than 24 hours
provided that any stops made are of short duration and for other than tourist purposes.
A visitor is a broad category of travelers. It is any person visiting a country other than his usual
place of residence.
THE COMPOSITION OF TOURISM INDUSTRY
Primary or major constituents:
1. Transport

2. Accommodation
3. Intermediaries
4. Catering and food
Secondary constituents:
1. Shops and emporiums
2. Handicrafts and souvenirs
3. Local transportation
4. Coolie and porters
5. Communication services.
6. Advertisement agencies
7. Publishing industry
8. Artists, musicians and performers
9. Suppliers of goods & services for hotels and caterers and travel related undertakings.
10. Banking & financial institutions
11. Theatre, Cinemas, special festivals & organized sports.
TOURISM CONCEPTS
International tourism - When the travel is from one country to another.
Domestic tourism When the travel is within the country that is trip taken by a tourist within
his/her own country or where the origin and destination are in the same country.
Inbound - It refers to tourists entering a country.
Outbound It refers to tourists leaving their country of origin to another.
CHARACTERISTICS OF TOURIST PRODUCT
1) Composite nature: Tourism product is a total experience & that the suppliers of subproducts and services are supplying a portion of the total product. It is the sum total of all
the sub-products that equals the tourism product.
2) Service based: Most of the components to the tourism product are service. The service
provided by industry personnel is a vital component of the tourism product.
3) Intangibility: Unlike goods, services are intangible i.e. they cannot be seen, heard, smelt,
touched, tasted or measured, they can only be experienced.
4) Inseparability: a) A service product cannot be separated from the producer.
b) A service is produced and consumed at the same time usually on the producers
premises by the consumer.
c) The consumer has to go to the producer.
d) A service is purchased even before it is produced.
5) Heterogeneity: Both production and consumption is being performed by human beings
the service as experienced may vary in quality. This can be overcome by standardization
and extensive training.
6) Interdependence of products: While it is important to identify the sub-products,
emphasis must be on the fact that the whole is greater than the sum of parts; i.e. subproducts are dependent on each other for success.
7) Perishability: The supply of services cannot be stored. IF the service does not generate
revenue by being used over a given period, it perishes.
8) Dominant role of intermediaries: In tourism sales intermediaries like tour operators,
travel agents, reservation services play a very dominant role and enjoy superior marketing
strength.
9) Diverse motivations: It is possible that people make exactly the same choice of
destination for entirely different reasons.
10)
Instability of demand: Tourism demand is highly influenced by factors such as
seasonality, political unrest, economy, climatic disasters, diseases, wars etc.
EVOLUTION & GROWTH OF HOTEL INDUSTRY IN THE WORLD

Warriors or traders were the early travelers but they did not have hotels to accommodate them.
The warriors used tents but the merchants seeking to trade tools, clothing and livestock, traded
merchandise for lodging. The inns offered little more than a cot or a bench in the corner of a
room or a stable. Most of them were private residences that offered temporary residence or
lodging to strangers. Guests stayed in large communal rooms where sanitation and privacy were
non-existent. After the establishment of money in 6 th century BC, inn keeping was one of the first
commercial enterprises and hospitality was one of the first services for which money was
exchanged.
In the third century AD, Roman Empire developed an extensive system of brick paved roads
throughout Europe and Asia Minor. Small road side lodges were constructed due to increase in
the road transport. During the Industrial Revolution in 1700s, the Europeans began to combine
food and beverage service with lodging. No attention was given to sanitation and beds as well as
rooms had to be shared with other travelers. These early European inns were unsuitable for
aristocrats. To accommodate wealthy travelers, luxurious structures were erected. These offered
private rooms, individual sanitation and all comforts of a European castle. These elegant new
establishments adopted the French name for mansion, hotel. The rates they charged were very
high and well beyond the means of common citizens.
In colonial America, inns were modeled after European inns. Beds and rooms had to be shared
with strangers. Throughout 1800s, American innkeepers improved their services and continued
to build larger properties.
Most of these were located in seaport town since sea transport was very widely used mode or
travel and transport then. The first American hotel the City Hotel opened in 1794 in the New
York City. It was one of the largest buildings in the city and was built exclusively for hotel
purpose. It had 73 guest rooms. Adelphi Hotel in New York was the first high-rise structure in the
city.
In 1829, a large new hotel was constructed in Boston. Tremont House was the earliest first class
hotel in America and brought revolution in the hospitality industry. This hotel was the first to offer
private rooms with locking doors. Each guest room had a wash basin and a water pitcher and a
bar of soap. Other innovations included a full time service staff, a French restaurant which was
located in the lobby, etc. These American hotels became important social centers and unlike
their European counterparts, welcomed anyone who could afford the reasonable rates.
Meanwhile in Europe, sanitary lodging continued to be regarded as a privilege to be enjoyed only
by the aristocracy. But in democratic America clean and comfortable accommodation was
available to any middle class worker or family.
In early 1900s, a new type of traveler entered the picture, the traveling businessman. For him
the world class hotels were too expensive and the old style inns too unsanitary. A new type of
lodging establishment was opened for these types of guests - the commercial hotels. It was
opened by Mr. E. M. Statler, at Buffalo, New York, in Jan. 1908. It was the beginning of the chain
hotel concept. This hotel provided private sanitary rooms with private bathroom. The guest
received a pitcher of ice water and morning newspaper everyday. A room and a bath for a dollar
and a half were well known among American travelers.
The great Depression nearly wiped out the hotel industry. But one hotel operator, Conrad Hilton,
managed to stay afloat as a result of his oil and gas investments. Around 1940 - 1950, the Hilton
Hotel Corporation built or bought numerous luxury hotels around the world and competed with
the largest hotel chains of the time Sheraton and Statler.
With the end of World War II, the hotel industry unexpectedly entered a new era of prosperity,
Americans began traveling as never before. With an automobile in every garage, Americans
began touring the country with their families. For this new type of traveler - the vacationing

family unit - the formality of a traditional hotel was inappropriate. Families traveling in their cars
needed casual lodging that was accessible from major highways and had ample facilities for
parking. The early these properties were small and had fewer than 50 rooms. Most of them were
owned and operated by a couple and were called Mom and Pop properties. By 1960, the motor
hotel or the motel had become a permanent and influential part of the hospitality industry. By
this time the motels had over 100 rooms with a separate parking space for each unit.
In 1960s, a new type of lodging outlet - the economy, or budget hotel entered the picture. These
lodging establishments sold only room space without F & B service. To save on construction cost,
the economy hotels were built on inexpensive land and had small lobbies. They also hired
minimum staff. By minimizing costs the budget hotels were able to give much lower room rates
than their competitors. The first successful economy hotel, Travelodge, opened in Tacoma,
Washington, in 1956 but the chain expanded nationwide by 1966. By early 1970s the idea of low
rate motel/s hotels had captured the imagination of investors mini bars are the standard
amenities of most budget hotels. These hotels / motels are also called as no-frills hotels.
By 1973, the no. of travelers staying in motels surpassed the no. of people staying in full-service
hotels. To compete with these low end properties, mid-market hotel chains introduced their own
limited service hotels. These hotels combined some of the features of the full service hotels with
the cost saving of the budget hotels / motels. e.g. Holiday created the limited service Hampton
Inn chain and Marriott created Courtyard hotels. In these hotels all the rooms have separate
living and sleeping areas. The lodging trend of the 1990s is towards expanded services made
possible through consolidation of responsibilities. Guest services departments are found in hotels
of all classes. These departments combine services that traditionally were performed by bell or
door attendant, a concierge and an in house travel agent. Two new concepts in the hotel industry
are The All Suite Hotels and The Residential Hotels.
EVOLUTION & GROWTH OF HOTEL INDUSTRY IN INDIA
Although the origin of hotel industry in India cannot be traced to a definite point of time, there is
evidence of its presence even during the Indus valley civilization & Vedic era. In olden day, travel
was predominantly taken for pilgrimage and trade. The concept of char dham and our country
dotted with Hindu temples as well as shrines frequented by people of all faiths is an important
indicator of the significance of pilgrimage by our ancestors.
Ancient India was well known for its silk, spices, gold and gemstones. Records speak of Indians
trading with Greece, Italy, Indonesia, Malaysia, China & Japan among others. The main mode of
transport was animals on land and boats & ships in seas and rivers. We find all major ancient
trading cities located along banks of rivers and sea ports.
The origin and evolution of the hotel industry in the country can be categorized in the following 3
periods:
1) Ancient & Madieval Era (from Indus Valley Civilization to AD 1600)
The beginnings of hotel industry in India stand rooted in the Hindu philosophy of atithi devo
bhava implying that an unannounced guest is to be accorded the status of God. There is
evidence of accommodation facilities in ancient India. The lodging houses during those times
were known as dharamshalas (dharama in Sanskrit means religion and shala school).
Dharamshalas, the resting places for pilgrims are believed to have originated in village chaupals
(meeting place for villagers to discuss social issues) Later with the help of rulers and local
Zamindars (landlords) more permanent structures were made. Here they were provided a safe
place to rest and spend the night. Other words in literature that are indicative of according
facilities to travelers are anna-kshetras (anna-food grains, kshetras-area), bhojnalaya (bhojanameal, alaya-house), paakshala (paak-cooking, shala-school), panthagar (panth- road or way,
agar-house)

Records of many foreign visitors & philosophers who came to India speak highly of the hospitality
facilities. Famous Chinese scholars Fa Hien (AD 399-414) & Huein Tsang (AD 629-643) who came
during the reigns of Chandragupta Vikramaditya & Harshavardhana respectively have mentioned
the existence of shelters for travelers.
In the medieval era between the 11 th & 13th century many sarais and musafirkhanas were made
mainly as resting places for messengers of the postal service set up by the Sultans of the Slave
and the Mamluk dynasty. The system was refined by Allauddin Khiljee who established dak
chowkis.
2) Colonial Era (1601-1947)
The early hotels were mostly operated by foreigners to cater to the European colonizers and later
the officials of the Raj. Some of the early taverns were Portugese Georges, Paddy Gooses,
Racquent Court between 1837 to 1840 but witin the next 10 years most of these disappeared
and instead more respectable hotels like the Hope Hall Family Hotel stared appearing. Other
famous properties included Victoria Hotel, in 1840, Esplanade Hotel in 1871, Watsons which was
exclusively for Europeans, Auckland in Kolkata in 1841.
In December 1903 Jamshedji Nusserwanji Tata inaugurated the Taj Mahal Palace and Tower Hotel
overlooking the Gateway of India in Mumbai following an incident when he was refused an entry
in Watsons hotel for being an Indian. The hotel which is an architectural marvel was the first
luxury hotel for Indians by an Indian. In 1923 Shapurji Shorabji opened the Grand hotel in
Mumbai. The first Indian style hotel was Sardar Griha in 1900 and Madhavashram in 1908. The
Ritz, The Ambassador, Westend etc. which opened between the 2 world wars are fondly referred
to as War babies.
3) Modern Era (1947 onwards)
Post independence there were big leaps in the hotel trade in the country. The Oberoi Group for
Hotels (founded by Rai Bahadur Mohan Singh Oberoi) and Tata group took over several British
properties, maintained high standards of service and quality and expanded their business. Later
decades saw ITC join hotel industry with properties under ITC Welcomegroup. The 1949 saw the
organization of 4 regional hotels and restaurants associations with head offices in Delhi, Mumbai,
Kolkata and Chennai. These 4 associations were linked in a federation, the Federation of Hotels
and Restaurants Associations of India (FHRAI) in 1955.
Realising the importance and potential of tourism and hospitality industry, the government
constituted the India Tourism Development Corporation (ITDC) in 1966 which opened many small
and large hotels across the country.
Over the last few decades, various well known International hotel chains have come to India.
These include Hyatt Hotels, Intercontinental Hotels, Marriott International, Hilton Hotels, Best
Western International, Four seasons Hotels and Carlson Hotels Worldwide.
The liberalization of the Indian economy has provided a boost to the hotel industry in a big way,
leading to a sharp rise in the number of the inbound and domestic tourists in the last 2 decades.
The boom in IT industry and other service sectors has placed substantial disposable incomes in
the hands of Indian people spurring the travel urge in them. The growth can also be attributed to
the countrys Incredible India campaign which showcases the countrys tourism friendly
aspects. Indias open skies policies and upgrading of national highways connecting various parts
of the country has opened new avenues.
HOTEL: DEFINITION & CORE AREAS
Definition
The word hotel is derived from the French hotel, which refers to a French version of townhouse.
Historically in the UK, Ireland and some other countries, a townhouse was the residence of a peer

or an aristocrat in the capital or major cities. The word hotel could have also been derived from
the word hostel, which means a place to stay for travelers.
A hotel or an inn is defined by the British Law as a place where a bonafide traveler can receive
food and shelter, provided he is in a position to pay for it and is in a fit condition to be received.
Hence a hotel must provide food (and beverage) and lodging to a traveler on payment, but the
hotel has the right to refuse if the traveler is not presentable (drunk, disorderly or unkempt) or is
not in a position to pay for the services. Alternatively a hotel may be defined as an
establishment whose primary business is to provide lodging facilities to a genuine traveler along
with food, beverage and sometimes recreational facilities too in a chargeable basis.
Core Areas of a Hotel: An Overview
The organization of a hotel today is very complex and comprises various departments. The
number of departments varies from one establishment to another. All departments have their
own managers or head of the departments reporting to the General Manager and the Assistant
General Manager. Hotel departments fall under either of the following two categories:
1. Revenue-earning departments: are operational departments that sell services or
products to guest thus directly generating revenue for the hotel. These include Front
Office, F & B Service and hotel-operated shops.
2. Support departments: are the ones that help generate revenue by playing a supporting
role to the hotels revenue-earning departments. These include HR, Maintenance,
Purchase, Housekeeping and so on.
The various departments are discussed below in brief:
Room Division Department: In a large hotel, Front Office and Housekeeping come under
this department. These are responsible for maintaining and selling rooms in the hotel. At
least 50 % of the total revenue generated by the hotel is attributed to the room division.
This department is headed by the rooms division manager to whom the Front Office
Manager & the Executive Housekeeper report.
Housekeeping Department: is responsible fore the cleanliness and upkeep of the front
of the house as well as the back of the house areas, so that they appear fresh and
aesthetically appealing to the guests as well as the staff. This department is headed by
the Executive Housekeeper.
Front Office: Headed by the Front Office Manager the FO is the operational department
that is responsible for welcoming and registering guests, allotting rooms, and helping
guests check out. Uniformed services like the concierge, bell desk and Guest Service
Center Executives (telephone Operators) are part of the front office department.

Food & Beverage Department: The F & B department includes restaurants, bars, coffee
shops, banquets, room service, outdoor catering, kitchen and bakery. While all the outlets
like the restaurants may be grouped specifically under the F & B Service department
headed by the F & B manager, the kitchen and bakery fall under the F & B Production
department, headed by the Executive Chef.
Human Resource Department: The HR team is headed by the HR Manager.
Recruitments, orientation, training, employee welfare, compensation, labour laws and
safety norms for the hotel come under the preview of the HR department. The Training
department is its ancillary department that looks after orientation and training of the new
employees as well as the existing ones.
Sales & Marketing Department: This is headed by the Sales & Marketing Manager.
Some of the larger hotels may have separate Sales and Marketing Heads. The function of
this department is five-fold Sales, personal relations, advertising, getting MICE (meeting,
incentive, conference and exhibition) business and market research. All these functions
lead to a common goal of selling the product of the hotel i.e. rooms and services by
creating customers.

Purchase Department: is led by the Purchase Manager who may report to the Financial
Controller. The procurement of all departmental inventories is the responsibility of the
purchase department
Financial Control Department: is headed by the financial controller who is responsible
for ratifying all the inventories of the operational departments. Inventory Control
procedures are the responsibility of this department. The Financial Controller along with
GM finalizes the budget prepared by the heads of the other departments. This department
undertakes all the accounting activities such as making payments against invoices, billing,
collecting payments, generating statements, handling bank transactions, processing
employee payroll data and preparing the hotels financial statements.
Maintenance Department: is also called the Engineering department. This is headed by
the Chief Engineer or the Chief Maintenance Officer. The department is responsible for all
kind of maintenance, repair and engineering work on equipment, machines, fixtures and
fittings.
Security Department: Headed by the Chief Security Officer, this department is
responsible for safeguarding the assets, guests and employees of the hotel. Their
functions include conducting fire drills, monitoring surveillance equipment and patrolling
the property.

CLASSIFICATION OF HOTELS & OTHER TYPES OF LODGING

Each hotel has unique features associated with it. The features may be its location; number of
guest rooms; special services such as concierge, travel assistance and valet parking; facilities
such as speciality restaurants, bars business meeting venues, swimming pool and so on. The
diversity in services and facilities provided by each hotel makes it quite difficult to have any
single basis of classification of hotels and if we classify them on different criteria there will be
some hotels which will fall into more than one group.
In a nutshell hotel classification serves the following purposes:
Lends uniformity in services and sets general standards of a hotel.
Provides an idea regarding the range and type of hotels available within a geographical
location.
Acts as a measure of control over hotels with respect to the quality o service s offered
in each category.
Classification of Hotels according to different criteria & other types of lodging
Standard
ClassificationStar ratings &
Heritage (by
the Govt.
body)
One Star
Two Star
Three Star
Four Star
Five Star
Five StarDeluxe
Heritage
Heritage
Classic
Heritage
Grand

Size

Small
Medium
Large
V. Large

Location

Downtown
Suburban
Airport
Resort
Motel
Floatel

Clientele

Commercial
Transient
Suite
Residential
B & B Hotel
Time Share
Condominium
Casino
Conference
Convention
Motel

Duration of
guest stay
Commercial
Resort
SemiResidential
Residential

Level of
services
Upmarket
MidMarket
Budget

Ownership

Propriety
Ownership
Franchise
Management
Contract
Time-share
Condominium

Alternative
Accommodat
ion
Sarai
Dharamshal
a
Dak
Bungalow
Circuit
House
Lodge
Youth Hostel
Yatri Niwas
Forest Lodge

1. Standard Classification
The Star classification is among the most widely-accepted rating of hotels worldwide. Ratings
of hotels in different countries are done by the government or quasi government sources,
independent rating agencies or sometimes the hotel operators themselves. The Indian hotel
industry follows the star rating system, which indicates the number and standard of facilities

offered by the hotel. The classification of hotels is done by a central government committee
called the Hotel Restaurant Approval and Classification Committee (HRACC) which inspects
and assesses the hotels based on facilities and services offered. The classification committee
includes the Chairman and other members chosen from the government and industry
associations such as Federation of Hotel & Restaurant Association of India (FHRAI), Hotel
Association of India (HAI), Indian Association of Tour Operators (IATO), Travel Agents
Association of India (TAAI) or Institute of Hotel Management Catering Technology and Applied
Nutrition (IHMCTAN). In case of the Heritage category, a representative of the Indian Heritage
Hotel Association (IHHA) is included in the category. The Committee visits the hotels and
evaluates the facilities and services before the grade is awarded.
One Star Hotels: These properties are generally small & independently owned, with a family
atmosphere. There may be a limited range of facilities and the meals may be fairly simple.
For example lunch may not be served and some bedrooms may not have an en suite bath or
shower. However, maintenance, cleanliness and comfort would be an acceptable standard.
Two Star Hotels: In this class, hotels will typically be small to medium-sized and offer more
extensive facilities than one-star hotels. Guest can expect well-equipped overnight
accommodation, usually with an en suite bath or shower. Reception and other staff will aim
for a more professional presentation than at the one-star level and will offer a wider range of
straightforward service, including food & beverages.
Three Star Hotels: At this level, hotels are usually of a size to support higher staffing levels
as well as a significantly higher quality and range of facilities than at the lower star
classifications. Reception and other public areas will be more spacious and the restaurant will
normally also cater to non-residents. All bedrooms will have an en suite bath and shower and
will offer a good standard of comfort and equipment such as a direct dial telephone and
toiletries in the bathroom. Besides room service, some provisions for business travelers can
be expected.
Four Star Hotels: Expectations at this level include a degree of luxury as well as quality in
the furnishings, dcor and equipment in every area of the hotel. Bedrooms will also usually
offer more space than at the lower star levels. They will be well-designed with coordinated
furnishings and dcor. The en suite bathrooms will have both a bath and shower. There will be
a high staff to guest ratio, with provisions of porter service, 24 hour room service and laundry
and dry-cleaning services. The restaurant will demonstrate a serious approach to its cuisine.
Five Star Hotels: Five star hotels offer spacious and luxurious accommodations throughout
the hotel matching the best international standards. The interior design should impress with
its quality and attention to detail, comfort and elegance. The furnishings should be
immaculate. The service should be formal, well supervised and flawless in its attention to
guests needs without being intrusive. The restaurant will demonstrate a high level of
technical skill. The staff will be knowledgeable, helpful and well versed in all aspects of
customer care, Combining efficiency with courtesy.
Heritage Hotels: A recent addition to the hotel industry in the country, heritage hotels are
properties set in small forts, palaces or havelis, the mansions of erstwhile royal and
aristocratic families. They have added a new addition to cultural tourism. In a heritage hotel,
a visitor is offered rooms that have their own history, is served traditional cuisine toned down
to the requirements of international palates, is entertained by folk artistes, can participate in
activities that allow a glimpse into the heritage of the region and can bask in an atmosphere

that lives nad breathes of the past. Taj Lake Palace in Udaipur and the Oberoi Cecil in Shimla
are examples of heritage hotels.
According to the Ministry of Tourism, the heritage hotels are further subdivided as follows:
Heritege This Category covers hotels in residences, havelis, hunting lodges, castles or forts

and palaces built between 1935 and 1950.

Heritage Classic This category covers hotels in residences, havelis, hunting lodges, castles or

forts and palaces built prior to 1935 but after 1950.

Heritage Grand This category covers hotels in residences, havelis, hunting lodges, castles or

forts and palaces built prior to 1920.

2. Classification on the Basis of Size
The number of guest rooms in hotels is a criteria to classify hotels. Hotels can be grouped into
the following categories on the basis of the number of rooms or the size of the hotel:
Small Hotel: In India hotels with 25 rooms or less are classified as small hotels, e.g. The
Oberoi Vanyavilas, Ranthambore. However in developed countries of Europe and America,
hotels with less than 100 rooms are considered small. These hotels provide clean and
comfortable but may not provide up market facilities such as swimming pool, restaurant, bar
etc.
Medium Hotel: Hotels with 26 to 100 rooms are called medium hotels e.g. Hotel Taj View
Agra and Chola Sheraton Hotel Chennai. However, in developed nations hotels with upto 300
rooms are termed medium sized.
Large Hotels: In India hotels with 101 to 300 guest rooms are regarded as large hotels e.g.
The Imperial New Delhi and The Park Kolkata, whereas the hotels with 400-600 rooms are
termed as large hotels in developed world.
Very Large Hotels: Hotels with more than 300 guest rooms are known as very large hotels
in our countr, example Shangri-la Hotel, New Delhi Hotel and Leela Kempinski, Mumbai. In
Developed nations hotels with 600 1000 rooms may be considered very large.
3. Classification on Basis of location: The Location of the hotel is one of the major criteria
for a traveler to select and patronize a hotel.
Downtown Hotel: A downtown is located in the centre of the city or within a short distance
from the business centre, shopping areas, theatres, public offices etc. The centre of the city
may not necessarily be the geographical centre, but it refers to an area that is considered to
be the commercial hub of the city. The room rates in this hotel may be higher than similar
hotels in other areas, so as to cover the huge investment made on the land. They are
generally proffered by business clientele as they find it convenient to stay close to the place
of their business activity. Hotel Intercontinental New Delhi and Hotel Le Meridien Pune are
examples of Downtown Hotels.
Suburban Hotels: As the land costs in the city centre are higher and the space is limited,
some entrepreneurs build their hotels near the outskirts of the city. Providing similar facilities
as the downtown hotels, these hotels are set in suburban areas and have the advantage of

quieter surroundings. Such hotels are ideal for people who prefer to stay away from hustle
and bustle of a city. The duration of the stay of guest in these hotels may be longer than at a
hotel located in the city. The room rates in such hotels are moderate and may attract the cost
conscious travelers. Trident Hotel Gurgaon and Uppals Orchid New Delhi are examples of
Suburban Hotels.
Resort Hotels: Hotels that are located at tourist destination such as hill stations, sea
beaches and county side are referred to resort hotels. These hotels have a very calm and
natural ambience. They are mostly away from the cities and are located in pollution free
environment. The room rates in these hotels may range from moderate to high, depending on
the additional services offered. These hotels combine stay facilities with leisure activities such
as golf, summer and winter sports etc. Some of these hotels are projected as dream
destinations to guests who wish to enjoy the beauty of nature and have a memorable holiday.
The occupancy in resort is normally higher during the vacation time and weekends when the
guests want to take a break from their weekly routine. Taj Fort Aguada Beach Resort Goa and
Wildflower Hall in the Himalayas, Shimla are example of Resort Hotels.
Airport Hotels: Airport Hotels are situated in the vicinity of airports and other ports of entry.
Offering all the services of commercial hotel, these hotels are generally patronized by the
passengers who need a stopover en route their journey. Hotel Sahara Star Mumbai and
Radisson New Delhi are examples of Airport Hotels.
Motels: The word motel is formed by merging 2 words motor and hotel. They are located
primarily on the highways and provide modest lodging to travelers. The development of roads
and other infrastructure in the 20th century gave led to an increase in people travelling by
their own vehicle especially in USA and Europe. Such travelers needed a neat and clean
accommodation for the night. The concept of motels came into existence in 1950. Motels
provide accommodation, food and drinks, garage facilities, a parking lot and re-fuelling of
vehicles.
Floatel: Floatels are type of lodging properties that float on the surface of water. This
category consists of all lodging properties that are built on the top of rafts or semi
submersible platforms and includes cruise liners and houseboats. Some of them provide
luxurious accommodation along with food and beverage facilities to the guests. The
houseboats of Dal Lake in Srinagar and backwaters in Kerela are some examples of floatels in
India.
4. Classification on the Basis of Clientele
Being a capital intensive industry, the diversities in guest requirements discourage hotels
from catering to all types of travelers. As a result hotels choose to carve out a niche for
themselves by catering to the needs of specific guest segments. Hotels can be classified into
following categories on the basis of their clientele:
Business or Commercial Hotel: Designed to cater to the business traveler commercial
hotels are generally located in the city-centre. These hotels provide high standard rooms and
amenities along with high speed internet connectivity, business center and conference halls.
They also provide in-house secretarial services, typing, fax, photocopy and other office
automations. The duration of guest stay is very short. The occupancy is high during weekdays

and lower during weekends. The Park in New Delhi and Intercontinental The Lalit in Mumbai
are examples of business hotels.
Transient Hotel: These hotels cater to the needs of the people who are n the move and
need a stopover en route their journey. Located in the close proximity of ports of entry, such
as sea port, airport and major railway stations these hotels are normally patronized by
transient travelers. They have round-the-clock operational room service and coffee shop, and
offer all the facilities of a commercial hotel. Transient hotels are usually 5 star and their target
market include business clientele, airline passengers with overnight travel layovers or
cancelled flights and airlines personnel. The occupancy rate is usually very high, sometimes
more than 100% as rooms can be sold more than once on a given day. Hotel Centaur in New
Delhi and ITC Grand Maratha Mumbai are examples of Transient Hotels. Airport hotels fall
under this category.
Suite Hotel: Suite hotels provide the highest level of personalized services to guests. The
guest rooms comprise a living area, a compact kitchenette, complete wit ha refrigerator and a
microwave, a bedroom attached with a bathroom and sometimes even a dance floor. The
facilities are highly customized and may include valet service, personalized guest stationary,
high-speed internet connection and in-room safety locker facility. These hotels are patronized
by affluent people and tourist who are fond of luxury. Burj Al Arab, Dubai and Intercontinental
The Lalit Goa Resort are examples of all Suite Hotels.
Residential Hotel: Residential Hotels provide accommodation for a longer duration. These
hotels are generally patronized by people who are on a temporary official deputation to a city
where they do not have their own residential accommodation. Guests stay for a period of
minimum one month upto 2 years. Guest rooms include a sitting room, bedroom and a small
kitchenette. These hotels could have a fully operational restaurant or a dining room and may
provide services such as daily housekeeping, telephone, front desk and uniformed services.
Bed & Breakfast Hotel: These hotels are generally operated in large family residences.
These range from houses with few rooms converted into overnight facilities to small
commercial buildings with 20 to 30 guest rooms. The owner usually lives on the premises and
is responsible for serving breakfast to the guests. The bathrooms may be attached or may be
on sharing basis. The tariff is lower than a full service hotel and hence suite the budget
traveler.
Casino Hotel: These hotels attract its clients by promoting gambling, arranging extravagant
shows, and charter flights. They have state-of-the-art gambling facilities along with specialty
restaurants, bars, round the clock room service, well appointed and furnished rooms for its
guests. The casinos of Las Vegas USA are among the most famous casinos in the world.
Conference Centres: A conference centre is a hotel which caters to the needs of a
conference delegation. These hotels provide rooms to the delegates of conference, a
conference hall with desired seating arrangements, special F & B requirements during and
after the conference. They also require conference specific gadgets like the overhead
projector, LCD projector, large size screen, computers and public address systems. These are
large hotels having more than 400 rooms, with a large number of rooms having twin beds.
Normally conferences are charged as packages which include accommodation and meeting

facilities. Intercontinental The Lalit Mumbai and The Ashok at New Delhi would be good
examples.
Convention Hotels: Conventions are meetings that involve a large number of participants.
The hotels catering to the needs of this segment are known as convention hotels. These
hotels have more than 2,000 rooms to accommodate the large number of delegates. They are
equipped with state-of-the-art convention centre with all the required facilities, such as
seating configuration (T-Shaped, Classroom-type, workshop-style and theatre-style), audiovisual equipments and public address system to meet the demands of a convention. A
convention hotel has a greater number of rooms to host the large number of attendees as
compared to conference centers.
5. Classification on the Basis of Duration of Guest Stay
Commercial Hotel: The duration of guest stay in these hotels is short, ranging from a few
days to a week.
Transient Hotel: Mostly occupied by travelers as stopovers en route their journey, the
duration of stay at transient is very short, a day or even less.
Semi-residential Hotel: These hotels are generally patronized by people who are staying at
a location while in transit to another place. The duration of stay may range from few weeks to
some months. They incorporate the features of both transient and residential hotels.
Residential / Apartment Hotel: As the name suggests, residential hotels provide
accommodation for long duration and are patronized by people who stay for a long time. The
duration of stay may range from months to few years.
Extended Stay Hotel: In todays age of downsizing, outsourcing and mobility business
executives are often away from their hometowns for extended periods of time and require
more than a hotel room. These hotels are for those guests who wish to stay for a long period
and cater to their long-term needs with special services, amenities and facilities such as fullfledged kitchens with dishes and kitchenware, refrigerator and separate area to wash clothes,
housekeeping services, grocery shopping services and recreational facilities.
6. Classification on the Basis of Level of Services
Upmarket/Luxury/World Class Services Hotels: Targeting the affluent segment of society,
hotels in the up-market category offer world class products with personalized services of the
highest standard. The emphasis is on excellence & class. These hotels provide upscale
restaurants and lounges, exquisite dcor, concierge service, opulent rooms and abundant
amenities. These hotels have many speciality restaurants with well-assisted service. Top-end
recreational facilities such as golf course, tennis courts, designer swimming pools with trained
life guards and other sports facilities, shopping arcades, beauty salons, health spas with
saunas and Jacuzzi are a regular feature. These hotels also offer the facility of health clubs
with trainers and dieticians. The shopping arcade may have international brands of books,
gifts, souvenirs, jewellery and handicrafts. These hotels are patronized by affluent people who
care for quality and include business executives, celebrities and high ranking political figures.

Mid-market/Mid-range Services Hotels: These hotels offer modest services without the
frills and personalized attention of luxury hotels and appeal to the largest segment of
travelers. They may offer services such as room service, round-the-clock coffee shop,
airport/railway transfers and multi-cuisine restaurant with bar. A typical hotel offering midrange service would be medium sized having roughly 150 to 300 rooms. The room rent is
much lower than the upmarket hotels. These hotels are patronized by business travelers,
individual travelers and groups.
Budget/Economy Hotels: Budget hotels focus on meeting the most basic needs of guests
by providing clean, comfortable and inexpensive rooms. Also known as economy or limited
services hotels they appeal primarily to budget-minded travelers, families, bus tour groups,
traveling business people, vacationers, retired persons and other groups. These hotels have
clean and comfortable guest rooms, a coffee shop, a multi-cuisine restaurant, in-room
telephone and channeled music and movies. They may also have a swimming pool, a
shopping arcade and a beauty parlor.
7. Classification on the Basis of Ownership
Proprietary Ownership: This is the direct ownership of one or more properties by a person
or company. Small lodging properties that are owned and operated by a couple or family are
common examples or proprietary ownership. Large properties that are owned by international
hotel companies such as Marriott or Hilton also belong to this category. A group of hotels that
are owned or managed by one company is called a chain. In general 3 or more units
constitute a chain. A proprietary chain is owned entirely by one company. In India the Taj
Hotels Resorts and Palaces and the Oberoi Hotels and Resorsts fall unr\der this category.
Franchise: A continuing relationship in which the franchisor provides a licensed privilege to
do the business, plus assistance in organizing, training, merchandizing and management in
return for a consideration from the franchisee.
It is the authorization given by a company to another company or individual to sell its unique
products/services and use its trademark according to the guidelines given by the former, for a
specified time and at a specified time and at a specified place.
In the hospitality industry, we often come across many big chains that are operating on a
franchise basis. In this kind of contract, which is mutually beneficial to both parties, the
franchisor allows the franchisee to use the companys ideas, methods, trademarks as well as
the brand logo to do the business. A private investor or franchisee can obtain the trademark
license, architectural plans, blueprints, interior designs, training and operating methods of the
franchisor by paying a fee. The franchisee is generally responsible for financing the
construction of the hotel, although some franchisors offer construction loans or may lease
real estate to franchisees.
The franchisee must abide by the franchisors quality standards and product specifications,
but is the legal owner of the business. Thus many hotels that are using the logo of Holiday
Inn, Sheraton or Hilton may actually be owned by local, independent investors.
Management Contract: Managing a hotel requires professional expertise. A new
entrepreneur with little or no experience in the business may safely choose to become the

franchisee of any well-established hotel chain. There could still be a problem in operating the
business because the franchisor provides the well established image, a tested and successful
operating system, training programme, marketing, advertisement and reservation system but
does not provide the cadre or experienced managers and employees necessary to run the
business on the day-to-day basis. To bridge this gap, management contract companies came
into existence. These companies have the required expertise to manage hotels. They operate
on the basis of management fee and sometimes on a percentage of he gross revenue.
Management Contract is a contract between the owner of the property and a hotel operator
(management contractor) by which the owner employs the operator as an agent to assume
the full responsibility for operating and managing the hotel.
Time-share Hotels: Time-share hotels also referred to as vacation-interval hotels are a new
concept in the hospitality industry. As the name suggests, it entails purchasing a tourist
accommodation at a popular destination for a particular time slot in a year. The buyers can
then occupy the property for the appointed time or rent the unit to other vacationers if they
can not avail the facility. They have to make a one-time payment for the time slot. Club
Mahindra holiday resorts are a popular example of time share properties in India.
Condominium Hotels: Condominium hotels are similar to time-share hotels, except that
condominium hotels have a single owner instead of multiple owners sharing the hotel. In a
condominium hotel, the owner informs the management company when they would occupy
the unit. The management company is free to rent the unit for the remainder of the year, and
this revenue goes to the owner. Owner generally pays a monthly or annually maintenance fee
to the management company that takes care of the premises, including landscaping, cleaning
of common areas, water and power supply etc.
Alternative Accommodation
Alternative accommodation can be simply defined as all those types of accommodation that
are available outside the formal or organized accommodation sector. An alternative
accommodation, thus, provides sleeping space and modest food to its users. There are
certain properties that cater to the needs of a large group.
Sarai/Dharamshala: These lodging properties are mostly found at popular pilgrimage
places. They are generally constructed by welfare trusts, social organizations or even the
state and provide basic security and sleeping facilities for a nominal fee.
Dak Bunglow/Circuit House/ Inspection Bunglow/Forest Lodge: A legacy of the British
Raj these were built as rest houses for colonial officials across the country as well as in
remote areas and scenic locales. All these properties have an ageless charm and an old world
style of hospitality as well as special cuisine, which forms a part of the attraction, apart from
the low tariff. These are owned by the various state governments and can be accessed
through the local district administration. Often these are the only lodging properties in remote
areas.
Lodge/Boarding House: Lodges are modest hotels situation away from the center of the
city or located at a remote destination. These are self-sufficient establishments that offer
standard facilities, such as clean and comfortable rooms, food and beverage (F&B) services
(bar facility may also feature sometime). Boarding houses are establishments that usually
provide accommodation and meals at a specified

period of time such as weekends or for a specified time of stay.

Youth Hostel: The youth from rural as well as urban areas travel for various reasons such a
education, adventure, sports and recreation. Youth hostels were established to cater to the
youth on the move, who couldnt afford steep hotel rents. A youth hostel generally provides
low-cost dormitory accommodation with common bathing and cafeteria facilities. They may
also provide kitchens for self-catering.
Camping Grounds/Tourist Camps: Camping grounds are normally located within cities in
open spaces. They provide parking spaces along with water, electricity and toilets. Camps
must follow certain regulations regarding the quality of services and cost and are set up by
municipalities.
Railway/Airport Retiring Rooms: A retiring room is for the convenience of the transit
travelers. These are situated at major railway stations and domestic and international
airports. They provide a resting place to passengers with confirmed and current tickets. These
retiring rooms are available at reasonable rates and are often air conditioned. Booking for the
same is made through the stations superintendent or the airport manager. They are equipped
with clean sanitation facilities and may include F&B facilities at a cost.
Paying Guest Accommodation: A Paying Guest (PG) accommodation is a non-institutional
accommodation offered by individual households at various destinations. Besides tourists
havens like Goa, this kind of accommodation is becoming popular in large metropolitan cities
among outstation students and the employed youth migrants from other towns. Guests
normally pay fro accommodation, while the rules for F&B Services may differ from host to
host.