Key elements of the Indian Institutional Environment
The primary focus of this section will be on the key institutional elements that will have a significant impact on the various competitive positions of the Banyan tree in the Indian environment. The various factors have been explained below that consists of the various key elements that might get influenced in the Indian environment.
India is considered as the largest democracy that has the federal form of the government. The factors like the interests of the politician’s and their influence on the various ideologies are some of the reasons that might have an impact on the hospitality sector (Peng, 2013). The taxation system is well developed based on the imposition of the tax by the Union Government. India is known for a great tourist destination that has a virtue of the various favorable climate and its access through the different international flight routes that may be frequent and reliable. Some of the significant incidents that might affect the hospitality industry are the terrorist attack and hike in the price. The majority of the Banyan tree hotels is situated in China inspite having its foundation in Thailand and it is important for the government of China to consider this as the socialist / quasi-democratic that has their regional and their state government that has been involved in the corruption and the local business of their rife. Hence, the Banyan tree needs to put into account the different levels of the cronyism and bureaucracy that has been prevalent in the establishments in the hotel industry so that it becomes a true tourist spot in China. The Banyan tree follows its CSR activities very closely that need not be in conflict with the conducts of the things that might be expected to remain close to them by the government of India.
The social influence is under the encompassment that changes its lifestyle in the consumerism, population and the globalization demographics. The hotel industry is generally a luxury one
Foreign Direct Investment in India
The purpose of the FDI is to encourage and invite the various segments of the FDI. In 1991, an economic liberalized policy has eventually transformed India to one of the largest democracy that has its shine on the standards of the global investment. It has become one of those sector in the hotel industry that has become permitted by the FDI that is 100% under the automatic route (Wagner 2017). The agreements in the foreign technology has become an automatic approval that needs to be granted if there is 3% hike in the capital cost in the proposed project that needs to be paid off on the grounds of the technical consultancy services. The net turnover that can be paid is 3% of the marketing or the franchising or the publicity of the fees. There is even a hike of about 10% that is about the gross operating profit that can be payable with inclusion of the incentive fees with the fees of the management (Schlegelmilch 2016.).
In 2008-2009 financial year, it can be seen in the GDP, has recorded a growth of about 6.7% as per the Central Statistical Organization. The growth of the GDP from 2008-2009 has been attributed to become a strong service sector that has a steady direct foreign investment that also includes the various governmental policy in the helping grounds for the sustainable rate of the growth (Koo, Kim and Kim 2016). It has been evident that India is likely to become and bring 40 international brand hotels by the end of 2011. The expansion of the rate of the hotel industry has become one of the largest that is primarily due to the business opportunity that has a strong performance in the economic background that also has the cross border investments. The current base of India in case of the Banyan Tree is the 110,000 hotel rooms that have their face in the shortage of the 150,000 rooms. A mismatch can be observed between the supply and the demand that has the lead with the high occupancy and with average rates of the room. The global economic recession that has an increased rate in the foreign tourist arrival to 5.37million in 2008 from 4.98 million in the year 2007. Various sports events like the Commonwealth and the IPL are part of those games that has a potentiality to create the demand for both the hospitality and the tourism industry in India.
The social influence encompasses through the various changes that may be because of the changes in the lifestyle, globalization and the various other demographics related to the population (Jeanpertet al. 2016). The social attitude towards the leisure and the work has been of great social consequence. The various other social aspects that is related to the hospitality sector through the various changes in the patterns of their family that also has the value in the shifting in the society. The people travel in groups or with their friends with the help of the various corporations that may be treated as a promotion to the corporate retreats that may be more or less in couples and are expecting children. The Banyan tree as a hotel industry has increased the accounts for the couples who are travelling alone or in a group travel. Through an analysis, it can be concluded that the mid aged couples are less likely to invest in the luxury holiday that may also be a honeymoon trip. Hence the target market has also a romantic package that would likely be shifted towards the aged couples that has more rate of greater disposable income rate (House and Street 2016).
Hotel market outlook of the Banyan Tree
(source: Sule and Varvarina 2017)
The Banyan tree has 36 resorts and hotels as per 2015 on their roster and the various company that has 70 spas, along with 77 retail galleries along with the championship golf courses that is three in number in almost 28 of the various country, but is not that renowned like those of the others. Several resources and the funds need to have a propagating attitude towards their brand on the global basis. The resort and the hotel management in the Banyan Tree has been a part of the expansion plan. Banyan Tree has launched some of the better generated experiences in this field (Hollensen 2015). The main aim of the Banyan tree project is to provide a combination of affordability and a luxury type of hotel that has made its brand a new one that is the eco friendliness. There is a need to apply this strategy that has a high end in the housing of the residential area with the introduction of the various contemporary services and their amenities that will become more popular in the mere future (De Mooij 2013). There are various competitors in the market and the position of the Banyan tree is at a good place but it needs to hold on its place or else the other competitors may kick it out. This can only be possible due to its ambiguity and its popularity that may be found that will help to focus on the first rate residential properties. Various disasters may happen but it will ultimately not affect the rate of the consumers in their hotel. Another major recommendation could be its potential expansion in the water that has way that is more specific in the cruises. The majority of the guest that has lived in the Banyan tree has older couples that may be in their mid 50s and 40s to make sense of the various services that will ultimately strengthen the loyalty towards the client that has offered through the inclusive packages (Baker 2014). A suggestion may be provided that is not in the cruise packages that may be all inclusive. The suggestion is that for the conglomerate diversification that may have a partner experience that has a leading high end cruise line that might be created in s customized eco friendly way on the water that needs to be focused specially in India (Armstrong et al. 2015).
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