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HOTEL INDUSTRY – AN OVERVIEW

In any country, the hospitality industry is inextricably linked with its overall economic
prosperity and resourcefulness. In other words the developmental level of the hospitality
industry could well be considered the index of its all round growth. Trade and commerce
too would be unable to thrive were there not adequate facilities and provisions for the
overseas traders and business people. Hospitality industry is also directly proportionate to
the inbound tourism to any particular country. The various countries of the world like
Egypt, China, Mexico, Pakistan and Nepal etc., that were the seats of ancient
civilizations, are till date the most favorite destinations of the tourists from all corners of
the globe. Hence each of them has vast potentials for developing both tourism and
hospitality industries. In this era of increasing globalization, hospitality industry or hotel
management is assuming greater significance and fast evolving as a lucrative career
option. The history of hotel industry is as rich as the history of civilization itself. From
the moment that cities and towns began to spring up, the need for lodging for travelers
was obvious.
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COMPANY & PRODUCT PROFILE

COMPANY PROFILE:

AVARI HOTEL LAHORE - HISTORY TIMELINE

In 1905 Two Italian gentlemen, Falettis and Nedous, start building a hotel in Lahore.
Completed in 1908, named the Nedous, this hotel is not only in the heart of History itself,
as it belongs to the daughter of Mr.Nedous, who marries Sheikh Abdullah, the late
president of post partition Kashmir. In 1947, after the independence of Pakistan, Nedous
was not run as hotel, but was turned into numerous small offices. In 1961, after Nedous
was auctioned to the late Mr.Dinshaw Avari and after extensive renovations, Park Luxury
Hotel came into existence in 1962 with 80 rooms,50 of which were suites, Park luxury
boasted of 5 dining halls, a lobby, card-room, billiard rooms, garages and 150 rooms for
servants. Each of the 50 suites, besides a huge bath offered attached dressing and sitting
rooms and a parking garage! ”Vedera” (rich landlord) and businessmen were the usual
clients. Year 1970 saw the end of this grandeur as this building was demolished
according to a contract with the government. The foundation stone for the present hotel
was laid on September 23rd 1973 and was inaugurated on January 3rd 1978, in
association with Hilton international for 10 year. Hilton International Lahore operated as
on of the only two five-star Hotels in Lahore. On October 1st 1988, this contract came to
an end the management of Hilton International Lahore reverted back to the owners, Avari
Hotels limited. The Avari hotels in Lahore and Karachi now portray a new corporate logo
with the name Avari Lahore and Avari Tower Karachi.
AVARI GROUP OF COMPANIES
Avari Family own and manage following hotels Pakistan as well as in Dubai & Canada:
• Avari Lahore.
• Beach Luxury Karachi.
• Avari tower (Karachi).
• Avari Xpress Islamabad.
• Avari Dubai (UAE)
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• Ramada Toronto ( Canada)

Moreover Avari Family also owns following companies operating in various sectors in
Pakistan:
 Spencer & company (Pakistan) limited
 Beach Brewery (Pvt.) Limited
 Avari Travel Agencies (Pvt.) Limited

PRODUCT PROFILE

The complete Product/Service range of Avari is described bellow:

1. Rooms
There are 186 Deluxe guest rooms, including 12 Executive suites, 3 Large Deluxe
suites, 6 Jacuzzi rooms, and a no-smoking wing. The services provided in rooms are:

- Individually controlled air conditioning.

- 24 hour room service.
- Two phones and a large business writing desk.
- 150 satellite channels on remote control TV sets.
- Fully equipped business center
- Modern amenities.
- Complimentary morning tea/coffee service.
- Internet service available in all rooms.

2. The Avari Club

Exclusive rooms at the club floor with express check-in, check-out with an added
measure of privacy and attentive guest service.
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3. Restaurants
Avari is providing different kind of restaurants which are specialized in providing
high quality of food and variety according to the different tastes of the customers.

- Kims Local and continental cuisine 130 seats

- Fort Grill Local and continental cuisine 110 seats
- Fujiyama Authentic Japanese specialties 126 seats
- Dynasty Chinese cuisines (“Sichuan”) 120 seats
- The Tolington Pakistani BBQ specialties 200 seats
- La patisserie Fast food and bakery 20 seats
- Samovar Snacks/Traditional afternoon tea 60 seats

4. Recreational Facilities
Avari Lahore is providing recreational facilities like temperature controlled
swimming pool, health club with gymnasium, massage and steam bath. Moreover;
jogging track, badminton court, Volley ball, Golf practice net, three championship
golf courses, Horse riding and Polo ground nearby are also provided to its valued
guests.

5. Guest Services
Following are the services provided to the guest that stay in Avari Lahore.

- Non Smoking Rooms - In-Room Fax in

- Hair & Beauty Saloon Penthouse Suites
- Suites - Baby Cot / Baby Sitting
- Major Credit Cards - Voice Mail Facility
accepted - Currency Exchange
- 1 IDD Phones in each - Satellite TV
room - Internet & Email Services
- Car Rental - 24 Hours Room Service
- Gift Shops
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- In-room complimentary - Airlines Sales Office

Tea/Coffee - Health Club /
- Laundry & Dry Cleaning Gymnasium / Massage
- Valet Parking - Jacuzzi / Sauna / Steam
- Complimentary Airport Bath
Shuttle - Doctor on Call
- Private Meeting Rooms - Tennis & Golf Courts /
- Business Centre Scuba Diving Nearby
- Sight Seeing - E-Rooms (Computer,
Arrangements printer & DSL
- Contemporary Amenities connection)
- Outdoor Swimming Pool - Car Parking

6. Conference, Banquet & Meeting facilities.

In order to meet the need of business, educational and ceremonial requirements , Avari
Lahore has provided state of the art Audio and Visual equipments in its halls. A
professional team is also available to handle details during official/non official meetings,
international conferences or corporate board meetings.

THE STRUCTURE OF EXTERNAL ENVIRONMENT

Macro Environment
Economic environment
In any country, the hospitality industry is inextricably linked with its overall economic
prosperity and resourcefulness. In other words the developmental level of the hospitality
industry could well be considered the index of its all round growth. Pakistan’s economy
has changed a lot during few years and it has affected Avari’s business as well. Our
economy is growing but due to inflation rate, people’s purchasing power has decreased
and it has decreased the Avari’s sales as well. People are becoming uncertain about the
future and are spending less which in result has made the profits to decline.
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Political Environment
As the changing political situations in Pakistan have affected the entire industry it also
has decreased the business for Avari. Because of this political instability people from
abroad are avoiding from coming Pakistan. Terrorism and suicide attacks are a major
cause of less business as well as destroying the image of our country. Investors don’t
consider Pakistan a safe place for their investment, no foreign delegations as well as
tourism have also decreased in nut shall Avari is faced with decreased business.
Legal environment
Avari is operating according to the rules and regulations of government. Avari also have
Permit room which controls the sale of liquor to the non Muslim holding liquor permit
.But it also operates in accordance to the legal rules.
Social environment:
Social and cultural factors are one of the significant factors affecting a business of Avari.
It changes its strategies in accordance to the change in social environment. Basant festival
was one of the famous occasions celebrated in Lahore but because of the legal restrictions
this time it was not celebrated which resulted in reduced profit. But taking it a social
responsibility Avari made its policies accordingly. Talking about culture Avari has a
Lobby that portrays the old Mughal’s paintings which gives a snapshot of the splendid
past.

Micro Environment

Customer:
Avari Hotel has segmented its customer in three categories
Foreigners 50%
Corporate Sector 30%
Walking customers/Companies 20%

Avari hotel has a competitive advantage that it has contracts with British and US
conciliates and there representatives stay at Avari during there visit in Pakistan. They are
a major portion of Avari’s customers that is fifty percent. Avari facilitates them by
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providing pick and drop facility from the airport. During there stay they are served with
the international standers of facilities and comfort. Corporate sector and business
personals is the second bigger share of Avari’s customers. It includes those personals that
come to Lahore for their business purposes, meetings, seminars etc. Twenty percent of
the customers are named as walking customers. This percentage of people come to Avari
for food or for attending functions like weddings, birthday parties etc.

Competitors
Avari has a direct competition with Perl Continental Lahore .Avari is market challenger
to PC. As a challenger Avari uses the Frontal attack strategy in which it targets to match
the competitors marketing efforts. Avari and PC share a sales comparison sheet including
the revenue and sales on the daily basis, which helps them to improve there strategies and
functions. But in some fields Avari is using Bypass attacks strategy as well. The
competitive situation prevailing in the market for Avari is Oligopoly because a few hotels
control the market almost entirely and the market share left by these giants can’t be
attractive for the new entrants. Avari is expecting to have its direct competitors; Grand
Hayyat which is going to come in operation in the next 4 years till then there is no direct
threat to Avari.
Technological environment
As technology is considered to be one of the sources for creating competitive advantage
Avari is paying more emphasis to it. WiFi is being used inside the building and a new up
to date Software Micro Fidelio is installed for data entry. Business center is providing the
facility of computer and internet to the consumers for the purpose of checking mails,
international dialing and tele-fax.

MARKETING MIX (4P’S)

Avari develops a complete marketing program to reach its consumers by using a
combination of seven tools; known as seven P’s which are as follows
• Product
• Price
• Place
• Promotion
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PRODUCT/ SERVICES

Now a day’s hotel industry is very much different from the one which existed in the past.
Previously hotels were providing a limited range of services like stay and food, but now
the needs have changed as well as have the services. The same change has affected Avari
and its offering more then the basics. It’s offering a wide range of services to its
customers like:

• There are 186 deluxe guest rooms, including 12 executive suites, 3 large deluxe
suites, 6 Jacuzzi rooms, and a no smoking wing.
• Individually controlled air conditioning.
• 24 hour room service.
• Two phones and a large business writing desk.
• 150 satellite channels on remote control TV sets.
• Fully equipped business center
• Modern amenities.
• Exclusive rooms at the club floor with express check-in, check-out with an added
measure of privacy and attentive guest service
• Temperature controlled swimming pool, health club with gymnasium, massage
and steam bath, also available, jogging track, badminton court, Volley ball and
Golf practice net, three championship golf courses, Horse riding and Polo ground
nearby.
• Conference, Banquet & Meeting facilities.
• Restaurants
PRICE
Avari uses different prices for its different target markets. Price is a major component in
customer judgment of both product and company as Avari’s target market is focusing on
upper class so prices are high according to its competitor’s prices.
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Banquets
This section works closely with guest in making arrangement for wedding, social
events, private and meetings. The banquet rooms are also equipped to handle
individual trade groups, conventions, and seminars. The main banquet halls and
their seating capacities are: -

Khorshed mahal
The Khorshed Mahal is the main banquet hall of the Avari hotel has a capacity of
900 persons.
From 9:00am – 11:00pm Rs.135, 000/+Tax
From 9:00am – 01:00pm Rs. 80,000/+Tax
From 9:00am – 05:00pm Rs. 90,000/+Tax
From 7:00am – 11:00pm Rs. 90,000/+Tax

Dinshaw mahal
Dinshaw Mahal is the second larger hall of Avari hotel and has capacity of 750
persons.
From 9:00am – 11:00pm Rs. 100,000/+Tax
From 9:00am – 01:00pm Rs. 60,000/+Tax
From 9:00am – 05:00pm Rs. 85,000/+Tax
From 7:00am – 11:00pm Rs. 85,000/+Tax

Sutlej hall
Sutlej hall has the capacity to accommodate 750 persons.

From 9:00am – 11:00pm Rs. 80,000/+Tax

From 9:00am – 01:00pm Rs. 45,000/+Tax
From 9:00am – 05:00pm Rs. 50,000/+Tax
From 7:00am – 11:00pm Rs. 50,000/+Tax
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Function rooms
From 9:00am – 11:00pm Rs. 90,000/+Tax
From 9:00am – 01:00pm Rs. 50,000/+Tax
From 9:00am – 05:00pm Rs. 55,000/+Tax
From 7:00am – 11:00pm Rs. 55,000/+Tax

Board room:
From 9:00am – 09:00pm Rs. 20,000/+Tax
From 9:00am – 01:00pm Rs. 8,000/+Tax
From 9:00am – 05:00pm Rs. 10,000/+Tax

Avari lawns
From 9:00am – 11:00pm Rs. 200,000/+Tax

Rooms
Executive Club Rooms:
Single Rs. 34,000/- Double Rs. 41,500/-
Business Club Rooms:
Single Rs. 25,000/- Double Rs. 39,500/-
Deluxe Rooms:
Single Rs. 25,000/- Double Rs. 37,500/-
Junior Suite
Rs. 35,000/-
Shalimar Suite
Rs. 40,000/-

PLACE
Avari is located in the heart of Lahore. Major cultural, commercial and tourist
attractions, bazaars with wonderful shopping opportunities enhance the importance of
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its location. Its just 20 minutes drive from Lahore international Airport along the
famous “Mall” a tree lined avenue surrounded by parks and gardens.

PROMOTION
Avari is performing many functions in order to achieve its promotional targets .It has
a separate marketing department that takes the responsibility of making the customers
aware of the new and existing services. Avari emphasizes more on personal selling
but other tools like billboard, brochure are also used.

BCG MATRIX
It is used in order to get a snapshot of the business.

High Market Share Low

w
Lo
STARS QUESTION
wth AVARI MARK
Gro
rket
Ma

h CASH COW DOGS

Hig

As Avari is growing and has a dominant market share .It falls in the category of stars.
Hotel industry in Pakistan is growing as well as the trend of hanging out. People are more
attracted in trying international foods (chine’s) of different flavors. Avari is capturing this
market share by offering different range of international foods like Japanese restaurant in
Avari is one of its kind in Lahore offering unique Japanese dishes along with this Avari
has Chine’s food as well.
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Market coverage strategie:

Avari pays very much attention in choosing the right market because if it’s not performed
well it will result in lost opportunities and waste of resources. The market coverage
strategies followed by Avari are:

Product market concentration Here Avari Lahore is concentrating in its major

segment that is foreigners, because most of Avari
Lahore revenue comes under this segment.
Market Specialization Avari Lahore is capable of providing all the
necessities that are required by its target market,
whether they are foreigners, corporate customers or
walk in customers. Each segment has been provided
all the facilities required by them.
Product specialization Avari Lahore is providing a wide range of products
and services to its target customers, and the detail of
the products and services offers by Avari Lahore has
been explained earlier.

CREATING COMPETITIVE ADVANTAGE: MISSION,OBJECTIVES,

SEGMENTATION, TARGETING, POSITIONING

STRATEGIC DECISIONS

MISSION STATEMENT
“We Aim To Provide All Our Guests Outstanding Quality and Comfort with Genuine
Friendliness and Professional Warmth”

STANDARDS TO ACHIEVE MISSION BY

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• Unconditional Teamwork and communication.

• Being fair with our Guests and with our colleagues.
• Personal responsibility:
o For oneself.
o For Property.
• Protecting assets
• Identifying defects
• For knowing the product
• For making Guest complaints your own and recording.
OBJECTIVES OF AVARI
• To provide high quality services at competitive market rates.
• To achieve hospitality excellence.
• To ensure the comfort of the wellbeing of the guests.
• To provide a differentiated product

SEGMENTATION

Avari Lahore has segmented its customers in to three categories that are

• Foreigners
• Corporate Sector
• Walk in customers

Almost the entire revenue of Avari is coming through these sectors. Most of the profits
come from the first two segments and Avari is making it possible to provide all the
services of international level which their customer needs.
As far as foreigners are concern there are some services which are not provided to them
such as international level bar and casino as these two aspects are not legally allowed in
the surroundings of Pakistan but still Avari is trying to provide all the necessary services
to its foreign customers.
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TARGETING

Avari Lahore is targeting on the first two categories of its customers that are foreigners
and corporate sectors and providing them the international level of facilities.

Targeting decisions
Segment size profit/unit sold Number of competitors
Large 50% Large Pearl
Large Hotel continental & Holiday inn
foreigners
Large Pearl
Large 30% Corporate Small events continental & Holiday inn
Sector
Large Pearl
Small 20% walk in Large food continental & Holiday inn
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POSITIONING
Perceptual map of Avari hotel

Good Quality
1.0
Avari
0.8 Peal
continental
0.6
Holyday inn
0.4

Low price 0.2 High price

-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 0.2 0.4 0.6 0.8 1.0 1.2
-0.4 -0.2 -0.2 1.4 1.6

-0.4

-0.6

-0.8
Poor Quality

Perceptual map shows that Avari hotel providing good quality and high prices as
compare with Pearl continental hotel. There are few other names in hotel industry in the
market which are doing well for customer care, while Avari hotel giving good quality
along with healthy environment. Avari Lahore is challenging to pearl continental hotel.
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CORE COMPETENCIES
Avari’s core competencies include:

Lady Avari
It is aimed to facilitate single lady traveler providing with comfort privacy and security.
Rooms are looked after by lady staff.

Best Japanese food restaurants

Fujiyama the Japanese restaurant located on the second floor the only Japanese restaurant
in the city, now even more attractive and enjoyable with Chef Taka’s special menu
including imported seafood and authentic Japanese dishes. The chefs prepare dishes right
in front of the customer which indicates the best quality and hygienic food.

3 time winner of safest hotel

Avari has the credit of winning the safest hotel award since three years. It is a clear
indication of Avari’s excellent performance and service toward its customers.

Diplomat of US and UK embassy

Avari has been a diplomat with the US and UK embassies which consist of the biggest
segments of its customers.

Own garden (providing vegetables)

Avari owns a beautiful garden which not only provides a beautiful view but it as well
provides the seasonal vegetables to the kitchen.

SWOT ANALYSIS OF AVARI

Strength
• Quality of services.
• Lady Avari, lounge only for business lady.
• Quality of food.
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• Best japans food restaurants.

• Security system.
• Swimming pool.
• Brand name.
• Courteous and friendly staff.
• Homely environment.
• Way of handling customer complaints.
• Big Lawns.
• Avari hotels chains.
Weakness
• Limited number of rooms.
• Limited car parking.
• Parking at your own risk write down which create a bad impression to customer.
• No music function.
• Old building.
• Fail to establish a long term relation with external customers.
• Lack of mass marketing.
• Regular cocktail parties.
• Unusable roof.
• Lack of automation.
• Too much paper work.
• No setting arrangement for the candidates.
• Poorly designed and furniture in all departments expect GM offices.
• High turnover rate last four year.
• Unhygienic food provided in employee cafeteria.
Opportunity
• Back lawns.
• New property at Islamabad.
• New food outlet.
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• Future renovations and extensions plan.

• Implementation of new sales process.
• Improved communication.
• International Trade fair.
• Loyalty Program.
• Construct Avari hotel in GAWADER.
Threat
• Pearl continental Hotel brand image and its coverage in Pakistan.
• Pearl continental Hotel extensions.
• Low rate Hotel and Guest houses.
• New competition diver.
• Political instability.
• Poor country image due to terrorism.
• Regular training of sale staff of competitor.
• Large number of sale teams of competitors.
• Low customer Loyalty.
• City image as an expensive one.

RECOMMENDATIONS

Limited car parking

Avari has very limited amount of space available for the car parking. Customer face
problems when they have to park the cars especially when there are functions or other
occasions happening. There is a board saying “Parking at your own risk” which creates a
bad impression on the customer as the security of the vehicles is the responsibility of the
hotel. They must have a basement for car parking purpose. Hertz (rent-a-Car) can shift
half of there cars to the air port and the hotel should do certain arrangements in order to
facilitate the increasing number of vehicles.
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Old building
Hotel develops in 1978 but no improvement in physical structure till now. It is
management responsibility to change the physical location & bring some remarkable
changes like use a crystal elevator, build a shopping mall.
Department conditions
During observation I feel very bad to see the condition of Human resource department
and they compare with the pearl continental hotel Human resources department which
creates a bad impression to general public.
Unusable roof
Avari Hotel Lahore has a big un-useful roof they can utilize and develop a new human
resources department with a proper setting arrangement and separate store room for the
data storage and have an orientation room and training room all these offices at one place.
Discriminations between contract and Avari employees
This is responsibility of the government to remove the concept of Contract employees it
create discrimination between employees and create a difference in benefits like Avari
employee get two bounce in a year as compare to Contract employees get one bounce in a
year & twenty-eight annual leave for Avari employees and fourteen leave for Contractual
employees.

Low wages
Low wages as compare to other hotels. That is the main reasons Avari turnover rates are
very high last four years. Government of Pakistan passes a law of minimum wages must
be five thousand per month. It helps to reduce a turnover rates.
Vision statement
Vision determines the direction of change in an organization and in the individual.
• “…there is no more powerful engine driving an organization toward excellence
and long range success than an attractive, worthwhile, and achievable vision of
the future, “widely shared.”
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• Vision clearly distinguishes leadership from management. As the citation from

Proverbs indicates, having a vision is essential to the welfare, even the life, of the
people.
Unhygienic food
Avari provide breakfast, lunch, and dinner facility to their employees with out any fee.
The quality of food provides in employees Cafeteria is very unhygienic because
employees are not happy with the menu and repetition is very often. Avari itself is
services provided and it is his responsibility to provide a quality of food to their
employees.
Lack of Automation
Half of their work are automated and rest of this are manually. They must have an
automat data entry but they mostly relay on papers work because they think they must
have a white and blacks written documents for the proof. Employees check-in and
employees check-out they use a card system some time it takes a time for check-in and
out. They must have a thump –scanning system for check-in and out purpose.

CONCULSION
In nutshell it can be said that although Avari is operating on small scale but due to
its core competencies and brand image it is growing more rapidly as compared to
the rest of the industry. If Avari follows its expansion and growth it will be able to
gain higher revenues. Its departments are contributing to its profitability. If Avari
ads more facilities and services it can catch more market share.

REFERENCES

Pictures [online], available, www.avari.com

Miss. Aysha Malik Brand Manager Avari

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