CHOTEL

A new star is born

Mission
Five years down the line-
To Become the first destination for every individual traveler
2
Team
VIDUR MEHRA
KANISHK MEHROTRA
PRABHAT BEHL
SAMARTH GUPTA
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Industry
9.4% of world GDP and 8.2% of total employment~ http://www.dnb.co.in/Travel_Tourism/Indian_Travel_and_Tourism_Industry.asp
India - 2nd largest in terms of business travelers
(1)
-Our Target,
Small traveler 73% of total
(1)
,
Unorganized sector of small and medium business and individual travelers.
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Opportunities
The average net profit of 10 hotels has declined by 65 per cent in Q4 FY 09 as compared to
the Q3 FY 09.
Out of these 10 hotels, in Q4 FY 09, 8 hotels have registered decline in net profit on
sequential basis.
5
Contd...
Increasing business travelers
Kiosks and self service
Search for cheaper yet cleaner accommodation
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Our Services
Primary Services
Reduced room sizes
Cleaner & Cheaper accommodations at business places

7
Contd...
Secondary Services
Kiosks
Business Consultancy
Community laundering
Newspapers, T.V. and telephone on Demand

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Competition
Being Niche but not Blue Ocean
Lodges and small hotels
Guest houses
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Competitive Advantage
Focus on value delivery
New concept Early start
Price- Compared with medium hotels
Service focus
10
0
0
30
90
90
140
150
170
30
60
60
50
10
20
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170
Setting up process
Analysis
Sites Identification
Building Up Time
Exterior Build Up
Interior Build Up
Final Set up
Start
Duration
days
Task Design
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Goals
Short term
To Start its operations in Mumbai
Have gross turnover of ` 50,00,000 expected net returns of 20% initially
Long Term:
Become the market leader in accommodating individual traveler
To expand in Kochi and Bangalore by 2018
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Finance
Initial capital required = ` 90,00,000
Study and analysis= ` 5,50,000
Land ( leased)- ` 35,00,000
15X2 Cabins = ` 40,00,000
Furnishing and Gearing= ` 10,00,000
Administrative and setting up = ` 4,50,000



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Break Even
Gross turnover of ` 50,00,000 1st Year
2nd year 20% increase - ` 60,00,000
3rd year 20% increase= ` 72,00,000
Expenditure -1st year= ` 10,00,000
2nd year = ` 16,00,000
3rd year= ` 22,00,000

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Annual increase in expenditure is estimated @ 10% due to capacity issue
Pattern continues than break even is between 6th and 7 year * assuming interest on capital
@10%p.a.
No interest on capital assumed- 6th year
15
Contd...
Resources
Service team- internal contacts and motivated hoteliers- head- Abhishek M.
Finance- Gagandeep S. with few colleagues
Promotion & Marketing- Marketing agencies- head- Akash K.
Training: Outsourced
Business Development: All of us combined

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Risks & Rewards
Risks:
Non acceptance of culture
Greater increase in inflation
Rewards:
More than 15% growth
Net returns greater than 12%
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Summary
Concept of small room accommodation
Emphasis on cleaner & hygienic service
Focus on individual & business traveler
Value add service on demand
Task design of 170 days





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Finance of `90,00,000
Break even in 7th year
Reward of net gains of over12%
Aim to be the market leader in accommodating individual traveler

19
Contd...
References
http://www.dnb.co.in/Travel_Tourism/Indian_Travel_and_Tourism_Industry.asp
http://www.nsdcindia.org/pdf/tourism.pdf
R. Chabra, Hotel Industry Review, Icfai business journal, June 2010.
Dr. K.Mohanlal, Rise India, Times of India,
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THANK YOU
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Finance Table
BUILDING (place where capsules hotel will be made )
Capsule Building ( FIBRE GLASS)
Furnishing of capsules and building ( matress , ac bedsheets,
pillows , etc etc etc
Stewards , management , gen sets , laundry machines , kiosks
Chefs (cooks) ,