A Brief History of India's Hotel Industry
Before World War 2, most hotels in India were developed in locations that were frequented by the British and Indian aristocracy. This period saw the development of hotels being undertaken by individual British and Indian entrepreneurs, with only a few companies owning hotels in India, such as The Taj Group--Indian Hotel Company (owned by J. R. D. Tata) and Faletti's Hotel, East India Hotel-Oberoi Group. The important hotels that were built during India's British period were:
The Rugby, Matheran (1876) The TajMahal Hotel, Mumbai (1900) The Grand, Calcutta (1930) The Cecil Hotels, Shimla and Muree (1935) The Savoy, Mussoorie (1936)
India gained independence in 1947, and the hotel industry had a period in which no hotel development took place. Upon his return from the Non-Aligned Movement Conference in 1956, Late Pundit Jawaharlal Nehru, then Prime Minister of India, recognized that tourism could be an engine for the country's economic growth and was inspired to build quality hotels in India for visiting foreign dignitaries. This led to the first-ever government investment in the hotel industry with the building of the Ashoka Hotel in New Delhi.
The India Tourism Development Corporation (ITDC) was set up in 1966 as a corporation under the Indian Companies Act of 1956, with the merger of Janpath Hotel India Ltd. and India Tourism Transport Undertaking Ltd. Today, ITDC provides a complete range of tourism services, including accommodation, catering, entertainment and shopping, hotel consultancy, duty free shops, and an in-house travel agency.
The government gave the tourism industry another boost when it created the Minis- try of Tourism and Civil Aviation in 1967, separating it from the Ministry of Transport and Shipping, thereby recognizing that tourism was not simply about transporting people from point A to point B but had a much wider role to play in the nation's economy. Concurrently, Rai Bahadur M. S. Oberoi, Chairman of East India Hotels Ltd., was expanding his empire by constructing New Delhi's first modern multi-story hotel, which was franchised to U.S.-based Inter-Continental Hotels. The portfolio of Oberoi hotels consisted of The Cecil, Shimla; The Oberoi Grand, Calcutta; The Oberoi Clarks, Shimla; The Oberoi Palm Beach; and Gopalpur on the Sea. The Taj Mahal Hotel in Bombay was the next to follow this franchising trend in 1970 when it adopted an Inter-Continental hotel franchise for its new hotel in Bombay. Simultaneously, the Oberoi Tower Hotel under construction in Bombay entered into a franchise and management agreement with Sheraton. Holiday Inn also made its entry into India through franchising its hotel project in Bombay.
This was the beginning of the methodical planning, designing, decorating, and furnishing of hotels in India, along with the installation of systems for operating various departments in a hotel. The training of managerial and other personnel was an important franchise benefit, and the first few batches of managers trained by the Inter-Continental Hotel Company set a new trend of competent professional hotel management for India's hotels that continues to influence and guide India's hotel industry today. Before the marketing impact of hotel franchising and hotel management by expatriate managers could be assessed and could proliferate, however, there was a surge of nationalism in India, resulting in the elimination of management service as an integral part of franchise agreements.
In 1975 ITC launched its hotel business with the acquisition of a hotel in Chennai, which was rechristened "Hotel Chola." The objective of ITC's entry into the hotel industry was rooted in the concept of creating value for the nation. ITC chose the hotel industry because of its potential to earn high levels of foreign exchange, create a tourism infrastructure, and generate large-scale direct and indirect employment. Three Welcome Group Hotels were commissioned between 1975 and 1977; these were non-franchised hotels, inspired by the slogan "Be Indian, Buy Indian" and using Indian expertise. Ultimately, however, these hotels adopted the Sheraton system in 1978 and used the services of expatriates for the purposes of upgrading staff training and installing Sheraton operating systems-all without a management contract. This gave the Welcome Group a good start. It must be noted, though, that it took time for these hotels to achieve substantial foreign occupancies. The tacit discouragement of foreign franchising by the government led the leading Indian hotel companies namely The Taj, the Oberoi hotels, and the Welcome Group-to launch their own franchising and management programs, giving rise to indigenous franchise operations. Their focus, however, was the 5-star and 5-star-deluxe categories of hotels. Such hotels were located in the prominent metropolitan cities and a few select resorts, leading to a concentration of franchised hotels in these areas.
Motivated by the success stories of the hotels in the metro cities, individual entrepreneurs began constructing hotels in secondary cities/resorts during the late 1970s.When India agreed to host the 1982 Asian Games, a boost was given to the country's hotel industry. The government announced a national policy on tourism and outlined the country's tourism development objectives. This policy was timed to help the country meet the huge need for hotel rooms in New Delhi, the venue of the Asian Games. The government granted licenses for building hotels to the Taj Palace, AsianHotels Hyatt Regency, India Tourism Development Corporation-Lodhi Hotel, Samrat Hotel, Kanishka, Le Meridien, and Surya Sofitel, with the stipulation that their new hotels had to be completed in time for the games. With the opening of these hotels, hotel franchising in the first-class/5-star hotel segment within the metro cities got further strengthened. The government officially recognize tourism as an “industry” in1986.
The food and beverage industry in India traces its roots to the traditional community feasts and the movement of people on pilgrimage thousands of years ago. Most people were on the move primarily for preaching and hunting. During those days people took shelter under trees and were dependent on natural sources for their food. Dharamshalas and chatrams were built later on to protect the lives of the travelers from wild animals and robbers. These were the buildings where the travelers could stay free of cost. Saraiswere developed during the Mughal rule to provide accommodation to the travelers which were later converted to inns and western style hotels during British rule.
Europeans visited the country to trade for the finest cotton and spices. Eventually the British colonized the region. They introduced their cuisines , the skill of making wines and distilled drinks and eating habits. Table etiquettes and the art of eating with cutlery were learnt . Economic activities paved the way for development of western style hotels and restaurants mainly to cater to the requirements of the British and European traders. The people of India generally did not prefer dining out till the early 1960s. Most of the restaurants of the 1960s were not much concerned about food and personal hygiene , or serving food at the right temperature. Limited items were prepared before hand , displayed in the shelves and served till the stock got exhausted. This is because those days they operated the business with the limited dishes that were prepared beforehand and they could not afford to have food holding because of the high cost and unavailability of resources. Only the higher end hotels had the luxury of cooking with gas.
The development of catering in India is mainly attributed to British, who introduced hotels and restaurants similar to the ones in Europe. They also established resorts hotels in hill stations. The rapid development of transportation , especially the railways in the mid- nineteenth century enabled people to move in large number .This led to the establishment of small lodges and restaurants in and around railway stations to cater to the needs of the travelers. Refreshment rooms at railway stations and pantry cars in some of the trains were introduced. Reputed hotels such as the Taj, Oberoi and the Ambassador were well established when India became independent and the industry grew faster.
Civil Aviation developed rapidly soon after the Second World War .The introduction of the international flight services on the year 1948 and the additional services in the mid 1950s encouraged a lot of foreigners to visit India and also many international chain of hotels such as Holiday Inn , the Sheraton, and the Intercontinental , and so on ,started their operations in India. Globalization policies of the government , fast means of communication and transportations, rapid industrialization , introduction of private air transport internet facilities and the establishment of the network of well organized travel and tour operators have made the world shrink and the movement of people has become very easy and fast.
India Tourism Development Corpoartion (ITDC) was set up in 1966 with the objective of developing and expanding tourism infrastructure in the country and thereby promoting India as a tourist destination .ITDC succeeded in achieving its objective by promoting the largest hotel chain in India and providing all tourist services such as accommodation , catering, transport , in house travel agency ,duty free shopping , entertainment publicity consutancy and so on under a single window. It also offered consultancy services from concept to commissioning in the tourism field for private organizations. The ministry of tourism gave top priority to the development of man power to meet the growing needs of hotels, restaurants and other hospitality services. For this purpose 21 IHM and 10 FCI were established by the end of 1980s. The hotel management training programme imparts adequate knowledge and training in the core operational managerial areas of the hospitality industry. In 2002 the ministry launched a programme called Capacity Building for Service providers.(CBSP) to train persons engaged in small hotels, dhabas, eating joints, restaurants and those working at immigration/airport staff and so on. The objective was to provide short term training to improve their etiquette , behavior, and attitude towards tourists.
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